Delivering innovation in construction

That the construction industry lags behind other industries on innovation and digital transformation is well known. A lack of investment in research and development, slow adoption of new technologies, low productivity and inappropriate risk allocation in contracts are just a handful of the common barriers to change, but more fundamentally there remains a lack of incentive for the parties that can make the biggest impact on a project to take action. Contractors, consultants and suppliers are often bound by lowest cost solutions, delivered to meet paper based, transactional performance criteria. In such cases contractors work to fulfil the contract, not to make better quality projects.

However digitisation, transformation and innovation are underway in the industry. You just need to know where to look. From the potential for Universal Building Robots, to 3D printed bridges and Building Information Modelling (BIM) throughout the construction and operational life cycles (not just in design), change is coming. Aware of this Middle East Economic Digest (MEED) and Mashreq Bank asked me to write about some of the world’s leading projects for a report which was shared at the MEED Quality in Construction Awards on 2nd May and will be online soon.

Before diving into the six case studies the report mentions research by McKinsey Global Institute which describes construction as being “ripe for disruption”. New technologies, it says, have the potential to deliver 60 per cent efficiency gains equating to $1.6 trillion in potential savings every year. At the top of the list for investment is digital technology with the research demonstrating that construction ranks lowest of 21 other sectors in terms of digitisation and has had only a 6 per cent growth in productivity since the 1940s compared to 1,512 per cent growth in productivity in agriculture and 780 per cent growth in manufacturing. But the experience of these other industries shows that there comes a point, a tipping point, where digital capability becomes a requirement for survival.

An example of this included in the MEED report is Siemens Building Technologies new headquarters in Switzerland. The firm did not want to perpetuate existing construction processes where contractors deliver a building according to a contract with the data developed during the construction period simply evaporating. Instead they wanted to capture this throughout design and construction and create a digital repository of data, a digital twin, that would enable the new facility to be cost effectively managed for the rest of its operational life. This meant using building information modelling (BIM) to its fullest extent, incorporating not only the digital 3D design model, but using it for construction work packages and linking time (4D) and cost (5D) and creating a virtual twin of the final building. To achieve this Siemens Real Estate went out to the market and demanded full BIM enablement. Not all major construction companies were able to comply. In Switzerland’s building sector a tipping point had been reached and Strabag, an Austrian contractor that has invested in BIM for a decade, was ready.

Siemens Real Estate undertook this transition accepting that it would need to spend more in the early stages of this project. Innovation does not come for free. But this investment would allow the company to manage its facilities more efficiently in future, minimising the lifecycle cost. Making the crucial link between the cost of new infrastructure and its operational expenditure (opex) is a vital step along the path of transformation. Clients may need to spend more, for infrastructure to cost less.

At the same time, incentivising contractors to deliver solutions that will result in better, more innovative, and more efficient infrastructure is also important. The Siemens project was carried out using a design and build contract, which gave Strabag more the freedom to help its client create the most cost effective long-term solution. Use of design and build also gives the contractor incentive to value engineer the scheme. As explained in MEED’s Mashreq Driving Better Value in Construction Report, this step sees contractors look for design alternatives which can maintain function and performance at lower cost. But under traditional lowest price contract arrangements there is no incentive for contractors to do this.

The good news for construction  is that the benefits of digital construction have finally been recognised, a tipping point is being reached, and the industry is investing for its own benefit. To date contractors have told MEED that low margins mean that they can’t afford to invest in digitisation. Now they report that they cannot afford not to.

Other case studies included in the report include:

  • The world’s first 3D printed bridge
  • Universal construction robots
  • Drones in monitoring and inspection
  • Offsite innovation on the Hong Kong, Zhuhai, Macau bridge
  • Digital construction innovation on a new bridge between Russia and China
  • Model based design delivery on London’s Thames Tideway

I will include a link as soon as this is live but here is a sneaky peak of the cover…..

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MEED executive education report 2015

CovereducationOne of the recent reports that I have worked on for Middle East Economic Digest (MEED) is all about executive education in the GCC. Despite the low oil price business schools and universities are continuing to report strong demand for their courses. Bespoke corporate training courses are particularly sought after as companies take advantage of the growing number of regional providers and a willingness to adapt content to suit the corporate customers.

For the overview of the executive education guide I spoke to many of the region’s business schools to find out how they were adapting to the regional dynamics. I found that although the sector remains one of growth and much activity, issues remain. Programmes have been put on hold by some clients, particularly those in the energy sector who have felt the impact of falling oil revenues most keenly. And some schools report a drop in corporate financing for their MBAs with fees paid privately instead. But rather than dropping off it seems that opportunities in executive education are evolving with companies becoming more discerning about the kind of training that they want for their employees. Creating and delivering this invariably requires the support of business schools, universities or professional service firms and will ultimately add to the depth and number of options available, which can only be a good thing for the region’s expanding economies.

The full article will appear on meed.com soon.

 

 

MEED rail report highlights industry challenges

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This week MEED have published a report that shows the challenges and opportunties facing the railway industry as the region seeks to expand its rail services. For the cities of the GCC automated metros are set to revolutionise urban transport, and between countries freight lines are up and running with high speed rail on the horizon. I was fortunate enough to talk with rail heavyweights such as Thales Group, Siemens, Talgo, Mott MacDonald, Atkins and not to mention a rolling stock guru by the name of Paul Lawson who advises Saudi Railways Organisation on its expanding train fleet.

Read the report here

As I move on to look at regional groundwater abstraction I realise that today (23rd June) is National Women in Engineering Day. To celebrate I have been looking at some of the biggest engineering stories that I have covered since switching from life as a civil engineer to becoming a journalist. This was my first big story. A car park collapsed killing four people on site and I was sent to find out why. Immediately it was clear that the shear wall at the end was very thin and bowing outwards. After three days of being denied site access an investigator finally relented and told me that he was looking into this very issue. I came back with a great story – and my first grey hair. Thanks NCE!

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Iraq’s infrastructure challenges

MEED this week published a major report on Iraq’s infrastructure needs and I contributed with sections on transport, logistics and housing. Read the full report here (if you subscribe)

Iraq Republic Railways has outlined a $60bn investment plan
Iraq Republic Railways has outlined a $60bn investment plan

Beyond the obvious security and political challenges  Iraq’s transport sector is also hindered by transport responsibilities being split between two main government departments in and the Ministry of Construction and Housing who look after all the roads and the Ministry of Transport which looks after everything else.  During my research I learned that Dar Al Handasah has been selected by MoCH to carry out a 20yr transport masterplan for the country, however successful delivery of this will rely on cooperation with the MoT.

Although the long-term strategy is yet to be determined, Baghdad has outlined general objectives. Its ultimate ambition is to offer an alternative transport corridor for logistics and trade from the East into Europe. Most ships currently sail around the Arabian Peninsula and through the Suez Canal. Iraq wants to offer a world-class port at Faw on the country’s southern tip, which will be connected to a regional rail network. Grand Faw Port is the biggest priority for Iraq’s ports and involves the construction of a 17-metre deep port, allowing the world’s largest vessels to dock, and 7,000 metres of quayside. The General Company for Ports of Iraq told me that a second contract is being tendered for a breakwater so progress on this project is being made.

From Faw, the plan is to move cargo via a rail link to the improved north-south railway, which will eventually extend into Jordan, Syria, Kuwait and Iran, as well as along the existing line to Turkey. All new lines will be double-track to allow both passenger and freight travel. On the current network, passengers and freight compete along slow and congested lines. As a result, most travellers and cargo haulage firms choose to drive, making a journey from Basra to Baghdad in five hours instead of up to 14 hours by train.

The new rail network also includes plans for passenger-only lines, including a 663-kilometre connection between Baghdad and Umm Qasr running south through Karbala, Najaf and Basra. French rail company Alstom signed a memorandum of understanding with the government to study this option in July 2011. According to IRR, the project is still in the preliminary design stage. Read more on this in MEED using the link above

Thanks to everyone who helped in the research.