The last 2 years have seen a dramatic shift in the way that Architecture Engineering and Construction (AEC) Companies are focusing their efforts. The global pandemic, increasingly visible impacts of climate change, and now war, have been key influencers in this shift that has led to these growing trends:
- Digitisation
- Supply Chain Risk
- Decarbonisation
What does this change mean for the AEC industry?
Digitisation
With a reduced work force and the sudden need to work from home, the pandemic set into motion a simple change that would have a ripple effect across the working world, and start the wheels of change in even the most resistant industries.
Construction was classed as a front line service, and teams needed to find way of increasing capacity and capability of their reduced work force in order to continue delivering projects safely and cost effectively. Additionally, in the drive to minimise the number of people on site, many management staff found themselves working from home and not in the site cabins with easy access to and over site of the project delivery team.
Even the most ‘old school’ of construction managers have made the switch to video conferencing, and begun to see the value of real-time data to help them manage their projects remotely, and more efficiently.
As the world has unlocked, these practices have not stopped. This is not to say there are not still significant challenges, and digital literacy and the skills gap still need investment and support. But as the fear that automation and AI will ‘take our jobs’ has subsided, the true value of data and automation through AI is beginning to be realised across all phases of AEC, from planning, design, construction, and operation, and all functions; safety, quality, cost, and sustainability.
In innovation we can split a market from early adopters to laggards with respect to how quickly they adopt new approaches. In construction this curve has traditionally been skewed to put many more industry organisations in the ‘late majority’ or ‘laggard’ section.
Where previously we have worked with solely to the ‘innovators’ and ‘early adopters’ of the AEC industry, such as Landsec, Multiplex, and Berkely Homes, now we are approached by organisations that may have traditionally fallen into the ‘late majority’ category who have crept into the ‘early majority’ thanks to this new acceptance of digital tools.
This has accelerated the growth of construction technology companies across the globe and increased the investment in this space. McKinsey reports that investment in construction tech has more than doubled over the past decade, with some sources citing that over half of that investment has been within the last 3 years.
Supply chain risk
Globalisation has enabled so many amazing things, but has also made it much easier to inadvertently procure products that are produced in ways that do not align with our Environmental Social and Governance policies, for example with the use of slavery, illegal and unsustainable deforestation etc. This has been thrown into stark relief in light of the Ukraine War, introducing new conflict materials: “It has recently been announced by the PEFC International Board, that all timber originating from Russia or Belarus is classified as ‘conflict timber’ and therefore cannot be used in PEFC-certified products.”. At Qflow the number of items we are asked to notify against, and the nuisances of supplier vs material certifications, have grown significantly over the past 18 months.
Greater transparency and accountability throughout the supply chain has become increasingly important to our clients and across the industry. This has resulted in two key changes in behaviour. Firstly, investors, developers and as such principal contractors and sub contractors are now requiring more and more data to be fed up the supply chain. From Requesting Environmental Product Declarations (EPDs) from suppliers, to monthly reporting from site teams. The impact is more time, spent collecting and auditing data. This puts immense pressure on already stretched teams. This is something that Qflow is relieving through automation and analysis. The second is that, this new found data has enabled contractors and developers to pin point which suppliers is performing best or worst, therefore focusing their efforts toup skill or move away from suppliers that struggle to deliver on these new aspirations.
Decarbonisation
COP 26 came to Glasgow in 2021. This acted as a focal point for many companies already on a journey to build a strategy around, and declare their route to decarbonisation.
This has been closely followed by the recent progress of Part Z, otherwise known as the Carbon Emissions (Buildings) Bill, through the House of Commons in February 2022. The bill seeks to regulate embodied carbon in the building process. It will require the whole-life carbon (WLC) emissions of a building to be reported, both at design and practical completion, and will set new limits for embodied carbon.
ESG investing is on the rise. Developers are increasingly finding that they must have strong ESG credentials and a route map to decarbonisation to access the funds they desire at the best rates. As with supply chain risk, this means more data to collected and reported to validate and evidence our Environmental, Social and Governance impact across the full extent of our projects; including Scope 1,2 and 3 carbon, cradle to grave material and waste impact, and local employment local opportunities.
Conclusion
Although driven by the same external influences of global pandemic, climate change, and now war, all three of these trends are also closely linked to each other.
The advent of remote working has reduced daily commutes, reducing workers day-to-day carbon emissions. The need to meet new reporting demands has further accelerated the adoption of digital technologies started by the pandemic. And the availability of this data has made it increasingly possible to engage our work-force, supply-chain and clients in the opportunity that decarbonisation and greater ESG presents.
Qflow is acting as a lens, bringing the data we need as in industry into focus so that we are better equipped to understand our day-to-day operations, and chart a course for a sustainable future. As we can continue to improve our efficiency and transparency through digitisation, we will be better positioned to up-skill and develop our supply chain and decarbonise Construction.
