KHS&S Gets Lean
The last several years have been tough ones for many of the Southeast’s specialty contractors. On this year’s Top Specialty Contractors ranking, revenue is down almost across the board.
That downturn certainly caught KHS&S Contractors as well, the wall/ceiling and theming contractor based in Tampa, Fla. With three Florida offices and 10 other locations around the U.S, the company has achieved the status of a nearly nationwide brand, but since the construction slump has been nearly nationwide as well, there’s been no avoiding a falloff in business.
That’s also despite its recent acquisitions of foreign-based companies, such as ATECH Group International, based in Dubai and Bangkok, and Hong Kong-based ThemeWorks International Group. (The contractor was recently working for Florida clients Universal Studios in Singapore and Disney in Hong Kong.)
In this year’s Top Specialty Contractors ranking, KHS&S reported $18.7 million in 2009 revenue from the four-state region of Florida, Georgia and the Carolinas. That’s down from the $44.7 million it reported a year ago and the $65.9 million of two years ago.
On a worldwide basis, its revenues declined from the $478.5 million it reported a year ago to the $330.4 million it indicated for the current ranking.
But the downturn doesn’t have company officials too worried. In fact, they’re looking at it as a time to regroup, refocus and, possibly, forge a brighter future.
As David Suder, president and CEO of KHS&S, told Engineering News-Record a year ago: “Downturns are a good time to take stock and figure out where you want to go. When things are not as active, you have to be more creative about your business.”
Going Lean
KHS&S may have “figured out,” as Suder says, a future new direction for itself. In May, the company announced a partnership to serve as the exclusive, nationwide distributor and installer for Eggrock, a Littleton, Mass.-based manufacturer of factory-built bathrooms for commercial applications.
The partnership was the result of a whirlwind romance between the two companies, which began early this year when John Platon, senior vice president for KHS&S in California, found the company and started wooing it.
Platon says he discovered Eggrock shortly after starting to research factory-built bathrooms in the U.S., a search fostered by seeing the method utilized on a project in Abu Dhabi.
He was impressed after he visited Eggrock’s facilities. “For me, it was almost like love at first sight,” he adds.
Eggrock was building high-quality bathrooms for some national hospitality firms, but was having limited success in finding widespread adoption, mostly due to the fact that it was not a contractor and didn’t have a business relationship with one.
Four months after the romance began, KHS&S and Eggrock made it official in May. In a press statement announcing the partnership, Jeff Barrett, president and CEO of Eggrock, stated: “This alliance expands our geographic reach coast to coast and gives Eggrock more manpower and resources, including relationships with developers and builders.”
“Once the clients that (Eggrock) was pursuing knew they had a substantial contractor as a partner, the doors started opening,” Platon says. By July, he adds, the firms were in discussions on the installation of “several thousand” bathrooms.
On the Job
The partnership rests on principles found in “lean construction,” where construction methods are made to be more cost-effective and efficient, thus reducing waste, cost and time.
Working from the project architect’s design, Eggrock manufactures the facility’s bathrooms at its factory to tolerances of approximately 1/8th of an inch, says Rob Evans, project manager for the contractor’s first bathroom-installation project at Florida Atlantic University.
Working for Balfour Beatty Construction, KHS&S is installing more than 700 units for a pair of seven- and eight-story dormitory buildings on FAU’s Boca Raton campus. The specialty contractor expected to complete its work in August.
Using just-in-time production and delivery, the bathroom units arrive at the construction site complete with the walls, tile, sink, toilet, light fixtures and towel racks already in place.
Prior to the exterior walls being erected, a crane lifts the bathrooms into the individual dormitory units, and KHS&S’ crew slides them into place and then hook them into the building’s wiring and plumbing systems. The bathrooms on the project range from 9 ft by 7.5 ft for the largest to 5.5 ft by 9 ft for the smallest.
“They’re exactly what we would’ve built onsite to the specifications that the architect provides, with the same fixtures,” Platon says. “They’re just being built in an environment that’s conducive to having zero punch list.”
Evans estimates that a supervisor and four workers can achieve a rate of installation—including lifting into the building and rough placement—of about 35 units per day, and achieve a rate of about 15 per day for final set.
Manufacturing the bathrooms offsite has its complexities, he adds. On this FAU project, for example, there are five different types of bathrooms, with “left-hand” and “right-hand” versions of each. In addition to different bathroom types, there are also different finishes.
“You’ve got to be extra sure you’re putting the right unit into the right area,” Evans says. To do that, KHS&S and Eggrock created a system of marking each unit’s exact location, and doing so in such a way that the crew flying the units into place can tell from a distance which unit they’re handling.
“It requires a lot of organization and collaboration with Eggrock, but it has worked out well,” Evans says.
Evans estimates this method should reduce installation time by at least a month, compared to traditional construction.
Future Potential
Platon thinks the time has come for a lean-like process such as this, which he says has been utilized in other countries for many years.
“The industry really needs it,” he says.
Or, as Suder added, in a press statement: “We believe innovative processes that merge technology and craftsmanship are the future of construction.”
KHS&S and Eggrock are focusing on the health care, hospitality, student housing and multifamily markets.
Platon expects the firm’s new bathroom business to provide some opportunity for its traditional services by introducing KHS&S to new geographic markets and prospective clients.
“These bathrooms are going to bring us opportunities that we weren’t aware of before,” he says.
