Lean & Green
- Published: Thursday, 23 February 2012 13:40
- Written by CP Staff
Tom Engelman is 2012 chairman of National Precast Concrete Association
In its annual economic outlook forecast in January, the National Precast Concrete Association (NPCA) posed this question: "Will 2012 be the year we turn [declining business] around?" Not likely, the report continued. Although the good news—if you can call it that—is that it probably won't get any worse, the report concluded. NPCA’s 2012 Precast Forecast shows no change in the size of the market for the coming year, although early signs pointed to slow growth and more opportunities in 2013 and beyond, "for precasters…nimble enough to adapt to a changing construction marketplace. If you're faster, leaner and greener than you were five years ago, you're headed in the right direction."
Recently elected NPCA Chairman Tom Engelman, president, Bethlehem Precast, Inc., could not agree more, adding that precast companies that manage to ride out this more-than-four-year-long construction recession will come out the other side with a production process in place that should work more efficiently than ever before. This is assuming that precasters can absorb the rising costs of construction materials and question-mark issues surrounding providing health care benefits and EPA regulatory battles.
"Bethlehem Precast was pretty lucky," Engelman told Concrete Products. "Last year, things were a little bit slow—we were down about 20 percent—but going forward, we're making adjustments in anticipation of what's coming in. We don't want to overestimate like we did in the past. But I think it's going to be fairly level for the next couple of years.
"We've had to make adjustments in how we do business. We follow our customers a lot more; we've had to chase the money a lot quicker; we talk with a lot more customers than we used to. You have to build your volume back up, so you need more customers. And we're trying to operate the plant differently than we used to. The struggles we're going through now will absolutely help us in the future greatly. You're going to have a better understanding of what's going on and react quicker."
LEAN TIMES, 'LEAN' PRACTICES
Engelman says, not surprisingly, that in an attempt to stay afloat, many precast makers are adopting 'Lean' manufacturing practices, in which the expenditure of resources for any goal other than the creation of value for the end customer is considered wasteful, and thus a target for elimination. "They aren't going fully 'lean' but they are using the principles in their plant to recycle things and work more efficiently," he explains.
At the 46th NPCA Annual Convention in Coeur d'Alene, Idaho, the group featured efficiency expert Paul Akers, founder of FastCap LLC of Bellingham, Wash., as its keynote speaker. In his presentation, Akers encouraged the membership to empower its employees by encouraging them to bring ideas forward and developing efficiencies in all work processes and in every location of the plant—from the bathroom to the production floor. "The way we did business before isn't going to keep you alive today," Engelman says. "You have to change the way you operate. Lean and efficient are how you're going to stay in business. At Bethlehem, we've learned that you have to manage your people differently. Instead of overloading our operations with people, we're leaning them down, maybe giving someone an extra hour overtime versus having a couple of extra guys on the job. We're recycling a lot more, including some of the wood we use, which we can use for other projects—we use a lot of plywood here because we're a custom precaster. We recycle all our steel. We're trying to keep up on the maintenance of our vehicles to keep them running efficiently. You used to let it slide a little bit, but now, every 3,000-5,000 miles, we're changing oils, going over the trucks, checking the brakes and tires. It's either work this way or you're out of business."
STAYING IN TOUCH
In the last two years, the NPCA blog (www.precast.org/blog) has been a valuable outlet for the association to reach its membership on such subjects as education, precast products, industry news, and the "Meet a Precaster" series, in which a different member company is profiled every month. "The blog gets read by most of the members, and we try to keep people informed on what's going on and how the political and economic atmosphere is moving," explains Engelman.
"We still have the Precast Express email newsletter, but we’ve never had a blog before. We're using social media more to get the word out about NPCA and what we offer for precasters and the specifier community. For all of this information, we're on Twitter, Facebook and YouTube—we've got videos on YouTube—we're trying to use as much social media as we can to get the word out about what's going on with precast products in general, and then we get specific on types of products and jobs.
"The younger generation is using the media,” Engelman added. “Architects and engineers use Google when they're researching something. So we're trying to make sure that we're in those areas so that they are reminded that precast is a viable option for speed and economy. We did a survey that found that 70 percent of all engineers and architects are Google-ing something first, so we have to be out there for that first look.”
A major part of Engelman's predecessor Dan Houk's tenure as chairman was bridging the information gaps between various organizations set up to serve the precast industry. Engelman also has on his agenda the bettering of communication between NPCA and the nation's various regional associations. "We want to support our affiliates and give them the tools that we have, making them available for their members," he points out. "Most of their members might also be members with us, but some of them aren't as active nationally as they are locally. We'd like them to have the same tools we have, so we talk to their executive directors and show them the tools we have and how they can use these at the grassroots level. Some groups have direct contacts with state or regional people, and they develop good conversations with them, which helps everybody in the long run, as far as state specifying products and how they specify them and what the parameters are."
One of the most important messages Engelman wants the association to push out to all members is the sustainable benefits of precast products. "We're trying to make sure it stays in their forefront," he says. "Sustainability is what specifiers and owners are looking for, and precast can give them that. We have a life-cycle analysis that we did several years ago, and we have a sustainability committee that works on those issues. We have an electronic virtual village with a view of a building above and below the ground, and you can click on any precast product in the picture to bring up an info box on the product.”
In his first official speech after being formally elected NPCA chairman, Engelman called special attention to the advancements both his company and the association had made in recent years in educational programs, including a soon-to-be-launched Learning Management System. He is especially proud because one of his employees, Mike Loy, production supervisor with more than 25 years with the company, is poised to become the first graduate of Precast University, which offers Master Precaster and Master Prestresser certificate programs including precast and prestress-specific training with comprehensive education courses for production, safety, technical, quality control and leadership. Loy's accomplishment will be celebrated at an event at The Precast Show in Orlando, March 1-3. Engelman hopes that by the association's 2013 show in Indianapolis, an even larger number of graduates will be on hand.
"At Bethlehem, I like educational opportunities as a reward for the guys," he explains. "It gives them a few days out of the plant in a different atmosphere with peers who do the same jobs all over the country. And then they go out at night and talk about how they do things, what they're doing, how they handle people and jobs. It gives them a different outlook than just the very narrow point of view of their own company. They can see that maybe they're doing the same thing other companies are doing, maybe they're doing something better or less so. And they bring those things back to me, we discuss them, and we try to make changes here in the plant.
"As far as the education goes, if you don't teach your people and show that you care about their climb up the ladder, they're going to become stale and begin to look elsewhere if they don't see a future. I try to use the education opportunities as a stepping stone to get themselves up the ladder from shop floor guy to lead man to foreman."
Engelman also offers his office workers at Bethlehem the chance to take courses in business, finance, selling, marketing, handling people and outlook/forecasting. In fact, the company is listed in the top 20 of all NPCA plants in terms of hours of education classes employees have taken. "Offering such chances helps with employee retention. They feel needed and wanted, and they have a good time, but it's also a great learning experience for them. And it makes it easier for us to hire from within rather than go outside the company. They understand the culture; we're a family-owned business, as are 85 percent of NCPA companies. Certain dynamics come into play at family-owned companies that don't come into play at corporate companies. It's like your kids, you like to see them grow and develop and move on to do something different, and if they don't stay in the industry, at least you've been a part of their life and moved them forward."
Despite his passion for educational efforts, Engelman doesn't consider himself a "pet project" kind of guy when it comes to his term as NPCA chairman. "I want the whole thing to work as a unit and keep it moving forward," he says. "There are a lot of little pieces that have to fit in, and I just want to make sure it's all organized and keep an eye on the bigger picture. I'm also keeping an eye on precast products as a whole, including all of the other associations. We think that if we got together as a group and had some kind of politically active group that would speak for our industry and let them know that we may be small but we employ a lot of people with a lot of dollars flowing through these groups. It would be good to speak as one. We're not trying to change any group or make them different; we just would like to get a piece of them on the same page to speak with members of Congress and some of the regulators who are trying to regulate everything to death."
Engelman says that even NPCA's long-running and popular Leadership School to prepare members for positions in the association has had to adapt to changing times from when he attended it in the mid-1990s. "It's developed and changed. The dynamics of what we're doing now is a little bit different than it was 15 years ago," he explains. "Things like efficiencies, safety and 'Lean' are more important than before. It teaches you how an association like ours operates, from the committees to the chairs to how the board works, what is expected of you if you want to go that far. Every group is having trouble finding leaders in their associations, and that's one of the charges we put to the board members: look for leaders who are coming up. There's a constant rotation in the chair positions, and we're trying to make sure we develop people to move into those positions so that they know what's going on when they come in and they can be productive in their first year."
STAYING UP IN DOWN TIMES
Another point Engelman made in his October 2011 speech was how NCPA managed to have "amazing financial stability at a time when trade associations are raiding their reserve funds. We made sure we focused on delivering to our members things that were of value to them and giving them value for what they're paying. We wanted to keep the dues low, so that everybody can afford to join our group and give them ample opportunities to participate in the committees and see how things develop.
"We've had our share of companies go bankrupt, plants being merged or sold off, and companies forced to lay off workers—some of whom have been longtime loyal employees. NPCA has remained financially healthy throughout this long recession thanks to the wisdom of the board and the expertise of the staff. We not only had strong member retention in 2011, but we gained about 88 new members to NPCA last year. It's true that when things are tight, people tend to back off staying in or joining an association, but I think we've proven that there's value through the product committees, networking opportunities, and tracking the political scene.
"We also have a long-term goal of working to align all the associations in the manufactured concrete products industry. The big picture is that we've got major competition with cast-in-place and competing materials like plastics. We need to work together as manufactured concrete producers."
To those ends, The Precast Show continues to be sponsored by multiple organizations including NPCA, the American Concrete Pipe Association, CastStone Institute, Interlocking Concrete Pavement Institute, and the National Concrete Masonry Association. According to Engelman, the numbers for the event are progressing well, with the exhibitor space is sold out. "Those booths are filled with our associates, who are such a huge part of our group," he states. "They are as much a part of the family of precasters as any producer is, and a lot of them are family owned as well, many of which have been operating 50 or 60 years."
Engelman also points to diversification as a key to staying alive and ahead of the game both at Bethlehem Precast, which used to handle a fair amount of residential work, and other NPCA members. In its peak years, Bethlehem ran a 40/60 mix of residential to commercial business; today, Engelman estimates residential work accounts for only about 20 percent or less of total business. "It's hard to tell what's going on with residential these days," he admits. "It's been up and down so much. Normally, we have a real active period in the late fall with people closing projects up and setting up work through the winter. But that didn't happen in November and December; it was absolutely dead. But now in the new year, I'm actually busy with residential products. It's kind of baffling me right now. It's going to come back, but it's going to come back real slow; there are just too many homes on the market, the banks are still holding foreclosed homes but there's no sense putting them on the market if they're not getting the value for them, so they're just sitting on them hoping the value comes back. But when they finally dump them back on the market, that will slow new home growth again. I predicted four or five years ago that it wouldn't be until 2015 that housing would come back, and that looks to be holding true. Four years ago, on one housing-specific product, I did 2,200 pieces; last year I did 310. That product was a good indicator of the housing market in general."
NPCA also is attempting to keep members informed of any unexpected costs that may come as a result of new regulations, including those from the Occupational Safety and Health Administration. "We want to make sure people can anticipate and plan for what's coming up by monitoring what OSHA has online and what the other regulators are looking at in terms of new rules," Engelman explains. "OSHA just instituted new a crane certification, and some of the states have got it now. Because we do residential work, now I have to pay to have a guy certified, and there's no guarantee that guy is going to stay with us. I paid $6,000 to have a guy certified in October, and he quit on me in December. The regulators haven't taken into account all of the things that could happen.
"Certification on cranes is fine if you're a crane person and you rent your crane out. But if you're a person who does a specific job every day with the same crane, I don't understand why you have to have certified people. It drives wages up and drives some people out of business. I had four trucks on the road, now I have one. How do I move my people around like that? When things pick up and I need to put another truck on the road, now I have to find a certified driver. Most people don't want to install a product, drive the truck and operate the crane. They're going to want $35-$40/hour. If I have to pass that cost on to my customer, they're not going to use my product.
"We also have to track environmental regulations. There's runoff on your property; you have to have pollution controls on all of your bins. The government is looking for money, and they will find ways to get money out of businesses to justify their department's existence. OSHA was very business friendly a few years back; they aren't quite that friendly today. They need money to keep operating, so they're looking to make sure that when they come onto your property, they're looking for fines. Before they would offer up suggestions on how to do things better and safer; now, it's 'You didn't do this; here's your fine.' In a tight economy, that's the way it goes."
Engelman adds that the waiting game surrounding a long-term transportation bill from Congress isn't helping precasters make expenditure decisions for the near future. "If a company is looking to develop transportation products, and they know that the transportation bill is only a two-year bill, how are they going to justify the return-on-investment if you only have two years of a bill sitting there?" he wonders. "We know they're going to do something beyond that, but we don't know what direction they're going to go. Congress is not clear on that."
Bethlehem Precast Inc.
Since 1980, Bethlehem Precast has provided quality precast solutions to the commercial and residential markets. Its commitment has made the company the number one installer of Bilco basement egress systems in North America. Offering a variety of products and services, Bethlehem Precast specializes in custom projects. Its work can be seen on several high-profile projects in the Philadelphia area, with Krimmel Theater in the National Constitution Center and Eagles Nova Care Rehabilitation Facility; the New York City area, including Diane Von Furstenburg Design Studio Headquarters and Museum of Arts and Design; the New Jersey area with Red Bull Park; and the Lehigh Valley area, including the Coca Cola Park minor league baseball stadium.
One recent high-profile project for which Bethlehem Precast has supplied material is an expansion of Louis J. Tullio Arena in Erie, Pa., which required about $1 million in new bleachers, wall panels and footing slabs. And the company just finished manufacturing 30 stair systems ready for shipping to New York City for Phase 1 of the new World Trade Center Port Authority Trans-Hudson Transportation Hub, located between Towers 2 and 3 and designed to accommodate 250,000 pedestrians per day. In the end, Bethlehem will produce about 190 pieces for the job. “We do quite a bit of work in New York City,” said company President Tom Engelman. “Right now, we're doing about 40 jobs there. Some are only 20 pieces; some are 300 pieces. Even in the slow economy, that's been fairly steady work.”
Engelman says that when he first became a member of the National Precast Concrete Association, he was on the transportation committee, which might have been considered strange since Bethlehem didn't make transportation products. “At the time, nobody else was willing to step up and take that role, so I did,” he says. “I then moved onto the building committee, which deals with the type of structures we make. Back in the early 1990s, my dad [company founder and former Lehigh Portland Cement technician Al Engelman] was on the transportation committee, and he was highly involved in other associations, but he valued this one and brought me along and basically got off one committee and had me put on it, and within a few years, I was chair.”
Despite his commitment to education both at the plant and association level, Engelman never officially joined the education committee. “I went to a lot of the education committee meetings and was fairly involved, but I never got on it,” he explains. “But people can sit in the audience during the meetings and raise your hands and have input. They want to know what people want and need; they do a really good job putting together educational program for the members.”
The Engelman family (which includes Al's six kids—four boys and two girls) entered the precast business after many years of being a construction company doing curbs and sidewalks. In 1989, the company purchased a small precast plant, and Tom learned the operation, which led to the eventual merging of the concrete and construction businesses. In 1995, the Engelmans bought out their one minority partner and Tom became president.
Serving Pennsylvania, New Jersey, New York, Delaware, Connecticut, Massachusetts, Ohio and Maryland, the company's precast solutions have saved time and money in both the residential and commercial markets. Bethlehem Precast’s experienced professionals are able to tackle some of the most complex projects and will work to develop a solution for the toughest challenges.
Offerings include commercial products like Cable Concrete (an articulating concrete block mat system), light pole bases, retaining walls, stair systems and landings, balconies, stadium/arena bleachers, and signs. In the residential arena, the company manufactures BulkTread (a forming system that allows basement egress to be poured at the same time the foundation is), PermEntry (an outdoor basement entrance), ScapeWEL window wells, steps, and other site amenities, such as chimney caps, car stops/truck stops, splash blocks, bollards, sign holders, planters, reinforced concrete pads, fence posts and extension rings.
National Precast Concrete Association
Founded in 1965, NPCA is an international trade group representing producers of plant-fabricated concrete units and precast industry suppliers. Currently representing nearly 1,000 companies worldwide, it is dedicated to expanding the use of quality precast concrete and pursues that mission by providing industry leadership and supporting members' success in ways consistent with the public interest.
Member benefits include educational seminars (both onsite and online), an annual trade show, industry newsletters, publications targeted exclusively to the manufactured concrete products industry, technical/sales literature, and a technical services hotline. NPCA provides technical and product information through eight product-specific committees and industry committees promoting education, safety, quality and technical issues.
NPCA President Ty Gable, C.A.E., has led the association staff for more than 17 years. During that time, NPCA has built a team of technical experts; grown the Plant Certification Program to more than 375 plants since 2003; and, in 2009, launched The Precast Show, the largest trade show specifically targeting the precast concrete products industry.