Q: In what way is modular manufacturing driving change in the construction landscape?
A: To begin with, in 2018 IFS had four times greater customer activity around modular construction than in any previous year.
The UN estimates that over two billion new homes will need to be built over the next 80 years. This housing need is intensified by the global shortage of skills, and has propelled everyone – from schools in Ireland to prisons and hospitals in the US, luxury apartments and workers’ dormitories – to seek modular construction solutions.
This trend will continue in 2019 as modular manufacturing enables affordable houses to be built quicker and in greater volumes.
Q: Are new entrants gaining momentum – and if so, how?
A: The wave of new entrants coming into the industry isn’t from a construction background. They bring unconventional thinking to the modular landscape.
Traditional construction companies should open modular factories to stay competitive as new players enter the industry from manufacturing, IT and design, supply chain and logistics, to local governments, banks and insurance companies.
Engineering News-Record’s Top 100 Global Contractors for 2017 found that European firms made up only 23 percent of the total – which is a decrease from 44 percent in 2010 – whereas Asian firms held 51 percent, reflecting an increase from 41 percent in 2010.
Many analysts predict that China, India and the US will be winners in the forecast US$ 8 trillion growth expected in construction by 2030 – but not Europe.
Q: How will these changes affect existing businesses?
A: The pressure on incumbent construction firms to adapt will be huge; they will need to have tighter controls and more adaptability over every aspect of their projects – provided that they can where necessary partner with larger networks of suppliers, and service and maintain assets when they’re built – including equipment hire – and even offer or manufacture some modular units or components.
It all adds up to an urgent need for better and more integrated digital management of complex and demanding projects.
Q: To what degree is technology utilised in this industry?
A: With shrinking profit margins and increased competition bringing unprecedented pressure on productivity and delivery, and growing urban populations and housing shortages creating more demand and a higher intake of orders, I expect firms to be compelled to move from being document driven to data driven.
Integrated business systems such as ERP will be vital for construction companies – and these systems will convert from being ‘nice to have’ to ‘need to have’ because the reality is that 10 percent of traditional construction firms could go out of business over the next five years as competition for delivery and productivity will be fierce.
Q: Could you describe the role of integrated business software in the construction industry?
A: Software such as ERP can connect and integrate all functions in a project’s life cycle all the way from inception to disposal, and from finance to operations to design, enabling maximum adaptability.
I’ve always argued that Building Information Modelling (BIM) will be a driver of digital asset life cycle management and integration. BIM is an integral part of moving to a data driven world.
This year, I expect to see construction companies take their first steps to discuss merging and building on the strengths of combining BIM and ERP.
IFS Global Industry Director for Engineering, Construction and Infrastructure