Insights April 2015 by Think Baseline

INSIGHTS

THE MAGAZINE FOR TODAYâ&#x20AC;&#x2122;S ELECTRICAL AND SYSTEMS CONTRACTORS

APRIL 2015

WWW.IECI.ORG

THE SUPPLY CHAIN ISSUE

PLUS

INDEPENDENT ELECTRICAL CONTRACTORS

+ OPTIMIZING THE SUPPLY CHAIN + THE LABOR SIDE OF THE SUPPLY CHAIN + PARTNERING WITH LOCAL SUPPLIERS

MAY 1S T, 9:05 A .M .

A CONTRACTOR SEES THE LIGHT AND SURVIVES THE BLAST IN AN INS TANT, N ATE PE TER SO N L E A R NE D THE VA LU E O F CN A’ S R I SK CO NTRO L R E SO U RCE S

IDEAL AD Nate Peterson of HandiDigits Electric has over 15 years of experience, but he wasn’t expecting the arc blast that came from his customer’s transformer door. Luckily, Nate was prepared. Thanks to his IEC’s safety training and an Arc Survival course from CNA Risk Control, he knew to wear proper Personal Protection Equipment (PPE) before starting the job. So instead of a costly legal claim and a lengthy hospital stay, this Master Electrician made it home for dinner and had some extra time with the kids. Well done, Nate.

When you’re looking for programs that help make IEC members safer and their businesses ® stronger … we can show you more.

To learn more about CNA’s coverages and programs for electrical contractors, contact your independent agent or visit www.cna.com/iec.

The examples provided in this material are for illustrative purposes only and any similarity to actual individuals, entities or places is coincidental. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. CNA is a registered trademark of CNA Financial Corporation. Copyright © 2015 CNA. All rights reserved.

INTRODUCING THE

2015 IEC NATIONAL POLICY CONFERENCE!

INDEPENDENT ELECTRICAL CONTRACTORS

MAY 4-6, 2015 | WASHINGTON, D.C. WASHINGTON MARRIOTT GEORGETOWN Formerly known as the Legislative Conference, IEC National has expanded programming for 2015 to include more than just legislative activity. This new Policy Conference will include regulatory actions, legislative trends, advocacy news, and much more. It will also include IEC’s signature networking events and visits to Capitol Hill to meet with elected officials and voice IEC’s opinions on critical issues.

2015 Policy Conference attendees will hear from key Administration officials and congressional leaders and spend an impactful day on Capitol Hill educating Members of Congress and their staff on the issues that matter most to them. Breakout sessions will cover topics such as: • The political landscape • Recent NLRB rulings • OSHA compliance • Federal contracting • And more. Join IEC May 4-6 in Washington, DC, to position your business for success in this ever-changing legislative and regulatory environment!

To register, visit www.ieci.org.

INSIGHTS

CONTENTS

APRIL 2015 | THE MAGAZINE FOR TODAYâ&#x20AC;&#x2122;S ELECTRICAL AND SYSTEMS CONTRACTORS

FEATURES

12 United We Stand, Divided We Fall BY TED GARRISON

16 Optimize Your Supply Chain

BY TODD REED

20 The Labor Side of the Supply Chain

BY NIEL DAWSON

24 Vertical Supply Chains Increase Tool Quality

BY THOMAS R. KLEIN JR.

26 Partnering with Local Suppliers

BY ADAM COOPER

www.ieci.org | April 2015 | Insights Magazine

CONTENTS CONT’D. 6

32 COLUMNS 6 President’s Message 8 From the Editor’s Desk 10 Marketing Matters 30 The Home Depot Advertorial 32 IEC Foundation 33 Inside IEC

34 Featured Products 36 Code Corner 37 Ad Index 38 Safety Corner

COMMENTS? 4

Insights Magazine | April 2015 | www.ieci.org

We want your feedback! Send comments or suggestions to communications@ieci.org.

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sprint.com/iecmemberemployees **Monthly charges exclude taxes and Sprint Surcharges [incl. USF charge of up to 16.8% (varies quarterly), up to $2.50 Admin. and 40¢ Reg./line/mo. and fees by area (approx. 5–20%)]. Surcharges are not taxes. See sprint.com/taxesandfees. Activ. Fee: $36/line. Credit approval req. Sprint Family Share Pack: Offer ends 5/14/15. No discounts apply to access charges. Includes unlimited domestic Long Distance calling and texting. Data allowance as specified. Third-party content/downloads are add’l charge. Int’l svcs are not included. Max of 5 phone/tablet/MBB lines. Data: Includes 12GB of on-network shared data usage and 100MB off-network data usage. Add’l on-network data usage: 1.5¢/MB. Add’l off-network data can be added by opt in only for 25¢/MB for tablets/MBBs. Mobile Hotspot Usage pulls from your shared data and off-network allowances. Monthly Access Charge: After 5/31/2016, customer will be charged applicable access charge in addition to data allowance charge. To avoid charges, customer must contact Sprint to make changes. Sprint Easy Pay or lease obligations will still apply if applicable. Switching to the 12GB tier from a higher data tier will terminate your waived access promotion. Usage Limitations: Other plans may receive prioritized bandwidth availability. To improve data experience for the majority of users, throughput may be limited, varied or reduced on the network. Sprint may terminate service if off-network roaming usage in a month exceeds: (1) 800 min. or a majority of min.; or (2) 100MB or a majority of KB. Prohibited network use rules apply — see sprint.com/termsandconditions. Contract Buy Out Offer: Limited time offer. Consumer, SDP and CL lines purchasing a new device with: Sprint Easy Pay, Sprint Lease, iPhone for Life Plan, at full MSRP, or Certified Pre-Owned and porting the new line on a service plan. Amount based on ETF (early termination fee) charged or remaining balance on install-bill device (excludes prepaid devices). All lines must be ported from an active wireless line at another carrier and remain active and in good standing to receive the American Express Reward Card. Requires you turn in your current competitor phone associated with the installment billing balance or ETF submitted to Sprint. Important: If you do not turn in the correct device in good working order (i.e., must turn on), you will be charged up to the amount of the Reward Card provided to you. You must register and submit your final bill showing your ETF or installment balance within 60 days of switching to Sprint. Allow 15 days for your Reward Card to arrive. Register at sprint.com/joinsprint. Excludes 100+ Corporate-liable, upgrades, replacements and ports made between Sprint entities or providers associated with Sprint (i.e., Virgin Mobile USA, Boost Mobile, and Assurance). Reward Card: Terms and conditions apply to Reward Cards. See Cardholder Agreement or visit americanexpress.com/sprint for details. Subject to applicable law, a $3.00 monthly service fee applies beginning in the seventh month after Card issuance. Card is issued by American Express Prepaid Card Management Corporation. American Express is not the sponsor of this promotion. SDP Discount: Avail. for eligible company employees or org. members (ongoing verification). Discount subject to change according to the company’s agreement with Sprint and is avail. upon request for select monthly svc charges. Discount only applies to data service for Sprint Family Share Pack. Not avail. with no credit check offers or Mobile Hotspot add-on. Other Terms: Offers and coverage not available everywhere or for all phones/networks. May not be combined with other offers. Restrictions apply. See store or sprint.com for details. ©2015 Sprint. All rights reserved. Sprint and the Sprint logo are trademarks of Sprint. N155210 Other marks are the property of their respective owners

MANAGEMENT PRESIDENT’S MESSAGE METHODS

ADVOCATE FOR YOUR BUSINESS

By Mark Gillespie “Real patriotism is a willingness to challenge the government when it’s wrong.” - RON PAUL In early May, many members of IEC will be converging on Washington, D.C., to participate in the 2015 IEC National Policy Conference. Here we will have sessions covering National Labor Relations Board (NLRB) rules that impact electrical contractors, OSHA enforcement policies, tips for federal contracting, the current political landscape, and insights into the 2016 election. We will then have the opportunity to visit Capitol Hill, where we will meet with our Congressional representatives and have an open dialogue about regulatory and legislative policies that affect our businesses and industry daily. Considering the political climate in our nation’s capital with the current administration and legislative makeup, there will be plenty of regulatory and legislative policies to discuss. IEC contractors and its representatives have been battling the NLRB over

“Ambush Election” rules and project labor agreements for years. IEC is also looking for support for the Secret Ballot Act that will guard against “card check,” repeal of the Davis-Bacon Act in favor of updated federal prevailing wage laws, and the Responsibility in Federal Contracting Act that would take the determination of wages in federal construction projects out of the hands of the Department of Labor. IEC also seeks common ground on issues of registered apprenticeship and the reauthorization of the Perkins Act, which funds high school technical and career programs.

If you are anything like me, you must be quite disappointed with the current political climate in D.C., an administration that overreaches its constitutional powers, Congressional gridlock on many pressing issues, and OSHA and the EPA changing regulations without business owners in mind. If so, support the legislative policies that are significant to the success of your business. I encourage you to challenge your legislators whether you make it to Capitol Hill, visit them in your hometown, call them on the phone, or write them a letter or e-mail.

There are several tax and energy policies that are important to our industry, these include tax reform and policies that incentivize innovative, smart, energy-efficient development that create jobs in the construction sector. IEC is in favor of an energy policy that supports renewable energy and the continuation of the 179D tax deduction.

Mark Gillespie is IEC’s 2015 National President. As the principal elected officer of the association, Gillespie serves as the National Chair to the Board of Directors, House of Delegates, and Executive Committee. He also continues to serve locally as chair of the A&T committee and trustee at the IEC of Greater Cincinnati chapter. He has been in the electrical trade for over 40 years and is currently the owner and CEO of TMI Electric in Cincinnati, Ohio.

All of these policies are important and affect our businesses and our participation is important to the health of IEC and the merit-shop philosophy.

Insights Magazine | April 2015 | www.ieci.org

SHOW OFF YOUR

IEC PRIDE The IEC Pride Store is back! From shirts to hard hats, pencils to mugs, the IEC Pride Store will equip you to show off your IEC Pride wherever you are. Go to www.ieci.org to visit the new and improved Pride Store today.

Insights MANAGEMENT

FROM THE EDITOR’S DESK

EDITORIAL OFFICE Thayer Long, Publisher tlong@ieci.org Joseph Cephas, M.A., Editor-In-Chief jcephas@ieci.org Deborah Stadtler, Managing Editor dstadtler@ieci.org Marlise Drischler, Associate Editor mdrischler@ieci.org ADVERTISING Rich Ryan, CEM RGR Services (419) 734-5545 rgrsvc@gmail.com DESIGN/ART DIRECTION Think Baseline PRINTING Mount Royal Printing 2015 IEC NATIONAL OFFICERS President Mark Gillespie, Clarksville, Ohio Secretary/Treasurer Joseph Hovanec, Rahway, New Jersey Senior Vice President Bruce Seilhammer, Camp Hill, Pennsylvania Vice President Lloyd Quinney, San Antonio, Texas Immediate Past President Gordon Stewart, Houston, Texas Insights is published in January/ February, March, April, May/June, July, August, September/October, and November/December by the Independent Electrical Contractors, Inc. Insights Independent Electrical Contractors, Inc. 4401 Ford Ave., Suite 1100 Alexandria, VA 22302 Tel: (703) 549-7351 Fax: (703) 549-7448

The Supply Chain of Insights As a building is being constructed, I often marvel at the speed of the construction and the balance of all trades to ensure a safe and sound structure. From an external perspective, we often overlook the millions of products and supplies that go into the development of the building. Contractors know all too well about the importance of reliable products and necessity of a seamless and efficient supply chain. One gap in the chain can delay an entire project. This issue of Insights gives a 360° view of the components in a successful supply chain for electrical contractors. Our team of writers cover a variety of topics that will help improve the fluidity of your company’s supply chain. As I read through the tremendous articles, I began to reflect on IEC’s supply chain and how we deliver Insights to 7,000 readers eight times a year. The production of Insights begins two months in advance when we receive articles from our pool of writers. Each issue has a theme and the majority of the articles relate to the theme. We then meet as an editorial staff and lay out every article and advertisement with the goal of encouraging every subscriber to read it from cover to cover. Following the editorial meeting, we send the layout to our graphic design team and discuss artistic direction. We then have three or more rounds of edits with our graphic designers that span over two weeks. When the design, content, and artistry of the issue is finalized, it is sent to the printers. The printers provide a final proof of the issue to guarantee layout and color matching of graphics. At the printer, the pages are printed and sorted before going to the bindery to be completed. Upon return from the bindery, the magazine is in its final format. The final stop is the United States Postal Service to be sorted and delivered to your mailbox. Much like the construction of a building, there are many unseen components to this magazine. In both cases, all steps of the process must synchronize in order to provide a quality product on time. Electrical contractors rely on their support system of suppliers and distributors to help manage in the supply chain process. What better way to learn how to have the most efficient system than to hear directly from suppliers and distributors (on page 20 and 26).

www.ieci.org

Established in 1957, IEC is a trade association with more than 3,000 company members and 53 chapters nationwide. INDEPENDENT ELECTRICAL CONTRACTORS Headquartered in Alexandria, Virginia, IEC is the nation’s premier trade association representing America’s independent electrical and systems contractors. IEC National aggressively works with the industry to establish a competitive environment for the merit shop — a philosophy that promotes the concept of free enterprise, open competition, and economic opportunity for all.

JOSEPH G. CEPHAS, M.A. Vice President of Public Affairs Editor-In-Chief, Insights IEC National FOLLOW ON TWITTER: @JosephCephas

As a reader, we are interested in hearing from you. If you have a specific topic you would like to see covered in an upcoming issue or a new delivery method, please contact the Insights Editorial Staff at communications@ieci.org.

Insights Magazine | April 2015 | www.ieci.org

MARKETING MATTERS

FINDING AN

COMPANY THAT WILL MAKE YOUR BUSINESS STAND OUT BY ALAIN PARCAN

WHAT IS SEO? SEO is the act of adjusting onsite and offsite content with the goal of generating leads via organic page one placement for targeted search phrases.

Insights Magazine | April 2015 | www.ieci.org

e all know horror stories about electrical contractors who wasted marketing dollars on search engine optimization (SEO) scams, wellintentioned but misguided web marketing efforts, or even tech folks who can’t answer simple business questions. Unfortunately, while some SEO companies have at least adequate technical skills, most don’t provide business owners with the one thing they really want—a voice on the other end of the phone. You would think it wouldn’t be too difficult to find a company willing to explain its process, right? Guess again. So, what’s an electrical contractor to do when it’s time to pull marketing dollars out of traditional marketing strategies and start investing on getting page one ranking on Google?

KNOW WHAT TO EXPECT Knowing what to reasonably expect from an SEO firm can make all the difference. And knowing what you want from the firm will help you find the right one. Start by asking yourself the following questions at the beginning of the process: • Do you know which electrical keywords receive the most traffic? (i.e. electrician vs. wiring installer. Hint: there are pros and cons to both.) • Are you willing to wait a few months for significant results? (Page one rank on Google) • Do you want a dedicated point of contact? • Will you spend a few hundred dollars per month to focus on just a handful of keywords or a few thousand per month for an all-encompassing SEO firm?

You should also:

If an SEO company is hesitant to give up any information about its process or provide a road map for your success, start looking elsewhere.

• Ask for references in your industry and find a company that has experience marketing online for electrical contractors. You’ll be amazed how many “bad apples” this will weed out.

3. The “long time, no hear” routine

• Ask how to reach them if you have questions. You should have a direct phone number and e-mail address for contacting your provider and a turnaround time under one business day. • Ask what the plan is if your results are not satisfactory. Your SEO provider should work with you to try out new strategies if current ones aren’t working. Most SEO firms will leave you feeling disappointed if you don’t do your research beforehand to confirm their expertise meets your needs.

WHAT TO AVOID Here are the four most common ways that SEO firms disappoint their customers. Get a better return on your marketing dollars by learning to steer clear of these common traits among amateur SEO marketers. 1. The “overpromise & underdeliver” routine The majority of SEO companies will overpromise to get your company more business or assure you they have inside access to Google’s formula. Assurances like these should set off red flags right away. Be wary of those that promise you the moon just to get you to sign up. 2. The “hide what we’re not doing” routine If an SEO company isn’t taking the time to educate you about its process, then one of three things could be the reason: It might not want to give away “proprietary” secrets; it has no intention of truly delivering results; or it is using “black hat” tactics that work in the short term but threaten your ranking.

Some SEO providers will attempt to convince you to sign a contract, but then go dark any time you try to reach them to see what they’ve done for your account. You should expect to have a dedicated point of contact and a direct line to reach them so that you can have your questions answered right away. 4. The “excuse me, come again?” routine Many people at SEO firms are hired for their technical skills, not their ability to talk to customers or listen to their business needs. The best SEO providers are good at both. Not every service provider can get it right ALL of the time, and SEO providers are certainly not exempt from this rule. Make sure you understand exactly what you’re getting, why it’s right for your business, and what the price really is before you sign on the dotted line. Remember, if it sounds too good to be true, it probably is. While web marketing can be confusing, it’s easier when you remember that hiring an SEO provider is just like hiring a contractor. Ask as many questions as you can. Getting to page one on Google is realistic if you’re working with the right firm. But, finding an SEO provider you can trust and who can get you great results while communicating with you can take some research. Look for an SEO partner who takes the time to understand your needs and educate you, and you will get the results you deserve. Alain Parcan is Director of Marketing for Market Hardware, Inc. Market Hardware helps electrical contractors compete on the web and offers special discounts for professional association members. For more information, call (888) 381-6925 or visit www.markethardware.com.

www.ieci.org | April 2015 | Insights Magazine

FEATURE

UNITED WE STAND, DIVIDED WE FALL BY TED GARRISON

Insights Magazine | April 2015 | www.ieci.org

“All for one and one for all, united we stand, divided we fall.” The classic quote by the Three Musketeers is appropriate to the construction industry and is at the heart of supply chain management. Any discussion of supply chain management requires the term to be defined. While many people use the term, far too often they misuse it. They think of supply chain management in terms of cost or functions such as purchasing, transportation, or warehousing. Unfortunately, that is not supply chain management. For most people in the construction industry, supply chain management requires a paradigm shift in thinking. In essence, it requires a totally new way of looking at the construction process. In the traditional approach to construction, the buyer attempts to obtain the lowest price by getting multiple bids. While this approach may appear to generate the lowest price for an item, it typically does not create the best price for the project. The practice of attempting to buy each product or service on a construction project at the lowest cost is referred to as sub optimization. Unfortunately, Edwards Deming began arguing in the 1950s that sub optimization typically leads to higher costs. The reason is that price is meaningless, unless it considers the product’s or service’s cost impact on other project costs.

For example, one distributor of light fixtures may offer a lower price because he plans to deliver all the fixtures at one time. Early delivery requires all the fixtures to be delivered before the first fixture is needed. This approach may save some transportation costs, but at what other added costs? When fixtures are delivered before they are needed, the contractor is forced to store them at the site, and most likely will have to move them several times before they are installed. Early fixture delivery results in additional costs for the electrical contractor. Research confirms that this is a common practice causing material to be moved four and half times on average before it is installed. CONTINUED ON PAGE 14 >

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There is the expense of protecting the fixtures and the labor cost of moving them. The longer the fixtures are on the site, and every time they are moved, increases the likelihood they will be damaged. Further, workers are more likely to be injured when moving materials then when installing them. Resulting injuries would have a negative impact on the contractor’s worker compensation modifier, which would raise costs not only for the current project but future projects. When all the above extras costs are added up, they typically exceed the small savings in transportation costs offered by the earlier delivery. A statement by the Project Management Institute (PMI) further complicates the problem. They have stated, “The buyer becomes the customer and is thus a key stakeholder for the seller.” In essence, PMI is saying that when the general contractor or specialty contractors buy materials or services, they are the customer. First of all, they are not the customer. The client is the only customer, but I will discuss that later. In the traditional approach, the most important thing for a majority of contractors is to obtain the lowest material and subcontractor prices in order to win the bid. Unfortunately, this approach ignores hidden costs to the contractor as illustrated by the fixture example and does not take into account the negative cost impact to other contractors or the client. In contrast, the client is concerned not only with the individual item’s price, but the total project cost as well as the long-term cost impact. In other words, the client is concerned about total price and how those items impact his performance and operations, including operational costs such as maintenance and energy costs. So if supply chain management is not about cost and functions, what is it?

SUPPLY CHAIN MANAGEMENT Supply chain management is the flow of materials and information throughout the construction process. The movement should be an integrated process that uses technology to meet the customer’s expectations. Supply chain management is a reversal of the traditional practices where contractors and vendors supply their product or service the way they want. In essence, they provide their product or service in the way that is best for themselves. A problem occurs in construction when each contractor and vendor attempts to do what’s best for itself because chaos is created. In an environment of chaos, no one benefits. It is easy for contractors and vendors to justify the position that they must do what is necessary to protect their interests, because their margins have been squeezed too tight. Unfortunately, the chaos caused by everyone only looking out for number one has a negative impact on everyone involved with the project. What saves many contractors is the fact this practice has been in place for so long that their unit prices reflect many of the problems and inefficiencies created by the traditional approach. However, the client pays more than is necessary, and this negatively impacts the contractors. Contractors are paid based on the value they deliver, so when the process is full of inefficiencies, the value to the client declines, and so will the contractor’s profit margins. This situation in part explains why contractors have experienced declining profit margins for decades. In contrast, supply chain management understands that working together, in essence, all for one and one for all, many of the inefficiencies and excess costs can be removed. The collaboration across company lines is essential because most of the inefficiencies that occur in the construction industry occurs between the tasks, not within the tasks. For example, if the electrical contractor paid the fixture

Insights Magazine | April 2015 | www.ieci.org

distributor extra transportation cost to make more timely deliveries, it would reduce the project’s cost. Supply chain management helps improve the handoff of the baton. It doesn’t matter if each runner on the track relay team improves his individual time by a few seconds if he keeps dropping the baton at the exchange. For this reason, supply chain management focuses on the system as a whole. It constantly asks how we can better work together to improve the overall project efficiency and performance. The driving force behind supply chain management is aligning everyone on the project to deliver what the project’s customer, the ultimate buyer, needs. When this becomes the goal, all the discussions revolve around a single idea: What is in the best interest of the client? Again, let’s examine this concept in terms of the fixture example. Since early delivery increases project costs, it’s in the best interest of the project, and, therefore, the client’s best interest, to pay the increased transportation cost because it will reduce project costs. Supply chain management is a joint effort between the client and construction/ design team to exploit the savings, service, and benefits of supply chain management. This is achieved by removing inefficiencies, excessive costs, and excessive inventory from the supply pipeline. Supply chain management includes paying the right price or best price for everything because that aligns the entire effort with what’s best for the project and the client. Supply chain management is about the flow of material and information from its source to its destination. In construction, as in any industry where the final product is unique, it’s essential that this information flow two ways. It must go from the client to all the designers, contractors, and vendors, so they know and understand the client’s desired result. Then there is the flow of information between all the vendors and contractors needed to coordinate the design and construction efforts. It’s also about the flow of material from

raw materials through installation. Supply chain management helps to ensure the flow of material is done in a timely and cost effective manner. The only way to do this is through an integrated effort between all parties.

FINAL THOUGHT The ideal supply chain management system includes the design team, the contractors, the vendors, and the client. This is critical because many of the inefficiencies and excess costs occur as a result of poor collaboration between the design and construction teams. In the design-bid-build arena, there is little collaboration as contractors are told what materials to use and how to install them. The lack of collaboration creates many inefficiencies. For that reason, it is highly recommended that supply chain management include the entire design and construction process. However, it is recognized that the construction team does not dictate the delivery method. Of course, contractors can try to influence the decision, but ultimately, the customer determines the delivery method. However, regardless of the delivery method, the construction team can still lower its project cost by implementing supply chain management over the construction effort. When the construction team collaborates, as opposed to everyone attempting to defend his or her silo, the construction team can reduce the project cost. Lower costs allow the team to submit more competitive bids while increasing their profit margins.

SUPPLY CHAIN MANAGEMENT FOCUSES ON THE SYSTEM AS A WHOLE. IT CONSTANTLY ASKS HOW WE CAN BETTER WORK TOGETHER TO IMPROVE THE OVERALL PROJECT EFFICIENCY AND PERFORMANCE.

Ted Garrison is the principal at New Construction Strategies. As an international speaker, author, and consultant, he is a catalyst for change within the construction industry. He can be reached on e-mail at Ted@TedGarrison.com or followed on Twitter @TedGarrison.

www.ieci.org | April 2015 | Insights Magazine

FEATURE

Optimize Your Supply Chain BY TODD REED

Insights Magazine | April 2015 | www.ieci.org

here are some things that are best left to the experts. You choose the best surgeon in town to operate on a family member. You trust major car repairs to a certified mechanic. Similarly, you should allow specialists in distribution to optimize your supply chain. Generally speaking, a supply chain is the network of individuals and organizations involved in the process of moving a product or service from the producer to the end user—and distributors are a vital link in the supply chain. Warehousing, inventory management, kitting, transportation, and estimating are all key functions of a modern distributor. Despite the expertise and technology used by distributors today, many contractors still believe their role in the supply chain is vastly greater than it has to be. “When a contractor examines his or her business elements, they will most likely find work that someone else could handle more efficiently,” said Steven Horst, Graybar Vice President,

Service and Administration. “By allowing your distributor to handle supply chain responsibilities, you can focus on your core competencies and become more profitable.”

Ask for Help

A contractor’s job is vast. It’s often difficult for a contractor to step back and examine their operation with a critical eye. It can be helpful to bring a third party to help recognize redundancies and suggest process efficiencies—that’s where your distributor comes in. Reputable distributors not only provide competitive pricing on the items contractors need but can also minimize the effort it takes to order, manage, and move those items. Many distributors offer a variety of services that help you focus on productivity, not parts. The right distributor will work to determine what is causing your pain points and offer ways to fix them. Good distributors will also

help identify and eliminate unseen issues that are costing time and money. Graybar, for instance, offers a service for customers called an opportunity walk. Opportunity walks are designed to identify waste in a company’s processes and procedures, which could include how employees complete day-to-day tasks, warehouse receiving, inventory management, and shipping processes. “Opportunity walks allow us to understand the contractor’s operations. We sometimes find problems that are relatively easy to fix. For example, we’ve discovered that contractors can save about 2.5 percent in operations costs by simply holding pre-job meetings,” explained Horst. “By putting all of the moving parts together at the beginning of a project, each individual should walk away with a clear understanding of his or her role and how to achieve that goal. This meeting eliminates redundancies and keeps all the key players on the right track.” CONTINUED ON PAGE 18 >

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Eliminate Redundancies Bringing in a distributor with an outside perspective certainly offers an opportunity to offer simple suggestions, but distributors can also offer more complex ways to eliminate wasted time and money. “Suppliers make magnificent products. Distributors efficiently deliver the products. Contractors are experts at installing the materials and providing related services to the end user,” continued Horst. “There’s an old school paradigm that a contractor has to have trucks, inventory in their back room, and handle returns and order from multiple suppliers. Experts find most contractors have a 25 percent redundancy in their supply chain. Material movement, transportation, returns, packaging – those things are productivity killers for a contractor.” Many distributors count services such as warehousing, inventory management, shipping, and receiving among their core competencies, so they are well suited to examine a contractor’s practices and offer advice. Distributors can also recognize ways that contractors are creating unnecessary work for themselves and offer value-added services to make the operation run smoother and more efficiently. “Services should be customized to meet individual needs,” Horst continued. “Your distributor’s goal should always be to make your life easier. Good distributors will suggest services or a combination of services that will require little to no management on the part of the contractor.” Some useful services can include: Electronic estimating – This service uses software designed for contractors to takeoff, estimate, and manage their job

materials and update pricing from the supplier to create and send purchase orders electronically to the distributor. Distributors should be able to load a contractor’s personalized pricing structure into the program to remove any guesswork and provide instant, accurate quotations. These services can streamline a process by providing accurate labor estimations and reducing clerical errors. Kitting and preassembly – By packaging the components to provide a complete “kit” of materials required for assembly or installation, contractors can reduce administrative and internal labor costs while improving customer service and reducing returns. Kitting and preassembly services run the gamut. For example, materials can be grouped by specific jobsite need (i.e., by room and floor), which eliminates trips from the job trailer to the point of installation. Kitting can include more advanced tasks like IP camera assembly, IP burn-in, and labeling. Allowing the distributor to handle kitting and preassembly will allow workers to do more productive tasks. Material management e-solutions – Because up to 40 percent of time on a jobsite may be spent on material handling rather than installation and service work, some distributors offer inventory management solutions that can reduce the cost of purchasing and handling inventories by automating the process with simple technology. By using an app on an iPhone, iPad, or Android device, orders are sent directly to the distributor and material can be delivered when needed. Furthermore, it can help eliminate the need for returns. Returns, on average, equate to one percent of a contractor’s annual sales, whereas the administration and labor costs associated with returns equate to five percent of their sales. Accounting management – Some distributors have the ability to consolidate individual invoices into a single invoice, summarizing billing activity to help make paying invoices easy and efficient.

Insights Magazine | April 2015 | www.ieci.org

Maximizing the Supply Chain Many contractors say a top challenge is finding skilled workers. By taking a holistic view of the supply chain, contractors can make sure their employees are performing the jobs they were trained and hired to do. “It is imperative to make sure your skilled laborers are focused on the jobs they are trained to do,” Horst says. “If you’re paying your electricians to receive and handle material, you are not receiving the value of your employees. If you’re using electricians and technicians to do material management, you’re increasing your labor cost.” One of the most amazing things about utilizing the supply chain properly is that quick wins add up. Money is saved when redundancies are eliminated. Jobs are completed on time. And when costs are down, bids can become more competitive, resulting in more projects won. “When you use your supply chain, your time and effort can be better used for more productive work,” concludes Horst. “Ask your distributor to work to your advantage. You may be amazed at the results.” Todd Reed is National Market Manager for Graybar, an IEC National Platinum Industry Partner. With five years of experience within a family-owned distribution business and 10 years as a Graybar employee, he knows the importance of efficiency, safety, and productivity for electrical contractors. As National Market Manager at Graybar, Reed’s goal is to find the best products and solutions to help contractors work more efficiently, stay safe on the job, and win more productive and profitable business.

2015

WEBINAR SERIES

With the success of the 2014 Webinar Series, IEC has launched the 2015 Webinar Series on new topics directly related to your electrical contracting business. As part of IEC Training Advantage, these webinars are complimentary to all IEC members. For more information and to register, visit www.ieci.org.

APRIL 22, 2015 What Contractors Should Know About NFPA 70e, Electrical Safety in the Workplace Speakers: Larry Ayer of Biz Com Electric and Bruce Bowman of Fox Systems

MAY 20, 2015 Hiring and Retaining the Right People Speaker: Jim Schug of FMI

AUGUST 26, 2015 Changes in the National Electrical Code That Are Good for Your Business Speaker: Jeffrey Sargent of the National Fire Protection Association

NOVEMBER 2015 INDEPENDENT ELECTRICAL CONTRACTORS

To Be Announced

FEATURE

THE LABOR SIDE OF THE SUPPLY CHAIN By Niel Dawson

Insights Magazine | April 2015 | www.ieci.org

When thinking about the “supply chain,” one rarely thinks about labor, rather it’s about getting the product to the jobsite at the right time with the right specifications. The steps of this product supply chain are often well thought out, including establishing relationships with both distributors and manufacturers that one feels they can trust and rely upon when the time comes. But without establishing relationships with trusted suppliers of labor, a contractor cannot meet the needs of the customer, in spite of having all the materials on the jobsite. The dilemma a contractor faces on the labor, or workforce development side of the equation, differs drastically from the equipment or product side for a number of reasons. First, a contractor can usually pick up the phone, put in an order for product, and have a comfort level that the products will be available when needed. There are certainly exceptions to this, but there are also normally other sources (distributors or manufacturers) to get the required products. For the workforce side of the supply chain, one normally is not able to pick up the phone and order the type of additional workers you’ll need to complete a job. CONTINUED ON PAGE 22 >

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Right up front, it’s important to state that there is no “silver bullet” to developing a workforce. Most of you that have been involved with the skilled trades for any period of time already know this, but what I would like to accomplish here is provide you with a framework and more tools to help solve this problem. From all the statistics that we have seen, the workforce shortage in the skilled trades is only going to worsen as our current workers age and move into retirement. What we’ll explore here is not only applicable for the large contractor who may have a recruiter on staff, but we will also look at some simple strategies and activities small contractors can also implement. You may also have heard of some of these recommended activities before, but I also ask you to take a look at how many of them are you actively and consistently doing?

START WITH A PLAN To start, let’s develop an overall workforce development plan. Below is a basic plan that you can start with and modify according to your individual company needs. First, you must define your company’s individual positions with a job description. If you don’t have job descriptions, IEC has them available for you (call your chapter or national office) ranging from helper to superintendent. You can then modify them to meet your individual needs. Here’s an example of a typical range of positions you should list: • Helper • Apprentice • Electrician • Crew Leader • Foreman • Superintendent • Estimator • Project Manager

For the smaller contractor, you’ll combine some of these positions while larger contractors will have many more steps or specializations. The important part is that you are clear about the duties, and even of greater value, the skills that are needed for that position. In this manner, when you begin your search, you’ll know exactly what you are looking for and therefore recognize it when you find it. Next, be clear that there are three basic areas from which to fill these positions: 1. Entry level/helper position (always outside of the company) 2. Upper level from within the company 3. Upper level from outside the company With this in mind, you can set out on a strategy to fill positions in these three basic ways. Let’s start with area one, entry level, and work our way up. However, filling upper level positions from outside your company is the most pressing, and most difficult, area to fill. Filling entry level positions within your company takes more of an investment in the process and will also take longer to see the results. However, once you have the process in place, it will continue to feed your workforce needs for years to come. In talking with Tony Varamo, Workforce Development Coordinator for Metropower, he says, “I always try to hire entry level workers based upon a ‘cultural fit’ with the company, which means the work ethic of the individual can be groomed by Metropower so that they become a lifetime employee.” This is very important to understand, because it will guide you to which primary strategy you will use to fill your workforce. With that in mind, here’s a list of some ways to fill entry level positions, starting with the least amount of investment, and working your way up to more investment, or time, but greater return: • Referrals from current workers (this can also help with upper level positions) – consider paying a bonus to your workers whom refer good candidates to the company (watch the timing of the bonus; consider the level and longevity of the referred candidate).

Insights Magazine | April 2015 | www.ieci.org

• Utilize the services of the local IEC chapter for candidates – this may vary according to each chapter’s level of budget and service. • Place an ad in a local newspaper, trade publication, or sportsrelated news source. • Seek out other organizations that can supply pre-screened candidates. Examples of these are Goodwill, Job Corps, other local job prep groups, and churches. • Establish a relationship with other cultural or non-profit organizations such as 4-H, Boy Scouts, and minority or other relevant groups in your area. • Create a Facebook (and/or Twitter) account for your company with the focus on job opportunities. Then learn how to grow your followers and boost your message. • Contact the local high school and offer to stop in and talk with students and assist the appropriate instructor. You can also contact your local IEC chapter to help establish an in-house apprenticeship program at the school (some are already doing this). This can be a significant ongoing feeder program to your workforce. An important consideration when recruiting new workers, is that you will probably be dealing with the “Millennials,” those born between 1980 and the mid2000s. These are the largest generation in the U.S., representing one-third of the total U.S. population. While this is a whole other discussion, it is important to understand the difference, including the values of this population, as you focus on recruiting this age group. For example, millennials value balance in life, meaning family, work, and play, and are sometimes referred to as the “me generation.” They also value understanding why or how things work the way they do and are turned-off with the “do it this way because I told you to” attitude.

Area two, filling upper-level positions from within your company certainly takes time, but it also requires careful planning. Many of these individuals will also be in the Millennial bracket, therefore keep in mind what they value. • Communicate to your employees the value you have in education and learning (this is key, because if they don’t believe the company values education, they probably won’t either). • Offer an incentive program (tuition reimbursement, wage increase each year, etc.) to attend IEC’s Apprenticeship Program or other technical program. • If the worker has already completed an apprenticeship program, most chapters offer continuing education classes. If not available, suggest areas of training to the chapter or find other classes, including online learning, for your workers. • Make sure all employees know the promotional career ladder of your company and utilize it to promote them. Then make sure the other employees know about their achievements and promotions with announcements, newsletters, and company meetings.

Area three, filling upper-level positions from outside your company presents a different set of challenges, but it can be the fastest and quickest way to grow your workforce, especially when you land that new big job. • Utilize IEC’s loan/borrow (shared manpower) program. • Most IEC chapters also offer a resumé or employment referral services to their members. • Use a temporary agency not just for temporary workers but to screen for new workers. • Use a permanent employment agency. Steven Mitchell, Placement Specialist at Tech USA, says, “Many contractors don’t think of using a permanent staffing agency, but when a trusting relationship is established with your placement officer and the contractor, it becomes a very viable strategy to finding new skilled workers.” • Veterans are one of the biggest areas that contractors can use to expand their workforce. There are also tax breaks associated with hiring veterans. To find veterans go to www.ebenefits.va.gov/ebenefits/jobs.

Although this is not meant to be an exhaustive list of ways to solve the workforce shortage, it is meant to provide you with a framework and plan whereby you can strategically begin to consistently have workers available just as you do material. Let’s hope that everyone is paying the same attention to the workforce side of the supply chain as they are to the product side. You certainly can’t meet the customer’s needs if both material and labor aren’t readily available. Niel Dawson has been the Executive Director for both the Atlanta & Georgia Chapters IEC for 17 years. He began with IEC as their Training Director in 1996 with previous experience in work-based environments, including job placement and overall executive administration responsibilities of several multi-million dollar non-profit organizations. With an M.S. in Education and specialization in Human Services Development, Dawson has served on the IEC Foundation Board of Trustees and the Georgia Society of Association of Executives.

www.ieci.org | April 2015 | Insights Magazine

FEATURE

VERTICAL SUPPLY CHAINS INCREASE TOOL QUALITY BY THOMAS R. KLEIN, JR.

American manufacturing has become a bit like a jigsaw puzzle, with many companies using both domestic and international sources to create a finished product. This situation makes it very difficult for contractors to track down where different tools are made and by whom.

Insights Magazine | April 2015 | www.ieci.org

Contractors depend on the right tools for the right job, and often, the quality of the tool is more important than just its cost. While there are many ways to make and sell a product, some manufacturers are staying true (or going back) to their American roots by maintaining or developing vertically integrated supply chains in order to design, produce, and market tools that are innovative, durable, and safe.

entire process helps reduce mistakes because quality incentives are 100 percent aligned. The manufacturer of the product also has the most to lose from making low-quality products, which is not the case for companies that outsource all or part of the production.

One of the most efficient ways for a company to achieve this trifecta of performance, durability, and safety is to manage a vertical supply chain from beginning to end. Companies don’t want to put their name on a product without being able to guarantee its quality. Having quality control throughout the entire process is crucial to ensuring high product standards. This allows manufacturers the ability to develop and produce new, innovative products with the design, engineering, and manufacturing built in to optimize specific applications of the product. In addition, relying on thirdparty manufacturing that competitors use lends itself to having “me too” products that “fit the mold” from a manufacturing plant that may be the jack of all trades, but master of none. All contractors have had the struggle of trying to find a creative way to use the wrong or broken tool for a given job. As frustrating as that can be, contractors also know the time and actual costs of losing or breaking a tool because it was made incorrectly. The costs of time hit the bottom line when someone has to leave a jobsite to replace a cheaply made product. Other indirect costs include project delays and the contractor’s reputation. Purchasing a quality tool from a trusted supplier the first time is an easy way to avoid these hassles versus constantly having to replace lowquality tools. Experienced contractors have learned that it’s better in the long run to buy a tool from a vertical supply chain manufacturer because every step in the production process of a tool is a potential chance for a mistake. Maintaining full control and accountability by one organization throughout the

How does the vertical supply chain process benefit contractors? It’s simple. A product is more durable, reliable, and longer-lasting when all steps of the toolmaking process are adhered to including using quality materials and ensuring innovative procedures and practices meet the high standards that are set. Other benefits include more streamlined supply chains, which can keep product costs down. Because vertically integrated manufacturers don’t have to ship the part to multiple factories, paying for production time, transportation, etc., those costs aren’t included in the final product cost. Each additional company that contributes to the product needs to make a profit, which can increase the overall cost. In addition to manufacturers’ and contractors’ unique benefits received by purchasing products from a vertically integrated company, everyone also shares the benefits of reduced carbon footprints from non-valueadded transportation and packaging. Contractors should research and understand a company’s business structure and supply chain before purchasing tools. It’s important to know whether the tools being purchased have been well produced and are safe. The truth is that vertically integrated manufacturing results in better made American products for contractors, and ultimately, more American jobs. Thomas R. Klein, Jr. is co-president at Klein Tools. Previously, he was the general manager of Klein Tools, Heavy Infrastructure Strategic Business Unit. He holds a B.A. from Babson College, and received his MBA from the Kellogg Graduate School of Management. Klein Tools, an IEC Platinum level Industry Partner, is a 158-year-old, US-based manufacturing company that produces the best performing and longestlasting hand tools on the market.

www.ieci.org | April 2015 | Insights Magazine

FEATURE

BY ADAM COOPER

Insights Magazine | April 2015 | www.ieci.org

In the world of electrical contracting, we rely heavily on our suppliers and vendors to support us, but we typically don’t take the time to support them, to help them help us be successful.

WE EXPECT A LOT FROM OUR VENDORS: • We expect them to have industry and field knowledge of materials so they can accurately fill our orders. • We expect them to understand what a superintendent is requesting in “field language.” • We expect them to have answers for all our questions on the tip of their tongues. • We expect them to respond to our communications promptly. • We expect them to have everything “on the shelf,” ready and waiting for us. • We expect them to know what our needs are, usually before we communicate them. • We expect their pricing to be fair. • We expect them to support us unconditionally. CONTINUED ON PAGE 28 >

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FEATURE < CONTINUED FROM PAGE 27

Sometimes we experience the failure of a vendor to meet one or more of these expectations: • The material is not in stock. • Materials are backordered. • They ship us the wrong items. • They don’t respond to us fast enough. • Their price is too high. We blame our vendors for impacting our business with these “failures,” but what have we done to ensure success? Have we communicated effectively? Have we planned ahead to allow a reasonable amount of time to fulfill an order? Have we built a relationship with the vendor above the “order material, receive material, pay invoice” level? Have we engaged them as partners on our projects or in our businesses?

B UILDING A RELATIONSHIP

Instead of blaming our vendors, let’s explore what a more supportive and mutually beneficial relationship might look like. To begin, we need to shift our relationship with our vendors from that of customer > supplier to equal partnership. We must begin

to recognize that we need each other to be successful. Contractors need suppliers for information and materials, and they need us for orders and revenue. When was the last time you sat down with your local supplier’s branch manager and discussed your needs on a project or enterprise level? Have you ever had a conversation like that? Larger electrical contractors often put Master Vendor Agreements in place that define the terms and conditions of business transactions between the two companies. This agreement sets forth terms for items such as submittals, conforming materials, returns, payment terms, discounts, and insurance. In addition, this agreement binds the vendor to the contractor’s subcontract terms at the project level and makes them equally liable for delays, defects, insurance claims, indemnity, and documentation. In return for accepting this agreement, the contractor typically guarantees the vendor a certain level of business (total order value per year) and favorable payment terms. This is the starting point for a partnership. The next step is open communication. It is the contractor’s responsibility to clearly communicate their needs at the project and/ or enterprise level. At the project level, this is accomplished by bringing the vendor onboard early in the project. They should be given copies of the plans, specifications, and project schedule. The contractor will also need to complete thorough material

Insights Magazine | April 2015 | www.ieci.org

takeoffs and provide these to the vendor. This provides the vendor time to put together the required submittal packages. Be mindful that these takeoffs are for large material buyouts, not miscellaneous orders. Typically, these large buyouts are for scopes of work such as underground, rough, trim, branch wire, conduit, and feeders. Large equipment orders such as switchgear, panels, and light fixtures would also fall into this category.

T IMING THE MATERIALS

Once the vendor quotes the Bill of Materials for each takeoff, the contractor commits the buyout orders to the vendor well in advance of the material being needed onsite. The vendor agrees to bring the material into local stock and hold for the contractor for a set period of time, based on the project/ scope duration and anticipated release schedule provided by the contractor. Depending on the project subcontract, the electrical contractor may be able to bill the general contractor for stored materials. If so, the vendor can also invoice the electrical contractor for the same stored materials. The vendor is then paid when the subcontractor receives their

payment. If the subcontract does not allow billing for stored materials, then the vendor sends invoices for materials as they are released to the jobsite. (Note that billing for stored materials typically requires specific insurance requirements are met by the vendor. These will be detailed in the subcontract). The subcontractor should release portions of these buyouts in sufficient quantities that the vendor is not overly burdened with delivery costs and material handling. There are no hard and fast rules, but typically material releases are not larger than one or two delivery trucks can transport. It should contain enough material to keep the jobsite supplied for two to three weeks of installation work, providing there is sufficient laydown area available at the jobsite. On the other end of the spectrum, the releases should not be so small and frequent that the vendor is delivering more than once per week.

L ONG-TERM DISCOUNTS

At the enterprise or company level, electrical contractors can leverage these relationships to “lock in” pricing for large commodities orders over a set period of time. For example, if a contractor can predict the amount of copper or aluminum

it will use in a year, it can lock in pricing per pound with a distributor and fix the costs for these materials for a set amount of time, typically 12 months. Contractors can also negotiate long-term fixed costs for commodities materials such as conduit, fittings, straps, strut, and wiring devices. This helps contractors to improve estimating accuracy and avoid material cost escalation between bid time and project award, which often lags several months on larger projects. By committing to purchase this material, it also helps the vendor to project annual revenue and bring the right materials into stock for future buyouts and miscellaneous orders. This relationship may also help contractors get better multipliers (discounts) on large purchases such as switchgear, generators, and lighting packages from vendors. If an electrical contractor can group similar purchases from multiple projects together and commit to buying them all from the same distributor, they can typically save three to five percent off the combined price. For example, if a contractor has three projects with switchgear packages worth $75,000 each, and they can get a four percent discount by purchasing them all from the same vendor/manufacturer, that would result in a total of $9,000 savings, or $3,000 per project. The more business a contractor does with a single vendor, the greater the possibility for shared savings.

The final step is feedback. The contractor and the vendor must keep the lines of communication open to share what’s working and what’s not. Problems should be identified early and worked on together for resolution. Don’t assume the other one is going to fix it. You’re in this together, and you must work as partners to resolve conflict and miscommunication. Just like a marriage, business partnerships take work. You must communicate if a need is not being met. Used correctly, these methods are designed to create mutually beneficial partnerships between vendors and contractors. By helping each other to be more successful in their respective roles, it decreases the occurrence of unmet expectations and increases the opportunities for savings, growth, and success. Adam Cooper has over 20 years of electrical construction and contracting experience. He has worked for several of the largest electrical contractors in the US and holds a Class II Unrestricted Electrical Contractors license in the state of Georgia. He started Ascent Consulting as a way to give back to the electrical contracting community and now offers his knowledge and experience to organizations looking for ways to grow and improve. Visit www.ascentconsult.net for more information.

www.ieci.org | April 2015 | Insights Magazine

ADVERTORIAL

Have It Your Way By Dennis Harrington

Insights Magazine | April 2015 | www.ieci.org

Whether at home or on the job, weâ&#x20AC;&#x2122;ve grown accustomed to the ease and convenience of buying online. Electrical contractors are no exception. The idea of putting into practice a just-in-time, made-to-order materials delivery system appeals to contractors looking to free-up truck space, minimize reliance on runners, and reduce jobsite waste. Bottom line: An online-based buying strategy can help save time, money, and aggravation.

To meet the needs of electrical contractors eager to grab their laptop or tablet when they need to secure supplies, The Home Depot is stepping up its digital game and offering a whole new level of online ordering convenience for the trade.

• Delivery to jobsite or other location —no runner required

• Easy, no-surprise order tracking

“Would I call this a breakthrough? Absolutely,” Light says. “It all goes back to that guy sitting with a 250- or 1,000foot reel of flexible conduit, cutting away all day. We’re making it easy for the contractor to have him do something else.”

Take wire. Purchasing wire by the foot or in bulk in the store is nothing new for The Home Depot customers. “We’ve done it forever,” says Randy Light, The Home Depot senior merchant - electrical.

With so much demand for online ordering, The Home Depot is planning to turn up the dial. “At some point, we plan to offer online wire that’s not available in the store. We’re not there yet, but it’s the goal.”

Light says The Home Depot is considering offering contractors the same kind of “have it your way” custom-cut modular cable assembly convenience as wiring. That’s a doubly good deal for contractors.

What is different is offering wire by the foot online. On homedepot.com/pro or the THD Pro App, contractors can now purchase a single foot of 10-gauge Romex or a variety of other wire configurations by using a couple taps or mouse clicks.

But they’re close. Today, electricians shopping The Home Depot website can find more than 20 different types of service entry available by the foot.

The Home Depot offered the custom-cut online option last year and found that it gave buyers of all types the freedom to purchase even small lengths of Romex, THHN, thermostat, sprinkler, bare copper, or service entry cable online. “We initially thought we’d get most of our business from small contractors and DIY customers,” Light explains. “But, based on the wire configurations we’re selling, the ordering is very pro-focused. It’s very similar to our in-store business.”

Growing Popularity Maybe that’s not so surprising. “Many in the industry don’t give enough credit to contractors for being tech-savvy or quick to jump on a good idea. They definitely ‘get it.’ I think many say to themselves, ‘I’m so busy. Why don’t I just order what I need now and the wire will be waiting for me at the jobsite on Tuesday.’” Light cites a number of other reasons why so many pros are jumping on the online bandwagon for their custom-cut wire needs: • Less waste • Less space needed on the truck • Likely cost savings (versus pre-packaged lengths) • Little or no cutting • Easier to handle and move the material

• Speedy, convenient ordering, especially from the THD Pro App

Dennis Harrington is an award-winning writer for Hanley Wood, a media company serving the residential and commercial design and construction industries.

“As always, it comes down to offering customers what they want, just the way they want it. We view it as our obligation to the customer,” Light observes.

Quick and Easy Demand from time-crunched contractors has led The Home Depot to offer another convenient option in stores: modular cable assemblies. These prepackaged whips are a gamechanger for any contractor who has split a finger or grimaced at the idea of cutting and assembling armored-cable assemblies from scratch. True, it may take only three minutes or so to work through an assembly. But having to accomplish that task dozens of times means someone is diverted from productive installation tasks. “Even with an MC cutter, it’s not easy to stand around and cut metal cladding, cut the ends, and then strip them time after time,” Light explains. “Our modular cable assemblies are available now in our stores in the most popular configurations. They’re a big time-saver for our customers and reduce the risk of claims for a cut finger or hand.” Light says the assemblies are available in 8-, 10-, 12- and 15-foot lengths in 10-, 12-, and 14-gauge solid or stranded wire configurations. The assemblies are also pre-stripped, with fittings pre-installed and color-coded for easy identification.

www.ieci.org | April 2015 | Insights Magazine

IEC FOUNDATION

IT’S NOT TOO LATE TO GIVE TO THE

2015 IEC FOUNDATION

SCHOLARSHIP FUND By Lauren Stewart, IECF Administrative Coordinator

2014 SCHOLARSHIP WINNERS

DAWNITA CLAYCOMB IEC Kentucky and Southern Indiana

EZEKIEL EVANS IEC Southern Colorado

JOSEPH MATSANGA IEC Fort Worth/Tarrant County

CLAUDIA MORALES IEC Southern New Mexico

DANA WALKER IEC Rocky Mountain

BRYAN TASSAINER IECA of Arizona

BRENDON GLEICH Central Ohio AEC-IEC

JESSE SORUM IEC Dakotas

ore than 7,500 electrical apprentices are currently enrolled in IEC Foundation (IECF) funded training programs. In 2007, there were more than 10,000! This recent deficit in skilled electricians slows down our recovering economy and cannot meet the needs of contractors. The U.S. Bureau of Labor Statistics (BLS) says that by next year the nation will need more than 734,000 electrical workers – 78,000 more than currently employed. Many electricians were laid off during the recession and did not return to the industry. The cost of training programs forced many apprentices to drop out, and an uncertain future

caused many potential apprentices not to apply. With our economy now on the incline, these young men and women are returning to the workforce and training programs searching for a future for themselves and their families. Last year, contributions to the IEC Foundation Scholarship Campaign helped fund scholarships to 30 very deserving students. We need your continued support to provide much-needed assistance to more young men and women who want to enter our industry. Our 2015 IEC Foundation Scholarship Campaign goal is $100,000 for tuition assistance to students entering or currently enrolled in a four-year IEC

Insights Magazine | April 2015 | www.ieci.org

apprenticeship program. The $63,000 we raised last year provided 30 students with scholarships. However, we could not provide scholarships for the other 60 applicants! With your help, we are confident we can achieve our goal and add to the $255,000 in scholarships the IECF has awarded over the past seven years. Contact us at (502) 417-0157 for more information on how you can give or send your donation directly to: The IEC Foundation P O Box 20687 Louisville, KY 40250 We are counting on you!

INSIDE IEC

A Grant to Grow Apprenticeship in Pennsylvania By Deborah Stadtler

he Central Pennsylvania Chapter of IEC has been awarded a $50,000 Apprenticeship Program Grant from the Pennsylvania Department of Labor & Industry to support the training of apprentices to become electricians - a high-priority occupation in Pennsylvania on both a statewide and regional level. While Central Pennsylvania IEC had never applied for any previous government grants, when Pennsylvania Governor Corbett announced that he was setting aside $1 million for existing apprenticeship programs to the building trades unions, the chapter debated whether to even write the proposal. Knowing that the maximum award would be $50,000, which could be gobbled up by as few as 20 programs, the chapter decided to act quickly. The grant was written with a request for the maximum amount and divided into five categories: Tuition expenses (textbooks and code books), safety training (OSHA 10 hour, aerial lift, grounding and bonding), instructor continuing education and training, training equipment, and program outreach and recruitment.

Officially, the project is titled “Support, Strengthen, and Expand lEC Apprenticeships.” The project will have three objectives to support, strengthen, and expand. The support aspect will offset current costs of IEC apprenticeships by partially underwriting the purchase of crucial books. The strengthen aspect would provide certification and continuing education to instructors. Expand would be executed through program outreach and recruitment. “We hoped that if the state didn’t like one category, they would still award us money in the other areas,” said Christi Buker, Executive Director of Central Pennsylvania IEC. “After submitting the proposal, it took longer than expected to get an answer, but in September, we were told that we would receive the full $50,000.” The signature process for the full agreement and the required notice of financial obligation took another five months to finalize. Finally, the chapter can get rolling to complete the training, outreach, advertising, and purchases before September 2015 when the grant period ends. “We are very excited about this opportunity,” said Buker. “While it is

a one-time grant, it is a much appreciated boost both financially and for morale to our members. It is allowing us to do some things right now that we might not have been able to do for a few more years or at all!” “It is a tribute to Central Pennsylvania IEC and it’s members that Governor Corbett recognized the value and quality of our Apprenticeship Program by awarding us this one-time $50,000 grant,” said Buker. “Now is a critical time to invest and train the workforce of the future and increase outreach activities to recruit more apprentices into IEC.” For more information, visit Central Pennsylvania IEC’s website at www.centralpaiec.org. Deborah Stadtler is Director of Communications for IEC National. She manages IEC National’s marketing, publications, and social media. She can be reached at dstadtler@ieci.org.

www.ieci.org | April 2015 | Insights Magazine

NEW & IMPROVED

Featured Products Columbia Lighting’s LXEP Drives Parking Garage Efficiency Hubbell Lighting has announced that Columbia Lighting has introduced an energy-efficient LED lighting solution built specifically for parking garage applications—the LXEP. Featuring an extra-wide-angle light distribution to illuminate parking bays, the LXEP reduces the number of fixtures required for garages while providing uniform light. Available in three linear lengths (2’, 4’, or 8’), the luminaire is offered in lumen packages ranging from 3,950 to 19,700 lumens. The 2’ has a nominal lumen range of 39504900; the 4’ option is available in 3700-9850; and the 8’ LXEP delivers 7400-19700 lumens. With light per fixture energy savings of up to 65 percent over fluorescent or HID sources, customers gain a quick return on investment. Additionally, the LXEP’s rated life is 60,000 hours (100,000 projected)—twice that of fluorescent and up to six times that of HID. This reduces maintenance and time needed to keep a parking garage safely lit. The LXEP is also available with exclusive wiHUBB® technology preinstalled for even greater control and savings. The LXEP is an instant-on light source with an optional battery back up and is compatible with a sensor to turn off or reduce light based on occupancy or available daylight. The luminaire also features 100 percent DR equivalent lenses for demanding locations and has a smooth housing for easy cleaning. Columbia Lighting stands behind the high quality and reliability of its new LXEP offering a five-year warranty. To learn more about Columbia Lighting’s new LXEP, please visit www.columbialighting.com.

Introducing NIMBUS®4FLEX 2X ILSCO is pleased to announce an exciting enhancement to its NIMBUS®4FLEX line of pre-insulated connectors. NIMBUS 2X has a unique wire stop feature built into the connector. This allows an installer to use flex or code conductor on either side with no need to stagger the inputs and outputs, which optimizes space because 2X requires half the space as conventional connectors. Another distinctive feature of the offering is the ability to mix any class of copper and/or aluminum conductor without concern for expansion, contraction, and galvanic corrosion. ILSCO’s patented screw design improves vibration resistance, compresses conductor without damage, and eliminates the need for ferrules, making it reusable. The entire line of NIMBUS connectors are UL Listed, CSA Certified, RoHS Compliant, and dual-rated for copper or aluminum conductor. For more information, please visit www.ilsco.com or call (800) 776-9775.

Insights Magazine | April 2015 | www.ieci.org

Lutron Revolutionizes Keypad Design with the Sleek, Clean, and Highly Versatile Palladiom™ QS Keypad Lutron Electronics has unveiled its latest innovation in product design - the Palladiom QS keypad. The Palladiom QS keypad provides a beautiful architectural aesthetic with a sleek, minimalist design that complements any décor. The keypad is available with a variety of customization options and is versatile enough for any project – including high-end residences, hotel guest rooms, and high-end commercial applications in restaurants, retail spaces, ballrooms, and conference rooms. Known for its timeless aesthetics and innovative designs, Lutron evaluated thousands of prototypes over the course of many years to develop the Palladiom QS keypad. The result is a clean and sleek keypad that is the first of its kind to feature flush buttons and faceplates made of the same material – plastic, glass or metal – for a coordinated aesthetic. Its customizable button layout and programming accommodates virtually any function.

Raco’s Mighty-Bite Push-EMT The push-to-connect technology in Raco’s Mighty-Bite PushEMT connectors and couplings make them approximately 75 percent quicker to install than conventional fittings. These products are now available at The Home Depot in nearly 200 stores and online at homedepot.com. Product at a Glance: • ½ in. and ¾ in. connectors and couplings

Palladiom is simple to operate and in homes, works with Lutron’s HomeWorks® QS total home control system. Commercially, the product works with Lutron’s Quantum® total light management system and the new myRoom™ hospitality guestroom solution. Featuring large, tactile buttons with backlit, engraved text, Palladiom is easy to find in a darkened room. Its backlight intensity can be adjusted for personal preference or dynamically change its light level based on the time of day. The Palladiom QS keypad will begin shipping globally on July 1, 2015. For more information, please visit www.lutron.com or call (888) LUTRON1.

• Push-on install • Approximately 75 percent quicker to install than conventional fittings • Constructed of corrosion-resistant zinc • Precision cast threads • Reversible zinc serrated locknut • Removable • Patented • cULus Listed Installation: 1. Cut EMT square and remove burs. 2. Firmly push and rotate EMT onto fitting a minimum of ½ in. 3. For connector, install into knockout. Install locknut hand tight plus ¼ turn. Removal: 1. Turn counter-clockwise. All fittings exceed the design requirements of UL514B and the National Electrical Code.

www.ieci.org | April 2015 | Insights Magazine

CODE CORNER

The Minimum Standard By Ron D. Alley

f you have been involved with the electrical construction industry for even a short period of time, you have probably heard the National Electrical Code® (NEC) referred to as the minimum standard. Electricians, engineers, inspectors, and others use this phrase to describe a standard that details guidelines and requirements for safe electrical installations. This standard organizes these requirements into a single resource, updated and published every three years.

This verbiage is used in an attempt to explain what perhaps could be simplified into, “NEC requirements constitute a minimum standard.” Nevertheless, the term minimum standard has stuck with people associated with the industry and is often repeated by electrical contractors, journeymen, inspectors, and instructors when discussing the NEC. More importantly, attorneys and insurance investigators are quite aware of the significance of the term.

States and local jurisdictions commonly adopt the NEC as at least one of the official documents governing electrical installations. By mandating the NEC as a law, the local governmental body, or Authority Having Jurisdiction (AHJ), can implement an inspection process to ensure compliance with the NEC. Many jurisdictions outside the United States also adopt the NEC as a guideline for electrical installations.

Far too many electricians are of the opinion that the requirements of the NEC are the boundaries we work up to. In fact, the NEC standard should be, at the very least, the starting point of any electrical installation. A good contractor realizes the importance of providing the consumer with a better than minimum installation, allowing provision for future expansion. This is why architects and engineers specify materials, equipment, and install practices to be of a higher quality than what the NEC requires. As far as “the practical safeguarding of persons and property from hazards arising from the use of electricity,” we should all consider the NEC as defining the absolute bare minimum level of electrical installation safety.

Many years ago the NEC contained the statement, “The requirements of this Code constitute a minimum standard.” The statement was amended over time and by the 1968 edition it read, “This Code contains basic minimum provisions considered necessary for safety.” The sentence was eventually deleted. 90.1(B) of the 2014 NEC declares, “This Code contains provisions that are considered necessary for safety. Compliance therewith and proper maintenance results in an installation that is essentially free from hazard but not necessarily efficient, convenient, or adequate for good service or future expansion of electrical use.” The Informational Note states, “An initial adequate installation and reasonable provisions for system changes provide for future increases in the use of electricity.”

States and local jurisdictions often adopt the NEC, yet amend it to include rules or requirements that are more stringent than those of the NEC. These amendments may address climate or soil conditions and other issues that are pertinent to the locality. Local building and electrical codes should be properly substantiated and be subject to the same rigorous public review process that NEC requirements are. Unfortunately, they sometimes are not. Proper substantiation includes technical

Insights Magazine | April 2015 | www.ieci.org

data, research papers, and records of life safety incidents, to name a few. When local jurisdictions start believing it is their responsibility to “fix” gray areas of the NEC, trouble is brewing. Many localized, self-appointed code writers do not keep themselves abreast of the utmost current developments of the NEC. They may even create amendments that are in direct contradiction to the logic exercised by the NEC Code Making Panels. The NEC suggests that the AHJ has the responsibility to interpret the rules, not necessarily write them. If someone feels a section of the NEC needs to be added to, subtracted from, or corrected in any way, they should submit a proposal to the National Fire Protection Association or become an active part of the development process. I believe that a grave mistake is made when jurisdictions amend the NEC to leave important sections out. A worse case scenario is created when a jurisdiction generates a requirement that is less restrictive than the NEC allows. The origin of less restrictive local amendments can usually be tracked to reasoning that is political or cost driven. When it comes to electrical safety, politics and job costs should never be a consideration. After all, how can a local standard be minimal to the minimum standard? Ron Alley is the executive director of the Northern New Mexico chapter of IEC. He is a principal member of Code Panel 18, a member of the IEC National Codes & Standards Committee, and a member of the Electrical Technical Advisory Council of New Mexico. He is an ICC certified electrical and building inspector, a licensed electrical contractor with Journeyman certification in Colorado and New Mexico, and has 42 years in the electrical construction industry.

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www.ieci.org | April 2015 | Insights Magazine

SAFETY CORNER

HVAC:

Not Just Your Average Load By Thomas Domitrovich, P.E.

he topic of heating, ventilation, and air conditioning (HVAC) presents a target-rich environment with regard to the topic of safety. As installers, we may only be concerned with the tools, personal protective equipment, liquids and chemicals, and electrical hazards from a safety perspective. We have to also consider that HVAC equipment could play an important role throughout its life for the contents (including people and goods) of the structure or area it serves. The fact that HVAC systems account for 39 percent of the energy used in commercial buildings in the United States means that we probably see a lot of these types of applications.

go beyond heating and cooling to the electrical supply equipment. The system must perform to the expectations of the design and do so for a long time without experiencing issues outside of normal maintenance concerns. The use of listed products for not only the HVAC equipment itself but for all of those components used in the installation help the system perform safely. It’s important that the equipment is installed per their listing requirements/ manufacturer instructions. The installer can be presented with a challenge when trying to determine the proper size of overcurrent protective devices and/or proper short circuit current ratings for this equipment. It’s the installer, for the most part, that must deal with the details.

For many reasons, the most important day in the life of HVAC equipment is the day it is installed. The selection and installation of HVAC equipment is surrounded with parameters that must be considered that

An important section of the UL White Book (www.ul.com/whitebook) is in Appendix A, “UL Marking Guide,” which includes a marking guide for “Electric

Insights Magazine | April 2015 | www.ieci.org

Heating and Cooling Equipment.” This marking guide can be useful to the installer as it describes all of the marks required by UL for the equipment. This reference helps us understand nameplates for this equipment, which can be confusing. For example HVAC equipment can be quite complex with voltage ratings that vary. Voltage ratings can be a single nominal value such as 230V or a ranges expressed as “220 – 240.” Standard voltage ranges include 110—120, 200—208, 220—240, 254—277, 440—480, and 550—600. A single unit may have more than one voltage rating because more than one supply circuit can be connected. A unit with more than one supply circuit will probably have different load ratings for each circuit. This is important for sizing overcurrent protective devices, conductors, and even generators should one be used to supply this load along with others.

Per UL 1995, the HVAC nameplate can specify the type of overcurrent protective device that must be used. When the nameplate specifies “Maximum Overcurrent Protective Device,” then either a circuit breaker or fuse is permitted. If the nameplate is marked “Maximum Fuse_____,” then fuse protection must be provided in accordance with the label. If the nameplate is marked “Maximum Circuit Breaker_____,” a circuit breaker must be provided in accordance with the label. Sometimes the equipment makes life easy for the installer/inspector. Reading nameplates can be challenging. The UL Marking guide can help interpret what you are seeing. As always there is the call to the manufacturer that should be made if needed.

NEC REQUIREMENTS HVAC equipment must get power from some electrical source and how that occurs is directly impacted by the National Electrical Code® (NEC®). The following are some key articles important to the successful application of HVAC equipment: • Article 110, “Requirements for Electrical Installations” • Article 210, “Branch Circuits” • Article 220, “Branch-Circuit, Feeder, and Service Calculations”

• Article 426, “Fixed Outdoor Electric Deicing and Snow-Melting Equipment” • Article 427, “Fixed Electric Heating Equipment for Pipelines and Vessels” • Article 430, “Motors, Motor Circuits, and Controllers” • Article 440, “Air Conditioning and Refrigerating Equipment” The following are those special locations and specific applications that may impact your HVAC installation: • Article 502, “Class II Locations”

• Article 240, “Overcurrent Protection”

• Article 517, “Health Care Facilities”

• Article 422, “Appliances”

• Article 550, “Mobile Homes, Manufactured Homes, and Mobile Home Parks”

• Article 424, “Fixed Electric Space-Heating Equipment”

CONTINUED ON PAGE 40 >

www.ieci.org | April 2015 | Insights Magazine

SAFETY CORNER < CONTINUED FROM PAGE 39

• Article 552, “Park Trailers” • Article 620, “Elevators, Dumbwaiters, Escalators, Moving Walks, Platform & Stairway Chairlifts” • Article 645, “Information Technology Equipment” • Article 646, “Modular Data Centers” • Article 665, “Induction and Dielectric Heating Equipment” • Article 670, “Industrial Machinery” • Article 680, “Swimming Pools, Fountains, and Similar Installations” The following are two important topics with regard to the electrical portion of the HVAC installation. Branch circuit protection and shortcircuit current rating (SCCR) are two topics we’ll explore in this article. Branch Circuit Protection HVACIndividual Motor-Compressor(s) and HVAC Equipment Having MotorCompressor(s) and Other Loads (Such as fan motors, electric heaters, coils, etc.). NEC Section 440.22(A) for individual motor-compressor applications tells us that the overcurrent protective device (OCPD) sized for branch circuit protection only must not exceed 175 percent of the hermetic motor-compressor rated load current or branch circuit selection current (whichever is larger). If this size OCPD cannot withstand the motor starting current, a higher amp rating is permitted, but in no case can the OCPD size exceed 225 percent. Always refer to the nameplate on the equipment as the sizing (amp rating) for overcurrent protection may have been determined by the manufacturer of the equipment. Should that be the case, it is not necessary to apply any further multipliers to arrive at the proper size.

The marked protective device rating is the maximum protective device rating for which the equipment has been investigated and found acceptable by nationally recognized testing laboratories. When the nameplate states the maximum size fuse or circuit breaker, it is critical that this direction must be followed without exception to be in compliance with 110.3(B) of the NEC. Remember, NEC 110.3(B) requires that listed or labeled equipment must be installed in accordance with any instructions included in the listing or labeling. Marked Short-Circuit Current Rating – New Air Conditioning and Refrigeration Equipment with Multimotor and Combination-Loads. NEC Section 440.4(B) requires the nameplate of this equipment to be marked with its SCCR. There are exceptions for which this requirement does not apply to this equipment: • One- and two-family dwellings • Cord and attachment-plug connected equipment • Equipment on a 60A or less branch circuit So for most commercial and industrial applications, air conditioning and refrigeration equipment with multimotor and combination loads must have the SCCR marked on the nameplate. This facilitates the inspection and approval process. Inspectors need this information to ensure that NEC® 110.10 is met. A potential hazard exists where the available short-circuit current exceeds the SCCR. HVAC equipment installed in locations where the available fault current exceeds the listed short-circuit current levels could present a real hazard to property as well as personnel. The SCCR of the HVAC unit, which is on the nameplate, shall be equal to or greater than the available short-circuit current at the terminals of the HVAC unit. If the HVAC unit nameplate specifies a specific type and size overcurrent protective device

Insights Magazine | April 2015 | www.ieci.org

(not supplied integral with the unit), then that specific size (as a maximum) and type overcurrent protective device shall be in the building distribution system that supplies the unit. HVAC equipment can be very important for safety, and care during installation can help ensure a long future for the equipment being installed. HVAC systems that do not function properly is one of the most common problems that impact workplace indoor environmental quality. The HVAC is responsible for ventilating, heating, and cooling an area or a structure. They not only heat and cool the air, they distribute and even remove air pollutants. In hot climates their cooling work can make a structure habitable, and in cold climates their heating work can make a structure habitable. When they don’t function properly, safety becomes a concern. The installation of HVAC equipment may not be as simple as some other aspects of the electrical distribution system. Care should be taken when selecting, installing, and inspecting this equipment. Remember, the devil is in the details. As always, keep safety at the top of your list and ensure you and those around you live to see another day. Thomas Domitrovich, P.E., is a National Application Engineer with IEC Platinum Partner Eaton Corporation in Pittsburgh, Pennsylvania. He has more than 20 years of experience as an Electrical Engineer and is a LEED Accredited Professional. Domitrovich is active in various trade organizations on various levels with IEC, International Association of Electrical Inspectors, Institute of Electrical and Electronic Engineers (IEEE), National Electrical Manufacturer’s Association (NEMA), and the National Fire Protection Association (NFPA). He is involved with and chairs various committees for NEMA and IEEE and is an alternate member on NFPA 73. He is very active in the state-by-state adoption process of NFPA 70, working closely with review committees and other key organizations.

CALL FOR NOMINEES

CELEBRATING EMERGING LEADERS IN THE ELECTRICAL INDUSTRY

The IEC National 40 Under 40 award recognizes IEC members and staff under the age of 40 who have made an impact on the electrical industry. The next generation of electrical professionals are taking the industry by storm. • Individuals from IEC member companies (including Industry Partners) and chapter staff are eligible to enter. The nominee must be under the age of 40 as of September 1, 2015. • Eligible candidates must submit a photo, a short essay, and a résumé. • The candidates will be evaluated on industry experience, leadership, impact on the industry, involvement in IEC, and community service. • The winners will receive a professional award, profile on the IEC National website and in Insights magazine, and recognition at the IEC Con 2015. The deadline for entries is June 1, 2015.

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Learn more and apply at www.ieci.org/40-under-40.

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