Emerging Technologies at EPCM

Showcasing Emerging technologies at EPCM and its implementation.

Table of Contents

1. Introduction

1.1. Emerging Technologies at EPCM: Engineering and Construction Industry

Major international trends in the engineering and construction industry include bigger, more complex projects, globalizations, 65% of growth in the next decade will happen in developing countries (including Africa) and complex regulatory requirements and environmental pressures (see Exhibit 1).

The current challenging construction industry in South Africa is mostly as a result of an increasingly complex contractual environment and fierce competition in the few projects that are available. Due to the aggressive competition, most projects are heavily pressured to drive costs down and complete projects in a short time frame as possible.

Taking into account all these challenges, companies operating in this industry should adapt in order to be able to operate effectively in this environment. With this being noted, the construction industry has been slow at developing and implementing technology in order to sustain competitive advantages. There has been no major disruption and engineering and constructing firms are still mostly executing projects the way it has been done 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 really 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. The majority of the work is executed in the oil and gas industry in Africa. The company employs 70 permanent employees, consisting of engineers, project managers and core construction personnel. The rest of the staff are appointed as contractors on a project-specific basis.

To increase the value proposition of the company, partnerships with various independent industry experts and local entities are formed on a per-project basis. This strategy was found to be very successful and the company is able to win many tenders following this approach as this increases the credibility of the company as well as including local expertise to specific processes. The company execute both design and construction projects.  Many of the 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 is EPCM’s customer

The majority of EPCM’s customers are production facility owners and project developers in Africa. There is generally more pressure on our customers with increased environmental regulations, financial constraints and tight engineering and construction schedules due to longer upfront project approval phases.

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

Technology also has an important impact on customers as they are looking for increased collaboration, convenience and access to information. Customers are contracting out non-core activities in order 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 that is currently been executed or tested on a specific project at EPCM as well as how the implementation of these technologies could be further developed and implemented at the company.

2.1. Laser-Based Facility Scanning

Existing production plants not always have up-to-date construction plans, and in the case of old facilities, there may be no construction plans at all. 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 is using laser scanners that is positioned in different locations in the plant to carry out a sweep of 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 used as 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 through 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 the construction of process plants and is currently been used extensively in the business. With 5D, the 3D model is linked to the construction schedule (4D) and further to the cost estimating model (5D). A test program is currently been executed for a large coal mining company in South Africa and the application of this has been proposed in a number of projects that the company has been awarded.

This approach is combined with laser scanning to generate the 3D model of the existing facility and the model of the new installations are overlaid by engineering teams.

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 and can be adapted if the construction schedule changes, to predict new cashflows and procurement schedule impact efficient and with much less effort than traditional manual methods.

There are opportunities to develop the model further to as-build status and hand it over to the client for usage for asset management and maintenance (6D). With the availability of 3D laser scanning equipment, the cost of as-building of facilities is significantly reduced.

With the model in the as-built format, this 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 with several important opportunities in the building construction industry that can be also applied to process plant construction projects.

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

2.3. Virtual reality

During the conceptual and design phase 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 facilitates 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 do a site visit 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 aligns stakeholders during design reviews and indicating 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 virtual reality usage in the company can be further expanded to give real-time information to the head-office where the project management and the discipline engineers are located. This can, for example, allows a project manager to visit the site remotely using headgear and a drone equipped with a high-resolution camera. This will save on travelling cost and time, increase the efficiency of progress tracking, resulting in quicker and more efficient response to technical queries, potentially reduce the impact of design changes, increase access to information and the efficiency of communication 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 application of augmented reality could also be explored where an enhanced reality headgear is worn that overlays 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 which makes 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

Challenges experienced by the company were identified and emerging technologies were proposed to address these problems. The paragraphs below explain the problems and potential solutions posed by the use of emerging technologies.

3.1.Emerging Technologies at EPCM: Digital collaboration

Engineering and consulting industry is widely dispersed and fragmented. Frequent communication and alignment due to inter-dependencies on the different stakeholders are important. Seemingly minor modification 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 to exchange 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 is already implemented in the company in terms of document sharing, online video meetings as well as document control on a cloud accessible for 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 with functions such as engineering, accounting, finance, and human resources, should integrate 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 increase 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 drawings and other project documents while on site. 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:. Document management systems are used by engineering and construction companies to upload documents, track changes to them, and record all decisions made about their content. In future, block-chain technologies could be used for controlling of legal contractual and design documents.

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

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

3.2. Emerging Technologies at EPCM: Project Monitoring

Projects Monitoring mainly consists of manual processes, which comes at a high cost and low efficiencies. 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 be utilised to enable real-time communication and to track people, machines, components and the construction process itself.

Progress Monitoring: Drones can generate 3D footage of construction sites continuously that can be compared against construction drawings and previous images in order to measure progress and identify areas in need of 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 into mobile devices. This can assist companies to manage project staffing across skilled trades or to monitor 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 visibility into productivity which will allow 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 that will simplify the process of collecting information.

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 the utilisation of equipment 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, managers can also distribute safety alerts and tips to the entire workforce. Predictive data analytics could be utilised to identify safety risks with potential mitigation used on past projects.

Quality control: Remote sites can be inspected by utilising real-time drone and 3D camera data to update and track punch lists in real time. 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 and need to evaluate how this data could be utilised going forward, as well as 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 in an effort to reduce time and increase the quality of the designs. With the use of big data and analytics, algorithms can generate new insights from the large data pools created both 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 is depended 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, and jointly define standards and agree on common goals.

On a project basis, big data and predictive data analysis could be utilised to share information between the different stakeholders along the value chain. Data can be collected by security cameras, 3D laser scans and models, schedules, drone data, recorded data from meetings, procurement and supplier information etc.

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. These are discussed on a high level below with potential recommendations that could improve successful implementation of the technology.

Costs: With the increased adoption of emerging technologies, the cost of these technologies reduce significantly. Companies should investigate and monitor the development of these new technologies until these technologies 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 to implement the technology. An informed decision could be made on the feasibility of implementation of the technology.

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

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

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

5. Conclusion

Due to the fact that 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, as well as test other technologies on projects. Tedious and time-consuming tasks can be automated, logistical issues can be reduced with data and connectivity and information sharing across the whole construction value chain assisting with overall efficiencies of the total value chain. This will result in critical resources to focus on key technical decisions, delivering best solutions, making informed decisions and increased efficiencies, while 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.