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And just like that, America is manufacturing again.
Thanks to a raft of reasons for onshoring, such as a global pandemic that rocked supply chains, the exponential growth in the semiconductor market, the need for data centers to support our life in the cloud, and national security, manufacturing facilities are breaking ground across North America at a pace that hasn’t been seen in generations.
Tech companies are at the heart of this manufacturing boom. Intelis spending billions to build semiconductor fabs in Arizona and a massive campus of semiconductor manufacturing fabs in Ohio whileSamsung and Micron have announced plans to build gigafabs in Texas.
It’s not just chips that are driving high-tech manufacturing. Companies like Apple, Alphabet (Google’s parent company), Amazon, Meta (nee Facebook),and others are spending hundreds of millions of dollars on data centers across the continent to support the digital world around us. Everything from ecommerce to e-mails are written, sent, and stored in the cloud.
Other high-tech, high-innovation companies are busy scouting locations for twenty-first century factories. Pharmaceutical giants and labs that produce everything from vaccines to diabetes medicines are ramping up construction, too.
As a supporter of the North American economy and the increase in jobs that construction of this magnitude and manufacturing bring, it’s exciting to see announcement after announcement of planned construction. As someone who has worked to support construction projects for more than 20 years, I am seeing leading indicators of construction delays and cost overruns on many of theseefforts.
Tech companies, being the innovators that they are, are known for solving problems. The owners of these projects – the tech companies – are acting as project and construction managers in many cases. The impulse is understandable. By controlling the project, the owner believes they can prevent problems from arising. However, managing a mega-million-dollar construction project is not the same as managing the project that brings about the next world-changing tech innovation. In construction, there are tried-and-true practices that can be put in place to maintain a schedule and control a budget while maximizing safety. There are alsonew, innovative approaches to contracting the indirect items and services needed to keep work moving onsite while enhancing site safety and sustainability efforts, mitigatinglabor and material resource constraint risks, and providing cost certainty.
AMECO has supported construction and maintenance projects for more than 75 years. Over that time, we’ve learned a thing or two about how to anticipate and solve problems before they arise. We have two key pieces of advice for manufacturers looking to expand an existing facility or build a new one.
1. Engage an EPC Firm–In recent years, particularly in the advanced manufacturing and technology industry, construction has moved to a General Contractor/Subcontractor model. This construction process is common in homebuilding and smaller, commercial construction. In this execution strategy, the design is handed over to a General Contractor (GC) who acts as the manager for the construction project and schedules out all the work that needs to be done. As they schedule, they hire subcontractors to perform the work. Often, different GCs are engaged for each project area or phase, which means multiple GCs and redundant subcontractor teams onsite.One downside on a megaproject is, if one subcontractor hits a delay, it will ripple out across the remainder of the project and its schedule.
It can be like too many cooks are in the kitchen, all working from different recipes, while only one set of ingredients is available, and they keep bumping into each other because it’s so crowded.Multiple GCs and redundant subcontractors onsite results incongestion and duplication (or shortage) of resources, such as labor, vehicles, construction equipment, scaffolding material, tool and consumables provision, an unnecessary increase of theoverall carbon footprint of the project, and even a loss of safety standardization across the site.
Engaging an engineering, procurement, and construction (EPC) firm prevents these issues. Theyplan, procure, manage, and self-perform construction ofmost of the project. Early in design they are alreadyplanning for constructability, often alreadyinvolving the person who will eventually be the construction manager.Construction kicks off with close coordination between the site and design teams, and home office engineering resources start to transition to the site as field support.In an EPC execution strategy, much of the construction work and its management is performed by one entity. This allows for tight coordination and planning.
EPC companies can typically build massive projects for a fraction of what the GC/Subcontractor model can in part because of …
2. Planning, planning, planning –An EPC partner will engage in a project long before the first bulldozer reaches the site. The planning process allows for better cost control as well as streamlining the procurement and contractingprocess while highlighting opportunities for material and labor efficiencies. The top EPCs have centuries of combined experience and understand how massive projects come together. As such, they can see cost savings where owners may not.
For example, AMECO recently found hidden costs savings potentialat the site of an electric vehicle battery manufacturing facility that is under construction.Portable toilets for the craft workers were being provided onsite. While portable toilets are a commonbathroom solution, there is another way. AMECO discovered the manufacturer could save millions of dollars per yearon restroom facilities for craft workers by installing a custom sanitation solution that eliminates the need for all the sewage to be hauled offsite for disposal daily. As an added benefit, the treated and recycledwastewater from the system can be used onsite for dust suppression or watering vegetation.This is just one example of how planning every detail of a project can lead to efficiencies that save time, money, and even impact sustainability.
The planning process is time well spent. Once the steel toed boots are on the ground, construction tends to happen much faster due to the ability to anticipate and plan for challenges well in advance.
Like Abraham Lincoln once said, “Give me six hours to chop down a tree, and I will spend the first four sharpening the axe.” Using an EPC and trusting the planning process will make “chopping down the tree” of building your factory happen much smoother without cutting corners on safety, quality, schedule, or cost.