Technology a key to boosting productivity: Report

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©BY DRAGONIMAGES

Special to Ontario Construction Report

Amid elevated inflation and unprecedented building demands, project owners are beginning to require modern technology and processes from contractors to improve productivity and control costs, says the co-author of a recent KPMG “digital maturity” survey of 275 construction companies.

“The value proposition rests with the owners,” said Jordan Thomson, the firm’s senior manager, infrastructure advisory in Canada. “The real imperative is what owners are beginning to ask for and owners are beginning to ask.”

The City of Toronto, for example, is stipulating the use of certain technologies or methods through the procurement process on projects including a new administrative building for the city’s Solid Waste Management Services division. A spokesperson said project tenders will require bidders to install solar panels on the roof, employ geothermal HVAC and use recycled construction materials as well as more timber instead of concrete.

Faced with chronic shortages of skilled labour, Thomson said construction companies are accelerating the deployment of digital tools to improve on site efficiency — with 46 per cent of those surveyed for the June report planning to spend more than 11 per cent of their corporate operating budget on construction technology and digital transformation. He said the application of data analytics, wearables, and internet of things sensors along with building information modelling software can minimize waste, safeguard worker safety, and allow project proprietors to do more with less.

He said productivity improvements in construction are essential if Canada is to meet ambitious green infrastructure and affordable home building targets.

“Leading firms are adopting technology to improve productivity and project management, safety on worksites, and decision-making,” added Mary Van Buren, president of the Canadian Construction Association.

“There is a cost however to investing in digitization that isn’t necessarily shared among all parties in the procurement process. Margins are slim in construction, especially for the small- and medium-sized contractors, making it increasingly difficult for them to adopt these types of innovations in their business operations. This is why CCA continues to work with federal departments in an effort to modernize procurement processes that encourage innovation by supporting shared risk.”

Those slim margins and the fragmented nature of the construction industry have discouraged upfront investment in technologies that would improve longer term results — and have contributed to the backlog of Canadian housing and infrastructure projects according to a report from consultancy McKinsey.

The report says the global construction sector holds the dubious honour of having the lowest productivity gains of any industry — while an HP survey of construction workers and decision-makers from the U.S., U.K. and Germany found 60 per cent of respondents agreed techniques and processes have changed little in the past 20 to 30 years.

According to report from FMI, a Raleigh, North Carolina-based consulting and investment banking firm, U.S. contractors wasted between $30 billion and $40 billion (U.S.) in 2022 due to poor labour output. The report cites so-called lean construction that minimizes waste of materials, time, and effort as one potential way to improve labour efficiency.

Megan Beange, national BIM lead for Public Services and Procurement Canada told a conference in May that Canada may be decades behind other G20 countries in reaching a state-of-the-art level for digital design and construction.

She said the industry here spends about two-tenths of a percentage point on research and development, compared to 3.5 per cent in the automotive industry and 4.5 per cent in the aerospace sector.

Against this backdrop, a new B.C. fund is offering up to $5 million (Ca.) for individual projects that adopt technologies and take other steps to improve productivity. Awards will also be available for the improvement of workplace cultures and hiring practices to attract and retain workers, including workers from under-represented and diverse groups and for the development of innovative training practices.

According to Richard Lyall, president of the Residential Construction Council of Ontario, the lack of government mandates for construction information modeling technologies has hindered uptake of high tech on construction sites. He added that Ontario is behind in the adoption of a unified digital building permit platform that would speed up the construction approval process.

Approval delays “have had a huge chilling effect on innovation,” Lyall Added. “Once builders get through the process, they are not taking chances on anything new unless it’s guaranteed to save time and money.” He said as well that a ramp up in off site construction of modules and panels would go a long way to improving construction efficiency in Ontario. But he said manufacturers need assurance of a guaranteed market to justify the mass production needed to make a dent in the province’s plan to build 1.5 million homes by 2031.

“There’s no way we are going to meet the housing targets we have unless we really go off site in a big way with modular panels and volumetric (on site modular) construction.”

 

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