E.M. Duggan: Prefabbing for profitability
While investment into new facilities gave E.M. Duggan room to expand, it also gave the company room to innovate.
When Leonard Monfredo joined E.M. Duggan in 2009, the country was in the midst of the Great Recession. He sold his general contracting business to his partner and moved from New York to work at the Canton, Mass.-based mechanical contracting firm run by his father-in-law Vincent Petroni. The company was doing about $70 million to $80 million in revenues.
A year later, company revenues plunged to $36 million.
But instead of hunkering down to weather the storm, Monfredo and Petroni saw an opportunity to make their company better by hiring new people.
“Everyone was laying people off,” recalls Petroni, who serves as E.M. Duggan’s president, CEO and CFO. “We had the opportunity to pick up some fabulous people who were never on the market and they couldn’t wait to get here.”
Monfredo, who is the company’s executive vice president of operations, agrees: “While the recession was a bad thing, it gave us that freedom as an organization. Vinnie and I assembled a team of people who would have never been available to us if the construction industry was doing fantastic.”
The two hired about 15 people who added their expertise in the mechanical contracting industry to help E.M. Duggan — which celebrates 125 years in business this year — to grow. To Petroni, these men were the company’s future.
“With these people coming on board and with Lennie here, I could see the future. I could see the next generation,” Petroni says.
With new vision, Petroni and Monfredo purchased the buildings on either side of the company’s corporate/warehouse facility — one in 2011 and the other in 2013. Petroni, who joined the firm in 1979, recalls that when the company outgrew its original space, the decision was made to add on to the back of the building. Office staff was moved into what used to be warehouse space, and the warehouse moved into the new space. This happened several times over the course of three decades.
“While we were going through the recession, we planned a growth period,” Monfredo explains. “We started by putting the right people on the bus. We knew once the recession ended there would be work to do. And when the floodgates opened, we were more than ready for it.”
From the company’s lowest point during the recession — $36 million — revenues jumped to $125 million and continued to climb. Today the company brings in $175 million a year — $169 million from new construction and $6 million in service. It employs 366 people — 85 in the office (including design and coordination staff), 259 in the field for new construction and 23 field service technicians — and has a truck fleet of 81 vehicles. Markets include commercial, educational, multifamily, hospitality, mixed use, hospitals, laboratories, stadiums and theaters.
In 2014, the firm opened a Special Projects Division in downtown Boston to provide mechanical services and support to projects in the metro area — from small rehab projects to major construction.
While investment into new facilities gave E.M. Duggan room to expand, it also gave the company room to innovate.
Monfredo is the fifth generation of E.M. Duggan’s family leadership. Under his guidance, the company that began in the 19th century is embracing 21st-century technology.
It all starts with Duggan’s 3-D coordination group, which provides detailed planning and scheduling for the firm’s new construction projects in order to ensure they are completed on time and on budget. “The buildings are ‘built’ there first, then comes the prefab,” Monfredo explains. “That’s why we are trying to pick up a lot of efficiencies in that group through new software platforms the architects and engineers can work on.”
Petroni says that in the early days of the group, it was tough to find people with plumbing and mechanical expertise who also could work with computers.
“We were paying $80 to $90 an hour to have a guy learn how to use a computer,” he notes. “Now the unions are training the young kids on the software, plus we bring in a lot of interns who are computer savvy but don’t know anything about plumbing. It’s easier to teach them plumbing than it is to teach them the computer software.”
Monfredo explains: “We have the best of both worlds here, a combination of union and nonunion people and it works very well for us. It gives us a good blended rate, so to speak, on how much the coordination group costs. It also provides the young people with a mentor to teach them the trade, while the young people teach the older generation how to use the most recent software. Constantly bringing in younger people in that group is very important.”
Building information modeling is where the industry is moving, Monfredo adds. Building owners see the value of having construction information at their fingertips for maintenance and repair work, as well as for renovation projects. And many now require BIM in the construction contracts.
“The end result is giving a client, a developer and a building owner the best product you can give them,” he says. “If a client can have a Revit model or a BIM model that includes every piece of equipment in his facility, when that equipment needs to have its belts changed or needs to be repaired, everything is intelligent within the model. It’s an incredible piece of information to be able to hand an owner so he is able to efficiently maintain his building.
“So we’ve really embraced it. If you want a client for the life cycle of that building, starting with the model is the most important thing. Having an intelligent model for them to work off makes the relationship much easier. And BIM allows you to build the building faster. You can see and solve problems a year before you start even going into the ground. Technology is really what’s going to change the industry.”
With efficiencies now built into the electronic model, E.M. Duggan turned to modernizing its prefabrication techniques. The company was one of the first mechanical contractors to implement prefabrication in the 1940s. With the purchase of the 142 Will Dr. building in the lot adjacent to the corporate headquarters facility in 2011, E.M. Duggan built a state-of-the-art, 55,000-sq.-ft. HVAC and plumbing prefab shop. In 2013, the plumbing/fire protection prefab shop was moved into the 136 Will Dr. building on the other side of the original facility.
Workers in the prefab facilities work right from the 3-D models created in the coordination group. They have everything they need to do their work within a few feet of their workspace — tools, equipment and parts. E.M. Duggan manufacturers its own ergonomic work tables that can be adjusted for people of different heights. And workers stand on rubberized mats, which are more comfortable than standing on concrete floors, as well as better for joints and muscles.
Monfredo did his research on prefabrication at trade shows and, through the company’s membership in the Mechanical Contractors Association of America, visited prefab shops at other mechanical contracting businesses. “We have taken bits and pieces from those other shops and we’ve given some of our information to our subcontractors,” he says. “We want to help the industry. It’s unfortunate that everyone is not jumping on the same page. Eventually they will because they’re going to have to.”
Modern prefabbing allows E.M. Duggan to “build” much of a building’s plumbing and heating systems six months before they need to be installed. The prefabbed units are stacked on pallets and stored until needed for the project. Not only does that make installation much more efficient on the jobsite, it keeps employees working at a steady pace year round. The finance side benefits, too, as the company can get building owners to pay for the prefabbed systems as they are built instead of waiting for actual installation.
To further enhance its prefab facilities, E.M. Duggan bought a T-Drill pipe-cutting machine so it can cut all metal pipe for a job, no matter what length is needed. Once the coordination group is finished with the design, the prefab crew can start cutting pipe. (You can view a video of the pipe-cutting machine at PMmag.com/videos.)
The company even “prefabbed” its tool inventory. Tools and parts are boxed in containers for different types of jobs — plumbing, heating, fire protection, etc. — that employees can sign out for a jobsite. The containers are replenished when needed. Everything in the prefab shops, tool containers and the warehouse is barcoded to control inventory.
Monfredo, who is LEED-certified, is not only passionate about technology and efficiencies, but also about the environment and what the construction industry can do about conserving natural resources. Not only does the company bid on LEED buildings, it has solar panels installed on the roof of one of the prefab buildings and an extensive recycling program.
When speaking with Petroni and Monfredo, it’s easy to see the respect they have for each other and what each brings to the company to continue its success. Petroni says he had that same relationship with his father-in-law, Edward M. Duggan II, who was the grandson of company founder Edward M. Duggan.
“The future is wonderful, as is all the things we have done the last few years, but I think we got here because of the history,” Petroni notes.
Edward Duggan II built the company’s reputation as a great company to do business with, as well as a great company to work for. A Master Plumber, he had a meticulous eye for detail and an exceptional memory, able to recall how many plumbing fixtures he installed on a jobsite 40 years before. He had a passion for the plumbing trade that stayed with him after his retirement in 1990 and until his death in 2011.
“Ed was an incredible guy and Vin had an amazing respect for him,” Monfredo says. “Obviously, it was the reason why he wanted to continue in the company, the same respect I have for him, if not more. I respect Ed’s reputation or else I wouldn’t be here. History is important to us all.”
E.M. Duggan has been named one of the Boston Business Journal’s Best Places to Work in 2013 and 2014. Monfredo and Petroni believe that part of the reason is the culture of autonomy the company has developed over the years.
“Many people who work here are long-time employees, and their friends and family members work here, too,” Monfredo explains. “I believe the perception of this company is that we do things right, we get things done, we care about our people and if you ever need something you will have it. I think that plays a huge part in the success of the organization. People are not going to get told ‘no’ if they need something to do their job better or easier.”
Petroni and Monfredo listen to their employees; if they have a better way to do something, it’s discussed and implemented if the idea is viable. In fact, that’s how the tool containers started; tools were going missing and someone came up with an efficient idea to solve the problem.
“I believe what separates us from our competitors is the culture, the desire to want to give our clients and the end user the best quality product that we can give them,” Monfredo says.
Headquarters: Canton, Mass. Combined square footage of three buildings is 120,000 sq. ft.
Market segments: Plumbing (31%), fire protection (11%) and HVAC (58%).
Employees: 366 people — 85 in the office (including design and coordination staff), 259 in the field for new construction and 23 field service technicians.
Top management:Vincent F. Petroni, president, chief executive officer and chief financial officer; Rick Dorci, executive vice president and chief operating officer; Leonard Monfredo, executive vice president of operations and president of Duggan Mechanical Services; Kevin Walsh, senior vice president of the Plumbing Division; Steve Hilliger, senior vice president of the Fire Protection Division; Tom Bopp, vice president of fire protection operations; Mike Gillis, vice president of design and coordination; Rick Armistead, vice president of the Special Projects Divison; and Kerry McClean, vice president of Duggan Mechanical Services.
1891: Edward M. Duggan opens storefront on Shawmut Ave. in Boston.
1942: E.M. Duggan dies and son William Duggan takes over company.
1948: William Duggan dies, leaving the business to sons E.M. Duggan II and William Duggan II. The company moves to a small office in Canton, Mass.
1968: Company buys property and builds facility at 140 Will Dr. in Canton — 2,275 sq. ft. with four employees.
1975: Capeway Wholesale Plumbing & Heating is purchased.
1977: Republic Plumbing Supply is purchased.
1979: Vincent Petroni, E.M. Duggan II’s son-in-law, joins the company as controller. First in-house computer installed. Monroe Plumbing Supply is bought.
1983: The plumbing supply operations are spun off.
1988: Revenue climbs to more than $10 million.
1990: E.M. Duggan II retires. Vincent and Maureen Petroni, representing the fourth generation, take control of the business. Paul Harrington is named president.
1991:The company celebrates its 100th anniversary.
2000: Service division is acquired.
2007: Revenue reaches $80 million.
2009: Leonard Monfredo, Petroni’s son-in-law, joins the company as the fifth generation.
2010: Paul Harrington retires as president, succeeded by Vincent Petroni. Leonard Monfredo is named president of Duggan Mechanical Services.
2011: Edward M. Duggan II dies. The company buys adjacent property at 142 Will Dr. and moves HVAC and plumbing prefab into the building.
2013: The property at 136 Will Dr. is acquired and the plumbing prefab shop is moved and expanded. E.M. Duggan is named one of Boston’s Best Places to Work by the Boston Business Journal. It also names EMD as one of Boston’s fastest-growing private companies.
2014: Special Projects Division is started out of downtown Boston. Boston Business Journal names EMD one of Boston’s Best Places to Work for a second time.
2015: Named one of Boston’s fastest-growing private companies by BBJ for second year.
2016: Company celebrates its 125th anniversary.
You can view significant milestones in the 125-year history of E.M. Duggan through these videos:
BIM/prefabrication technology: https://www.youtube.com/watch?v=wUI9FlSJUWU
Opening of prefab shop at 136 Will Dr.: https://www.youtube.com/watch?v=UxXdZuB2wdY
Prefab timelapse: https://www.youtube.com/watch?v=y4tQP4gYqZc
Special Projects Department: https://www.youtube.com/watch?v=r2_Hj_ekAHs
Duggan Mechanical Services: https://www.youtube.com/watch?v=-ic20zQx7BU