30 Years Strong | Leadership Series 10 of 12 | Lean & Value
By David Branigan, Chief Financial Officer
Most of what a customer pays for a utility project is not the hourly rate.
The rate is on the quote, so it gets the attention. The larger part of the cost is time that nobody quoted: trucks driving across the city, a crew waiting for a second contractor, material trucked off site and tipped, restoration that could not start because the excavation finished on a Friday and the restoration contractor could not come until Wednesday. None of that shows up on an invoice as waste, but that is what it is, and the Customer pays for all of it.
In April I wrote about the financial discipline behind OE's thirty years — investing in fleet, people, and capacity before we needed them. This article is about the other side of that: what those investments do for the Customer's cost. Being lean, at OE, does not mean squeezing the crew or the equipment. It means taking the wasted hours out of the job, so that what the Customer pays for is work.
Where the wasted hours are
Thirty years of working in Ontario has taught us that the wasted hours are rarely in the excavation itself. They are in everything around it: getting to the site, waiting on the next contractor, dealing with the material, and going back to fix what was not done right the first time. OE has built the business to take each of those out.
Getting to the site
A hydrovac unit that spends two hours on the highway is two hours the Customer is paying for and getting nothing back. OE runs more than seventy trucks out of six Ontario locations, so the unit comes from the nearest yard, and the right unit is available rather than whatever happens to be free. Across OE's work, that has cut travel by around 30 percent. The Customer sees fewer hours on the invoice, and there are fewer emissions on the road at the same time.
One team from start to finish
Utility work is rarely one job. It is excavation, restoration, traffic control, soil handling, and the coordination that keeps them in order. When those pieces are split across separate contractors, the Customer's project manager becomes the person holding them together, and every handoff is a place for a day to go missing. The restoration crew cannot come until Tuesday. The traffic plan belongs to someone else. The bin arrives on the wrong day.
OE provides all of it, end to end. The excavation finishes and the restoration starts, because the same dispatcher scheduled both. Traffic control is part of the scope, not a separate contract. There is one schedule and one team accountable for the whole job, and there are no gaps between contractors for the Customer to manage. That is where most of the saving comes from, and it never appears as a line item. It is the days that did not go missing.
Dealing with the material
Everything that comes out of the ground has to go somewhere. On many projects that is the part nobody planned: material hauled to whichever site will take it, at whatever the rate is that week, with the environmental question left open at the end. OE handles it as part of the work. Our ECA-approved soil recycling facility in the central Greater Toronto Area means shorter hauls, recycling ahead of landfill wherever the material allows, and one line on the invoice rather than a surprise.
Doing the job once
The most expensive waste on any project is going back. An experienced crew reads the locate against the drawing, recognizes soil that is going to behave differently at depth, and adjusts before it becomes an incident or a return visit. Keith wrote last month that this kind of judgment cannot be bought in or rushed. It is also the biggest driver of productivity we have. On projects where OE handles the full scope, productivity has improved by 50 percent, and overall costs have come down by around 10 percent. Those results come from crews who do the work once.
What value means
This industry often uses "value" to mean "cheap," and I want to be clear that is not what I mean. The lowest rate on a quote and the lowest cost of a finished project are different numbers. Only the second one matters to the Customer at the end of the year.
The nearest yard, one team from excavation to restoration, material handled properly, and a crew that does it right the first time — every one of those things cost OE something to build. The locations, the fleet, the facility, and keeping experienced people are the investments I wrote about in April. This is what they buy for the Customer.
In closing
Thirty years in, we still ask the same question on every job: what is the Customer paying for that is not work? Every year, the answer gets a little shorter. That is what lean means at OE, and it is where the value comes from.
David Branigan
Chief Financial Officer | OE Utility Services | www.oeservices.ca
>> Where do the hidden hours sit in your projects? I would welcome you to contact us.
If you have not already, we encourage you to read our leadership team's prior articles in our 30 Years Strong Leadership Series:
1 of 12 — Honouring Our 30-Year Legacy and Shaping What's Next — Keith Boulton, CEO
https://www.oeservices.ca/honouring-our-30-year-legacy-shaping-what-s-next
2 of 12 — Reliability at Scale: Leading Operational Excellence — Tony Kerwin, COO
https://www.oeservices.ca/reliability-at-scale-leading-operational-excellence
3 of 12 — Growth Through Trust: The Discipline Behind Sustainable Sales — George Chung, CSO
https://www.oeservices.ca/growth-through-trust-the-discipline-behind-sustainable-sales
4 of 12 — Built to Last: The Financial Discipline Behind 30 Years of Reliable Growth — David Branigan, CFO
https://www.oeservices.ca/built-to-last-the-financial-discipline-behind-30-years-of-reliable-growth
5 of 12 — People First: Building Culture in Utility Services — Nicole Chapman, CHRO
https://www.oeservices.ca/people-first-building-culture-in-utility-services
6 of 12 — The Most Dangerous Word in Safe Digging: Safer Than the Alternative Is Not the Same as Safe — Tony Kerwin, COO
https://www.oeservices.ca/the-most-dangerous-word-in-safe-digging
7 of 12 — The Real Price of the Lowest Bid: What Infrastructure Customers Are Actually Buying — George Chung, CSO
https://www.oeservices.ca/the-real-price-of-the-lowest-bid
8 of 12 — Preparing for the Future: Talent, Tech & Transformation — Nicole Chapman, CHRO
https://www.oeservices.ca/preparing-for-the-future-talent-tech-transformation
9 of 12 — The Next Chapter: Vision for the Next Decade — Keith Boulton, CEO
https://www.oeservices.ca/the-next-chapter-vision-for-the-next-decade .
