Fabcon

Source: Construction Digital

Date :01/06/2007 13:21:32

Innovation is the mantra at Fabcon and it has helped them grow into one of the leading foam core concrete wall panel manufacturers in the country.

Written & Produced by James Buchanan and Sean Bakke

When it comes to maintaining a competitive edge nothing beats being the first to innovate and get new products to the market. This is true whether you are creating computer software or products for the construction industry. It is also a lesson that Fabcon, a manufacturer of precast concrete wall panels, has learned in spades as they have placed a premium on being the first to market with new and highly innovative products.

Their success in this area has even led this growing company to take the rather unique step of building its own skunk works to test new innovations in the areas of plant automation, field operations, and product design. “Being the first to market with newer and better products is what has helped us build our competitive edge in this industry,” says Mike Le Jeune, president and CEO of Fabcon. “And it is something we want to keep as we and the industry continue to evolve.”

Structure…

Founded in 1970 by David Hanson and Gerald Rauenhorst, in Savage, Minn., Fabcon began its life doing pretty much what it does now – manufacturing concrete wall panels for use in building construction. As the company began to grow they refined their engineering and increased their capacity. Then in the mid-1990s the company grew with one leap when it acquired the American Precast Company, which had offices and plants in Indiana and Ohio. Their expansion continued as they brought a plant and sales office online in Pennsylvania, and opened sales offices in Iowa, Michigan, Illinois, and Wisconsin.

However, what really caused the company to grow was the creation of its signature product called VersaCore, which is a concrete panel with an insulating foam core. With the success of this product Fabcon caught the innovation bug and began to reexamine its manufacturing capacity to increase efficiency and offer a number of design elements to their customers. Over the past decade the company has managed to triple its sales.

Today, the company is something of a hybrid in that they entail elements typical to both an architectural and structural manufacturer. On the one hand, they compete on price with structural manufacturers, while on the other they offer a number of design elements that include finishes, aggregates, patterns, and decorative banding choices.

With all of these moving parts and a number of regional offices Fabcon relies on a matrix management system to coordinate all of their regional offices with the home office in Minnesota. “Essentially, you could think of it like a Big Mac at McDonald’s,” says Le Jeune, “in that no matter where you go there is a high degree of product and service consistency. With us, our customers can expect consistency in all of our offices in service, the quality of our product and its appearance.”

At the local level, says Le Jeune, general managers have a fair degree of autonomy to make decisions related to tactics and follow through on the company’s stated goals. Basically, they are free to manage the day-to-day aspects of their offices. Strategic and policy decisions are made at the corporate level, but involve the input of the general managers in a very substantive way. “We do a lot of work to get everyone on the same page,” says Le Jeune. “The intent is to generate a lot of buy-in by these managers to the strategic plan so we don’t have to look over their shoulders as they manage their offices.”

Fabcon also offers a number of incentives and metrics to help their managers accomplish the company’s strategic goals, which also fosters teamwork, says Le Jeune. The example here is their safety initiative. It would have been impossible for their safety manager to have accomplished his goals without a lot of cooperation from the general managers to make sure they were all pulling in the right direction. In the end, they were able to achieve their safety goals due to strong communication skills among managers and coordination among locations.

Innovation…

Over the past decade Fabcon has managed to triple its sales, which the company in large part attributes to its ability to develop new products and innovative ways to produce those products. Key among them, as mentioned above, is the creation of their VersaCore panel.

In August 2001, Le Jeune and a few of his colleagues were on their way to the company’s manufacturing facility near Columbus, Ohio, when they began to discuss ways to develop a lighter panel with a higher degree of energy efficiency.

The Holy Grail of this design, which had been long sought by other manufacturers, is to place an insulated foam core in the middle of the panels in a manner that would not affect the structural integrity of the panel. The problem, though, is that foam tends to float in wet concrete.

Le Jeune recalls that the Fabcon people in the car came up with an idea to keep the billets from floating that they thought might work. They quickly returned to the office and called a foam vendor; they asked, “How much would you charge for a foam billet 5” x 12” and 2,000 miles long?”

Then they sat staring at the phone, waiting for an answer, Le Jeune recounts, because they were too excited to work. When it came it was exactly what they had hoped to hear and, in a matter of months they were producing the VersaCore panel in Ohio and later throughout the company. Incidentally, the “brilliant” idea they had for keeping the billets from floating ultimately wasn’t used, but because of that idea, they overcame the notion that it couldn’t be done – and they did it, Le Jeune says.

The actual process they are using is proprietary.

The addition of a foam core reduced the weight of the panels, meaning they could put more on each delivery truck, while increasing the R-value of the panel making them far more energy-efficient. And because the cost of the foam core turned out to be comparable to the filler previously used, the panels cost the same as those produced by Fabcon’s competitors.

Though satisfied with what they had accomplished, Fabcon remained committed to innovation with their product, Le Jeune says. Only two years later they came up with their VersaCore Plus panel, which has an even higher R-value, durability, lighter weight, and increased design capabilities. Their most recent addition is VersaCore+Green, which Le Jeune says is even lighter making it easier to transport, has a higher R-value than the previous two iterations, made of far more recycled content, and costs the same as their other products. “Even as we are bringing out the next generation of our panels,” says Le Jeune, “the following generation is being developed and tested.”

Further, the VersaCore+Green panel addresses a growing industry trend and places the company in a good position to continue as the industry leader. “Building green is the current industry wave and it has been ramping up sharply,” says Le Jeune.

It should also be noted that Fabcon’s rolling bed technology has also brought additional benefits to the manufacture of the panels. Because the casting equipment is stationary, equipment lifecycle costs are reduced, production is more energy-efficient, the entire production line can be housed in a smaller area, and higher tolerance levels can be achieved.

Fabcon has even taken plant automation a step further by introducing a laser projection system, which has brought tolerances to below a quarter inch and allows for the addition of far more design elements to the panels.

The system uses FabCAD 3D, proprietary software that interfaces with a computer-aided manufacturing system to project a laser image of designs directly onto panels. This makes the process more accurate and faster and reduces the labor intensive and less accurate hand-measuring previously used as the panels were being created.

The laser imaging also eliminates the need to manually transfer panel designs from paper to the manufacturing bed, which promotes design flexibility without losing efficiency or increasing costs. The visible finishes Fabcon offers customers include rake, which are long vertical grooves; rib, also vertical, but similar to a corduroy pattern; faux block or brick; square, diamond, or round recessed shapes cast into the wall; band, which is imprinted borders; and dovetail. Fabcon can also produce custom finishes for their customers, which could include exotic aggregates, color tints, white cement or any combination.

Asked what the next step in plant automation could be, Le Jeune says the company definitely anticipates building off its success and is looking at robotics and improvements to the casting equipment to ensure, “The exact amount of concrete is poured in the exact place at the exact time.” They are also looking at alternative materials to cement.

Field Operations…

While most of the company’s focus has been on the production side, they have recently taken steps to improve their capabilities on the delivery and installation side. The key challenge is to dramatically decrease the cost of field operations, says Le Jeune.

Because they have managed to reduce the tolerances of their panels to less than a quarter inch on the production side, there is increased uniformity among individual units. This uniformity has opened the door to increasing the efficiency in their field operations by allowing them to use more sensitive connecting devices to load and offload panels and in their rigging as they assemble the panels on site.

In short, they can move the panels and install them at the job site more efficiently, increasing the speed at which they can complete a project. Moving each panel from the delivery truck to installation is a much more fluid process, and because tolerances are so much tighter they can be sure that each panel is squared with the next unit, increasing installation speed and efficiency.

What this means, says Le Jeune, is that rigging, which used to take eight minutes now takes approximately two minutes. The point is that we can move a lot faster and can go from installing 16 panels per day to 24 to 30, which makes a big difference. By tightening our tolerances we are able to significantly improve our field operations.”

Efforts to make field operations more efficient also include tightening logistical coordination. “It’s a nightmare in practice as there is not a lot of margin for error because each panel must be placed on the truck in the right order so it can be removed from the truck in the right order, and the order of when the trucks arrive at the site must also happen in a coordinated way. One slip and everything gets thrown off.”

One challenge to making changes necessary to improve field operations can be resistance by crews to new procedures. “It’s hard to overcome employee resistance to change,” says Le Jeune, “but as they see how much better it all works their attitudes are shifting to supporting these changes and offering suggestions to fine tune the operation.”

Formalizing new policies also helps ensure consistent application and overcome employee reticence. Fabcon is an ISO-certified company so procedures are developed and implemented on a company-wide basis with proposals being generated and communicated laterally, top down, or bottom up. For example, the regional offices can act as micro-generators for innovations on the tactical and strategic level. There are communication streams that allow new ideas and practices to be shared between regional offices and the company’s headquarters as well as from the home office to regional offices and field operations. This plays into their focal strategy of being a leading source of innovation in their industry.

When a sense of parochialism plays a role, meaning a regional office is resistant to suggestions from the corporate or another regional office, force from above can be applied to initiate change, says Le Jeune. “It is important that we keep all lines of communication open between our various managers and directors. It is also important that our training be repetitive and consistent,” he says.

The Supply Chain…

Fabcon’s supply issues can be summed up in three words, cement, cement, and more cement. The company produces approximately 1.5 miles of panels each day and each panel is made of wet concrete, the chief component of which is cement. Running out is not an option.

With construction companies across the country and the world dealing with intermittent supply and price fluctuations, it is critical that Fabcon has a steady flow of cement coming through the door at a steady price. “We negotiate those deals at the end of the year for the upcoming year and everybody knows, if you short us on cement you are done,” says Le Jeune.

For larger suppliers Fabcon has some leverage, but they are able to exert the most leverage at the local level where they are a big piece of the supplier’s business. “We are consistent users of their product as in any given year we will produce 16 million sq. ft. of wall panels,” says Le Jeune. “We will okay a modest price increase from year to year to maintain stability and if the increase can be justified, but one thing that is not negotiable is that we will not be shorted on cement.” He notes that Fabcon will pay a bit more “for a vendor we have confidence in.”

Their other major supply issue has to do with the foam cores they use in their products. As supply is not so much an issue, their challenge here has been timing deliveries so they have the correct amount of supply to meet sales and manufacturing velocity. “This was a big deal when we first switched to the foam core and were getting set up,” Le Jeune says.

Continuous improvement…

Fabcon places a high priority on customer satisfaction, which includes customer-driven innovation. They achieve this through customer surveys conducted through third parties to determine customer perception of products and services. This information is used to drive their R&D initiatives to stay on top of trends in the market place.

A key example of where their technology matches their goal of customer satisfaction is their flexibility and ability to build panels to customer specifications without decreasing the efficiency of their process or increasing costs. Automation means the customer gets a product to their specifications at a good price.

Beyond automation, the company is instituting new field procedures to satisfy customer desires for faster installation. Under the moniker of “Ten and Out,” the company sets the goal of finishing all job site close-out procedures within ten days after the last panel is installed. This means the job is completed, the customer approves of the work and the condition the site is in, and Fabcon is ready to completely leave the site.

Product quality is also an ongoing goal, and they are shooting for a 94 percent defect-free rate for production.

Looking forward, the company is very focused on driving up their customer satisfaction scores. As an example, last year they set a goal of achieving an 8.0 score (of a possible 10) and were able to attain an 8.3.

“We have already picked most of the low hanging fruit in this area,” says Le Jeune, “so the next iteration is going to be quite a bit tougher.”

Another key element to being successful with their customers is on the employee side. From stem to stern the company seeks to hire highly skilled employees with experience from larger corporations and with Six Sigma.

To do this the interview process is a very important step and one they try to involve a number of people in. They also like to conduct multiple interviews in order to get a better sense of the potential employee.

They have also created profiles for success in various positions using Profile XT software. “The Gallup organization has also provided us a tool that examines the leadership skills needed for different industries and levels of employment,” says Le Jeune.

As to retaining employees once they are hired, Le Jeune says, “It is important to get them engaged in the vision of the company. And because we offer a lot of opportunities for advancement, we are in a near constant mode of positive change, evidence that we are a growing and good company to work for. They see people who work here advancing through the company and they believe they can do that too.”