How industry pressure points drive tech innovation
Construction firms looking to improve productivity should align technology investments with business objectives and seek buy-in from end users, according to panelists of an FMI webinar.
Contractors are anticipating significant growth in the next several years, with about 75% of respondents to a January AGC survey saying they plan to add to their workforces this year, despite data supporting the fact that around 82% will struggle to find qualified workers.
With drastic change underway, the industry is tasked with finding ways to stay ahead of the curve and keep pace with demand. Despite construction’s sluggishness in adopting technology — a 2015 McKinsey Global Institute study placed construction ahead of only agriculture and hunting in terms of digitization — technology can help the industry stay ahead.
In an Aug. 16 webinar hosted by management consulting and investment banking firm FMI Corp. and construction software company Rhumbix, speakers detailed how technology and automation can improve labor productivity as well as opportunities and hindrances to tech adoption.
Jay Snyder, technology practice leader at FMI, identified four factors putting pressure on the industry: project complexity, labor shortage, productivity, and schedule compression. Each pressure point can both catalyze change and enable technology and innovation, he said. Overarching drivers of digitization, according to Snyder, include:
- Proliferation of connected devices.
- Expansion of wireless connectivity.
- Decrease in cost of cloud storage.
- Development of software for mobile applications.
- Consolidation of the software market.
- Heightened importance of integrated solutions.
Data, which Snyder said is the raw material of business, will drive the future of everything. Caterpillar, for example, partnered with tech company Uptake to provide a Software as a Service Solution (SaSS) that uses sensors to gather performance and maintenance data on heavy equipment. The resulting data drove insights that not only reduced downtime, but increased the utilization and operational efficiency of equipment, according to the companies.
Productivity, said FMI senior consultant John Murphy, is a measure of management effectiveness. Mathematically speaking, it is installed units per man hour in the field. Companies don't get paid for the work that happens in the back office — it's the crew installing linear feet of pipe or cubic yards of concrete, for example, that makes the money. The question companies should ask, then, Murphy said, is, "What are we doing to set up the crew for success? Equipment, materials and tools are getting smarter" and making their way into this process.
During the webinar, Murphy also outlined eight deterrents to productivity through the acronym DOWNTIME:
- Waiting for a task to be completed
- Non-utilized talent
- Transportation of tools, products and materials unnecessarily
- Inventory that's inefficiently managed
- Motion (defined as excess movement of people or objects)
- Excess processing (or executing actions or activities that aren't required)
To maximize savings and increase profitability, Murphy recommended focusing on field workers. He calculated that a 1% productivity improvement would save 4.8 minutes in an eight-hour workday and increase net profitability by 10%. A 10% improvement, therefore, would save 48 minutes and yield 100% increased profitability.
The real opportunity in technology, he said, is to integrate it in a way that will deliver more value to customers. This can be through any number of tech avenues, including the internet of things, advanced robotics, artificial intelligence, modularization/prefabrication, iterative manufacturing or autonomous vehicles.
Tech deployment strategies
If technology implementation fails, it most frequently is due to it being a poor fit with processes and procedures, according to Murphy. That's followed by low adoption, difficulty in using it, inadequate training and poor integration with existing software and technology.
"It doesn't help to bring on technology if you don’t have best-in-practice processes and procedures in place to support the guys in the field," Murphy said.
Snyder piggybacked on that thought. "Tech always needs to fall back to what your strategic business objectives are as a company. Understand what those are, then apply resources to resolve those issues.
"A supporting tech strategy doesn't need to be elaborate, lengthy or take a lot of time and resources to develop," he said. Rather, it acts as a "framework and focus" for the company's technology investments and a way of measuring progress in adoption.
Synder also advised construction companies to seek buy-in not only from the top down, but also from the bottom up. "Don't try to pursue tech, devices or capabilities that the field or back office workers aren't interested in adopting," he said. "But if there's something you need to adopt that meets resistance, then build acceptance by explaining the current state and the perceived future state as you adopt new tech."
Guy Skillett, vice president of construction innovation at Rhumbix, organizes digital construction into five buckets — higher definition surveying and geolocation, 5-D BIM, digital collaboration and mobility, IoT and advanced analytics and future-proof design and construction — with the majority of firms focusing their efforts in the middle three buckets. He also shared that, to have the best outcomes, companies must evaluate tech's ability to be impactful and have a high likelihood of adoption.
Successful tech deployment, according to Skillett, comes down to three seemingly simple steps: Plan for it, configure it and deploy it.
Citing Rhumbix case studies, Skillett shared how Skanska saved 95 minutes per worker per day as a project went from needing four workers and 58 hours to complete a task to only two workers and seven hours. This added up to an 88% reduction in task duration and it streamlined craft worker assignment, he said.
In another example he provided, Turner Construction Co. reported a seven-fold return on investment as workers took 69% less time to enter timecard data and foremen went from spending 4.5 hours doing paperwork to only 20 minutes.
Follow Laurie Cowin on Twitter