In June 2016, global consulting and research firm McKinsey & Company published a study on the commercial construction industry, which concluded, “Large projects across asset classes typically take 20 percent longer to finish than scheduled and are up to 80 percent over budget.”

McKinsey’s report went on to say that, “The industry has not yet embraced new digital technologies that need upfront investment, even if the long-term benefits are significant.”

The report also cited delayed information sharing about projects and paper-based communications as major roadblocks to progress.

“The average commercial construction project has around 40 to 50 different participants, ranging from millworkers to concrete contractors and landscapers,” says John Fingland, general manager of collaborative solutions for Trimble.

Fingland, a former general contractor, reached a point where he began to see how technology could expand opportunities for growth and success in construction 18 years ago. And now, he is seeing clients reach this same realization.

“The key is obtaining ‘constructible’ data that is so accurate that you can build with it,” Fingland says.

This means data that can connect the larger projects that companies work on and model using building information systems (BIM), and then finding ways to connect these digital models and the information that is attached to them to the building supply chain.

“If we can take the data that is already resident in the BIM system and use it to drive material and labor requirements, all the way through a supplier network, everyone engaged will have clearer visibility of all that is going on in the project,” Fingland says.

So, how does this work?

IoT (Internet of Thing) tracking sensors can be used in warehouses, on trucks, and even on the labor force so that a manager of a large construction project can see where all of his/her labor and materials are at any given moment—and ensure that everything that is needed onsite will be there.

Workers, materials, and equipment can be monitored and tracked so that project managers know where they are at all times.

If a change order must be executed — say, for materials — the information contained on the BIM system can immediately drive a set of revised requirements down the supply chain, notifying all affected suppliers.

Everyone who works on or with the BIM-supply chain uses the same information, which is stored in a central data repository. This eliminates confusion and conflicting reports on project status and needs.

Most importantly, a collective effort between BIM and the supply chain addresses the central worry of every large-scale commercial construction contractor: meeting the due dates and the terms of a contract.

“They (contractors) feel increasingly exposed, vulnerable even. Why? Because they realize that they do not have a supply chain that can deliver BIM requirements on their projects. Lead suppliers cannot work in isolation, and the need to find capable suppliers is becoming a critical priority,” says Vito Getuli, Silvia Mastrolemba Ventura, Pietro Capone and Angelo L.C.Ciribini in a 2016 paper on the BIM-based construction supply chain.

Where Geospatial Fits In

In construction, as in other fields, there is always a visual component. This is captured with geospatial technology that takes advantage of the synergy between BIM and the supply chain.

With the help of geospatial mapping technology, construction project managers can immediately receive alerts that are pegged to specific locations that could be experiencing a labor, materials or equipment shortage. If the manager is waiting for materials to arrive, he or she can turn to geospatial logistics maps that show where a truck in transit is—and how long it will take to get the materials to the site.

Geospatial technology also has the ability to attach other types of relevant information to points on a map—such as a photo of a rooftop on a building that is being constructed or a bill of materials (BOM) that is specified for a particular area of a building that is being constructed.

“What matters to the manager is keeping the project at a cadence where it will complete on time,” Fingland says. “In any given day, a project manager could have a need to know, for example, who’s onsite and where they are. If it’s a five-person drywall team that’s supposed to be there, and the project manager only sees two of them onsite, he or she knows there is a labor shortfall that could impact the project. If materials are supposed to be onsite at the start of day, but aren’t, telematics are widespread in the trucking industry and it wouldn't be hard to see where the delivery truck is on its route and when it will get to the site. All of this improves project manageability.”

Fingland points to an example of a Dutch commercial building contractor that made the decision to locate several materials depots on the outskirts of Amsterdam so as to avoid traffic congestion and move materials to building sites faster.

“In many cases, the builder prefabbed elements of the construction at these depots, later shipping the prefabbed articles to the final buildings so they could be installed,” he says. “The company operated in a just in time (JIT) mode, just like a manufacturer using a supply chain would.”

The ability to combine BIM modeling and geospatial capabilities with a supply chain of materials, labor, and costs facilitated the distributed warehousing and module building effort.

Dealing with Change

Unlike manufacturing, however, commercial building projects aren’t usually repeatable processes.

There are frequently uniqueness’s that arise based upon how materials are installed or sourced. This forces change orders — and it means that both your BIM and your supply chain must be able to rapidly respond to change.

By digitalizing an end-to-end construction project, from BIM to supply chain, managers are in a better position to predict both costs and schedules. They can also reduce the number of change orders, which usually impacts costs and schedules adversely.

“Changes occur in all phases of a construction project, and it is essential to implement an appropriate change management (CM) regime to reduce change-associated cost and time delays. Poor management of changes will lead to cost overruns and failure to meet the owners’ goals and expectations,” says Penn State’s Fangxiao Liu, Abdou Karim Jallow, Chimay J. Anumba and Dinghao Wu in a 2014 paper called “A Framework for Integrating Change Management with Building Information Modeling.”

The goal of that study was to propose methods for integrating change management with BIM. However, for those of us who have worked with supply chains, which are the real “shakers and movers” of labor and materials to jobsites, the optimal way to manage change in materials, labor and project scope is through a network of suppliers or the supply chain.

In other words, the supply chain is the natural point of integration for change management, which begins in BIM and then must be sent out to suppliers throughout the project construction network.

“In our own work with clients, we and they have seen real improvements in change order reductions with the integration of BIM with the supply chain,” confirms Fingland.

Best Practices

For construction companies wishing to optimize their project performance through BIM-supply chain integration, here are three recommendations:

#1: Define outcomes and goals before you attempt integration.

It’s tempting to jump on a technology bandwagon before thoroughly figuring out what you want to get from the investment. Don't do this.

Instead, define a clear set of goals for your business first. These might include improving your profit margins on projects, reducing project time to market, or reducing labor, rework and change orders. Then, measure your current performance. After you pilot an integrated BIM-supply chain solution with your projects, you can see if you are improving performance over your past performance baseline — and if you will be able to reach the business goals and outcomes you have set for yourself.

#2: Use the geospatial capabilities of BIM-supply chain integration to the max.

The geospatial capabilities of BIM make projects “real.” You can link these BIM capabilities to the geospatial information available through supply chain data, thanks to the advancements of telematics in trucking and transport and the use of IoT technology in building and materials/labor tracking.

By tracking a delivery on a truck, you can see where the truck is and how soon the supplies will reach your site. By tracking expensive equipment dispensed to sites, you will always know where the equipment is and (thanks to new diagnostics sensors) if the equipment is in good working order and ready to take on a task. You can likewise track work crews and progress.

Much of this work can be done in a central “command center” that utilizes information flowing from BIM and the supply chain, so actual site visit time is reduced.

#3: Don't underestimate the cultural impact on your company and suppliers.

Not every supplier will be ready to take on supply chain responsibilities and the digital efforts that accompany it, so there could be potential fallout. In some cases, there might even be a need for you to work alongside suppliers to get them onboard.

Internally, moving to more digitalized workflows can also impact your employees. The construction trades are still highly manual and paper-intensive. Digitalizing and automating portions of workflows can threaten workers who fear their jobs could radically change or go away.

To eliminate the fear, proactive training and communications are critical.