Australia’s construction industry is navigating uncertain waters.
While there has been robust growth with new projects and an uptick in building approvals, significant challenges remain in staying afloat and delivering projects on time and within budget.
Higher capital requirements due to inflation, supply chain disruptions, and shortages of essential materials such as cement and timber, are also driving up costs. Construction costs have increased by one to three per cent each year for the last 22 years.
Amidst all of this, we’ve seen construction firms cutting costs to stay afloat, including some much-publicized layoffs from our country’s heaviest hitters. At the same time, we’ve had to combat labor shortages and skills gaps to complete heavily delayed jobs.
Stories like this are becoming all too common, but they don’t have to be.
The construction industry has traditionally been slow in their uptake of technology. A recent McKinsey report indicates that companies have spent on average less than one per cent of their revenues on IT – less than a third of what is spent in automotive and aerospace.
The Value of Data in Construction
We live in an era when every touchpoint of an operation can be quantified.
Data is a valuable asset, and through integrated IoT (Internet of Things) systems in machinery and other assets, organizations can capture end-to-end operational data that can be fed into centralized data hubs to form insights for evidence-based decision making in the present, and artificial intelligence-fueled data modelling for insights for the future.
This would give decision makers access to everything that is happening on the ground – whether they are building a 15-storey residential site in the Perth CBD, or a new airport terminal in western Sydney.
Advanced technology helps decision-makers make more informed decisions, to optimize both financial and operational efficiencies.
In construction, this means forecasting supply chain issues before they happen, managing key components of projects to minimize cost blowouts and delays, and reducing risk through informed means to become more resilient.
Humans are creatures of habit and routine. While it’s easy to speak about what the construction industry should do, we must acknowledge that there are implementation challenges at play.
Embracing a Smarter Future
In a landscape where productivity has remained the same while financial costs have soared, it’s clear that the industry’s future is set in stone – unless it embraces meaningful change.
While we tend to think about risk analysis in a purely dollar-value sense, technology now enables real-time data collection which was previously difficult to collect, helping companies mitigate issues by identifying risks before they become problems.
In fact, research from Accenture shows that the monitoring and predictive maintenance of assets decreases maintenance costs by up to 30 per cent and eliminates breakdowns by up to 70 per cent.
To put this in perspective – a malfunctioning component of a hoist gear assembly in a tower crane, if not managed ahead of time, may set progress back anywhere from hours, days or even weeks, depending on how quickly asset managers can source, ship and install a replacement component. In turn, this creates a domino effect of sunk costs across labor and equipment that leads to rising costs and project delays, meaning an asset manager is reactively managing the issue at hand.
Alternatively, a hoist gear assembly equipped with IoT sensors would alert an on-the-ground decision-maker to a component’s performance issue in real time, meaning a replacement part could be ordered ahead of time, managing stress on the impacted component ensuring it would be replaced before malfunctioning. This would help avoid shutdown and allow asset managers to make proactive decisions.
Building an IT infrastructure is akin to constructing a building’s foundations. It must be unified, considered, and strong enough to withstand obstacles. IFS’s integrated structure ensures data purity while centralizing all facets into a single system, significantly simplifying data management.
The industry is at a crossroads. We either continue down a path of uncertainty or embrace the tools – end-to-end insights, AI and IoT sensors – to create a smarter, more resilient future.
It’s time to choose progress.
