VOICES FROM THE INDUSTRY: Industry needs new methods to make it in new economy

May 26, 2008

It's happening: Premium gasoline is breaking the $4 barrier that diesel fuel passed several months ago. While there are other serious issues in this "sour economy," fuel prices are the most obvious sign of the future we face.

We can view the problem in several different ways:

This is just temporary. Our problems were caused by a bunch of crooks, greedy oil companies and the war in Iraq. Things will get back to normal if we cut back a little and give it time.

If we can find more cheap oil and maybe use more biofuels, prices will get back to normal.

We've entered a new era and we aren't going back. The age of cheap resources is over, and we need to develop more efficient ways to do everything, especially to make our world more sustainable.

There are other views, but here we are. "Later" has come sooner than we thought it would.

If we focus on the third view, design and construction firms must redesign and reconstruct their processes to succeed in a challenging economy.

Construction is an enormous part of our economy and always will be. There are predictions that by 2030, more than 50 percent of our buildings will be less than 30 years old. In other words, there's a lot of work to do.

Big part of economy

The Indiana University Kelley School of Business has calculated that construction constituted 3.7 percent ($7.8 billion) of the Indiana gross domestic product in 2007. With the volume of work underway, 2008 will be an even better year. While construction draws on resources from all around the world, it's still a local business. For our own sake, we need to seek greater efficiency.

Most people agree that construction costs seem too high. We can point to many factors that are beyond our control, diesel fuel and steel being obvious examples. Other factors, however, represent areas for potential innovation that will save money or allow us to invest more.

A study by the University of Pennsylvania showed that almost half of all labor costs on construction projects are wasted due to inefficiencies, such as poorly timed changes and laborers waiting for deliveries, going up and down hoists, and waiting for other trades to move out of the way.

The study pointed out that "even if the industry's woes have been exaggerated, the stakes for our economy-as well as owners' budgets-are simply too high to allow debate to trump action." Using the 2007 numbers for Indiana, a 12-percent improvement in efficiency will yield savings of $1 billion.

Think what we could do with almost $1 billion per year! We could choose not to spend the money, or we can attack problems that we only talk about today. We also must invest in more energy-efficient systems, and we could probably add solar power or other technologies to every building we build.

New words for a new process

Computers have changed the drawing process. They enable powerful images and allow the instant sharing of information. But some would argue that the computer has enabled meaningless duplication and too much chatter of little value.

The challenges of real information exchange still exist because we are using old words. The traditional terms that have been used in the design and construction industry for years are obsolete today. "Schematic design," "design development," "construction documents," "bidding/ negotiation" and even "construction" are dinosaurs of the pencil-and-paper era and seem to translate the obvious into matters of great complexity.

Design management in the digital age doesn't occur in simple phases, and construction usually starts before the design is complete.

At the beginning of the design sequence, we should devote our common efforts to clearly articulating the real project goals, parameters and program to establish a cost and schedule for a project, no matter how big or small. That phase would be called "project definition" and would result in the basic configuration of the building and its systems.

The next phase would be called "process definition." In this phase, we would outline the complete work plan, including the myriad of project requirements and all of the challenges of contracting, staffing and choosing materials.

Then, detailed design and construction can fall into the most efficient sequence. Here's where computers and global delivery processes can really be exploited, using building information modeling and similar programs that can simultaneously integrate form and function with quantity, methodology and cost.

The action word is "communication." This attitude must extend into construction to replace the wasted efforts of debating scope and service while tradesmen wait to do the actual work.

Breaking old habits will probably be hard, but saving 12 percent in wasted time and effort is an achievable goal. There's no downside, especially if the money is more properly invested in making our community a better place to live. In this case, sooner will be far better than later.

Altemeyer is vice chairman of BSA LifeStructures, the Indianapolis-area's largest architectural firm. Views expressed here are the writer's.
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