Internet of Things in Capital Projects
14 June 2017
The world is becoming ever more digitally enabled. Since leaving university in 2010 the changes I have experienced have been nothing short of dramatic. I still remember a time when Transport for London (TfL) had a 24 hour manned phone number for directions in London (which was as painful to use as it sounds). Now we use our smart devices to order Ubers or use any number of our favoured transport apps to take us to our pre-programmed home address. The connected world and our smart devices are our lifeline.
However, in the world of capital projects we still live and act (for the most part) like we are lost in the streets of London in 2010. Choking project inefficiencies still exist and the capturing of lessons learned is still an art rather than a science. This allows schedules across the supply chain to be poorly managed, leading to cost overruns being identified too late. Change comes slow to those who wait but the opportunity to improve and streamline project delivery is here and it is called the Internet of Things (IoT).
“IoT is doing more with less effort - capturing and harnessing information, typically through sensors and actuators, and sharing it with a wider computing network.”
- Real time benefits:
Profit margins in the construction sector are tight, topping the scale at 1.5% on average in 2015. Recent studies have found that 75% of capital projects run over budget and 20% miss their target delivery date. Unfortunately, this seems to have almost become an accepted norm within the industry.
IoT can drive real time insights through performance measurement and management. Optimising predictable performance on site through connected networks, such as crane hook time, will drive day to day efficiencies. Weather delays could easily be accounted for by connecting live information from site to the wider supply chain, enabling the efficient planning of deliveries and resources. This proactive and automated decision making approach is one example of how cost and schedule risk could be mitigated through a connected network environment.
- Insights and opportunities:
Now I realise that change is a process but even small, positive steps can have a big impact. IoT is more than just connected smart devices. Capital projects should take inspiration from the world’s first true industry, agriculture. Specialist equipment manufacturers are pioneering IoT farming through driverless technology and capturing future crop yield estimates through strategically placed sensors on machinery. A simple idea with a huge impact. Think of the amount of data produced on a construction site, from the supply chain to daily resourcing information, which never amounts to anything. Could a network of connected sensors and assets enable us to drive operational insights and improve data use? Would identifying project trends in a proactive way lead to savings in programme and cost? I think so, but the determination for innovation must be promoted and supported across the project lifecycle.
- Managing the asset lifecycle:
Through an IoT network, construction and asset performance can be continuously monitored, enabling pre-emptive and predictive actions to be take; e.g. maintaining a generator on site or reducing concrete set time. This can be further enhanced by connecting assets indirectly to the wider supply chain, possibly procuring parts automatically or using 3-D printers on site. Lifecycle asset and estate management could be optimised further still through applying circular economy principles to the Building Information Modeling (BIM) model, giving the real time true value of an asset at a strategic level.
Technology adoption on capital projects need not be bold or expensive, rather it should be positive and transformative to the way your business and projects currently operate. IoT is one aspect of a bigger solution but in my view it’s a small step that can be taken where the benefits far outway the costs.
If you want to know more on the use of IoT and the connected world within major capital projects, or on the PwC Technology Capital Project Service team please follow this link .