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August 5, 2021

Inspire – Innovate – Motivate

Asset management for construction 101

4 min read

Modern processes and systems are driving new life into age-old practices and solving increasingly complex challenges.

Construction is one of the world’s oldest and most essential industries, with building, industrial, and infrastructure projects always in demand. It is also highly complex, inherently hazardous, and constantly under scrutiny. Costs, deadlines, safety, and regulatory compliance dominate the industry’s priorities.

COVID-19 has caused unprecedented flux in the industry with projects reduced, paused, postponed, or shelved. New environment, health, and safety risks and regulations; furloughed workers; disrupted supply chains; and subcontractors and smaller suppliers struggling to survive have heightened the challenges. Furthermore, the remote-work trend, should it become permanent, could create a glut of empty buildings and depress demand for new construction for some time to come.

The fears are universal. According to PwC’s COVID-19 US CFO Pulse Survey, published last April, 71 percent of respondents were concerned about the financial impact of the pandemic, including the effects on results of operations, future periods of liquidity, and capital resources; 64 percent feared a global recession; and 41 percent were worried about effects on the workforce and productivity.

For the construction industry, surviving and thriving in the face of any challenge requires precise management of the projects as well as the assets being built, but here is where the industry falls behind. Its dependence on patchworks of project management software, scheduling tools, and personal spreadsheets is contributing to construction lagging in productivity gains compared to other industries.

Fortunately, construction project and asset management capabilities have vastly improved over the last several years. Technological and data intelligence breakthroughs are transforming how the industry operates and enhancing visibility and control of its myriad moving elements. They are also allowing engineering and construction firms to upgrade their business models and employ innovative strategies to meet new challenges.

Asset management essentials


Construction is asset-centric, and its data is the launching point for asset lifecycle management. Ideally, throughout the design, engineering, and construction phases, all details and documents about the assets and their components are gathered and managed centrally. Then, during commissioning and closeout, the records are transitioned to the asset owner, providing a foundation for ongoing maintenance, repairs, improvements, and potential future decommissioning or demolition.

Optimizing construction asset management requires well-integrated business systems, with enterprise asset management (EAM) at its core. EAM is the central information store and control point for the entire asset lifecycle.

Construction is also project-centric in that it requires having the right people, tools, systems, and processes in place to deliver high-quality, complex assets on schedule and under budget, while complying with all safety and regulatory requirements. Managing the countless overlapping project activities of a vast network of partners and materials suppliers using siloed systems and data is untenable.

Long-term, high-value engineering and construction projects require tightly integrated governance and control of the full project lifecycle, from planning and financing to engineering design, construction, and closeout. Management of all elements must be coordinated and cohesive, including the contracts, projects, documents, risks, quality, health and safety, work orders, inventory, procurement, logistics, customer relationships, financials, and human resources.

Engineering and construction contracts are complex, multi-faceted, and subject to scope changes and revisions. The management systems must accommodate bids, contract changes, progress-based billing, subcontractor management, equipment rentals, time and expense management, cost and budget control, and more. They need to enable visibility and coordination of the activities of engineers, contractors, subcontractors, consultants, and others involved in the project, as well as construction materials and equipment supply chains.

Enterprise resource planning (ERP) software is prominent in construction project management and tightly integrated with other purpose-built systems.

Streamlined and automated approaches


Disruptive technologies are breathing new life into staid construction practices. Digitalization and the internet of things (IoT) are enabling data-driven approaches to managing construction projects and increasing workforce productivity and safety.

The attractiveness of these technologies to younger, digitally savvy job candidates helps to mitigate pressing skills shortages and talent gaps. For example:

  • Mobility allows projects to be managed from any location.
  • Augmented and virtual reality (AR/VR) support on-demand instruction, collaboration, and expert support from any location.
  • Building information modeling (BIM) software creates a 3D model or “digital twin” of an asset, allowing users to simulate designs and changes and determine the optimal approach.
  • 4D scheduling combines a 3D project model with the construction project schedule for more intelligent planning and scheduling.
  • Artificial intelligence (AI) and machine learning (ML) optimize project scheduling and predictive analytics and enable prescriptive analytics.
  • Drones facilitate surveying, mapping, inspections, security surveillance, emergency response, and materials transport.
  • Robots are available for hazardous, difficult, or monotonous tasks and improve the speed and quality of construction activity.
  • 3D printing provides rapid access to selected tools and materials, without lead-time concerns.
  • Blockchain automates contractual processes and paperwork to save money and accelerate project completion.
  • Cloud-based, subscription delivery of enabling software avoids the upfront capital expense and complexity of managing it on site.

Construction trends drive new business opportunities


In any industry, agility is necessary to adapt to changing trends and circumstances. Following are opportunities supported by the latest software and technology:

  • Reusing design elements to shorten project timelines and improve construction quality
  • Incorporating modular construction by building some assets off-site to save time and improve profit margins
  • Offering aftermarket operations, maintenance, and/or facilities management services, also known as servitization, to generate new revenue streams
  • Repurposing unused assets, such as offices now empty due to remote working, to leverage earlier investments and shorten construction completion time.

There is no better time or greater need to strengthen construction systems and methods. To ensure the industry remains recession proof and can meet current and unanticipated challenges, it must revisit current practices and seriously consider new approaches to synthesize and modernize its approach. Taking these steps now will help to ensure the safe, on-time, on-budget delivery of high-quality assets for years to come.

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