Big Data in Construction: A Path to Greater Efficiency and Profitability

In today's technology-driven world, integrating big data into business operations has revolutionized how companies make decisions, optimize processes, and improve efficiency. The construction industry, often seen as traditional and slow to adopt new technologies, is beginning to embrace the power of big data to enhance decision-making, reduce costs, and increase profitability. This article explores how leveraging big data can transform construction management, providing real-world examples and best practices for maximizing its benefits.

The Power of Big Data in Construction

Big data refers to the vast information generated by various sources, including project management software, sensors, telematics, and asset tracking systems. This data can provide valuable insights into project performance, resource allocation, and operational efficiency when harnessed correctly.

Examples of Big Data Applications in Construction:

Project Management Optimization: By analyzing data from project management software, construction companies can identify patterns and trends that lead to project delays or cost overruns. This allows for proactive adjustments and improved project planning. Example: Fieldwire, a leading construction management software platform, integrates big data analytics to help project managers track progress, identify risks, and make data-driven decisions.

Predictive Maintenance: Sensors and telematics systems can monitor the health of construction equipment in real time, predicting when maintenance is needed before a breakdown occurs. This reduces downtime and maintenance costs. Example: Caterpillar’s Cat Connect technology uses data from equipment sensors to predict maintenance needs, helping companies avoid costly repairs and downtime.

Resource Allocation: Big data can help construction companies optimize resource allocation by analyzing usage patterns and demand forecasts. This ensures that labor, materials, and equipment are available when and where needed. Example: Autodesk's BIM 360 uses big data to improve resource planning and allocation, enhancing project efficiency and reducing waste.

Safety Improvements: Analyzing data from safety reports, wearable devices, and sensors can identify potential hazards and improve safety protocols on construction sites. This leads to fewer accidents and lower insurance costs. Example: Smartvid.io uses AI and big data to analyze safety data and identify high-risk areas on construction sites, helping to prevent accidents.

Cost Management: By integrating financial data with project management and resource allocation data, construction companies can gain a comprehensive view of their costs and identify areas for savings. Example: Oracle's Construction and Engineering Cloud uses big data analytics to help companies manage costs and improve financial performance.

Leveraging Connected Tools and Telematics

One of the most significant advancements in leveraging big data in construction is using connected tools and telematics. These technologies provide real-time data on tool usage, location, and condition, offering numerous benefits for tool fleet management.

Benefits of Connected Tools and Telematics:

• Data Collection: Real-time data on tool usage, location, and condition is automatically collected. This data helps monitor tool performance and identify potential issues before they cause delays.
• Daily Inventory Reports: Each day, inventory reports are generated, providing an accurate account of which tools are used and which are idle. This transparency helps in better allocation of resources and avoiding unnecessary purchases.
• Preventive Care: With detailed data on tool usage, maintenance schedules can be optimized to service tools before they fail. This proactive approach reduces downtime and extends the lifespan of tools.
• Always High-Performing Equipment: Real-time monitoring ensures tools and batteries always perform at their best, preventing issues caused by dead batteries or malfunctioning equipment.
• Dashboard Monitoring: A centralized dashboard provides an overview of the entire tool fleet, allowing managers to track tool usage, location, and condition from the office. This visibility enhances decision-making and operational efficiency.
• Accountability: Tools can be assigned to specific employees and tracked, creating accountability and encouraging better care of tools.
• Optimized Fleet Size: Data-driven decisions can help define the optimal size of the tool fleet, minimizing idle time and ensuring the right tools are available when needed.
• Rental Options: Insights from usage data can inform decisions about renting tools instead of purchasing, leading to cost savings.
• Loss and Theft Prevention: Faster identification of lost or stolen tools reduces replacement costs and enhances security.

Integrating Software with Hardware for Enhanced Productivity

Integrating software with hardware, such as connected tools, gateways, and telematics, typically represents less than 1% of a construction company's revenue. However, these investments can significantly impact labor productivity and profitability. By collecting and analyzing data from these connected devices, companies can optimize their operations, reduce downtime, and make informed decisions that drive efficiency and profitability.

Case Study: RFID Technology in Retail

A comparable business case is using RFID technology in retail inventory management. Retailers like Walmart and Zara have implemented RFID tags to track inventory in real-time, improving stock accuracy and reducing out-of-stock situations. According to a study by Auburn University's RFID Lab, RFID implementation can minimize inventory shrinkage by up to 80% and improve inventory accuracy by 25% to 30%. This transparency allows for better inventory management, reduced shrinkage, and informed purchasing decisions, ultimately increasing sales and customer satisfaction.

Case Study: Apple AirTags

Apple AirTags have quickly become a popular solution for tracking personal items, with millions sold since their launch. These tiny devices use Bluetooth technology to provide real-time location data, allowing users to track their items from their smartphones. The success of AirTags highlights the value of connectivity and data in managing everyday objects. One notable case traveler tracked his lost luggage using an AirTag, saving him from replacing the lost items and purchasing new clothes while waiting for the airline to locate his bag.

Case Study: Hilti's Innovations

Hilti's ON!Track 3.0 asset management software and the Nuron tool platform are prime examples of how leveraging big data can revolutionize tool management in construction. These cloud-based solutions offer real-time tracking and inventory management, reducing downtime caused by missing or misplaced tools. The system provides alerts for low stock levels, maintenance needs, and certification renewals, ensuring compliance and operational efficiency.

ON!Track helps identify idle tools and define core fleet items versus those that can be supplied on demand (short-term rental). This flexibility in managing the tool fleet can lead to substantial cost savings.

Nuron Connected Tool Platform: Hilti's Nuron platform connects all cordless tools to a single ecosystem, providing data on tool usage and performance. This connectivity allows for predictive maintenance, reducing downtime, and ensuring tools are always ready. The platform also offers enhanced safety features and real-time location tracking.

Hilti Fleet Management: Hilti’s fleet management program allows construction companies to lease tools rather than purchase them outright. This model provides access to the latest tools without the upfront costs and includes maintenance, repairs, and replacements as part of the service. This approach reduces administrative burdens and ensures that tools are always in optimal condition, leading to increased productivity and lower total cost of ownership.

Saving Enough to Buy a Porsche 911 Turbo S or a Ford F-450 in a year!

Do you know how much downtime, non-consolidated POs, and repair costs accumulate in a year? For a $10-20 million revenue construction company, optimizing tool management and reducing inefficiencies can save a significant amount. These savings could potentially afford the company a brand-new Porsche 911 Turbo S or a top-of-the-line Ford F-450 within a year. For instance, the average cost of processing a purchase order in the USA is generally estimated to be between $50 and $150. For example, the Center for Advanced Procurement Strategy (CAPS) Research found the average processing cost to be around $527, which includes internal processing, approvals, interactions with suppliers, and invoice processing.

Data is the New Oil: Implications for the Construction Industry

"The world’s most valuable resource is no longer oil, but data," a front page by The Economist, underlines data's immense value in today's economy. Like oil in the 20th century, data is a driving force behind innovation and efficiency in the 21st century. In the construction industry, leveraging data can significantly improve decision-making processes, enhance productivity, and reduce costs. By harnessing the power of data through tools like telematics and asset management systems, construction companies can gain a competitive edge, optimize their operations, and increase profitability.

Collecting big data from the hardware and software ecosystem may seem like a small aspect of a construction company's operations. Still, its impact on productivity and profitability is significant. By adopting and investing in a data-driven approach, construction companies can reduce labor costs, minimize downtime, and improve overall efficiency. Starting small and gradually expanding these practices can lead to substantial long-term benefits, positioning companies for future success in an increasingly competitive industry.

As the construction industry continues to evolve, those companies that embrace data-driven decision-making will be better equipped to optimize their operations and drive profitability. Now is the time for the construction industry to harness the power of data and invest in digital transformation.

Mert Yaman

References

• McKinsey & Company. (2020). "The rise of the connected worker: technology that makes work more efficient and productive."
• Apple Inc. (2021). "Apple AirTag: The ultimate tracker for personal items."
• Construction Industry Institute. (2019). "Improving Construction Labor Productivity and Performance."
• Planergy. (2022). "PO Processing Cost: Average Cost, How To Calculate It, and How To Reduce Costs with Software."
• ProcureDesk. (2022). "How To Calculate Your Purchase Order Cost."
• Auburn University's RFID Lab. (2020). "The Impact of RFID in Retail."
• Hilti Corporation. (2021). "ON!Track Tool Tracking And Asset Management."
• Hilti Corporation. (2021). "Hilti ON!Track 3 Asset Management Software."
• The Economist. (2017). "The world's most valuable resource is no longer oil, but data."

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