Jason Janning, Senior Vice President and General Manager, Hilti
It was Friday afternoon and the sales director had an announcement. “Great news, we won the overhead grid application at Project Falcon!”
“Wow, that’s awesome! Congrats to team on the big sale. What did the customer say?” I replied.
“They appreciated our presentation and are convinced Hilti’s prefabricated solution will save time and cost for the project.” The sales director was beaming, and he deserved to be. We’ve been investing in the engineering and operational capacity to offer prefabricated steel assemblies. And our customer’s decision to place her trust in Hilti was a welcome sign of progress.
I shared his enthusiasm. “When do we get started?”
“Well Jason, that’s where it gets complicated,. We’ll need to deliver the product on Tuesday, and the order will wipe out all of Hilti’s North American inventory across three items. Even then we’ll still be short. So, the materials manager is ordering overseas stock to be brought in over the weekend using air freight.”
“Gosh, that sounds expensive for Hilti and for the customer. But we always deliver. Tell me, how long have we known about this order?”
“We got the go ahead earlier today.”
“Today, huh. When did the customer get approval to proceed?”
“Hmmmm. And how long has the project been in design?”
Two days to deliver a large and complicated materials order that could have been anticipated months earlier? Costly air shipment of heavy steel components? High stress and weekend work to fulfill a single large order? This may sound like an extreme scenario but it’s not. Less than one third of Hilti’s product shipments are fulfilled using the lowest cost shipping option. Nearly half our product shipments use high cost, urgent means to get products onto jobsites.
Construction logistics are expensive, particularly in last-minute scenarios. Beyond the obvious costs of couriers and air shipments lie the hidden costs. When jobsite or warehouse employees set aside their planned work to visit a warehouses or store, productivity suffers. And regardless of who pays the freight bill, the costs to our industry of ineffective materials planning are massive.
After nearly a decade of experience in construction product sales and fulfillment, one thing still surprises me. For all our excellence in creative design, building engineering, worker safety, and whiz-bang tools, construction supply chains are highly inefficient.
It can’t go on like this.
Technology and innovation have revolutionized countless industries. Examples abound from retail banks to grocery stores, from travel planning to telecommunications. But for all the progress in the business world, we work in the most productivity-poor industry on Earth: construction.
In 2017 The Economist nailed the point. “In the past 20 years the [construction industry’s] global average for the value-added per hour has inched up by 1 percent a year, about one-quarter the rate of growth in manufacturing. Trends in rich countries are especially bad. Over the same period Germany and Japan, paragons of industrial efficiency, have seen nearly no growth in construction productivity. In France and Italy productivity has fallen by one-sixth. In America, astonishingly, it has plunged by half since the late 1960s.”
Don’t despair; there is good news. Innovative general contractors, trade contractors, architects, and engineers are making great strides forward. And equipment companies are doing their part to bring robotics, augmented and virtual reality (AR/VR), internet of things (IOT), and fifth generation wireless communications (5G) to jobsites. These technologies will help incumbents and insurgents introduce breakthrough innovations.
One construction technology that offers proven promise across the entire design-build-occupy progression is Building Information Modelling (BIM). The overarching goal of BIM is to design and model a buildable, digital prototype of a physical asset before it’s constructed in reality.
The value to architects, engineers, GCs, sub-contractors, and owners/occupants is well-documented. Its benefits include cross-trade collaboration, reduced rework, worker productivity, materials savings, offsite prefabrication, and many more.
BIM is a gateway technology which enables countless innovations. One field-based example is Hilti’s Jaibot, the world’s first BIM-enabled construction jobsite robot. And that’s not all. Hilti offers BIM Services designed around six use cases. They are consistent with industry norms and are designed to serve our customers’ daily workflows. They include:
But spare a thought for BIM’s prospects in other less glamourous areas, including materials coordination and waste reduction. By overlaying the 4th dimension of time and schedule into the model, contractors can more effectively manage myriad material flows into and through complicated jobsites.
Jobsites are as much a marvel of material and worker movement as they are of engineering and design. And while logistics isn’t as eye-catching as the latest architectural design, there is serious savings to be gained. Savings that can be invested toward developing technologies that benefit the construction industry, our workers, and the owners we serve.
In summary, BIM should be applied more aggressively toward materials planning and scheduling. Contractors should therefore budget costs to anticipate jobsite logistics productivity. In turn construction materials suppliers can shift more resources to transformational product and service innovations that bring exciting changes to jobsites big and small.