In its 2017 report entitled Reinventing Construction: A Route to Higher Productivity, the McKinsey Global Institute revealed that the construction industry lags all other major industries in productivity. In fact, the construction industry experienced a productivity decline of almost 1.5% per year from 2005 through 2014. In this, our third in a series of blog posts drawn from our recent web report, The Promise of Smart Infrastructure, we discuss the ways in which development of smart infrastructure will induce the construction industry to become more productive.
The McKinsey report breaks down manufacturing and construction processes to outline areas of potential for productivity improvement:
Of the 48-60% total potential productivity growth available, all improvements but 'On-site execution' and 'Capability building' are factors in the manufacture and construction of smart infrastructure. Therefore, the construction of smart infrastructure will directly or indirectly drive productivity improvements amounting to as much as 40%.
We provide 3 examples:
RFID tagging is the first element of smart infrastructure. Each tag serializes the product in which it is embedded and, with this, any party in the supply chain can scan the tag in the piece to record or recall its product history:
- Quality control/Quality assurance information
- Batch number
- Production date
- Construction contractor
- Repair history
- Maintenance history
McKinsey Productivity Application: Technology
- Manufacturers using RFID tagging in their plants reduce up to 30-35% of costs of inventory management and reduced costs from eliminating paper record-keeping.
Product Tracking Software
Information about products that are tagged with RFID tags or barcodes is recorded digitally and can be shared with other parties in the supply chain. The North Carolina Department of Transportation (NC DOT) requires that all its concrete vendors tag their products and share the data digitally through Idencia's Connected Concrete™ product tracking system. NC DOT then accesses the data and downloads into its proprietary tracking system.
McKinsey Productivity Application: Procurement & Supply Chain Management
- The North Carolina Department of Transportation estimated that RFID tracking saves $1.2 million in annual costs of inspecting manufacturing plants.
As-Built Information Ported to BIM Model
BIM, an acronym for Building Information Modeling, is web-hosted software used to create 2-D and 3-D models of construction projects. In addition to the efficiencies it affords in design and construction collaboration, BIM models also create more efficiency for asset managers after the project is complete. The design of the product is complemented with 'as-built' information; i.e., data about the products included in the construction project. Complete information about the project is housed in one place, therefore making asset maintenance more efficient.
McKinsey Productivity Application: Design & Engineering
- McKinsey specifically recommended the use of BIM systems. In its SmartMarket Report: The Business Value of BIM for Infrastructure 2017, Dodge Data & Analytics reported that a survey of BIM users reveals the top two benefits are fewer errors and greater predictability of costs. Serializing products during manufacture (using RFID tags or barcodes) enables individual information about each manufactured product to be collected and ported into the BIM model.
As we will describe in our next post in this series, smart infrastructure will create significant advances in the productivity of asset maintenance as well. If you would like to discuss smart infrastructure or learn how RFID tracking can make your operation more productive, we hope you will request a consultation.
Our mission at Idencia is to elevate the productivity of infrastructure. We offer RFID tracking solutions that improve productivity and offer value throughout the value chain. As a cloud-hosted product tracking system that is seamless between manufacturers, contractors and asset managers, Idencia adds information value to all, eliminates redundancy and saves time.