Emerging Technologies at EPCM

1. Introduction

1.1. Emerging Technologies at EPCM: Engineering and Construction Industry

Major international trends in the engineering and construction industry include larger and more complex projects, increasing globalization, 65% of growth projected in developing countries (including Africa) over the next decade, and the need to navigate complex regulatory requirements and environmental pressures (see Exhibit 1).

The current challenging construction industry in South Africa is mostly the result of an increasingly complex contractual environment and fierce competition in the few available projects. Due to the aggressive competition, most projects are pressured to reduce costs and complete them in the shortest possible time frame.

Taking into account all these challenges, companies operating in this industry should adapt to be able to operate effectively in this environment. With this being noted, the construction industry has slowly developed and implemented technology to sustain competitive advantages. There has been no major disruption, and engineering and construction firms are still mostly executing projects as they were 20 years ago. As a result, there has not been real efficiency gain, with reduced efficiencies reported in some countries. Processes such as “lean”, “just-in-time”, etc., have also not been widely applied in this environment. There is, therefore, a major potential in the engineering and construction industry to implement technologies to improve efficiencies.

1.2.  Business Strategy

EPCM Holdings (EPCM), the business under investigation, was founded in 2014 and operates in the engineering and construction environment. Most of the work is executed in Africa’s oil and gas industry. The company employs 70 permanent employees: engineers, project managers and core construction personnel. The rest of the staff are appointed as contractors on a project-specific basis.

Partnerships with various independent industry experts and local entities are formed per project to increase the company’s value proposition. This strategy was very successful, and the company can win many tenders following this approach, as this increases the company’s credibility and includes local expertise in specific processes. The company executes both design and construction projects. Many design projects roll over into construction contracts, where the clients already build a trusting relationship with EPCM, providing an opportunity for increased scope on these projects.

1.3.  Who are EPCM’s Customers

Most of EPCM’s customers are African production facility owners and project developers. Due to longer upfront project approval phases, our customers are generally under more pressure due to increased environmental regulations, financial constraints, and tight engineering and construction schedules.

A shift in the industry became more prevalent, and we noted more industrial developers entering the local market dependent on external equity and debt financing. These financing models require a single contracting company to take responsibility for execution. This company is called an EPC company, which provides Engineering, Procurement, and Construction in a total turn-key solution.

Technology also impacts customers, as they are looking for increased collaboration, convenience, and access to information. Customers are contracting out non-core activities to optimise and increase the efficiency of core operations. This results in an increase in information sharing between the different stakeholders to integrate these non-core activities to increase the efficiency of the value chain.

2. Emerging Technologies Currently Being Implemented in EPCM

This section includes emerging technologies currently executed or tested on a specific project at EPCM and how these technologies could be further developed and implemented at the company.

2.1. Laser-Based Facility Scanning

Existing production plants do not always have up-to-date construction plans, and there may be no construction plans for old facilities. In addition, even if drawings are available, it may be necessary to digitalize them because only a physical version exists. Carrying out a facilities survey and converting existing plans to digital format can consume numerous man-hours, driving up the cost of design and consulting.

The company uses laser scanners positioned in different locations in the plant to sweep their surroundings and create models in just a small fraction of the time required with the traditional approach. The team then adds properties to the 3D model for each component to add intelligence to the model as required for modifications.

3D scanning can also be used as data input into many other technology uses and will be used in the paragraphs below to explain potential future uses.

2.2. BIM (3D, 4D, 5D)

Building Information Modelling (BIM) is a 3D platform for central integrated design, modelling, planning, and collaboration. 3D BIM provides all stakeholders with a digital representation of a building’s characteristics during the design and construction phase of the project.

EPCM has created a task team to develop the concept of 5D (BIM), used in the building construction industry, and apply it in the construction of process plants. A 3D geometric model is commonly used to produce isometric drawings for constructing process plants and is currently used extensively in the business. With 5D, the 3D model is linked to the construction schedule (4D) and the cost-estimating model (5D). A test program is currently being executed for a large coal mining company in South Africa, and the application of this has been proposed in several projects for which the company has been awarded.

This approach is combined with laser scanning to generate the 3D model of the existing facility, which engineering teams then overlay with the model of the new installations.

5D building modelling streamlines the planning and budgeting process, simulating construction and cash flow and generating material lists automatically to assist further with payment schedules and just-in-time procurement. A 5D building model indicates materials use, equipment installation, and expenses with a high degree of accuracy. It can be adapted if the construction schedule changes to predict new cash flows and procurement schedule impact efficiently and with much less effort than traditional manual methods.

There are opportunities to develop the model further to as-built status and hand it over to the client for use in asset management and maintenance (6D). The availability of 3D laser scanning equipment significantly reduces the cost of as-building facilities.

The model in the as-built format could assist the client with future modifications, hazard assessment, operator training and production simulations. Such a life-cycle BIM can produce a continuous build-up of knowledge by enabling a seamless flow of information across different construction and operation phases and stakeholders. Refer to Exhibit 2 for the life cycle of BIM, which includes several important opportunities in the building construction industry that can also be applied to process plant construction projects.

By integrating the value chain further to include the operator and distributor, the data could be even more powerfully applied to increase the operating efficiency of the total value chain through the project’s total life cycle, including decommissioning, demolishing, and reinstatement.

2.3. Virtual Reality

During the conceptual and design phases of the projects, EPCM uses 3D laser scanning and 3D cameras to produce the as-built status of the asset profile upfront. This increased confidence in the design and facilitated the execution of the project. Many of the company’s projects are in remote areas in Africa, including high-risk countries, and by utilising this technology, the exposure risk of the team, as well as the cost of time and travel to these remote areas, is significantly reduced. Therefore, the engineering teams can visit the site by utilising virtual reality. This ensures that all the design engineers are familiar with the existing facilities. Due to the nature of projects, engineering design teams are often located in different locations; this technology will facilitate collaborations across these different geographies. During different stages of the designs, augmented reality helps to engage and align stakeholders during design reviews and indicates progress throughout the project’s life cycle. This technology can help to identify interdependencies and clashes during the design and engineering stages and enable a virtual experience of the facility even in the early design phase. Virtual-reality safety walk-throughs, for example, can be used to assess potential hazards.

The company’s virtual reality usage can be expanded to give real-time information to the head office, where the project management and discipline engineers are. This can, for example, allow a project manager to visit the site remotely using headgear and a drone equipped with a high-resolution camera. This will save on travel costs and time, increase the efficiency of progress tracking, resulting in quicker and more efficient responses to technical queries, potentially reduce the impact of design changes, and increase access to information and communication efficiency with the head office. This can be further enhanced by exploiting mobile connectivity and augmented reality to engage in real-time communication and accurate on-site information.

An augmented reality application could also be explored where an enhanced reality headgear overlaps new designs and technical information as the user looks at existing facilities. In other words, the 3D model of the project developed during the design phase is overlaid on the actual site, making it easier to visualize progress and discuss engineering decisions. The current cost of this technology is currently exceeding the benefit gained from implementing the technology, however, if this becomes more cost-effective it could be further explored.

3. Emerging Technologies at EPCM: Problems in the Industry that Could be Addressed by Utilising Emerging Technologies

The company identified challenges, and emerging technologies were proposed to address these problems. The paragraphs below explain the problems and potential solutions posed by using emerging technologies.

3.1.Emerging Technologies at EPCM: Digital Collaboration

The engineering and consulting industry is widely dispersed and fragmented. Frequent communication and alignment due to interdependencies among the different stakeholders are important. Seemingly minor modifications to a materials order could, for example, have major time and cost implications if made late in the project phase. The benefit of digital collaboration in exchanging information online is obvious throughout all project phases.

Due to the complex construction design, scheduling, procurement and execution strategies, there is much benefit in applying technologies to interconnect and streamline the interaction and communication between the different parties. Cloud-based collaboration technologies have already been implemented in the company in terms of document sharing, online video meetings, and document control on a cloud accessible to a controlled group of people for both internal and external reviews and issues.

Virtual reality technologies can further be utilised for increased collaboration and alignment by utilising, for example, real-time drone or 3D camera data and virtual reality headgear between different stakeholders in different geographic locations.

Head-office integration: Head-office functions such as engineering, accounting, finance, and human resources should be integrated across different project sites to access and exploit valuable project data on costs, decisions, resources, and schedules. Systems could give foremen and other staff members immediate access to real-time head-office data. Some tools, for instance, could allow sub-contractors to see which change orders have been approved, including those for which they have not provided payment. This increases collaboration across a larger part of the value chain, sharing information for better decision-making.

Design management: Engineering and construction personnel often need to update on-site drawings and other project documents. Rather than returning to the office to complete such tasks, mobile platforms and cloud storage can be utilised for mark-ups and approval of changes in the field.

Document management: Engineering and construction companies use document management systems to upload documents, track changes, and record all decisions about their content. In the future, blockchain technologies could be used to control legal, contractual, and design documents.

Contract management: Workers can use artificial intelligence technology to update contract-compliance checklists or collect client and contractor communications information when contract terms are renegotiated. This technology can also be utilised for automatic change management on projects.

BIM can create a level playing field by providing a neutral and unbiased view to improving dispute resolution.

3.2. Emerging Technologies at EPCM: Project Monitoring

Project monitoring mainly consists of manual processes, which come at a high cost and low efficiency. Internet of Things can create value by collecting, communicating, coordinating and leveraging data from connected devices. This could be utilised to monitor construction progress, performance and productivity, inventory and asset management, safety and quality control. Drones and embedded sensors can enable real-time communication and track people, machines, components and the construction process.

Progress Monitoring: Drones can continuously generate 3D footage of construction sites, which can be compared against construction drawings and previous images to measure progress and identify areas that need action.

Field productivity: Crew deployment can be tracked in real-time, including the number of active working hours for each team member. For instance, GPS data from wearable devices could be used to track employees, or construction personnel can record data about their activities, location, and hours on mobile devices. This can assist companies in managing project staffing across skilled trades or monitoring on-site productivity at the trade or worker level. Another example is where field-data-collection sensors could automatically connect to cost systems to provide real-time productivity visibility, allowing managers to make immediate adjustments if required.

Performance management: With real-time sensors and drone data, managers can update and immediately share information (including workforce data collected by wearables) in the field, particularly during the crucial preconstruction and construction phases. Performance dashboards can automatically import field data, simplifying the collection process.

Inventory and asset management: For example, radio frequency identification (RFID) tags and barcodes can be used on products and components in construction projects for inventory management of tools, parts and consumables. Continuous monitoring and preventive maintenance could identify problems before they occur, improving construction equipment uptime. Central fleet management systems and vehicle tracking can increase equipment utilisation across the project, potentially identify fuel cost savings and avoid unauthorized use of vehicles.

Safety monitoring: Safety is always a major concern for engineering and construction companies. Safety incidents can be reported and tracked across job sites, and managers can distribute safety alerts and tips to the entire workforce. Predictive data analytics could identify safety risks with potential mitigation used on past projects.

Quality control: Remote sites can be inspected using real-time drone and 3D camera data to update and track punch lists. The use of GPS during projects, particularly those related to transportation, has already increased the accuracy of project specifications. This, in turn, increases efficiency and accuracy during on-site execution. In the future, autonomous quality-control systems can be created by combining new technologies and artificial intelligence with other tools, including GPS and building information modelling (BIM).

3.3. Exploring Alternative Usage of Existing Company Data

The company has access to a vast amount of data on previous projects executed. It needs to evaluate how this data could be utilised going forward and what additional data could be captured on future projects. This data includes site photos, 3D models, project cost estimates and schedules, design data, vendor information, quality documents and progress reports in different formats and cannot be easily utilised using existing technologies. Currently, the project team members search for similar projects based on their own and team members’ experience and reference these projects for go-buy documentation to reduce time and increase the quality of the designs. With big data and analytics, algorithms can generate new insights from the large data pools created on construction projects and during the operations phase of existing assets.

If advanced data analysis tools are used to find similar designs or solutions to similar problems resolved in the past, the data could be utilised to increase operational efficiencies. The predictive analysis could be utilised to predict potential project risks based on past projects, internal and external to the company, with proposed mitigations. This information could assist the project teams and company to increase efficiencies and make better decisions.

3.4. Improve the Construction Value Chain

The performance of engineering and construction companies depends on the performance of all the stakeholders in the construction value chain and throughout a project’s life cycle. Companies, therefore, need to enhance coordination and cooperation across the value chain, jointly define standards, and agree on common goals.

Big data and predictive data analysis could be utilised on a project basis to share information between the different stakeholders along the value chain. Security cameras, 3D laser scans and models, schedules, drone data, recorded data from meetings, procurement and supplier information, etc, can collect data.

4. Emerging Technologies at EPCM: Constraints or Associated Risks in Implementing these Technologies

Constraints in implementing these technologies are mostly related to high costs, skills, cybersecurity, regulations, and compatibility with legacy systems. The following are discussed at a high level, with potential recommendations that could improve the technology’s successful implementation.

Costs: With the increased adoption of emerging technologies, the cost of these technologies has reduced significantly. Companies should investigate and monitor the development of these new technologies until they are feasible to implement on a larger scale. This monitoring could include pilot tests on projects to measure the actual cost savings compared to the cost of implementing the technology. An informed decision could be made on the feasibility of implementing the technology.

Skills: Due to the skills shortage in emerging technologies, companies mostly depend on 3^rd parties to develop and assist with implementing and integrating technologies in their companies. Companies can create a centre of excellence to focus on the digital transformation of how they execute projects. Within these departments, the required skills can be imported or developed in-house based on the company’s digital transformation strategy.

Cybersecurity: This should be evaluated on a technology-specific basis. Cybersecurity engineers must be alert and conduct frequent threat analysis and risk assessments. By using tools such as Artificial Intelligence (AI) and Machine Learning, companies can more effectively predict and protect against cyberattacks.

Lack of compatibility with legacy systems: New technologies deliver the greatest value when seamlessly integrating with existing enterprise systems. This integration should be carefully evaluated before and during the implementation of new technologies.

5. Conclusion

Because the engineering and construction field is slow to adopt technologies, there is a major potential to leapfrog into the latest technologies, increasing operating efficiency significantly.

Although EPCM has started to implement some emerging technologies on projects, there is still much to do to extend the application of these technologies and test other technologies on projects. Tedious and time-consuming tasks can be automated, and logistical issues can be reduced with data and connectivity and information sharing across the whole construction value chain, assisting with overall efficiencies. This will result in critical resources focusing on key technical decisions, delivering the best solutions, making informed decisions, and increasing efficiencies. At the same time, technology assumes responsibility for the rest of the integration, information sharing, procurement and construction management process.

Exhibits

Exhibit 1: Megatrends shaping the construction industry’s future

Source: World Economic Forum, 2016. Retrieved from: http://www3.weforum.org/docs/WEF_Shaping_the_Future_ of_Construction_full_ report__.pdf

Exhibit 2: Applications of BIM along with the engineering and consulting value chain

Source: World Economic Forum, 2016.