As the industry seeks to bridge the global infrastructure gap, the delivery of critical assets is still being delayed. To solve the productivity issue, the combination of technology and alternative delivery can be a powerful tool, say project delivery experts Richard Robinson and Matt Forbes*.
Highway congestion, unreliable rail networks, power outages, water shortages and flooding… These infrastructure-related issues are experienced daily and extensively throughout the world. All this persists, despite the fact that we know bridging the global infrastructure gap is essential to economic growth and community well-being.
A swift and effective response to these challenges is currently hampered by inefficient and outdated project delivery methods, creating a significant and measurable impact on our economies. In the United States, a six-year delay in starting construction on public infrastructure programs manifests as a US$3.7 trillion loss of output across the economy. While in the United Kingdom, the cumulative impact of stalled projects during 2015–16 alone is projected to dent investment-related gross domestic product (GDP) to the tune of £35 billion (US$46.7 billion).
THE PRODUCTIVITY GAP
The frequent failure to hit targets for cost, schedule and output have made infrastructure and construction notably poor performers in today’s economic landscape.
The drag on productivity can be ascribed to numerous causes. The top concerns include a fragmented supply chain with sub-optimal integration across different services; piecemeal procurement with limited consideration of the total cost of ownership or total life-cycle implications; resistance to change within the project cycle, along with the effect of low margins on research and development investment; and limited adoption of new technology and best practices.
The result is a lose-lose for customers and the industry as a whole. Buyers get an inefficient, expensive service, often with delayed projects and poor-quality assets; suppliers struggle to survive financially.
EMBRACING INNOVATIVE DELIVERY MODELS
With numerous best-practice examples and exemplary projects, it’s clear that the tools and approaches are available to produce a positive transformation in the delivery of major infrastructure projects. The challenge is to kick old habits and outdated ways of working and build a new industry dynamic.
Our proposed two-step approach to solving the productivity issue embraces first, setting up projects differently to include a more integrated method that links across the life cycle of an asset, reduces total cost of ownership, and creates assets that are more constructible and fit for purpose. Secondly, deploying digital tools to unlock the full power of this integrated tactic, will release the full power of digital tools. We believe this approach could produce efficiencies of around 30 percent.
Exploring these two items in more detail:
Setting up projects for success: We must break down the familiar silo approach of plan, design, build, and operate and maintain. The following aspects are vital for successful infrastructure project delivery:
- Aligning all objectives and rewards across the supply chain to meet the client’s key success factors.
- A more honest dialogue around risk — with suppliers providing greater transparency on the true nature of risk in their own programs, and owners willing to absorb more risk directly themselves.
- Well-designed and performance-based partnership models that ensure all parties have “skin in the game” and are incentivized to deliver the best for the project and client (public-private partnerships being an example of this, but other contract structures, such as design-build or alliances, provide this opportunity as well).
- Employers resisting the temptation of modifying existing well-defined contract structures, such as NEC (formerly known as the New Engineering Contract) in the United Kingdom.
- Using an organization specifically to act as “integrator” on major projects — managing the interface and relationships between different parties (including small and medium enterprises) across the life cycle — supported by the right technology platforms.
- Getting the basics right: robust project setup, streamlined governance and continuous stakeholder buy in.
Using technology to unlock the power of integrated delivery: Digital tools can bring efficiencies in each individual service line, but they also enable the full power of an integrated approach by providing the following:
- A digital thread that ensures relevant asset data is passed between the phases of the project life cycle — a “running current” of consistent and appropriate information to all stakeholders through the different stages of building and operating an asset.
- Enhanced and automated value engineering to create a more buildable and operable asset.
- Digital engineering techniques, including automated design tools and the growing use of artificial intelligence (AI) and machine learning that not only replace repetitive manual tasks, but also use the power of machines to provide a more reliable outcome.
- Asset intelligence (including the capture and analysis of performance data) to drive more efficient operations and feed back into future designs.
These tools maximize the efficiency of an asset over the entire project life cycle, resulting in lower total cost of ownership and enabling the full power of an integrated offer.
THE FUTURE IS WITHIN SIGHT
While the industry has wrestled with its productivity gap for many years, the time has come to embrace innovation and make the big leap forward. We now have the keys to unlock the future — and they lie in the combination of new delivery models and the smart use of technology.
*Note: Adapted from AECOM’s Future of Infrastructure report, you can find the full article and source material at: https://infrastructure.aecom.com/innovative-delivery-models