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| Harris Companies: Lean and Green |
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| Written by John Zorabedian | ||
| Monday, 31 March 2008 19:00 | ||
 Greg Hosch, president of the St. Paul, Minn.-based Harris Companies, a mechanical contractor that provides bundled energy solutions and designs and builds HVAC, plumbing, and process piping for clients across the upper Midwest and in the Southwest, said his company has lagged behind the green marketing trend."Our culture is really technically and engineering focused, and we struggle when it comes to marketing," Hosch said. And although the company's strategic focus for 2008 is to establish itself as a premier provider of green building and energy solutions in its markets, it is not only potential customers but also potential employees who need to hear that message. Young people, although extremely conscious of the environment, have little interest in the construction industry and have been shying away from learning technical trades and engineering. This is a big challenge for Harris Companies, which needs more young people to fill its ranks as it moves people up the leadership chain. Hosch said he worries about who the next leaders of the company will be. "We want to grow nationally, so that only exacerbates the challenge of finding the next generation of leadership and management," Hosch said. "Construction is not seen as a glamorous industry. It's just not sexy." Industry groups and unions are trying to boost interest among high school students and graduates at college and career fairs. Marketing green building might work to their advantage. At Harris Companies, green construction still makes up a small percentage of annual revenue, but the growing cost-consciousness of commercial and industrial customers on energy has led the company to develop innovative approaches. Green energy The US ethanol industry has taken a big hit in recent months from rising commodities prices and lack of efficiency in converting corn to fuel. Harris Companies, in partnership with AE&E Von Roll and Alliant Energy, has developed a process that makes the refining process much more energy efficient. Using a fluidized bed incinerator to burn a waste byproduct of ethanol production, the companies patented a process that creates energy from the incineration of waste to partially power ethanol production. For one ethanol producer, Corn Plus Cooperative, the process will cut its natural gas costs by $7 million to $8 million annually, Hosch said. Now that Harris Companies has worked out how to implement the process, it should be able to create future ethanol business. "Over the last few years, if an ethanol plant had a choice to improve their process or spend money to add more production, they would choose to add more production capacity," Hosch said. "Now those dynamics are really starting to change because of the cost of corn and other commodities. We see that as a good market opportunity." In March, Harris Companies completed an $86 million contract for a 55 million-gallon-per-year ethanol plant in Minnesota, Ottertail AG. It's the largest revenue project in the company's history. Ottertail AG has signed a letter of intent to add a fluidized bed incinerator to its plant. The company is also focusing on other green projects, delivering bundled energy solutions to customers to improve energy efficiency and reduce costs. Some of these projects are LEED certified, the industry standard for green building. Even for projects that are not certified, the energy savings can be just as good-Harris Companies strives to design solutions that allow customers to pay for capital upgrades with their reductions in operating expenses. The company calls them bundled energy solutions. "Most of the projects are geared to saving energy-lighting retrofit, heat recovery, building controls optimization, etc.," Hosch said. "A lot of the property owners don't care so much about certifying. They want to do the right thing, or they want to save money." Hosch said he is aligning the company toward sustainable construction through LEED and other green training for employees so they can be a resource for customers on green building. Providing energy-efficient solutions in large, technically complex projects is where the company excels, "but we struggle with getting people to know we can come up with the solution," he said. Model company Harris Mechanical, a division of Harris Companies, began work this year on a $255 million football stadium at the University of Minnesota, under general contractor MA Mortenson. What's most exciting about this project, Hosch said (Harris Companies' scope of work on this project is over $26 million) is the contractor's reliance on Building Information Modeling or BIM, a 3D computer modeling process that allows subcontractors like Harris Companies to prefabricate piping and ductwork. "It's a big, high-profile project, and the general contractor is really committed to building modeling," Hosch said. "There's an intense 3D modeling effort to work out the collisions before they happen in the field." BIM and off-site prefabrication allow greater cost savings, lower on-site manpower, and improve quality. Harris Companies will complete construction this year on a $6 million, 77,000-square-foot prefabrication facility, which will be LEED certified. "Our plan is to be efficient enough there that we can not only provide ourselves with prefabrication but also sell prefabrication to our competitors," Hosch said. Prefabrication was Harris Companies' thematic goal for 2007 (Hosch attributes "thematic goals" to the business consultant and author Pat Lencioni), a plan to maximize efficiency, lower costs, and improve the prefabrication process. At the end of last year, the company purchased Climate Control, a mechanical contractor in Phoenix, for an undisclosed amount. With revenues of $190 million, Harris Companies is still looking to grow geographically. Hosch said that will require the right people to take it to the next level. "The biggest challenge is finding the next generation of leadership," Hosch said. |