Construction sites are packed with heavy equipment, from dump trucks, excavators and bulldozers to cement mixers, backhoes and cranes. However, downtime is a big deal in construction, and equipment idle time averages 36% across the industry. Unplanned equipment downtime can cost thousands of dollars per day per site. Scale that up to companies working across dozens of projects and sites, and the size of the problem becomes stark.
It all makes minimizing equipment downtime vital to achieving steady progress on complex construction projects and keeping costs under control. Furthermore, construction companies that experience more equipment downtime generally lag behind their competitors and risk losing business. Maximizing uptime can therefore deliver competitive advantage.
Tech to the rescue
Research by McKinsey has shown that construction companies can improve equipment uptime by between 30% and 50% using IoT and increase site productivity by 1% to 5%. IoT is ideal for boosting tool utilization and can ensure only licensed workers can use particular pieces of equipment, which helps reduce accidents and improve site safety.
IoT enables monitoring of equipment and tools by site owners or operators, equipment manufacturers and rental companies. By better understanding the performance and maintenance requirements of equipment, unscheduled downtime can be reduced, making sites more productive and efficient.
For example, IoT sensors can detect when equipment and machinery are sitting idle, allowing them to be deployed to an alternative site where they can be useful. Equipment can also be sitting around awaiting repair or replacement, which can mean a whole site has to be shut down.
The knock-on effects of these types of downtime can be significant: with work on hold, itinerant or day laborers can depart in search of work on other construction projects. Delays can snowball from hours into days or weeks. Being able to monitor a piece of equipment’s condition remotely and carry out predictive maintenance to keep it up and running, is invaluable.
In addition to better utilization and maintenance of assets, IoT also helps safeguard them. Theft and loss of equipment and tools further undermine a construction site’s profitability. Site managers and contractors can only do so much to ensure site security, and with many sites being home to sub-contractors and sporadic day laborers, it can be hard to keep track of everything on site. Having sensors affixed to heavy equipment helps construction companies monitor their location and reduce the risk of theft or loss.
Furthermore, there is a servitization element to IoT in construction. Heavy site equipment is highly expensive to buy, so many construction companies rent machinery from third-party suppliers. Those equipment suppliers and rental companies can use IoT connectivity to track machine usage, schedule preventative maintenance, as mentioned, and improve their billing processes, reducing their costs.
How it works in practice
IoT can also enforce geo-fencing equipment by individual site or even by specific areas of a site. Then if that equipment leaves that particular area, an alert is generated and sent to a central monitoring station, and the asset can be located and retrieved.
Equipment can also be monitored for everything from overuse to being exposed to inappropriate environments, such as being left in pools of water or snow for extended periods. This kind of detailed monitoring gives construction companies new insights into equipment lifecycles and maintenance, helping them make planning more efficient and, again, driving reductions in downtime.
Real-world examples demonstrating IoT’s value
Orange works with some of the world’s leading construction companies to drive change and help them gain a competitive edge. For example, construction firm McConnell Dowell chose to work with Orange to develop a smart and scalable IoT solution. It gathers real-time information on heavy machinery utilization and other assets across its sites, driving greater productivity and reducing downtime.
Companies can drive real results from IoT, with one of Asia’s leading construction companies demonstrating the potential in using data to power transformation in a traditional industry. The company appointed a digital officer to each business unit and digital champions throughout the organization and set about becoming a data-powered company. By leveraging data and digital technologies like IoT, the company was able to realize operational outcomes like a 25% increase in equipment fuel efficiency, 15% increase in worker productivity and a 10% increase in plant and machinery productivity and utilization.
Enhancing the world’s largest industry
Construction is the world’s largest industry and employs approximately 7% of the world’s working-age population. But for a long time, it has been slow to evolve traditional working practices and slow to embrace technologies that can help it modernize, which has held the industry back. McKinsey’s Reinventing Construction report revealed that construction has only seen a 1% increase in productivity growth in the last two decades, at a cost to the global economy of $1.3 trillion per year.
It’s something that needs to change. McKinsey also highlighted that the construction industry needs to evolve and showed ways it can change to improve productivity by 50% to 60% and deliver $1.6 trillion per year in incremental global value.
Driving benefits from IoT in construction requires building managers, property operators and developers to all work together to connect equipment and deploy interoperable systems that let devices communicate with each other to drive efficiencies. Orange works with construction companies worldwide to develop ecosystems of partners to help reduce risk and drive business forward. We also help you realize the benefits of connectivity throughout your organization and how to maximize IoT technology to boost operational efficiency, reduce costs and accelerate innovative ideas.
This is how to achieve real, tangible results: construction companies with more than 50% of their heavy equipment connected enjoy 23% better financial performance than their competitors with less than 50% connected. And the more equipment connected, the better the results. Construction companies with over 75% of fleets connected realize 51% better financial performance. In fact, 98% of construction companies have told PwC that they expect digital tools to increase efficiencies by 12%. IoT solutions will be central to that.
Read more about how Orange is helping McConnell Dowell create smarter construction sites with IoT.
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I’ve been writing about technology for around 15 years and today focus mainly on all things telecoms - next generation networks, mobile, cloud computing and plenty more. For Futurity Media I am based in the Asia-Pacific region and keep a close eye on all things tech happening in that exciting part of the world.