There are strong signals that the industry is undergoing an inevitable change that will increase business intelligence across processes, people and technology. In the past three years, the number of AEC technology vendors servicing the AEC space has grown by 600%. In the same period, private equity and venture capital investment are at an all time high, as those outside the industry see the opportunity and are making investments.
AEC providers are organizing and hiring people with new skill sets such as data scientists, chief data officers, blockchain experts and virtual design and construction experts. Technology adoption in the field is growing with examples being a 240% increase in drones on jobsites and 80% of field personnel capturing data with mobile devices.
Technology trends include:
- Computer vision, Artificial Intelligence (AI), Machine Learning (ML) and Analytics
- Blockchain, Distributed Data
- Robotics, 3D Printing, Prefabrication, Modularization
- Building Information Modeling (BIM), Digital Twins
- Digital Collaboration, Common Data Environments (CDE)
- Data Capture, Mixed, Virtual and Augmented Reality (MR/AR/VR)
These technologies will force companies to look at process differently. In the near future, there will not be one answer, but rather a number of possibilities to optimize the process and outcomes. Computerized or Generative Design will allow a number of outputs, or options, to be proposed based on defined variables and constraints. Take an elevator, for example. For years there has been one answer for elevator design with a single shaft per box. If an elevator could move both horizontally and vertically, we could repurpose space in buildings and move people faster. “Thyssenkrupp’s magnetic system, called Multi, will be able to circulate around a building, horizontally as well as vertically, and the company predicts that it will change urban landscapes, revolutionising the design and structure of large buildings.”
Cost and schedule planning will undergo a similar change. Traditionally there is one answer for the speed and efficiency in which the building can be built. This answer comes from the superintendent and their experience. While their answer traditionally is the best based on the data provided, what if the plan was generated looking at a number of variables such as the option that costs the least, is fastest to complete or creates the smoothest crew cadence? These variables allow companies to balance time, cost and process optimization to derive options and select the right option for the project— and these practices are being deployed at this very second.
The transformation will evolve this industry from custom craft to production. For years, companies have been interested in earned value techniques. The challenge is, the earned value process is costly to administer and by the time the reports are published, the data is out of date. Any opportunities that could be driven from the report such as using a different piece of equipment have been missed. This digital transformation will allow companies to capitalize on earned value techniques in real time and make them available to projects of all sizes. Optimized plans can be delivered to the field with the material required, the right crew size and instructions for the day’s activity. The connection with the office and field and the increase in IoT (Internet of Things) allows material, equipment and labor to be tracked and deployed. Knowing at 9am that you only have a drywall crew of 10 against a daily work plan of 15 will alert you to being off cadence that can have a rolling impact on other trades. Progress can also be reported along with quality checks via automated reality capture.
To illustrate, VolkerWessels is a multi-disciplinary firm based in the Netherlands providing construction, infrastructure and real estate services, including self-perform. What started as an effort to reduce the volume of construction traffic into urban areas with more optimized delivery plans has yielded production optimization. VolkerWessels has set up warehouses outside of Amsterdam not just to stage material, but also to prefabricate components and package material and equipment by task and location for just-in-time delivery to the site. The concept has grown to workforce coordination as well. The workforce meets at the warehouse and is bussed in to the project each day with the material and equipment they need to do the work.
The Digital Transformation
A digital transformation is underway. The results of these new processes, skill sets and technologies is promising, and the improved outcomes will make this transformation stick. Some notable recent examples include up to a 50% increase in field productivity, 10% compression of schedules, 80% reduction in rework and asset owners able to free-up critical funds that had been locked in contingency, to expedite value-add projects. Boston Consulting Group projects that “within 10 years, full scale digitization in nonresidential construction will lead to annual cost savings of $0.7T-$1.2T.”
This transformation will be required for organizations to stay competitive. The positive way to look at this change is as an opportunity to improve a company's core economics: expand margins and market share, overcome labor shortage, increase operational efficiency and deliver new services and value add.
Transformation will cause companies to get laser focused. Companies will evolve to have sweet spots by construction type, region or method so that they can optimize the supply chain and process. This is evident in the divestitures being done by AECOM and Jacobs. Skilled resources in this industry could become more valuable free agents. Construction technology emerging as progressive, innovate and leading-edge will attract the next generation of builders. Highly skilled or specialized resources may become decentralized and shared for better utilization and valuation— like an Uber-model for construction.
How is your organization addressing digital transformation? Leave your comment below.