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ALTHOUGH the construction industry suffers from sluggish productivity growth and relatively low financial returns, it has been slow to embrace the process and technology innovations that could help it to do better with respect to both profitability and performance.
In general, R&D spending in construction runs well behind that of other industries: it accounts for less than one per cent of revenues, versus 3.5 to 4.5 per cent for the automotive and aerospace sectors. Ditto for spending on information technology.
Traditionally, the sector has tended to focus on making incremental improvements. But this will no longer do. Projects are ever larger and more complex. The growing demand for environmentally sensitive construction means traditional practices must change. And the shortage of skilled labour and supervisory staff will only get worse. These are deep issues that require new ways of thinking and working.
Here are five ways the industry could transform itself over the next few years.
1. Higher-definition surveying and geolocation. Geological surprises are a major reason why projects are delayed and go over budget. New techniques that integrate high-definition photography, 3-D laser scanning and geographic information systems, enabled by drone and unmanned aerial vehicle technology, can dramatically improve accuracy and speed. And they are more accessible than ever because costs have come down substantially.
Photogrammetry, for example, provides high-quality, high-definition images of survey areas. Light detection and ranging (Lidar) technology is much faster than conventional technologies and provides high-quality 3-D images that can be integrated with project-planning tools, such as building information modelling (BIM).
Used in conjunction with ground-penetrating radar, magnetometers and other equipment, Lidar can generate above-ground and underground 3-D images of project sites. This is particularly important in dense, environmentally sensitive or historical project sites where disturbance needs to be minimised.
These advanced survey techniques are complemented by geographic information systems that allow maps, images, distance measurements and GPS positions to be overlaid. This information can then be uploaded to other analytical and visualisation systems for use in project planning and construction.
2. Next-generation 5-D building information modelling. The construction industry lacks an integrated platform that spans project planning, design, construction, operations and maintenance. Instead, it still relies on bespoke software tools. In addition, project owners and contractors often use different platforms that do not sync with one another.
Next-generation 5-D BIM is a five-dimensional representation of the physical and functional characteristics of any project. It considers a project's cost and schedule in addition to the standard spatial design parameters in 3-D. It also includes details such as geometry, specifications, aesthetics, thermal and acoustic properties. A 5-D BIM platform allows owners and contractors to identify, analyse and record the impact of changes on project costs and scheduling.
The intuitive, visual nature of 5-D BIM gives contractors a chance to identify risks earlier and thus to make better decisions. For example, project planners can visualise and estimate the impact of a proposed change in design on project costs and schedule.
The use of 5-D BIM technology can be further enhanced through augmented reality technology via tablets or wearable devices. A wearable, self-contained device with a see-through, holographic display and advanced sensors can map the physical environment, for instance. Companies are developing BIM-like design and construction solutions for these platforms. In this "mixed reality" environment, users can pin holograms to physical objects and interact with data using gesture, gaze, and voice commands.
3. Digital collaboration and mobility. One reason for the industry's poor productivity record is that it still relies on paper to manage its processes and deliverables such as blueprints, design drawings, procurement and supply-chain orders, equipment logs, daily progress reports and punch lists.
Now owners and contractors are beginning to deploy digital-collaboration and field-mobility solutions. A large global construction firm recently announced it was working with a software provider to develop a cloud-based, mobile-enabled field-supervision platform that integrates project planning, engineering, physical control, budgeting and document management for large projects. Several large-project developers have already successfully digitised their project-management work flows.
In an American tunnel project that involved almost 600 vendors, the contractor developed a single platform solution for bidding, tendering and contract management. This saved the team more than 20 hours of staff time per week, cut down the time to generate reports by 75 per cent and sped up document transmittals by 90 per cent.
In another case, a US$5 billion rail project saved more than US$110 million and boosted productivity by using automated work flows for reviews and approvals.
It's long been difficult for central planning teams and on-site construction teams to connect and share information about progress in real time. Now the availability of low-cost mobile connectivity, including via tablets and handheld devices, has ushered in a new generation of cloud-based crew-mobility apps. These can be deployed even on remote construction sites and could change the way the industry does everything from work- and change-order management to time and material tracking, dispatching, scheduling, productivity measurement and incident reporting.
4. The Internet of Things and advanced analytics. Project sites generate vast amounts of data, but little of this is captured, let alone measured and processed. The Internet of Things - sensors and wireless technologies that enable equipment and assets to become "intelligent" by connecting them with one another - could change that.
On a construction site, the Internet of Things would allow construction machinery, equipment, materials, structures and even formwork to "talk" to a central IT platform to capture critical performance parameters. Sensors, near-field-communication devices and other technologies can help monitor productivity and reliability. Potential uses include equipment monitoring and repair, inventory management, quality assessment, energy efficiency and safety.
One popular form of near-field-communication technology is radio-frequency identification (RFID). This is used extensively in logistics, retail and manufacturing environments to collect precise information about a product, place, time and transaction.
Since the 1990s, construction has used RFID to track materials and equipment and to develop automated time sheets. Costs of RFID equipment - including scanners, receivers and tags - are falling, and new applications are emerging.
Soon, tags will be able to include information on specifications, dates, defects, vendors and original-equipment manufacturers, maintenance records, operating parameters and other applications.
In addition to the opportunities from the Internet of Things, digitisation could enable construction firms to capture data. Then advanced analytics can help to improve efficiency, timelines and risk management.
Insights from advanced analytics helped one oil and gas giant improve the productivity of its engineering function by 20 to 25 per cent by pairing the right teams, appointing appropriate team leads and modifying their work flows to minimise waste and improve efficiency.
In another case, a large Middle Eastern construction firm used a predictive-analytics engine to prevent equipment breakdowns on-site for its fleet of construction vehicles. This saved millions of dollars in downtime, fuel costs and maintenance expenses.
5. Future-proof design and construction. New building materials and construction approaches can lower costs and speed up construction while improving quality and safety.
These usually account for more than half the total cost of projects. Traditional materials such as concrete, cement and asphalt make up most of this demand. But there has been a wave of innovation in construction materials over the past few decades; a number of products have been developed with specific uses in mind.
Here are a few that are particularly interesting:
Adoption of these "materials of the future" has been slow due to a lack of awareness, a limited supply chain, a lack of availability at scale and risk aversion. Despite being available for more than 30 years, for example, ethylene tetrafluoroethylene (ETFE) gained widespread adoption only after it was used to build part of the aquatic building for the Beijing Olympics in 2008. ETFE weighs less than one per cent of an equivalent glass panel and costs 24 to 70 per cent less.
About 80 per cent of all construction work is still done on-site, but project developers and contractors are deploying new approaches that show promise. Among them:
Techniques such as prefabricated, prefinished volumetric construction integrate off-site capabilities to transform the construction site into a manufacturing system.
The result: greater efficiency, less waste and improved safety. In addition, materials such as cross-laminated timber are emerging in response to the need for greener construction options. In the United Kingdom, an 80-storey timber skyscraper recently received preliminary approval.
Recommendations for action
It's time for a new mindset. Owners often believe that their responsibility ends when they award contracts, forgetting that they pay the economic costs of delay. For their part, contractors often do only the minimum required to meet contractual terms, leaving substantial value on the table. For the industry to do better, it needs to embrace four principles:
Other industries have shown that first movers can build a sustainable competitive advantage. In the construction sector, this is also likely to be the case. Over the next decade, these winners of tomorrow will take the lead in technology innovation and digitisation. Resisting change is no longer an option.