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Technologies on the Rise in the Construction Industry

Published on August 20, 2015 by in Uncategorized

By Robert J. Hall

The construction industry is always changing and advancing. Think about how different construction looks today than it did 50, 20 or even 10 years ago. In fact, the only thing constant is change. The technological advances have made a big difference in how structures of all sizes are built. However, what can we expect over the next few years? Here are several ways that technology will continue to evolve the industry — in 2015 and for many years beyond.

  • Going Paperless: Reducing paper saves time and money. This trend is catching on in nearly every industry, but it is becoming very popular in the construction field. Reducing the use for paper clutter in the work environment can make it much easier for you as you are working on projects, small and large. The adaptation of tablets and smartphones has enabled nearly every task to be accomplished without the use of physical papers.
  • Drones: Drones are now used for surveying and other related tasks. This allows a crew to reach spots that may have otherwise been difficult or even impossible. While the upfront cost for a drone can be expensive, the money saved on surveying crews can be significant and make a big difference in a construction firm’s overall operations.
  • Additive Manufacturing:  Additive manufacturing, or 3-D printing, allows construction pieces to be “printed” on demand. This reduces the length of time to wait for factory creation by an enormous amount. 3-D printing is a very economical solution and eco-friendly, too — since there is often much less waste when products are created on demand than when products are created and sit in a warehouse until needed.
  • GPS Fleet Management: Large construction firms may have many trucks and other vehicles in the field. A GPS system can help you keep track of your fleet and know exactly what vehicle is at what jobsite. Today’s GPS management systems are easy to operate and provide data that helps you with all aspects of your business.
  • Additional Green Growth: Going green is trendy, there is no doubt about that. However, green technologies are influencing nearly every aspect of the construction industry. From fieldwork to deskwork, more and more green initiatives will come into play. If you can find ways to take advantage of the ecologically friendly initiatives today, you may save time and effort in the future.

The most exciting thing about construction is that this is only the tip of the iceberg when it comes to the technology changes that are occurring. Who knows what home or building construction will look like a few years down the road? What is certain is that the road to get there will be very exciting. Those in the business should keep an open mind and be ready to embrace these technologies as they move from the fringes to the norm. After all, everything we now know about construction was once thought of as “just a trend.”

 

Robert J. Hall is president of Track Your Truck, a leader in GPS vehicle tracking systems and software for small and midsized companies.

 

 

 

 

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 
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Creative Destruction and the Construction Industry

Published on August 17, 2015 by in Uncategorized

By David Nour 

Creative destruction sweeps away the old to be replaced by the new. A tsunami of creative new consumer devices is transforming our landscape with connectivity, responsiveness, and intelligence. The construction industry must take note, because the homes, offices and institutions we build will be directly affected by increased consumer expectations and abilities, elevated by this wave.

This next generation of gadgets is teaching us how important it is to develop innovations that are part of an ecosystem. For the construction industry, the concern becomes how do you participate, contribute, become part of a technology innovator’s ecosystem, in a way that captures synergies for all members of that ecosystem?

What’s amazing is how little these gadgets need YOU, the consumer. Once installed, the ecosystem begins learning by seamlessly syncing data streams to help individuals achieve their desired outcomes at home, at work, and in transit. These innovations don’t need you to be anything but the buyer who takes them home.

Whole industries will experience creative destruction as the “Internet of Things” ecosystem trend matures. Industries that were founded on demographic information will need to shift to behavioral science. At one time you could generalize that people roughly alike demographically would have roughly the same buying patterns. The housing construction industry could count on a middle class family wanting to own their own 2,500-square-foot home. Now we’ve splintered into segments of one. Today my psychographics, my digital behaviors, everything I encounter that influences my thinking and call to action, can be very different from the middle class family next door. Maybe I want a 5,000-square-foot McMansion; maybe I want to rent.

This shift can be extrapolated from the housing trade to every corner of the construction industry. You can no longer expect to market based on broad generalizations. As your prospective customer, I need you to provide that which helps me choose, decide, move to the next step. I don’t need you to sell to me, but to understand what I find credible, believable, digestible, in order to help me buy.

The construction industry needs to be part of the next generation of “smart” ecosystems, designed to take advantage of connectivity, responsiveness, and intelligence. What will the creative destruction ahead mean for your company? In what ecosystem will you find your niche?

Takeaways

1. Smart consumer product ecosystems affect the construction industry because they elevate consumer expectations and abilities.

2. Creative destruction will led to entire ecosystems of devices designed around insights into customer needs.

3.  As the “Internet of Things” trend matures, marketers in the construction industry must move from selling to helping customers buy.

 

David Nour is an enterprise growth strategist and the thought leader on Relationship Economics® —the quantifiable value of business relationships. He is the author of several books including the best selling “Relationship Economics— Revised” (Wiley), “ConnectAbility” (McGraw-Hill), “The Entrepreneur’s Guide to Raising Capital” (Praeger) and “Return on Impact—Leadership Strategies for the age of Connected Relationships” (ASAE). Learn more at www.NourGroup.com. David may be reached at dnour@nourgroup.com.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 

 

 
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3-D Printing’s Impact on Construction: Substance vs. Hype

Published on August 13, 2015 by in Uncategorized

By Andrew Armstrong

3-D printing is starting to revolutionize how things are designed and manufactured, as well as who can build and where things can be produced. And with the potential introduction of giant 3-D printers that can print concrete structures, small time manufacturing possibilities are no longer all 3-D printers are capable of; instead, these technological wonders may be capable of building things as large as homes in the near future.

The newest thing in 3-D technology may be what Behrokh Khoshnevis, a professor at the University of Southern California, has dubbed ‘contour crafting.’ Contour crafting is the concept of designing and creating three-dimensional objects from bottom to top, and bringing that technology to the realm of construction. Before long, Khroshnevis believes that he’ll be able to create entire structures out of pure concrete using 3-D printers. In other words, he may be able to 3-D print a concrete house. If the technology works, building a home would take less than 24 hours in the future.

There are others who are trying to master the art of concrete 3D printing, too; Skanska, a contractor, recently paired up with Foster + Partners to develop a “commercial concrete printing robot.” Richard Buswell, who has been working on the technology for the past eight years, has stated that while the technology is viable within the lab, it is the application of the technology in the real world on which work is being done. The significance of the marriage between concrete-based construction and 3-D printing was aptly summarized on the Autodesk publication, Line//Shape//Space, which reads, “3D-printing technology is being integrated to produce complex building forms. This union has the potential to reduce the time required to produce such components by several orders of magnitude — from weeks to mere hours.”

While Khoshnevis, Skanska and Foster + Partners plan to create a 3-D printer that will create structures out of concrete, a Chinese company recently — not to mention successfully — 
printed an entire home’s structures using a 3D printer, and then assembled the home in mere hours. To create their masterpiece, the Zhuoda Group printed six different modules, ranging from a bathroom to a bedroom, totaling 200 square meters. The house was then assembled in three hours (as a note, the actual printing of modules took approximately 10 days). The cost of building the home was priced at between $400 and $480 per square meter, bringing the total expense of printing and assembling to roughly $81,000 to $96,000. The home was created from materials that were sourced from agricultural and industrial waste, but no more specific information about the materials has been given out.

For now, 3-D printing using concrete materials/filament, and building homes and structures using 3-D printing, is not commercially viable. However, it’s not unlikely that with more advancements in relevant technology, 3-D printing could become an integral part of the construction process. If not used to construct homes entirely, it’s safe to say that 3-D printing will, at the very least, be used to create building components or tools.

Andrew Armstrong is a technology enthusiast, business owner, and digital marketing strategist based in the San Francisco Bay Area. A graduate of UC Berkeley in 2003, Andrew enjoys attending Cal Football games with his wife, experimenting with new technology, and chasing around his toddler son. Follow him on Twitter.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.


 
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Buildings, Bridges and Roads On Demand

Published on August 7, 2015 by in Uncategorized

By Dr. Perry Daneshgari & Dr. Heather Moore

You order and buy your entertainment, clothing, office supplies, home goods and many other products and services from Amazon and Walmart. Very soon, you’ll be able to order your houses, commercial buildings, roads, bridges, schools and other structures from them too.

Not unlike placing an online order for a car, you will go to an online or boutique store in the mall, enter your specifications or draw your dream home or school, agree on the price, and send away your order. That order will go to an e-shop, which will transfer your specifications to a 3D BIM model. The full scale model, build simulation and work packages will be created and sent to prefabrication Construction Mega Centers (CMC).

CMCs may be located in Turkey, China or in the United States. They’ll create subassemblies where all the parts for your specific structure – including, fixtures, bathtubs, kitchen, bathrooms, etc. have been delivered there by the suppliers and manufactures. The subcontractors will come to the CMC or receive the subassemblies on the site and start assembling your building. This all will be done within a few days and at a fraction of the normal cost. Possibly 10 percent of what it costs today.

You may say, “no way.” But here are a few examples. This video shows a Chinese hotel that was built in six days that is soundproof and thermal insulated and able to withstand a magnitude 9 earthquake. The Chinese sustainable building company, Broad Group, has achieved another seemingly impossible feat – building a 30-story tall hotel in 360 hours.

Building a comparable building here at home would have taken 9 to 12 months or 18 to 24 months, respectively. We may not think it is possible now; just like we didn’t take the SMED (Single Minute Exchange of Die) seriously back in 1975. SMED was invented by Toyota’s Production System, which took a typical die exchange time form two weeks down to few minutes and changed the history of manufacturing.

The fact that the production site and assembly site are separated is already introducing many opportunities for reducing the time and cost of buildings. For example, the entire facade of Barclays Center in New York was designed using  3-D modeling program. The same software also is used in design and development of Boeing commercial airplanes, as well as many automobile producers across the globe. The façade subassemblies were manufactured in a yard by the architect company responsible for the design, matched to the site with laser scanning and assembled at its current location in fraction of the time.

The fact that the current paradigm of building structures is changing and they can be built, preassembled and put in place in separate locations already is verifying that the historical construction model of stick-build is behind us. The Chinese already have the capability to build our domestic U.S. buildings in segments and to order, put them on a ship and do the final assembly in downtown San Diego or New York City. If you don’t believe this, look up the new Bay-Bridge in San Francisco. The Bridge was designed in America, built and preassembled in China, and put in place in San Francisco. You know who taught them all this and proved the concept?  It was the Kaiser Ship Building Facilities in San Francisco, which reduced the time of building liberty ships from nine months to four days – and eventually to one day. They did all that without modeling and computers, back then. The cost of shelter has to come down to match other progresses of the human race in productivity and this is just the beginning.

Dr. Perry Daneshgari is the President & CEO of MCA Inc., a management innovation company. He can be reached at perry@mca.net

Dr. Heather Moore is MCA Inc.’s Vice President of Operations and she can be reached at hmoore@mca.net.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 
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How to Manage Outsourced Field Services with FSM Software

Published on August 4, 2015 by in Uncategorized

By Jenna Puckett

For field service operations, the needs of the customer fluctuate. A field service technician can serve numerous customers in one day— each with a different problem. Plus, these issues have to be solved on the customer’s terms and timeline.

These external demands, coupled with increased industry competition, place extraordinary strain on businesses with field services. To relieve the pressure, many companies are turning to outsourced field services.

Is your field service stretched too thin?

The field service ecosystem encompasses many touch points (call center, dispatch, technician, billing, etc.), and each holds potential for mistakes or miscommunication. Because poor service threatens future sales and revenue, it’s imperative that the transition between each point is smooth.

Outsourced field services provide companies with flexibility. With a third party provider companies have more qualified resources from which to draw, so they can automatically schedule and dispatch technicians based on fluctuating demands.

In addition to having access to skilled technicians when you need them, the benefits of outsourcing include:

  • Increased geographic coverage
  • Greater speed of service
  • A wider range of service capabilities
  • Reduction in call center and field service labor costs
  • Reduced parts and inventory management
  • Increased service quality and customer satisfaction

But as with any strategy, there are unique challenges involved. Most notably, the need to manage a disjointed workforce in order to provide a seamless experience to the customer.

These challenges highlight the need to adapt to the changing service environment. Full visibility into in-house and outsourced teams is necessary to deliver the high level of service that customers expect.

How to Overcome Field Service Outsourcing Challenges

To manage outsourced services, companies need to measure and track service costs, first-call resolution rate, average repair time and service profitability. In order to gather this data, workers must be able to capture customer, product, equipment and technician information and transfer it across the organization and partner network.

It’s vital that businesses with outsourced field service operations adopt technologies that provide agility and insight. Field service management software provides visibility into contractor service delivery and can make third-party technicians nearly indistinguishable from an organization’s internal workforce.

Modern field service management tools give outsourced providers a window into your company. A vendor portal lets contract technicians view customer and SLA information, access inventory, and report on service status and delivery. Providing two-way interaction with outside employees also helps companies:

  • Give technicians better access to information in the field
  • Develop standardized scheduling processes
  • Improve forecasting and planning for future service demand
  • Capture service information across the enterprise
  • Gain visibility into field assets, including people, inventory, and vehicles
  • Monitor work orders and SLA compliance
  • Provide customers with accurate technician arrival times

It’s important that outsourced field services doesn’t result in performance dips, which requires communication and visibility. FSM software with a vendor portal and mobile functionality serves as a single database for all parties. It allows companies to track and manage the entire field service process, and gives partners the ability to enter, update, and view service information, as well as dispatch and logistic functions.

Customers expect prompt, high-quality problem resolution. Exceptional customer service is not optional. Third party technicians can resolve customer needs and positively represent the face of your brand— but only if they’re empowered with the proper tools and technology. Field service management software ensures your business can keep up with these increasing demands and expectations, for the sake of the customer.

Jenna Puckett is an associate technology analyst at TechnologyAdvice. She covers topics related to project management, marketing automation, employee performance, and other emerging tech trends. Connect with her on LinkedIn.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 
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Three Green Trends in Construction

Published on July 27, 2015 by in Uncategorized

By James White

Much of the construction industry is turning green with an eye to the future and the ever-increasing demands of eco-conscious customers.

It’s estimated between 40 to 48 percent of new commercial buildings will be green beginning in 2015, according to the Green Building Council. Sixty-two percent of construction companies building single-family homes report using green building methods in at least 15 percent of the homes built since 2013. That number is expected to rise to more than 80 percent  by 2018, presenting a huge economic opportunity for construction industry professionals large and small.

What’s Red, Hot and Green This Year in Construction

  • Many construction companies are switching to paperless processing. Everything from customer files to zoning requirements, from project invoices to project updates can all be done without killing a single tree. Construction contractors believe going paperless could add up to $5,000 a year in savings as well as streamlining the entire business. Geo-fencing is replacing timecards. Most construction contractors already rely on time-tracking software to help them organize bill paying and employee payroll, but new geo-fencing applications have taken job site tracking a step further.
  • Zero-energy buildings save energy and actually prevent greenhouse gases. A zero-energy structure employs solar, wind and biofuel solutions to electricity and heating/cooling needs. Slow to catch on because of their upfront expenses, zero-energy buildings have long-term energy-saving benefits that make them a sound investment. Solar power, the best known of the renewable energy resources, is the most employed of the green building materials currently in use.
  • New peer-to-peer (P2P) business solution known as resource sharing.Startups such as EquipmentShare.com in the Midwest and Yard Club Inc., based out of San Francisco, match contractors to equipment owners and operators, which is beneficial to both parties. This not only helps small construction businesses by providing access to equipment they may need without having to purchase it, but big heavy-equipment dealers can benefit from sharing as well. By renting out their heavy construction equipment, companies can generate additional income between projects and provide work for their operators rather than lay them off in lean times. Caterpillar Inc., one of the largest heavy-equipment dealers with over 400 different heavy-equipment products for sale and rent, recently announced an investment in Yard Club proving just how valuable this P2P business will be in the future.

Facing Forward

For construction companies to grow and thrive throughout the coming years, it seems apparent green practices and materials will have to be employed by most serious development companies and contractors. Demand for green building materials and processes continues to grow and is expected to increase dramatically over the next several years.

The construction industry must adapt to changing markets, customer pools and industry innovations to remain viable in the 21st century. So far, it looks like they’re off to a good start.

James White is an experienced home improvement blogger and construction worker. His writing has appeared in many publications, including EHS Today, Constructonomics, and Building Blok. He is involved in promoting the ideas of sustainable building and construction safety. And, when he’s not saving the planet through his blogging, White revels in exploring the latest developments in the construction and manufacturing industries, its history, its advancements, and where we will be tomorrow.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 
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New Amendments to Chapter 558, Florida’s “Notice and Opportunity to Cure” Statute

Published on July 22, 2015 by in Uncategorized

By Gary M. Stein and K. Stefan Chin

People involved in the construction industry, including owners, condominium associations, architects, engineers, general contractors, subcontractors and suppliers, should take note of House of Representatives Bill 87, signed into law by Governor Rick Scott on June 16, 2015. HB 87 amends Chapter 558, Florida Statutes, Florida’s “Notice and Opportunity to Cure” Statute, effective Oct. 1, 2015.

Chapter 558 was enacted in 2003 as a pre-lawsuit alternative dispute resolution mechanism to resolve construction defect disputes and reduce the number of construction defect lawsuits filed, while at the same time protecting the rights of property owners.  When applicable, an owner of real property must comply with the requirements of Chapter 558 prior to filing a construction defect lawsuit. HB 87 includes several key amendments to Chapter 558, Florida Statutes.

The legislative intent has been revised to clarify that Chapter 558 is intended to provide an opportunity to resolve construction defect claims through confidential settlement negotiations. This should facilitate more open dialogue between the parties involved, which may lead to resolution of more construction defect claims prior to litigation and potential reduction of time, resources and expenses spent in litigation.

The statutory definition of “Completion of a building or improvement” has been revised to include issuance of a temporary certificate of occupancy.  This provides more clarity for the parties involved by setting an objective standard for determination of when the parties’ warranty obligations commence and conclude.

The statute has been revised to include additional requirements for a Notice of Claim, including identification of the location(s) of each alleged construction defect based upon at least a visual inspection by the claimant or its agents.  Requiring more specificity in Chapter 558 Notices of Claim should provide the recipient of a Notice with more information about the construction defects being alleged, which may lead to more efficient and effective investigation and resolution of claims. It should also reduce the number of improper construction defect claims being alleged, thereby allowing the parties to focus their efforts on resolving legitimate claims.

The scope of documentation, which can be requested under Chapter 558, has been revised to include maintenance records and other documents related to the discovery, investigation, causation and extent of the alleged defects identified in the Notice of Claim and any resulting damages. Expanding the scope of documentation that may be requested should facilitate a more complete understanding of the operative facts by the parties involved, which may lead to more effective resolution of claims.

In conclusion, the construction industry should take note of the 2015 amendments to Chapter 558, Florida Statutes.  The amendments should facilitate more efficient and effective resolution of construction defect claims prior to litigation, potentially saving the parties and the courts time, resources and expenses associated with a construction defect lawsuit.

Board Certified attorney Gary Stein, Miami co-managing partner of the national construction law firm of Peckar & Abramson, P.C., is general counsel for the South Florida Association of General Contractors. He can be reached at gstein@pecklaw.com.

 

 

 

 

 

K. Stefan Chin is an associate with the firm. He can be reached at kschin@pecklaw.com

 

 

 

 

 

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.


 
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Baby Boomer Trends for Senior Living

Published on July 9, 2015 by in Uncategorized

By Brian Webster

Born between 1946 and 1964, baby boomers are second only to Millennials as the largest generation. With most in their 50s and 60s, a large percentage of the generation is headed towards joining the nearly 70 percent of seniors over the age of 75 that live in some sort of senior living or assisted living community.

As more and more individuals from the baby boomer generation enter retirement and begin a transition from a single-family home to a senior living community, it’s important to understand the characteristics that define this generation.

Sense of Community:

A sense of community is important to baby boomers. When looking for a new residence, this generation will stay closer to home in order to maintain personal relationships with family and friends. If there is a senior living option within their current neighborhood, close to family and friends, baby boomers will be more likely to choose that residence over another with similar amenities and outside of their neighborhood.

Amenities:

Amenities play an important role in a baby boomer’s preferences when choosing a residence. It’s common for most developments to include a pool, fitness or wellness centers, outdoor gathering spaces, coffee bars and/or small kitchen entertaining areas. However, new senior centers are now incorporating salon rooms, game spaces and comfortable meeting spaces to interact with family and grandchildren, further reinforcing their desire to maintain a sense of community.

Personal and Financial Freedom:

Moving from a single family home to a senior living community offers baby boomers a great deal of personal and financial freedom. They are able to take advantage of the equity they have built, as well as reduced utility, home maintenance and repair costs, to explore places and opportunities that they may not have been able while they were tied to a single family home. Some places require an initiation fee or for them to “buy-in.” These are meant to offset the additional services and amenities that are on site but are usually very costly. Whether or not they’re required to “buy-into” a senior living community can play a big role in where seniors decide to reside. Depending on the amount of the fee, residents can decide if their monetary investment is worth the services and amenities they’ll receive from being a part of the senior living center.

 

Brian Webster serves as Project Manager at KWA Construction. He is LEED AP certified with an extensive knowledge of green building.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 
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Selecting the Right Industrial Coating

Published on June 26, 2015 by in Uncategorized

By Tatsuya Nakagawa

If you don’t have a background in coatings and corrosion industry, the coating selection process can be daunting. Product data sheets are filled with testing standards that you have never heard of and lab results that may have no application to your situation. A century ago there were only a handful of choices, but today there are thousands of coatings to consider. Luckily you can navigate through the countless choices by focusing on these four key areas.

Condition and Type of Substrate
Not all coatings will function well on concrete, steel and wood. It’s important to ask, is the substrate in good enough condition to accept a coating as is or does the surface need to be repaired or prepared in a certain way? Always remember, coatings are only as good as the quality of the surface it’s adhering to.

Performance Requirements
Does the coating need to withstand high vehicular or foot traffic? Does it need to have high chemical resistance? Will the coating be exposed to high temperatures or UV? If facility downtime is an issue, then a fast curing coating needs to be used. Does it need to have flexibility so it can expand and contract with the substrate or resist impact? What is the temperature going to be during the coating project? For instance, epoxies generally need 50F (10C) to effectively cure, so if the temperatures are lower than that, external heating needs to be utilized or a cold weather coating would need to be considered. Lab results are good, but it’s always good to ask a supplier if they have an example of a similar application in the field.

Safety & Environmental Considerations
According to research firm MarketsAndMarkets, the current worth of the global green coatings market (2012) is $60.6 billion and is estimated to reach $85.7 billion by 2018. VOC-free, BPA-free options are becoming more available in many coating categories, but be sure that these coatings are cost competitive and meet all your performance requirements. Using a sustainable coating will make your jobsite safer and lessen the impact of your project on the environment.

Costs
Costs can sometimes be tricky to access without knowing some additional details beyond the product datasheet. First of all, you need to discuss with the supplier what the specification of the project would be (ie. thickness requirements, coverage). Another area that cost comes into play is surface prep. The cost of surface prep needs to be examined for the coatings system you select. Whether the coating system requires a higher quality surface finish or an additional layer of primer, the costs can add up in a hurry. Asking about the service life and future repairability of the coating is also a good practice.

It’s an exciting time in the coating industry with many innovative solutions on the market. Stick with these fundamental tips and it will increase your chances in making a good selection.

Tatsuya Nakagawa is the VP of marketing and co-founder of Castagra Products, an industrial coatings manufacturing company. Castagra is used by the world’s top companies to protect their assets. Contact info@castagra.com.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 
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Building on Strengths to Enter New Sectors

Published on June 22, 2015 by in Uncategorized

By H. Kent Goetjen

What did this year’s CEO Survey reveal about how engineering and construction (E&C) CEOs view the state of their industry in the face of unprecedented digital transformation?

  • They’re concerned about the economy, project funding sources, and other risks, but are still fairly confident of revenue growth.
  • They’re looking to new sectors, actively investing in digital technologies and forming new alliances with companies.
  • Many are collaborating with competitors.

Cautious confidence

E&C CEOs are more pessimistic about the economic outlook than peers in other industries: 28 percent believe global economy will improve this year (versus 50 percent last year). Despite these reservations, 67 percent of them think there are more opportunities for growth than three years ago. They’re just as confident as last year that they can generate higher revenues in the short– (81 percent) and mid-term (92 percent). They’re looking to the US and China – albeit at lower levels than other CEOs – to produce much of this growth. But Saudi Arabia and Africa are on their radar too.

Gearing up for disruptive megatrends

Overregulation and higher taxes top E&C CEO concerns, but 58 percent are also worried about bribery and corruption. They’re also preparing themselves for major disruptions over the next five years, as megatrends converge. The likelihood of more competition makes them nervous. But they’re generally more relaxed about the disruptive potential of new regulations, distribution channels and production technologies, and changes in customers’ behavior, than peers in other industries.

Active in new and adjacent industries

More than half of E&C CEOs think more companies from adjacent industries will enter the sector in the next five years, although 31 percent don’t expect significant rivals to emerge. In fact, 41 percent say they’ve already entered another sector, more than the average of 33 percent. These pioneers are targeting the energy, utilities and mining, professional and business services, and industrial manufacturing sectors.

Digital delivers efficiency and innovation

Most E&C CEOs are also investing in digital technologies to create value in new ways. Their top priorities are cybersecurity, mobile technologies for engaging with customers, and data mining and analysis. They’re also more interested in the potential of 3-D printing than other CEOs, which suggests increasing off-site manufacturing could become the norm.

How have these investments paid off? E&C CEOs say digital technologies have been valuable in improving operational efficiency and enhancing data analysis, external and internal collaboration. They’re also positively impacting innovation capacity, sourcing and supply chain management. But maximizing returns is difficult. It requires clear vision of how digital technologies can deliver competitive advantage, a robust plan that includes concrete measures of success, and a CEO who’s willing to champion digital.

Dynamic alliances, different talent

The percentage of E&C CEOs who plan to form a new alliance leapt to 61 percent from 49 percent in 2014. They’re far more likely to be joining forces with competitors than CEOs in other sectors are (45 percent versus 27 percent).

Half of E&C CEOs also intend to hire more. Finding candidates with the right skills is a key concern, but they’ve taken steps to address talent shortfalls: 72 percent have widened searches to different countries, industries or demographic segments; 61 percent have implemented a strategy for promoting talent diversity.

Kent Goetjen is PwC’s U.S. Engineering & Construction industry sector leader. He has more than 30 years of experience providing service to clients in the engineering and construction industry.

Have an idea for a guest blog for Construction Today? Contact alan.dorich@phoenixmediacorp.com or jim.harris@phoenixmediacorp.com.

 

 
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