How to Win More Profitable Sales Through Efficient Fabrication Design

Research uncovers smart methods to reduce design variation and fabrication costs and time by

eliminating unnecessary processes.


Introduction

This report is written for project managers or business managers who are involved in building or fabricating structures such as sheds and warehouses or assemblies involved in manufacturing or fabrication processes. In these projects, each project will have some unique elements as well as a number of elements that are similar or identical across every project. For the sake of brevity, I will refer to all of these projects as fabrication projects.

In every fabrication project, what matters most to every stake holder is to engage in an effective and efficient process that minimises risk and variations to provide:

1. A completed structure or assembly that meets project specifications and design and safety standards

2. The project to be completed on time

3. The project to be completed within budget.

However all too often fabrication projects fail to achieve these criteria in the most cost effective and timely manner. We have identified that the typical approach to the design and fabrication processes has a number of significant factors that combine to greatly reduce the ability to achieve optimal results in these projects.

In this report I detail the fabrication project challenges and mistakes that typically create inefficiencies and cost blow outs, even from the traditional approach taken by very professional firms.

This report will explain how this state of affairs has been allowed to develop and also what needs to be done to avoid the expensive delays and unnecessary costs that result. I will also detail a systematic approach that will enable you to significantly reduce many peripheral costs in set-up and fabrication processes to facilitate a more cost effective outcome. The benefit of operating in this superior manner is that you not only reduce your project costs, but you also gain so much extra productivity that your ability to perform at such high levels can become a major competitive advantage that puts your business at the head of the pack. This means you can also win more projects because of the ability to streamline your quoting process and provide cost savings through improved and more efficient work processes.


The Typical Approach

Allow me to go right down to basics for the moment. The reason will become clear.

The traditional, time worn approach to fabrication projects results in the following sequence of activities for each project:

1. The structure or assembly is proposed.

2. Initial concepts are created and possibly costs are estimated at this point.

3. Concepts are approved.

4. Designs are drawn up and submitted for approval.

5. Designs are approved or modifications are requested.

6. Designs are modified and submitted for approval.

7. The technical structural integrity elements are determined.

8. Designs are completed.

9. Material lists are created.

10. Materials and labour resources are sourced and priced.

11. Pricing is approved.

12. Materials are ordered.

13. Materials are delivered.

14. Fabrication is scheduled.

15. Assembly is scheduled.

16. Fabrication and assembly work is performed.

17. The final structure is checked and approved, with or without modification.

18. Final sign-off is obtained and the project is completed.

The major challenge with the typical fabrication project can readily be seen in that there are so many distinct stages in completing each project and that at each stage there are:

 risks of time delays,

 variability that makes it difficult to assess costs accurately,

 different stakeholders that have their own separate requirements, and

 Difficulties in coordination of the transition between each stage.

In most firms involved in fabrication projects, the process of design and fabrication has typically been viewed as a project by project situation, with a focus on how to perform each project in a time and cost effective manner. Little thought has typically gone into the process of the process, if I can put it that way. The consequences are suboptimal solutions, unnecessary delays and additional costs that could be eliminated by a more strategic approach.


Product Cost vs Time

Dr. David Anderson PE CMC in his article titled Design for Manufacturability highlights the fact that around 80% of the costs of manufacturing are already decided and committed during the conceptualisation and design phases of any project. He recommends that more cost-effective outcomes can be achieved by earlier collaboration of more parties involved in the project with a view to “design for functionality, but also to optimize cost, delivery, quality, reliability, ease of assembly, testability, ease of service, shipping, human factors, styling, safety, customization, expandability, and various regulatory and environmental compliance.”

The outcome of the research indicates that greater collaboration and communication between all parties at the early stages of planning and design can eliminate the consequences normally experienced without this. When the opportunity arises to analyse and review the process of design across multiple projects and to introduce standardization and reduction of variables and set-up elements within the process, additional efficiencies can also be achieved.

The reality is that involving an expert engineering consultant early in the process will not change the overall design cost significantly, but the potential savings on the reduction of time delays through the project and reduced material costs, as well as creating more efficient and cost effective structures over the lifetime of the structure, will create significant benefits in costs of production and timeliness.


The Top 5 Reasons for Fabrication Project Inefficiencies

Research has uncovered 5 major reasons for delays and cost inefficiencies on fabrication projects as well as issues with quality outcomes.

1. Suboptimal solutions from poor upfront planning and poor strategy in quoting

Most fabricators and manufacturers provide their clients quotes with significant fudge factors due to the amount of unknowns that may affect the ultimate cost of production. This is typically a result of poor information gathering practices and lack of collaboration between parties. Using engineering processes that focus only on a single project rather than having a multiple project focus has the potential to lead to delays or extra time taken to research appropriate solutions. This increases the potential for mistakes and added costs. Poor upfront planning leads to creating a project plan that has unknown time delays that cost additional time and money to resolve. Delays in producing quotes in a timely manner also leads to losing work you may otherwise win.

2. Frequent delays in the stages from design to final investment decision

Where issues that would lead to suboptimal solutions are detected during design and approval stages, plans are frequently sent back to designers for reconfiguration due to changed circumstances. All parties in the process are often under pressure from their own clients or circumstances to get the job done quickly and they try to rush the process. The need to have work done quickly can add to the competitive pressure and the potential to lose work to competitors who are more efficient through these stages.

3. Lost productivity due to inefficient fabrication processes

Typically fabricators are frequently inefficient due to unnecessary processes or variability of processes due to the level of customisation and lack of standardisation designed and engineered into their methodology. Poor process design can lead to more than necessary set-up time and frequent stop-start between jobs. Lack of standardization can also lead to additional costs of materials and lead times in ordering and purchasing small quantities required for one-off jobs instead of being able to purchase in bulk and hold in stock much more frequently used items.

The critical factor which enables the engineering consultant to add significant value is mainly due to their design for manufacturability analysis process. When a skilled engineering consultant views the fabrication process from a strategic viewpoint it is frequently possible to find savings and efficiencies by significantly reducing the number of discrete stages in each project from the typical eighteen steps.

4. Added cost of manufacture due to over-allowance to cover uncertainty and variability

Technology and construction materials are rapidly changing, which requires engineers to continuously update their knowledge and expertise. Where engineers lack experience in a specific area or fail to stay current with industry leaders problems can occur. This is often seen with sole practitioner operations that lack resources to deliver quality work or possess a limited range of expertise, which leads to delays or extra time taken to research appropriate solutions. The main issue that results from lack of expertise is that the engineer takes an ultra-conservative approach which leads to over design and over specification to allow for multiple factors of safety. Obviously over specification leads to unwarranted and unnecessary costs add to the production budget.

Many fabrication projects have also suffered from engineers who are willing to sit back and just do the job as prescribed, rather than proactively providing high value advice and innovating more enterprising and cost effective solutions. Issues such as these have led to a lack of understanding of the value of proactive involvement of the expert consulting engineering firm.

5. Inability to provide clients with an accurate and ideal time frame for completion of the project

An issue that is frequently experienced is where the number of variables within the fabrication process itself make it virtually impossible to predict with any certainty how long it will take to complete any given project. With so many opportunities in the process for time to blow out, the risk of not achieving efficient, on time performance is unacceptably high.

Another area where project owners can suffer cost blow outs is in gambling with trying to short cut the engineering component across a range of projects. Rather than trying to minimize the costs on each project they would be better off by focusing on maximising profits across all projects. While some projects may go according to plan with no unforseen issues arising, unless the services of an expert consulting engineer are fully utilised it won’t be long until a major issue occurs that eliminates all of the potential savings.

Often a project owner can create unnecessary blow outs due to a lack of upfront planning that has led to project schedules that are too tight when unanticipated events create a need for changes to the project.


5 Ways a Structural Consulting Engineer Expert Can Add Value to Your Project.

1. Unique Cost Effective Solutions that Improve Processes and Results

An expert consulting engineering firm demonstrates its expertise by continually developing innovative approaches to solving design problems to develop the most professional and cost-effective solutions that meet all legal and safety standards. This is achieved by developing superior management systems that enable engineers to communicate with clients as advisors rather than vendors. They will look beyond the initial problem and take into account the implications of any solutions before deciding on the optimal approach.

Working in such a way enables the manufacture or fabricator to get the right advice that will significantly reduce the cost of operations or improve the quality of output through custom solutions that are tailored to the particular business. Efficient processes also extend to the ability to produce quotes and proposals in a quicker time frame, which not only enhances your professional image but also helps you win more projects by being better at meeting your customers’ deadlines.

2. Effective Information Gathering Systems to Facilitate More Effective Design

Nowhere is the adage, “More haste, less speed,” because of missing vital information that should have influenced the up-front planning. An expert consulting engineering firm will insist on the client getting a better quality process that will effectively analyse the current situation and bridge the gap between how current operations are and how they could be. They will help the client weigh the risk and cost of potential problems against the cost of better preparation and information up front. Usually, better up-front information will achieve a more cost effective design, ultimately saving the client money and avoid project blowouts.

An expert consulting engineer will create proactive communication processes to help clients be better educated, to be organised and prepared for each project. They will also operate in such a way to add value to other specialist involved in the project.

Under-engineered or under designed projects are avoided by better up front information, preventing future costly problems.

Time delays are avoided by better communication of known factors that are uncovered through better preparation.

3. Accuracy, Speed and Value to Deliver Projects on Time.

An expert consulting engineering firm will operate in partnership with all parties. Where an ongoing relationship enables good communication and feedback loops to be established professional firm will set benchmarks and promised time frames around responsiveness and quality. They 2014 | How to Win More Profitable Sales Through Efficient Fabrication Design 6 will develop internal processes to manage responsiveness around urgencies and established levels of response time frames.

They will be attentive to client requirements and manage their processes to fit with the client and to be flexible to manage the process so that the things that are needed urgently are done quickly but other less urgent matters can be delayed. Feedback to clients can be fast tracked through sound project management and communication processes which enable client accessibility to project and job tracking.

4. Professionalism and Expertise

A professional engineer will stay at the leading edge of the industry by education and continuing professional development not only in their technical field but also in the area of project management and business processes. Professional engineers will focus on multiple project efficiency rather than one project at a time processes. Efficiencies and cost saving are created by standardization of designs and options. Using the Pareto Principle, where 80% of the outputs can be achieved with 20% of the effort, efficiencies can be achieved through manufacturing processes, purchasing, inventory management, labour time, construction time and many other areas.

At the moment, an “over-the-wall” practice prevails in the industry. In such a practice, the plans are given to the next designer or “customer” in the process until the plans are ready. Because no one seeks to support each other, this practice leads to suboptimisation, where the stakeholders just strive for optimising their own performance. Furthermore, there is a tendency to rush into the details of the design without a proper understanding of the premises.


5. Strategic/Forward Thinking - Plan For Success

The expert consulting engineering firm doesn’t just do what they are asked to do. They will be proactive about educating and offering advice about alternative approaches, the risks involved in taking short cuts and the potential costs. They will partner with all parties to ensure they get the best results and be involved early in the project so that all parties can fully benefit from their expertise through valuable collaboration. In almost every case, better information provided up front will result in a more cost effective construction due to the ability to design more precisely to the conditions and not over-engineer to avoid risk. To the right is a diagram that shows the benefit of increasing the upfront planning which typically won’t cost any more than otherwise but have a significant savings in either time or money on the scope project.

Conclusion

It is clear that the proactive, design for manufacturability approach to designing, planning and managing fabrication projects creates a distinct competitive advantage and results in more projects completed on time and in budget. The difference between the expert consulting engineering firm and the average firm becomes as obvious as a competition between a professional racing team who conduct research to ensure they use the most up-to-date technology and who maintain their vehicle in premium race winning condition and strategically plan every race in advance using all the information they have gathered from previous events. This can be compared to a team who buys a vehicle, before defining the criteria relating to the use of the car, track conditions and race strategies while never conducting maintenance until things start breaking down and finally are forced to replace it when it seizes up on the track, unable to move at all.

Until now, you could be excused for operating in the traditional manner. However, now you are aware of a different, superior strategic approach, you have a choice to make. Your first step is to do the research. Find out how beneficial this new approach could be for your business and how much you could save by avoiding the common mistakes you are probably making by working the same way you always have.

Gamcorp is currently offering a free consultation or a preliminary design review for your next project. Gamcorp will assess your current approach and help you identify ways to save time or money or avoid unnecessary risks in your development process. Please call Gamcorp now on (03) 9543 2211 for an initial discussion or visit our website at www.gamcorp.com.au for more information.