In this series of features we will be looking at industry verticals the Channel is serving with a view to determining, this month, the opportunities, challenges and market movements which are impacting those partners selling into Manufacturing and Construction sectors.
The headlines in construction have all been grabbed by communicating with building sites and adoption of technology to provide solutions whereas in manufacturing more ‘traditional’ needs emerge such as collaborative working and UC – that sounds like Digital transformations to us.
Economic output data from the Office for National Statistics (ONS) shows that the UK economy grew by 0.6% in the three months to July 2018. The main reason for the increase recorded is expansion in the service and construction sectors with output in the construction sector increased by 3.3% in the period.
The UK construction industry is appearing to look more and more forward thinking.
There is a Digital Construction Summit taking place in January 2019 in London which heralds the provision to delegates of case studies on successful digital projects, thought leadership on the adoption of building information modelling (BIM), discussion around the ways in which embracing the latest technology will improve efficiency, as well as safety, health and wellbeing.
If you cast your eye over the show seminar topics below it is easy to see that any ICT reseller would feel at home!
• How digitalisation can assist with modern methods of construction
• The impacts technology will have on the Future of Construction
• How data can benefit client, contractor and supply chain
• Protection from cyber threats
• Value of building information modelling and Digital Tech
Intervention
In recent times the government has taken a number of steps to boost these sectors.
At the Conservative party conference this October Prime Minister Theresa May announced the scrapping of the strict cap on Local Government borrowing to fund new developments potentially leading to an extra £1bn borrowing and building tens of thousands of new homes.
The previous month the government launched a fund to provide up to £1 billion in finance to house-builders in an attempt to tackle England’s housing shortage. The money is being facilitated via Barclays and Homes England, a government agency created at the start of 2018.
Clearly these moves are a bit like changing the course of an oil tanker and will take some time but they are both positive in terms of the direction they are pointing the ship.
When we think about the manufacturing sector in the UK we tend to get the wrong end of the stick because contrary to widespread perceptions, UK manufacturing is thriving, with the UK currently the world’s eighth largest industrial nation.
If current growth trends continue, the UK will break into the top five by 2021. In the UK, manufacturing makes up 11% of GVA (Gross Value Added – defined by the ONS as the value generated by any unit engaged in the production of goods and services), 44% of total UK exports, 70% of business R&D, and directly employs 2.6 million people.
Interestingly, the ONS attributes the sustained growth (Overall, the sector has increased by 1.4% a year since 1948) to a better quality; more skilled workforce; a shift in production from low to high productivity goods; improvements in automation and technology; increased investment in R&D, and a more integrated global economy.
This month the 4-day Manufacturing Leaders’ Summit in Liverpool takes place as part of Digital Manufacturing Week.
Business leaders from the sector will be discussing ‘the new age of digital manufacturing’, meet their peers, share their stories and grow their understanding of what tools techniques and technologies are best placed to drive their next period of growth.
Speakers include firms such as digital transformation specialists Lighthouse Systems and GE Digital Europe with case studies being presented by Chief Digital Officers from the likes of Coca Cola, BAE Systems and BOC UK&I.
Clearly the digital transformation journey is flowing through the sector and presenting opportunities for channel players of all sizes to get involved.
Long Tail of Productivity
One of the key pain points that must be addressed across all business sectors in the UK is that of productivity. The FT calls it a ‘crisis that should be keeping the country’s politicians and civil servants awake at night’.
This is because the UK has experienced a slump in productivity growth since the financial crisis that shows no sign of coming to an end. The slowdown has been more acute than any other western country.
It matters because achieving higher growth in productivity — or output per hour worked — is the way nations become richer, living standards rise and governments have the resources to improve public services or cut taxes.
Productivity growth in the manufacturing sector has dropped from over 4% a year pre-2008 crash to barely 0.5% today.
One core reason for Britain’s stunted productivity growth is a ‘long tail’ of companies with poor levels of output per hour worked.
Compared with France and Germany, the UK has a larger number of innovative, high productivity companies. But Britain also has far fewer companies than France and Germany doing a bit better than average, and a lot more doing significantly worse. The Bank of England comments; ‘The UK’s international productivity gap is, to a large degree, a long tail problem’.
Productivity Pain Points
Recent research reveals that productivity of UK construction firms is hindered by misinformation and mistakes on jobsites; two-thirds of firms point to preventable problems like rework and overruns as a serious drain on resources.
For example, productivity is being held back by a lack of accurate and timely information on the jobsite.
Almost half (42 percent) of firms surveyed say misinformation is the most significant factor limiting their performance, according to the new Digital Foundations report from construction productivity software provider PlanGrid. The survey of 235 industry professionals explores the factors impacting the productivity of construction firms, including their use of technology and opportunities for improvement.
Inaccurate and outdated information is causing firms to spend time and money fixing mistakes on projects; 68 percent of businesses surveyed say that dealing with rework is the biggest source of wasted time. Other curbs on performance include lack of resources (46 percent), too much focus on administrative tasks (37 percent) and scheduling errors (33 percent).
Lack of technology is a key limitation in construction, particularly when it comes to how drawings and specifications are shared on-site. Nearly a quarter (22 percent) of firms still rely entirely on paper-based drawings, while 32 percent run less than a quarter of their projects without paper.
Meanwhile, 10 percent of all firms say they make only minimal use of technology on their projects.
The continued use of paper drawings may be a key hindrance to accurate information sharing, as eight percent of firms say ensuring everyone has the latest version of plans has the biggest positive impact on their productivity.
Productivity in the UK construction industry did not improve in the 20 years prior to 2015, in contrast to the manufacturing sector where it almost doubled.
First Digital Steps
Construction firms are however taking initial steps forward in the adoption of technology. Over half of businesses make use of file-sharing tools (52 percent), while 12 percent have begun to use Building Information Modelling.
“With Brexit just around the corner, it is more important than ever for UK firms to improve their productivity and strengthen their businesses,” said Tracy Young, CEO of PlanGrid. “The research shows that taking notes by hand or sharing plans on paper results in delays, mistakes and ultimately poor margins on construction jobs. By adopting easy-to-use mobile technology, construction teams have an incredibly exciting opportunity to improve their performance, attract vital talent, and make the industry and UK economy future-ready.”
Get Smart
A construction market sub-set where channels can get increasingly active with solutions is smart buildings.
Smart buildings are sometimes referred to as 'automated buildings', 'intelligent buildings' or buildings that incorporate smart technology. However, it is a fairly ambiguous term that at its most basic level has been used to describe buildings that include technologies such as:
• Automated systems.
• Intelligent building management systems.
• Energy efficiency measures.
• Wireless technologies.
• Digital infrastructure.
• Adaptive energy systems.
• Networked appliances.
• Data gathering devices.
• Information and communications networks.
• Assistive technologies.
• Remote monitoring.
IoT and connectivity firm Pangea says it is set to change the energy game with smart building solutions, the company is working with Buddy Platform Limited, a provider of cloud-based solutions for making spaces smarter, to transform the way energy is used in buildings in the UK and beyond.
Currently in the UK, 30% of energy used in commercial buildings is wasted, 53% of small businesses don’t plan for energy usage, and 20% of companies spend over a whopping £250,000 a year on energy.
Pangea says it’s hard enough for businesses to manage occupant behaviour and deal with rising operational costs, all while trying to meet complex government policies like ESOS.
That’s where a ‘Fitbit for Buildings’ comes in: through a combination of IoT sensors and SIM-enabled IoT connectivity, the device tracks a multitude of energy stats, all on a per building, floor, desk or device basis. Whether it’s electricity and water consumption or temperature and humidity across a single or multiple buildings, operators will have their building’s vitals placed at their fingertips over a real-time dashboard with a sleek interface and impactful visuals.
The device itself clips to a surface in a building and communicates with the Buddy solution via Pangea cellular IoT connectivity.
“Then it’s go time: businesses can start monitoring energy usage for patterns, stay aware of anomalies, and solve problems before they crop up. They can set efficiency targets, meet government green standards, and stop worrying about being caught out by ridiculous energy bills.”
According to Pangea Managing Director Dan Cunliffe, the partnership is in line with the strategy of helping their partners engage with IoT through a solution that’s transferable over many sectors—after all, everybody has a building.
“It’s more than just a tracker. The data collected helps your building tell a story of where and how energy is being used, and puts businesses back in control. Our goal is to address and solve a very real, tangible problem that every industry will face at some point.”
Wider Perspectives
Gary Redshaw, Radio Communications Products Manager at distributor Nimans says his company is enjoying impressive demand for two-way radios particularly in the construction industry as well as manufacturing.
“There are many reasons for this including margin rich sales potential and options to greatly enhance health and safety and customer service levels.
Obviously in construction there’s often lots of heavy machinery such as cranes so being guided radio to radio is a tremendous advantage. People on the ground can be warned of any potential hazards or dangers too. There’s no legal requirement to have this form of communication but it’s been proven time and time again. The safety element they provide is priceless and in many ways represents a common sense approach. If accidents do occur then two-way radios can help get assistance quicker.
There’s massive demand now because site managers and the construction industry as a whole recognise the importance of instant communication. One advantage over mobile phones is a reliable signal. In rural areas, this can be a particular problem for smartphones. In addition, a mobile will only transmit one-to-one whereas a radio can transmit to many different devices at the same time. It’s almost infinite.
There’s two types of technology to consider, analogue and digital. Analogue sales remain strong but digital is growing fast. Quality of speech and higher performance are some of the advantages. In addition, there’s also licenced and more powerful unlicensed radios for resellers to consider.”
Redshaw says that two-way radio is ideally suited to manufacturing as well as other sectors. Sales are massively on the rise.
“To some it may seem like an old-fashioned way of communication but that’s definitely not the case with lots of modern cutting edge features and long battery life. It’s very practical, you don’t have to dial people or look up numbers and most important of all it’s free communication once the initial hardware has been bought.
In terms of customer service, it’s easy to quickly contact a colleague if a visitor arrives or if an order needs to be placed. Internal and external communication benefits greatly.”
<h4>Ed Says...</h4>
As we have seen here, there are multiple levels of engagement for channels in these sectors. From established applications such as two-way radios through to leading edge smart building management and monitoring there is something for everyone.