Ziadat ... the construction industry needs to change its mindset about emerging technologies.
Change in mindset ‘essential’
The construction industry has been comparatively slow in adopting emerging technologies such as artificial intelligence, robotics and 3D printing and there is a need to start right from the drawing board to bring about a transformation in the sector, says Dr Ghassan Ziadat*.
01 March 2019
Despite the construction sector’s significant potential in boosting economic growth, it still lags behind other industries in adopting emerging technologies, says a leading industry expert.
Speaking to OSCAR WENDEL in an exclusive interview for Gulf Construction, Dr Ghassan Ziadat of McKinsey & Company says the construction industry will need a new mindset in order to take full advantage of these technological trends. And this is creating a skills gap among many construction players, who do have the desire to transform but have difficulties in bridging the gap, he says.
“If you talk to CEOs, as McKinsey has done, about the challenges in transforming and taking advantage of technology, 70 per cent say that it’s finding the right IT people.
“You can find IT people but the challenge is to find and retain those who understand construction and can apply technology using artificial intelligence (AI), machine learning, data analytics, etc to full advantage to improve construction productivity. That’s where the gap is,” says Ziadat, who comes from an industry background and understands the challenges well.
Elaborating on the skills gap and how, if plugged, this could be used to the benefit of the construction industry, he says: “There is considerable potential for improving productivity – overall, it can be as much as 60 per cent, based on the technologies that are available today. And 15 per cent of that improvement could come from digitisation and adopting technology.”
He says construction is a significant player in the economy contributing about 13 per cent of the world’s GDP. That’s worth $10 trillion. But a 2017 report by McKinsey, Reinventing Construction Through a Productivity Revolution, finds the industry still lags behind those such as manufacturing and agriculture in terms of productivity (see Figure 1).
Considering how traditional the construction industry is, it’s a challenge to adopt new technologies and transform, says Ziadat. “What’s required is a decreased reliance on site conditions and on mostly unskilled labour, by moving most of the construction off-site into factory-like conditions,” he says.
He says other industries, for example, automotive or aerospace, are way ahead because they have realised the benefits of automation. To achieve this, Ziadat says, we need to go back to the drawing board and ensure that the design enables a lot of fabrication offsite using technology, such as 3D laser scanning and digital twinning to ensure that what’s being prefabricated in the factory will fit perfectly when it arrives on site.
“Technology enables you to do extremely accurate digital twinning of what you’re building, both on-site and in the factory,” he says.
Ziadat says using robotics in the factory helps improve productivity, health and safety, and work quality, and minimises exposure to elements such as hot weather that impacts concrete and other building components.
“So, to begin with, investing in technology, AI and robotics can bring about an improvement,” he says.
However, “construction is only half the story”, Ziadat points out. There’s also the OpEx issue. “You’ve got to look at the total cost of ownership of projects and to get the best value for the clients. Owners have to holistically look at the past performance of their projects, not just through the construction stage.”
Ziadat stresses the need to use facts and figures for making decisions and operating projects using an objective and analytical approach. “Learn from the success stories and previous challenges,” he says.
“You can build something quickly but it may cost you a lot more to maintain. So, you’ve got to study and analyse the data and apply the learning on future projects1.
There are usually legal aspects to this that need to be addressed such as who owns the data and who can make use of it for the benefit of everyone and the total lifecycle cost of the project,” he adds.
Commenting on using AI in the construction phase, Ziadat says there are various facets to it. “One is data analytics, which is about understanding the past performance of projects in terms of personnel and machinery resources and whether there are patterns that emerge where productivity can be improved. And then learn from these past experiences to help people make better decisions to improve their productivity.”
McKinsey has found that while AI is still relatively nascent in construction, a narrow set of use cases are gaining attention; and several applications in other industries could have significant relevance for engineering and construction firms2 (see Figure 2).
In addition to AI, the other emerging technologies Ziadat is excited about are robotics and 3D printing.
“3D printing is showing promising signs in many parts of the world. 3D printing can be done either in the factory or on site.
“Again, to adopt these technologies we’ve got to adapt our designs. For example, how do you adapt the materials that you use so that you can take full advantage of 3D printing?
“Composite materials such as reinforced concrete where steel reinforcement cages need to be fabricated before concrete is cast and integrated into the rebar, do not lend themselves easily to 3D printing. But, glass, carbon or aramid fibres can be pultruded with plastics to create composite structures straight away and can handle significant stresses and strains that the elements have on the structure,” he says.
In terms of adoption of technology, Ziadat insists this should be from the very beginning in a project’s lifecycle.
“The earlier these technologies are adopted in the project lifecycle the better, to realise their full value. You need to start from the feasibility study stage on to the design and engineering stage and procurement,” he says.
Looking at productivity in Dubai’s construction market from a global perspective, Ziadat says the emirate has certainly come a long way in certain aspects of construction, such as tall buildings.
“But overall, when it comes to major and complex projects, it’s the same story the world over. Generally, I would say the vast majority of major projects have cost or programme overruns – overruns of a 100 per cent or more in some cases. So there is still a lot of room for improvement,” he adds.
Regarding cost overruns, he says a certain amount of underpricing and under-estimation of the contractual risks is to blame.
Ziadat says the impact of moving towards an integrated delivery approach is one of the issues McKinsey analysed to improve productivity and make the industry more collaborative and less adversarial.
“It’s got to start right from the beginning where you look at how the procurement and contracting processes happen. What model of contracts do we use between the owner, the contractor and the consultant? How do we encourage people to work together and be more aligned for the benefit of the project? How can transparency be encouraged instead of parties protecting themselves and mitigating their own risk instead of the overall project risk?” he concludes.
* Dr Ghassan Ziadat, vice-president – major projects, McKinsey & Company, was a keynote speaker at Dubai Municipality’s International Conference for Sustainable Materials held last November.
Ziadat worked with Atkins for 10 years as a regional director managing major projects. Prior to that, he was a partner and a global director with a company that became part of Aecom.
