Profiting From Unity

By Akio
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The construction industry is turning to the cloud for improved efficiency and profitability.

The rapidly growing global construction industry suffers from fragmentation, which increases risks, leads to wasteful practices and negatively affects project delivery and stakeholder interests. But now, cloud-based collaborative tools are replacing traditional industry practices with new business models that imagine, design and construct better buildings.

clicktotweetClick to Tweet: #AEC Turns to the Cloud
for Improved Efficiency & Profitability


Article by Nic Lerner, originally printed in COMPASS Magazine 

From the Construction Intelligence Center to PricewaterhouseCoopers (PwC), most industry trackers agree that construction is in for a boom.

A PwC–sponsored report entitled “Global Construction 2030,” published by Global Construction Perspectives with Oxford Economics, predicts a compound growth of 85%, to US$15.5 trillion, by 2030.

That level of expansion is more than a percentage point higher than the 3.9% annual growth rate projected for the global economy as a whole, driven in large part by rapid growth in urban populations.

But a dark cloud looms behind those silver growth projections.

The industry, experts agree, is so fragmented with numerous segments – architects, engineers, construction firms and dozens of trades both big and small – that it is not prepared to handle this level of expansion.

A LEGAL TANGLE

Javier Glatt, co-founder and CEO of CadMakers Virtual Construction, a Vancouver-based integrated construction technology firm, said the reasons for fragmentation come down to legal responsibility.

“The causes of fragmentation are risk and liability issues and their apportionment through the industry,” he said.

As buildings become bigger and increasingly complex, they require more specialized skills at every stage. Tiers of subcontractors are appointed not only to do the work, but also to carry some of the risk.

Glatt cites a misalignment of incentives between stakeholders and contractors, with some working to push down costs while others seek to benefit from budget increases.

Even the design process becomes fragmented, with different contractors responsible for structures, facades, visualization, analysis and multiple building systems.

The good news, however, is that there is plenty of room for improvement.

“Automating processes and making prefabricated components off-site reduce risk, cost, waste and errors,” he said.

“Working with a single unified 3D model that everyone has access to helps solve a lot of problems that arise when contractors don’t or can’t communicate among themselves.”

When each contractor produces its own individual model and data, the chances of error and miscommunication increase.

With a unified project model, Glatt said, “builders understand their role in the project and their interactions with other contractors. They can concentrate on their core skills, solve problems and build better.”

PERCENTAGE GAINS

Research conducted by Dodge Data & Analytics, a leading data, analytics, news and intelligence provider for the North American construction industry, reinforces these observations.

Donna Laquidara-Carr, the company’s Insights Research director, said that their analysis of Architecture, Engineering & Construction (AEC) industry data, from a study conducted in partnership with the Lean Construction Institute, shows that 92% of “typical projects” – those that suffer from fragmentation – experience delays, 85% go over budget and 63% suffer quality defects.

“The data demonstrates that integrated project delivery correlates with significant performance improvements and waste reduction,” Laquidara-Carr said. “And we hear time and again that the key to unlocking these benefits is early stage collaboration.”

The data shows that only 1% of owners deployed project integration tools on typical projects, she said, but that these tools were used on 22% of the industry’s “best-performing projects.”

Consequently, positive team chemistry was reported on 68% of the “best projects,” compared with just 10% on “typical projects.” Teams were well- integrated on 61% of the “best projects,” but only on 9% of “typical projects.”

The data indicate that when all stakeholders – including owners, contractors and trades – are integrated in a virtual “big room” that facilitates working together as one team, the AEC industry functions better, Laquidara-Carr said.

A virtual “big room” is a term for a unified online communications and collaboration platform.

Building Information Modeling (BIM) was heralded as a solution to fragmentation, but industry experience has not been consistently positive.

Tim Beckett, director of Beckett Rankine, a UK-based specialist marine civil engineering consultancy, is a design contractor on the 25-kilometer (16 miles), 7.4-meter (24 feet) diameter Thames Tideway Tunnel. The super sewer is budgeted at £4.2 billion (US$5.2 billion) and will reach depths of 65 meters (213 feet).

Tideway is building the Thames Tideway Tunnel to tackle the problem of overflows from London’s Victorian sewers for at least the next 100 years, and enable the UK to meet European environmental standards. (Image © Tideway)

Tideway is building the Thames Tideway Tunnel to tackle the problem of overflows from London’s Victorian sewers for at least the next 100 years, and enable the UK to meet European environmental standards. (Image © Tideway)

Standard BIM systems can be “clunky to use, expensive to buy and require specialist skills to operate,” Beckett said. However, he sees benefits in a cloud-based approach, which offers the advantages and capabilities of BIM while making information more broadly available to people of all skill levels.

“The Thames Tideway Tunnel is expected to operate for more than a century, so all the data must be future-proofed,” Beckett said.

“A cloud-based solution to project management at this scale would allow stakeholders simple, easy, cheap, permanent and traceable access to the data that they need, today and into the future.”

CONTINENTS UNITED

“Visual simulations and high-resolution data are necessary to properly think through very complex projects,” said John Cerone, director of Virtual Design and Construction at New York-based architecture firm SHoP Architects.

“Standard BIM supports traditional building practices, but builders are seeing that a high-quality, unified 3D cloud-based approach helps them make more money by being more efficient.”

That the industry will accept a unified approach to managing building project data is only a matter of time, Cerone said.

“Construction is such a large part of the global economy that many billions can be saved and made through efficiencies,” he said.

Encouragingly, SHoP is hearing significant interest from builders who want to share the benefits of a unified approach.

Replacing linear processes with the concurrent working practices enabled by a unified approach speeds the design-to-fabrication process and introduces greater accuracy while automatically maintaining financial rigor.

“If car companies can know how much steel goes into a car, to the micron, why can’t you do that with a building?” Cerone said.

clicktotweetClick to Tweet: “Car companies know how much steel goes into
a car to the micron; why not buildings?” @SHoPArchitects

On a current project, Botswana Innovation Hub, an iconic symbol of Botswana’s support for research and development, SHoP has attained this level of “digital craft” across continents.

The results, Cerone said, are “speed with no waste, total accuracy of fabrication and absolute budgetary control.”

“A new 3D-model-based paradigm that actually incentivizes innovation, produces higher profits and helps make better buildings is coursing through the AEC industry,” Cerone said. “The industry is transforming, and it is very exciting to be a part of it.”

4 Benefits of Building Lifecycle Management:

BIM (Building Information Modeling) data, combined with PLM (Product Lifecycle Management) capabilities and processes, creates “Building Lifecycle Management” (BLM), which can increase construction predictability, long-term value and profitability. Main benefits include:

Improve Productivity: BLM helps remove version-control issues, with all users accessing a single live database. Human error, rework and iterations can be drastically reduced.

Increase Quality and Value: Armed with richer data in context, designers can make better decisions. Data access also improves coordination among builders and suppliers, allowing them to more quickly and accurately realize the design intent. BLM also offers built-in governance and traceability, improving accountability.

Reduce Waste, Risk and Cost: BLM is designed to reduce waste by more accurately predicting outcomes, identifying potential points of conflict and optimizing processes. BLM also reduces risk to the project schedule, worker safety and the overall construction budget.

Gain a Competitive Advantage: A BLM system enables a team to become more efficient than competitors, deliver higher quality, gain the loyalties of owners and design partners and retain a healthier profit margin.

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RELATED RESOURCES

WHITEPAPER End-To-End Collaboration Enabled by BIM Level 3: An Architecture, Engineering & Construction Industry Solution Based on Manufacturing Best Practices

Design for Fabrication Industry Solution Experience

Think a Zero RFI Goal Is Impossible? Consider These Strategies for Improving Project Coordination

By Marty R
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clicktotweetClick to Tweet: “Early collaboration can reduce RFIs,
reduce change orders on AEC projects”

The typical commercial construction project generates on the order of 3,000 to 20,000 RFIs (Requests for Information). It’s a staggering number, especially considering reviewing and documenting each RFI takes time. Studies show each RFI resolution costs about $1,000 in time and labor, even when BIM design tools are utilized.

RFIs are an indication of a lack of understanding of the design, as well as a lack of close coordination among the project teams. Further, RFIs are the source of changes in scope, costing the project owner more time and money than expected.

clicktotweetClick to Tweet: “AEC projects generate 3k-20k RFIs per project; indicates lack of understanding & coordination”

For AEC teams aiming to improve performance and predictability in construction, the goal should be to reduce RFIs as much as possible.

One way to do this is to get all team members on the same page early in the design process. A building lifecycle management (BLM) approach can facilitate this, drastically reducing RFIs and change orders.


Related Whitepaper: End-To-End Collaboration Enabled by BIM Level 3: An Architecture, Engineering & Construction Industry Solution Based on Manufacturing Best Practices 


BLM success story: One Island East, Hong Kong

Swire Properties Ltd. applied BLM processes and technologies for its One Island East tower in Hong Kong. The 70-story, 1.75 million square foot project was delivered on time, and with zero cost overruns.

3D clash detection became a primary vehicle for early collaboration and enhanced coordination. Over 2,000 issues were identified and resolved prior to tender. As a result, the One Island East project team issued just 140 RFIs—a 93% reduction from traditional construction coordination processes.

clicktotweetClick to Tweet: “How a 70-story 1.75Mill sq ft
project was delivered on time, with 0 overruns.”

One_Island_East_201302-Image-Source-Wikimedia-Commons-courtesy-of-WiNG

One Island East,
Hong Kong

Incentivizing the shift to early collaboration

The benefits of closely coordinated teams might be clear cut for to the project owner: a project that is delivered on time and on budget. However, individual members of the design and construction team might not be so quick to invest in a change to BLM processes that enable this improved coordination.

Typical construction project budgets include a healthy contingency, meant to cover overruns caused by RFIs and change orders. A portion of the contingency can be reallocated as a fee for the design firm and subcontractors to work on identifying issues that create RFIs.

clicktotweetClick to Tweet: “Reallocate AEC contingency budget to
architect & subs as incentive for preventing RFIs”

Thus, re-allocating a portion of the contingency becomes an incentive for eliminating jobsite problems before they arise.  Technology can support the detection and resolution of these problems earlier—when these issues are less costly to resolve.

The benefits of a collaborative approach

Such early coordination among team members can dramatically reduce RFIs, preventing budget and schedule inflation. Moreover, owners benefit in the long run by having a project team focused on improving operational performance.

AEC teams that put the tools in place to improve project coordination are better prepared to turnover a project that can ease maintenance and operations throughout the building’s lifecycle. And they’ll be able to improve their own bottom-line as well.


To learn more about how AEC professionals can benefit from the collaboration enabled by BLM, download the Dassault Systèmes whitepaper.

Extended-Collab-venn-diagram

BLM Processes Reduce RFIs

clicktotweetClick to Tweet: “Think a Zero RFI Goal Is Impossible?
Consider These Strategies for Improving Project Coordination”

A “Perfect Storm” for AEC Industry Transformation

By Akio
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shutterstock_122817211

Click to TweetClick to Tweet: A “Perfect Storm”
for #AEC Industry Transformation

It’s no secret that the AEC industry is suffering from a surplus of waste: wasted materials, wasted time spent on rework and change orders, waste from highly fragmented processes.

However, what the industry is beginning to realize is that it’s not the first group to think, There must be a better way.

The aerospace industry is one recent example; in the 1990s, companies such as Boeing began to look at technologies and processes used in other industries to tighten their supply chain and manufacturing processes. A switch to all-digital modeling made this possible.

Also necessary was a switch in mindset. Aerospace professionals had to switch their thinking from “project” to “product,” and adopt product lifecycle management tools that would deliver increased value to the end-user.

With these 2 steps, AEC professionals can likewise optimize their processes:

Step 1. Adopting Revised Business Models

According to Hector Lorenzo Camps, founder of PHI Cubed Inc., the industry is looking for ways to improve, but to truly move forward will first have to revise its compensation and business models.

Click to TweetClick to Tweet: “To move forward, #AEC industry
1st must revise its comp & business models” @HectorCamps

Although design-build contracts are increasingly popular, there remains too little true partnership among all parties involved in the design, construction and operations processes.

Today’s typical contracts emphasize distinct roles for all players in order to help control liability.

“Many relationships in the industry are strained because of the adversarial nature of the industry standard contracts that pin professionals against each other to divide risk,” Camps says.

New collaborative forms of agreement—namely, Integrated Project Delivery—remain slow to take off as AEC professionals explore new liability rules and shift from a “best for me” to a “best for project” mentality.

Click to TweetClick to Tweet: #AEC is shifting (slowly) from
“best for me” to “best for project” mentality.

Tied to this need to collaborate is another necessary step for AEC professionals: the need to shake their reliance on a 2D, paper-based management process.

Step 2. Adopting Tools for Better Integration

Until all industry players make the switch to 3D processes, there will be a problem with what Camps calls “two versions of the truth with documentation, one in 2D and the other in 3D.”

Many firms are working with a mix of 2D CAD and 3D BIM to accommodate all parties’ preferences.

“Contractually, firms go with the 2D documents, which often are obsolete and predate the model. Builders under pressure, wanting to build from the best available data, are asking to build from the model and produce 2D documents after,” Camps says. “The coordinated model needs to drive the dimensional and informational control of the project and the field implementation documents. The contractual language needs to reflect this.”

Camps believes owners—who ultimately stand to gain the most from collaborative projects—will drive this evolution to 3D.

“All they need to do is write into their contracts the information management strategy. As long as the roles, responsibilities and use case for information are defined, and intellectual property is dealt with, they should have no problem getting professionals to deliver digital documents,” he says.

Why Now Is The Time For Change

The good news? The AEC industry is already beginning to adopt the tools and processes that will make transformation possible.

“We have the perfect storm for real industry transformation as significant as the industrial revolution,” Camps predicts.

Click to TweetClick to Tweet: .@HectorCamps predicts a “perfect storm
for #AEC transformation as significant as #IndustrialRevolution”

First, AEC professionals are beginning to borrow concepts from manufacturing. To further reduce waste and improve quality, the industry is looking to close the gap between design and fabrication. Lean construction is one such effort, as the industry attacks waste by taking lessons learned from Lean Manufacturing and Just in Time delivery models.

Second, Camps points to a number of technology solutions becoming available that may further speed improvement.

For example, the advent of cloud computing is making it easier than ever for all players to work together in a more tightly connected process.

As Camps points out, AEC companies generally have far fewer employees than manufacturing industries, making it potentially more difficult to invest in an expensive data management system. Cloud computing can allow even small firms to participate in building lifecycle management without having to invest in prohibitively expensive data management systems.

Click to TweetClick to Tweet: Cloud computing allows small firms to
participate in #BLM without investing in expensive systems

By putting data on the cloud, it’s also typically easier for various parties to share data and resources related to a project.

“This ad hoc approach to PLM makes it very easy for the AEC industry to adopt the benefits of integration and collaboration without all the forward structuring that would happen if they had to form a unique corporation in order to integrate their processes,” Camps says.

In addition, the Internet of Things is making it easier to move digital models from the drawing table to the field, giving contractors and designers rapid insight into potential problems. And Camps even points to rapid manufacturing, such as 3D printing, as a potentially promising technology for optimization, as these tools could someday make it possible to produce one off building components while maintaining the economies of scale of standard offsite production facilities.

Beyond technology, however, today’s growing engagement from public owners looking to spend more wisely is invigorating further innovation in connectedness.

The most carefully watched case in point is the UK’s Level 2 BIM requirement for federal buildings, set to become effective in 2016.

“It’s expected that by 2019, BIM Level 3 will be required. Level 3 in essence is ‘full collaboration between all disciplines by means of using a single, shared project model which is held in a centralized repository,’” Camps says.

He adds, “By that definition, they just described the 3DEXPERIENCE Platform.”

Related Resources

Collaborative, Industrialized Construction Solutions from Dassault Systèmes

Spotlight on PHI Cubed: Guiding the AEC Industry Toward Greater Levels of Integration

Spotlight on MEMKO: Pushing Collaboration Across the Project Life Cycle to Revolutionize Design and Construction

Spotlight on Impararia: Reducing the Gap Between Aerospace Optimization and AEC Inefficiency



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