Putting The Puzzle Together
Gary Statdfield understands the process of prefabrication. His Mechanical Inc., owned by the Helm Group, has been doing it since 1968 - and now owns one of the largest prefab shops in the Midwest. The company ranked No. 19 (with $76.93 million in revenues) in the 1998 PM 100.
"Prefabrication definitely improves our position," says Statdfield, president of the Freeport, Ill.-based company. "We're putting the savings in the bid. We're able to bid lower prices without compromising our profits, and we're getting more jobs."
Mechanical Inc. - a mechanical contractor with offices in East Moline, Ill., Carbondale, Colo., and Janesville, Wis. - has built a solid foundation of core customers that returns with even more business (70 percent are repeat customers). Prefabrication enables Statdfield's company to offer a stunning safety rate, save money and get jobs done on time, every time.
The 21,000 sq. ft., two-bay prefabrication facility abuts sister company Civil Constructors, where Mechanical traces its roots.
"Civil was doing a lot of wastewater treatment plants in the mid-1960s," says Statdfield. "About 80 percent of the volume is either mechanical work or concrete work. Civil was doing all the concrete, and recognized to be competitive they would have to develop their own mechanical work."
Shortly after the company started, Mechanical had the opportunity to fabricate some water treatment skids for Illinois Water Treatment (now U.S. Filter) in Rockford, says Statdfield, a 26-year industry veteran. Mechanical built a prefab shop specifically for the job. "We started fabricating everything they made and sold." The partnership has continued off and on throughout the years, but Mechanical's prefab shop is hardly hurting for business - its customers include Chrysler, General Motors and Kelly Springfield.
Plan, Plan, PlanAt one time, Mechanical defined prefabrication as something that needed to be welded, but has expanded to include any type of material. Now, Mechanical completes whatever it can before it gets to the jobsite, working with aluminum, carbon steel, titanium, copper, PVC, Monel and Inconel. Sizes range from thin gauge material to 1-1/2 inch wall with diameters up to 144 inches. Transportation is the only limitation to size.
"Prefabrication takes a lot of planning," explains Statdfield. "It's difficult for people to get into that mindset. You have to draw everything up, visualize it and all the other interferences there may be, work around them, build it, bring it to the site some months later and expect it to fit.
"There are a couple benefits to putting things together in the shop," Statdfield says. "Obviously, there are fewer manhours on-site, which in our minds makes us safer. We think it is much safer when you are under the same condition all the time. The weather is not a factor; other trades are not a factor. We think by doing prefabrication, you end up being a safer contractor."
And the statistics back up what Statdfield claims. The construction industry standard is about 8 accidents for every 200,000 manhours, compared to 2.67 accidents at Mechanical. More impressive, zero accidents have been recorded at the prefab shop - all have occurred in the field. (Statdfield notes the accidents mostly occur from new workers not acclimated to the environment.)
"These guys are in the same environment, working with the same tools, out of the elements, away from other tradesmen, who sometimes cause accidents. By being off the jobsite, we provide a safer environment for other tradesmen, too," adds Statdfield.
The low accident rates can also be attributed to meticulous training. Statdfield says it takes a lot of training for the foremen and the project managers to be able to visualize the obstacles that need to be overcome.
The other safety aspect branches from scheduling. "If you have a fast track schedule, a lot of times the site you're working on doesn't allow you to have many people on-site. We have 40 people here building stuff you just couldn't put on-site," Statdfield explains. "For instance, we have six guys working the night shift right now. It saves money as far as labor and time. You have lights, heat and no elements to bother you. You have equipment tools and devices that are automatically doing things as opposed to manually in the field. The quality itself is definitely better."
Yet another safety advantage of prefabrication stems from the employees. The turnover rate at Mechanical, a union shop, is extremely low, with its workers averaging more than 15 years, not including apprentices. The flexible schedule is a win-win at Mechanical. The three unions that feed workers to Mechanical are pleased with prefabrication because of the safety rates, Statdfield says.
Opening New HorizonsOther contractors come looking for Mechanical to perform prefabricated work on jobs they have won. Statdfield estimates that more than 30 percent of the work completed at his prefab shop is for other contractors. "We're helping other contractors get more work, by them coming to us at bid time," says Statdfield. "We're giving them our prefab prices, and they're passing it on to their customers."
Mechanical is currently constructing 25 module skids for a microfiltration plants in Del Rio and San Antonio, Texas. The water supply in Del Rio was contaminated by floods in late fall, so Mechanical's part of the job needs to be completed in a timely fashion. These microfiltration module skids, for the first two sites in North America, take approximately 2,000 manhours to complete.
"The Del Rio job is not typical for us," explains Statdfield. "The job hasn't even been started yet. We're up here building 50,000 manhours worth of work before the job starts. So they start to build the building where it's going to be enclosed in, the modules just show up - and all you have to do is plug them in."
Mechanical will finish and store the module skids before the building is ready in Del Rio. The 28-million-gallon-per-day plant will be finished later this year. When the skids are needed in Texas, Mechanical will lift the units with either a five- or 10-ton crane onto a truck - and send it on its way.
A typical job sees the prefabrication being done after the building is complete. As soon as the piece is ready, it is shipped. The company has not experienced any problems with the transportation of completed materials.
Statdfield admits there is still work that can only be completed on-site. "Straight links with lots of fittings are not cost-effective to do in the prefab shop," says Statdfield. "Other than that, if you sit down and do the planning, you can prefab anything."
There have been other jobs that needed to be completed in a jiff. A $10 million job in Mechanical's own backyard, Freeport High School, had to be completed in a mere 11 weeks. (The architects recommended a 72-week schedule to complete the job.) A $10,000 per day late penalty fee caught the company's attention, says Statdfield. The school replaced its entire infrastructure over the summer break. "We tore out the plumbing and heating systems," says Statdfield. "We did a lot of planning to avoid the penalties. We fabricated virtually everything here."
Another job in 1996 was built so fast that Mechanical's prefabricated work became part of the building structure. "They couldn't get the building steel fast enough, so we said, 'Forget about the building steel, we'll build that here and put all the pipe in.'" Statdfield explains. "When the time came we just plugged this whole structure into place. You wouldn't believe the amount of time and money it saved."
Mechanical's core customers, especially those who work on factory assembly lines 24 hours a day, 7 days a week, enjoy the savings in time. Because everything is prefabricated, Mechanical completes jobs during rare weekend or holiday shutdown periods.
What's Next"We're not looking to be the biggest just to say we're the biggest," says Statdfield. "I think we'll grow at a slow profitable rate."
Some of that growth will be from a planned geographic expansion.
"We need to identify what our core customers want to do, and be flexible enough to change," Statdfield adds. "We'll analyze and adjust."
It'll ensure Mechanical Inc. will be around longer than Legos.