While global labor productivity has risen by 2.8% in the past 20 years, productivity in construction has increased by only 1%, compared with a 3.6% increase in manufacturing, actually declining (see Figure 1). If the construction industry can fill this gap in line with the global economic rate, the industry value could rise by $ 1.6 trillion, increasing global GDP by 2%. However, the construction industry is widely regulated, avoiding risks and difficult to navigate for new players. But not all that is lost … To solve this imbalance, there are increasing efforts to engage innovative technologies and business models.
One part of the construction value chain is seeing a lot of innovation Pre-made. The use of off-site manufacturing increases labor productivity and reduces waste, ultimately improving efficiency. While prefabricated buildings are not new, with the emergence of early examples 12 years agoten In the twentieth century, the urgent need for new housing and higher productivity increased attention.
Innovative approaches to construction
Digital techniques such as Building Information Modeling (BIM) enable simulation of all aspects of design performance and evaluation before construction, and integrate information related to the construction project from design to management after years of construction. More recently, the 5D BIM program has helped speed up transparency in design, cost, and visual progress by taking advantage of the advanced analytics provided by Internet Objects to improve location control in materials, labor, and equipment productivity.
One troubled is the Katerra. The company was founded in 2015 and has raised more than $ 1 billion in equity so far from the Vijtgen Vision Fund, DFJ, Khosla Ventures and others. Katerra adopts the project lifecycle approach from end to end and provides prefabricated buildings, providing full service in architecture, engineering, interior design, material supply, construction management, general contracting and recruitment services. Another player, Legal & General, a British multinational financial services company with a history of housing supply, saw the construction of prefabricated buildings as a development of its location in this market. The company invested in the world's largest home plant with the capacity to produce 3,000 homes a year and aims to influence the housing crisis in the UK.
For prefabricated buildings, materials must be suitable for the model. Huge timber, specifically, Cross Laminated Timber (CLT), is one of the building materials that is preparing for rapid progress in the next decade or so through pre-fabrication. CLT is a wood factory with multi layered construction. It is easy to install and generates almost no waste. On the sustainability side, CLT can reduce the carbon footprint in the building by isolating the carbon dioxide used during construction. Built-in wood can be used to construct prefabricated buildings, in a closed loop cycle: timber can be used from manufacturing to run the plant, and when buildings are demolished, carbon can be stored in reused or recycled materials. Compared with conventional construction, the CLT purchase requires a higher level of coordination than the earlier design process. The pre-fabrication of the panels in the factory provides precision and quality, improved materials use while minimizing the site's waste significantly, and therefore is a very suitable material.
Europe has been a pioneer for the CLT for several years, where the UK was at the CLT center with nearly 500 completed projects, accounting for about 20% of CLT's global use. Strong commercial benefits have been achieved by less demanding and evidence-based building systems, as well as by a significantly more developed development market than other countries. In addition, Legal & General is setting up a new plant in the UK to produce CLT for use in ready-made housing.
While the United States has been slow to adopt the CLT, there is a growing demand for it due to access to updated materials approved by federal and state building laws. Last year, the Wood Innovation Act, which aims to market wood products for building construction, was enacted through a range of national grant programs such as the Collective Timber Certification Program. Katerra has also fully adopted the CLT as its preferred core material, recognizing its potential. This month, Katerra will open a 250,000-square-foot facility to expand CLT's production in the United States, allowing materials to be accepted more widely in the construction industry.
Waugh Thistleton, a UK-based architectural firm and one of the pioneers in CLT development, has so far completed many projects and is a global voice for driving the use of CLT in building construction. The company completed the construction of 121 apartments last year, concluded in a report after the completion of the project that the wood harvested from a forest in Austria took 20 minutes to renew. Evidence of material availability if demand increases.
New ways in the steel industry
Many current steel companies adopt the Lifecycle Assessment Methodology (LCA), which takes into account the environmental impact of the building based on the entire life cycle of the building, from material manufacturing, and the transfer and installation of building components to disassembly and demolition at the end of life. In addition, LCA includes the environmental potential for reuse and recycling.
This summer, ArcelorMittal Steel Production Company announced a devastating, object-based approach to evaluating the overall performance of building construction solutions, called Steligence. This approach aggregates buildings as complete objects, taking into account all aspects as parameters to improve the entire supply chain. The method also looks at improving the building from an economic, environmental and social perspective, taking into account the interaction between the different buildings and the interaction between the building and the surrounding environment (workplace disturbance, traffic that brings construction materials to the work site, etc.).
Other players also take innovative approaches to steel. For example, SSAB aims to be the first company in the world to steel the world's fossil steel by 2045. The company has introduced an innovative process of making hydrogen-based steels, which will benefit from the hydrogen markets that are expected to bear fruit. Decades. With the adoption of LCA and new technologies, as well as a more serious attitude towards sustainability, the steel industry is looking forward to keeping up with new materials to maintain its position in the market.
Traditionally, construction is a risk-averse industry, with the adoption of materials / technology slow and hampered by a range of global regulatory barriers as well as fierce competition from a large number of players. The inefficient implementation of projects, inadequate skills base and lack of R & D investment have led to a highly fragmented value chain.
As with every industry, technology will play a key role in improving the problem of building productivity. For these destructive solutions to flourish, construction companies need to invest more in workforce training, taking the mentality of continuous improvement to revolutionize the adoption of new solutions. But technology alone will not solve the problem. Key opportunities are to improve entire project management processes, including value engineering methodologies in the design process.
While the ideas above are worthy of expression, there are many areas within the value chain that can and should be considered. To get a better understanding of the ongoing activity in these different areas, be sure to check out our i3 platform.