Engineering and construction leaders are pushing digital. Here’s how, and why.

08 October, 2020

Tony Caletka
PwC Principal, US Energy Advisory Practice
Mike Sobolewski
Engineering and Construction Industry Leader, PwC US

The COVID-19 pandemic hit the engineering and construction (E&C) industry hard on numerous fronts. Worksite lockdowns. Supply chain disruptions. Delayed and suspended projects. However, despite the pain it has wrought, the crisis has also accelerated innovation – particularly in the industry’s long-overdue adoption of digital and emerging technologies.

PwC’s report “Construction’s digital past and future” explores how the industry’s workplaces and workforces are poised to be fundamentally changed through the adoption of digital technologies in myriad ways – improving project delivery, introducing efficiencies, and enabling remote operations while reducing risks and enhancing safety. Leading E&C companies are employing a range of solutions, including digitizing and tele-networking platforms, reducing site-based labor costs and risk and digital upskilling.

Digital tech also eases the talent shortfall pressure. While some of the effort to embrace digital technologies hinges on worker safety requirements, these efforts have also served to compensate for the industry’s perennial shortfall in skilled labor. Even before the pandemic unfolded, E&C companies were well aware that they needed to up their digital games. According to the Associated General Contractors’ 2020 industry outlook survey (carried out in 2019), three-quarters of respondents cited worker shortages as the most pressing concern for 2020. And, to help meet those shortages, roughly one-third of respondents agreed they’re adopting labor-saving equipment (e.g., drones, robots, 3D printers, laser- or GPS-guided equipment). PwC’s 23rd Annual Global CEO survey also found a similar trend: Most (77%) E&C CEOs had plans in place to adopt 4IR tech to drive growth even before the COVID-19 disruption.

So, where are E&C companies going digital? E&C companies are looking to a range of innovations across the value chain. Augmented reality technologies (e.g., smart glasses), for instance, are being deployed so on-site workers can access data, information and images of parts or drawings. Smart glasses are also connecting on-site workers with remote colleagues for guidance, instruction and knowledge sharing (from senior to junior workers), adding efficiencies and boosting productivity. Similarly, fully immersive virtual reality is being used for worker safety training, especially for workers preparing to operate in “hot environments” (e.g., decommissioning of a nuclear power plant or turnaround of a refinery). Back-office processes, too, are being automated through robotic process automation technologies to add yet more cost-cutting efficiencies.

Taking a page from other industries’ digital playbooks. Leading E&C companies are also looking to co-opt use cases of 4IR technologies already rolled out by other industries. Insurers, for instance, are increasingly deploying artificial intelligence and machine learning via photo recognition technology to assess the condition of a customer’s asset. Construction companies are employing the technology for quality assurance/quality control to reduce delays or “hold-points,” especially for critical operations (e.g., equipment pad, bolt pattern, weld), through integration of mobile devices and smart phones for data-capture in a mixed-technology environment, including cost, schedule, safety, risk and engineering collaboration tools. Photo recognition technologies can also speed up condition assessments of materials on brownfield projects (e.g., assessing the condition of steel or concrete). Other technologies, such as LIDAR, are also saving time and labor in inspections, such as determining the presence of rust, contaminants or thickness of coatings. Taken a step further, autonomous mobile robots can now be equipped with LIDAR to walk a “flight-path” to scan the site and capture progress achieved, measure tolerance, count manpower, quantify materials in a lay-down yard, and assess safety and the conditions of construction sites. Unmanned aerial vehicles (drones) – common in the real estate and insurance markets – are now regularly deployed for inventory and progress monitoring as well. The arrival of robotics used to automate tasks on-site, or in fabrication shops, also holds great potential for the industry. Just consider that the global construction robots market (which includes mobile robotics, stationary robots, aerial drones and industrial 3D printers) is forecast to grow to $187 billion in 2024, up from $79 billion in 2018.

Site footprint reduction: Is it a permanent thing? One of the biggest impacts of digital technologies is reducing the site footprint (trailers, latrines, lunch and washtents, etc.) – which not only guards worker safety, but also cuts general conditions and indirect cost and raises productivity – and will likely be an enduring pursuit. E&Cs are now regularly assessing just who needs to be on-site and who can work remotely – whether that be in an office, in a home study or a fabs shop. Some are going as far as outsourcing scalable roles, leveraging remote workers as part of their extended workforce. 

A few things to keep in mind on all things digital. Looking ahead during – and beyond – the pandemic, here are few things to prioritize when raising your organization’s digital acumen:

  • Refresh business processes, not just technology. Digitization is an opportunity to rethink the way you do business. Note that you may have to completely redesign end-to-end processes before putting in bots, automation and other tools.

  • Expand use cases to promote cross-functional collaboration and cross-stream value. As you continue with digitization, pay attention to digital activities that promote cross-functional collaboration. You just might unlock value that was sitting, unrealized, in a siloed environment.

  • Shift the corporate culture to a digital mindset. You can help amplify the shift to a digital mindset by encouraging employees to think about their jobs and career paths in new ways and by rewarding learning and behaviors that enable digital upskilling.

  • Make digital skills learning accessible – and fun. It is important to design engaging learning experiences so that the information “sticks,” such as Digital Fitness apps that help gamify digital learning.

  • Incentivize employees to innovate. In digital upskilling campaigns, employee-led innovation can be a powerful force. Use incentives and rewards to help them see how these skills empower them in their personal and professional lives.

  • Engage and guide workers through times of change. It's not too late. These emergent technologies and applications are far from ubiquitous. Digital transformations are fit for purpose. It is as much about people as it is the technology. Having a platform that tracks workers’ feedback and sentiment helps make them feel invested in improving the digital initiative, ultimately enabling its adoption.

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