There is a lot of talk about "smart" things, infrastructure included. But what does that really mean?
In this report we answer the question and describe the opportunity that smart infrastructure provides for addressing the investment gap between current spending and the (much greater) need for new investment over the next 20 years. There are many other benefits to smart infrastructure but this is the most fundamental and, perhaps, the most promising.
In our view, what makes infrastructure "smart" is its ability to provide information dynamically. We define it as:
Infrastructure that conveys information about its manufacture, construction, depreciation and use to its stakeholders.
Why is it imperative to build smart infrastructure? Because it will redefine the utility of infrastructure and eliminate billions of dollars from the cost of manufacture, construction and maintenance.
Smart infrastructure will include products and feature sets that will produce the utilities described in our definition, such as information about:
As we will demonstrate below, the processes of manufacturing and constructing smart infrastructure will require practices that address the most pressing challenge standing in the way of fulfilling the world's $94 trillion infrastructure need: Inefficiency in the construction industry.
The G20 released its Global Infrastructure Outlook in 2017 to forecast infrastructure investment needs and the funding gaps relative to current spending. The forecast suggests that $94 trillion of new investment will be needed through 2040, starting with $2.7 trillion in 2019. This amount is $15 trillion more than current spending will fund, suggesting that the world will need to spend more or find ways to become almost 20% more productive in infrastructure construction.
In its 2017 report entitled Reinventing Construction: A Route to Higher Productivity, the McKinsey Global Institute reports 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. Not surprisingly, the industry also lags in the adoption of digital technologies.
While investment needs are surging, the governments of developed countries are experiencing political pressure to reduce the tax burden and economic pressures that are limiting tax revenue growth.
In its Fiscal 50: State Trends and Analysis report, the PEW Charitable Trust reveals that, while 2018 state tax collections in the US are demonstrating strong short-term growth, this proves to be the exception to the rule in the years since the Great Recession of 2007 - 2009. Collections in 2016 and 2017 provided the slowest tax revenue growth (outside of an economic recession) in 30 years. Tax revenues increased more slowly immediately following the Great Recession than for any of the three previous recessions.
The report's conclusion underscores that infrastructure project managers cannot rely on tax revenues alone to fund the funding gap or additional maintenance costs of new infrastructure investments.
"But even a return to peak levels can leave states with little extra to cover costs associated with population increases, growth in Medicaid expenses, deferred needs, and accumulated debts and liabilities."
There will be many public benefits to smart infrastructure that are not addressed in this report, including:
The McKinsey report details recommendations for achieving $1.6 trillion of productivity improvements, enough to fill the gap between annual infrastructure investment and the global need. As we will illustrate in the Construction Productivity section below, a substantial proportion of the recommendations involve the application of technology and new practices. In many cases, these also happen to be the solutions and practices used to manufacture and construct smart infrastructure.
Smart infrastructure will drive the productivity improvements necessary to meet global infrastructure needs.
The Asset Management Productivity section demonstrates how smart infrastructure will reduce the cost of asset inspections by 40% or more, saving billions of dollars annually.
The Case Studies section that concludes the report provides examples of early smart infrastructure projects that are already in place.
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The McKinsey report breaks down the manufacturing and construction processes to outline areas of potential for productivity improvement as follows:
Of the 48-60% total potential productivity improvement available, all but 'On-site execution' and 'Capability building' have application in the manufacture and construction of smart infrastructure. Therefore, transitioning from traditional infrastructure will directly or indirectly drive productivity improvements amounting to upwards of 40%.
Below are 3 examples of how the elements of smart infrastructure can be applied to improve the productivity of the manufacturing and construction processes.
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:
McKinsey Productivity Application:
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.
Click above to see how Connected Concrete™ makes manufacturers more productive.
McKinsey Productivity Application:
BIM, and 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. Information that was originally the design is replaced with 'as-built' information; information about the products included in the construction project. Complete information about the project is housed in one place... in its own way making the project 'smart'... and therefore makes asset maintenance more efficient.
Serializing products during manufacture using RFID tags or barcodes enables individual information about each manufactured to be collected and ported into the BIM model.
McKinsey Productivity Application:
As we will describe in the section that follows, smart infrastructure will also create significant advances in the productivity of asset maintenance as well.
As powerful as smart infrastructure will be as a catalyst to improved construction productivity, it will produce a more direct impact in reducing the costs of managing infrastructure. Specifically, the inspection process.
The American Society of Civil Engineers (ASCE) reports that there are 614,387 bridges in the United States. The Federal Highway Administration requires that bridges must be inspected every two years. Estimations of the average cost of inspection range between $5,000 and $15,000. Therefore, the cost of inspecting bridges in the US is somewhere between $1.5 billion and $4.5 billion annually.
This is just the cost of inspecting bridges and only in the US. Considering that inspections are also required for tunnels, highways, water infrastructure and more throughout the world, it is likely that the aggregate global cost of inspections conservatively ranges between $15 billion and $25 billion annually.
The cost is so high because inspections are conducted manually using paper records. In its 2014 paper, Design of a Bridge Inspection System (BIS) to Reduce Time and Cost, the Department of Systems Engineering and Operations research at George Mason University outlined the steps of a bridge inspection process as follows:
Without creating digital records during construction, all of the steps involving 'review' require searches of paper records. The inspection process itself is entirely manual, which costs in labor, time and, sometimes, safety.
Compounding these costs, the current state of poor infrastructure repair in the US compels that more resources be dedicated to inspections. In its 2017 Infrastructure Report Card, the ASCE grades the overall state of US infrastructure as a "D+" and states that more than 56,000 bridges were 'Structurally Deficient' at the time of its writing. Structurally Deficient bridges must be inspected every year, thereby doubling the inspection cost.
Given the resource allocation pressures on states cited earlier in this report, reducing the cost of asset maintenance is essential to the quality and safety of our infrastructure.
Another look at the bridge inspection process reveals where time and costs can be saved from equipping the bridge during construction with RFID product tracking and sensor data collection:
As previously stated, the time and cost of searching for and reviewing records will be reduced by using digital records produced from RFID product tracking. While a physical examination of the bridge will still be required, having sensor data delivered digitally will minimize inspection time by:
In Design of a Bridge Inspection System (BIS) to Reduce Time and Cost, George Mason University proposed a study to compare various alternatives for inspecting the Theodore Roosevelt Bridge spanning the Potomac River between Washington, DC and Virginia.
Having identified metal fatigue and concrete cracking/section loss as the primary factors in bridge deterioration, the study reviews the use of piezoelectric accelerometers which convert vibration measures to electronic signals that can be communicated in the form of data.
Estimating that the manual cost of each inspection is $30,000, the study postulates a total cost of $750,000 to inspect the bridge over 50 years ($30,000 x 50 years / 2 years between inspections).
Including the set-up cost for equipment and assuming 25 inspections at a reduced cost, the study projects total inspection costs using accelerometers over 50 years to be $440,000, savings of more than 40%¹.
¹Costs are likely to be less today due to lower costs of processors and the use of wireless technologies. The 2014 study assumed that 65 accelerometers were connected to the processor by cable. The study also compared the cost of using drones, which presented the lowest cost. It is likely that drones will be used in combination with smart infrastructure to produce the lowest overall cost.
To date, smart infrastructure applications (outside of research projects) have been substantially limited to RFID tagging and product information tracking. The number of these has increased in recent years however. Some notable Idencia customers include:
Massachusetts Department of Transportation tested RFID tracking in two bridge rehabilitation projects.
Large tunnel projects are also including RFID tagging in their specifications more frequently, including these projects that used the Idencia tracking service:
Seattle SR 99 Tunnel Seattle, WA USA
Seattle's SR 99 Tunnel has applied both product tracking and sensors. Here, the sensors are primarily for public safety. As the video demonstrates, sensors are used to detect air quality issues and excessive heat from fires. Fans and sprinklers are automatically initiated and the Washington Department of Transportation command center is notified.The Washington DOT bills the tunnel as "one of the world's smartest".
Memorial Bridge Portsmouth, NH USA
The New Hampshire Department of Transportation partnered with the University of New Hampshire and the National Science Foundation to outfit the Memorial Bridge in Portsmouth, NH with sensors that monitor structural health and environmental conditions. The bridge spans the Piscataqua River between Portsmouth, NH and Kittery, ME. A DSL cable communicates data to a UNH server used to monitor critical factors of structural health and environmental conditions in real time.
Jindo Bridge Jindo Island, South Korea
The University of Illinois' Smart Structures Technology Laboratory has partnered with KAIST (a research university in South Korea) and the University of Tokyo to equip the Jindo Bridge with a network of wireless sensors to monitor its structural health. The Jindo Bridge connects the mainland to Jindo Island and is the largest to date for a project of this sort. The project is also touted as the first monitoring system of its kind for a cable-stayed bridge.
The good news for manufacturers and managers of public infrastructure assets is that the smart infrastructure features will be offered as services, avoiding the necessity to invest in their own. Idencia will be a leading player in this space. If you would like to engage in a dialog, please complete the form below to request a discussion.
Jeff Pollock is CEO of Idencia, Inc. He writes about lean practices and technology applications to the manufacture of infrastructure products. Above all, he is committed to the continual pursuit of improving customer value and contributing to the advancement of manufacturers building the physical infrastructure of the world.
Jeff Pollock Idencia, Inc.
Idencia offers its Connected Concrete™ RFID tracking solution to improve productivity throughout the construction value chain. It is used to create product records that extend from the time of manufacture through end-of-life. Cloud-hosted, it is seamless throughout the infrastructure supply chain, eliminates redundancy and saves time.