The construction industry was witnessing only slow growth for more than a decadeeven before the outbreak of the pandemic. With the COVID-19 situation, the industry is probably seeing something close to the worst of its days. According to a report by the Global Construction Review, the GVA (Gross Value Added) for the Indian market is set to fall by 34%. Another report by The Economic Times in June revealed that the industry may suffer losses of nearly INR 7.3 lakh crore in construction investment.

However, if McKinsey’s view of disruptions being the catalyst for change is to be believed, the situation could turn in favor of the key players in construction, as well as the new entrants.

So, what’s McKinsey’s view, and how does it impact transformation in the industry in the coming year? Let’s shed some light on that.

Key moves to shape the future of the construction industry

The experts at McKinsey, one of the global leaders in consulting and research, feel that technology-led disruptions and the current pandemic situation will transform the construction ecosystem. They say that the following shifts in construction will not only change the old ways but also highlight the new normal the industry will change too.

Productization 

From being purely a service-driven industry, construction will take on a product-based approach, marketing the structures that they raise along with their associated services as standardized products. For eg., one interesting set of thoughts is emerging around housing with integrated co-working-like facilities to empower a greater number of people working from home. It will help increase the satisfaction of the end customers, who will be able to understand things better. The idea that when consumers buy products, they buy concrete results will contribute towards the industry performing well holistically.

Control of value-chain and integration with supply-chain

The companies will be more self-sufficient by controlling all design, engineering, manufacturing, supply chain, and other activities along the value chain to establish self-sufficiency. The focus will be more on such companies that adopt a one-stop solution and they will lead the others. In the context of technology (more on that later) this could mean construction companies will have to find a way to hire, engage, and retain technology talent like BIM experts. That’s a considerable shift.

Specialized development

The companies will be developing specialized niche based on their expertise along with different segments like single-family houses, commercial buildings, infrastructure, hospitality real estate, healthcare, etc. This will help them build deep expertise, success stories, and intellectual property that will help them get an edge over their competitors.

Branding and customer-centric development

This point follows from the predictions that construction companies will look to provide product-based solutions, which can be easily marketed to the end customers, and that they will adopt specialized development as their mantra. With narrow targeting, the companies will have to focus on their branding to target niche markets. Their offerings will have to be extremely focused on the needs of that target segment. Customer-centricity will become an inevitable need.

Incorporation of technology

Technological integration will help the construction industry build better, faster, cheaper, and more sustainably. The availability of new materials, increased digitalization, more data-driven decision-making, and automation of workflows will help them seek a better and more promising future. From building off-site manufacturing units to incorporating robotics in manufacturing and construction technology, the returns on investment will increase manifold. Of course, the base of many of these technology-led innovations will have to be the comprehensive, transparent, and current models provided by BIM.

Investing in human resources

In India, the construction industry is probably low down on the list of employment options of millennials. A physically taxing work environment and perceptions about traditional and outdated work practices hold them back. This will change with the incorporation of advanced technologies, increased employment of a full-time skilled workforce, and the dying out of many traditional practices.

Sustainability

Much has been said. Suffice it to say that sustainability is now a key focus area of the industry. With time, it will prove to be the oxygen for construction companies.

How can India make the most of these shifts?

The value of the global construction industry will jump to $12.7 trillion by 2022, according to a report by the Hindu Business Line. If India can make the most of the current disruptions and turn them in its favor with the help of both government and private initiatives, it will be able to contribute about $640 billion to this. The industry has to do away with old practices and adapt to technological advancements like BIM, 3D imaging, Cloud and mobile technologies, AR/VR, Robotics, and more, as well as invest in start-ups that aim to change the future of this sector with their innovative ideas and designs.

It also needs to employ more skilled manpower, especially among the young people, who are scared to join the industry right now. Appropriate salaries, along with better working environments, opportunities for growth, and even higher incentives will prove attractive. The construction companies can also work hand-in-hand with the government to empower women, who currently stand at only 10% of the total workforce in the industry. Such initiatives will help them make the most of the global technologies and disruptions that are set to change the industry.

McKinsey says that the ongoing and future disruptions will shape the industry by breaking conventions, changing business models, and finally delivering on the promise of technological advancements. Such trends, if they come about, could permanently alter the way construction companies run today, forcing them to adapt to the new world. And this will help us leave the pandemic and its economic impact behind to look towards a better and safer future.

The current pandemic may have led the construction companies into challenging timesdue to a disruption in the supply chain and shortage in manpower. But not all hope is lost.

Construction companies are turning to technology to help them get back on track, control costs, and work more efficiently. In that vein, they are increasingly adopting a promising way of construction called modular construction.

Once heralded as the next big thing in the construction industry along with 3-D printing, companies use modular construction to build certain pre-fabricated units offsite and then fit it with onsite structures. One can think of it as Lego blocks that are stacked one above the other to create a structure. Hopes from the technique are high. In fact, McKinsey predicts modular construction to be a $130 billion market by 2030.

Modular construction offers various benefits:

• It can accelerate the speed of construction by 50%
• It can lead to 20% cost savings
• It can reduce the labour costs of a project by 25%.

While modular construction has proven to be a boon for the construction industry, it has its challenges to pull off.

For instance, if the pre-fabricated unit is not precisely manufactured, it may not fit well with the onsite structure and could lead to cumbersome and disruptive rework. In fact, the company might have to incur 30% of additional costs due to rework.

That’s where technology like Building Information Modelling (BIM) can come to the rescue.

The Role Of BIM In Modular Construction

BIM promotes the creation of comprehensive, accurate, time-sensitive, and validated models of every little detail of the construction site. This level of detail can help construction companies to create a detailed 3D visualization of each component being constructed offsite as well that can fit perfectly within the rest of the structure that is documented just as clearly.

BIM can also help in:

1. Digitizing the construction workflow

Some construction companies have started thinking of concepts like Digital Engineering. A key component of this would be digitizing workflows. Automating these processes can drive up construction efficiency and reduce risk. Digitization can help companies to estimate costs accurately, reduce the reworks, promote transparency in project status, and maintain quality. Of course, given the wealth of information inherent to BIM, companies can create digitized workflows of the offsite construction of complex designs of components.

2. Enabling MEP coordination

Mechanical, Electrical, and Plumbing MEP coordination can be quite tedious and time-consuming. It accounts for almost 40% to 60% of the project. In the context of offsite modular construction, this is a crucial process because all three disciplines should be aware of the precise location of the proposed installation during the modeling phase. An oversight could lead to a major loss in time and effort. To ensure seamless integration among different plans, companies use BIM. BIM gives the specialists a 3D view of the structure in the pre-construction phase. It enables the specialists to identify potential clashes in the MEP systems and address them at an early stage itself. Modular construction benefits from the precision provided by BIM and minimize risks in pre-fabrication design.

3. Reducing cost escalation

As found by a study on the Korean construction industry, although modular construction is known to reduce costs, it could escalate costs if the initial planning is not done correctly or if the workforce is not skilled enough. BIM can help companies to address this issue by reducing escalating costs. It can help companies to streamline their construction workflows, reduce wastes in the pre-fabrication stage, and even find the right collaborators who can reduce insurance costs and tender risk premiums. According to a study by McKinsey, BIM has generated positive ROI for at least 75% of the construction companies.

4. Adhering to project schedule

Considering that both offsite and onsite development takes place simultaneously, modular construction can be completed 30% to 50% sooner than traditional constructions. It is particularly useful for construction companies as they can avoid risks or delays occurring due to extreme weather conditions that may prevail onsite. To coordinate efforts across locations and ensure seamless adherence to the project schedule, companies have been using BIM.  Right from exchanging information to coordination, BIM enables the project managers to manage the project end-to-end effectively. It brings together all the stakeholders involved in the project, which ramps up the process of communication and eventually, the completion of the project. Countries like the UK and Norway also use BIM to submit their designs to the Governmentelectronically, so they can quickly check if the construction complies with the regulations and approve it.

5. Reducing wastage of pre-fabricated material

The iconic 50-storeyed Leadenhall Building in London may be a landmark for tourists. However, architects know it for its sustainable model of construction. The Leadenhall Building is a fine example of how modular construction can help companies to achieve zero waste as most of the components are designed and manufactured offsite. Apart from cutting labour costs and improving productivity, modular constructions are also known to help build sustainable buildings. It can reduce up to 90% of waste. And of course, with BIM project managers can reduce wastage effectively. Considering that the drawings are made in 3D, it allows the stakeholders to visualize the plan, identify errors, and rectify them early. It reduces the chances of rework and brings in precision in the entire process.

Conclusion

It is clear that the techniques of modular construction along with the power of BIM can help construction companies to boost the progress and quality of their projects. No wonder world over governments and construction companies are backing BIM to fast-track projects. Have you considered how BIM can help you drive up your effective implementation of offsite modular construction?