AECbytes "Building the Future" Article (August 19, 2013)

VDC in the Cloud – Journey to LEAN Construction

Chris France
President, Advance2000

Many of you have read my chapters in “Mastering Revit Architecture” and AECbytes’ articles, “BIM and the Cloud” and “BIM and the Cloud, Part 2: The Economics of Private Cloud Computing.”  I’m still seeing tremendous interest in this strategy.  Years ago, I recall talking to an architect and asking him, “What is your product?”  He told me his product was a set of drawings.  Being new to the industry, I didn’t agree with that, and in 2013, I still don’t agree with that statement.  I think the “product” of an architect is a building or structure.  Drawings are just a means to an end.  Owners do not sit in their boardrooms and vote for a set of drawings. They vote to build a building or structure to further the goals of their organization.  Now that we have the cloud, we need to go from BIM in the Cloud to VDC in the Cloud.

Virtual Design & Construction (VDC) is the term used by Contractors to “virtually construct” a building on a computer before they actually construct it on-site.  It is not to be confused with the Architect’s Building Information Modeling (BIM), which is primarily focused on design and creating drawings as their product.  BIM does not generally address means, methods, schedules, costs, safety, logistics, inventory, manufacturing, etc., but VDC does.  As good as BIM is, it is only optimizing a sub-process.  VDC is optimizing the entire lifecycle of a structure with the processes, technology, and people to support it.  If BIM in the Cloud took the industry by storm, imagine what BIM-VDC in the Cloud would do!

Here is a summary of the business benefits of VDC in the Cloud:

  • Lean Construction – Eliminating waste from construction process
  • Agility & Mobility – Adapt to market forces quickly from any location
  • Collaboration – Assemble the best team no matter where they are located
  • Cost Reduction – For the building and the infrastructure for construction
  • Leveling Playing Field – Small/medium firms can compete with the big ones

Let’s look at each one of these benefits in more detail.

Lean Construction

First, let’s define Lean Manufacturing from which Lean Construction was derived.  The Wikipedia definitions of both are given below.

Lean manufacturing, lean enterprise, or lean production, often simply, "Lean," is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for.

Essentially, lean is centered on preserving value with less work. Lean manufacturing is a management philosophy derived mostly from the Toyota Production System (TPS) (hence the term Toyotism is also prevalent) and identified as "Lean" only in the 1990s. TPS is renowned for its focus on reduction of the original Toyota seven wastes to improve overall customer value, but there are varying perspectives on how this is best achieved. The steady growth of Toyota, from a small company to the world's largest automaker, has focused attention on how it has achieved this success.

Lean Construction is a combination of original research and practical development in design and construction with an adaption of lean manufacturing principles and practices to the end-to-end design and construction process. Unlike manufacturing, construction is a project based-production process. Lean construction is concerned with the alignment and holistic pursuit of concurrent and continuous improvements in all dimensions of the built and natural environment: design, construction, activation, maintenance, salvaging, and recycling (Abdelhamid 2007, Abdelhamid et al. 2008). This approach tries to manage and improve construction processes with minimum cost and maximum value by considering customer needs (Koskela et al. 2002).

The term "Lean Construction" was coined by the International Group for Lean Construction in its first meeting in 1993 (Gleeson et al. 2007). The Construction in "Lean Construction" refers to the entire industry and not the phase during which construction takes place. Thus, Lean Construction is for owners, architects, designers, engineering, constructors, and suppliers.

OK, so how do you do this in a highly fragmented industry with multiple processes and just as many different IT infrastructures?  One way to execute the lean construction strategy is to own/control the entire team.  We’re seeing this now as many of the large firms are bringing all resources in-house to execute design-build projects. Contractors are hiring/buying design and engineering firms. They can then have one team, one IT infrastructure, and one workflow communication process. This strategy can only be executed by very large companies.

Another way to execute this LEAN strategy is to consolidate the IT. As hard as this is, it is much easier than consolidating companies.  There are several IT providers that are standing up LEAN construction applications and the IT infrastructure and then making it available to virtual teams.  Since Construction is still a project-based endeavor as seen in the definition, individuals from different firms can come together on one platform to virtually design and construct a building.  Now that the IT infrastructure is consolidated, we still need a good suite of products that will support an integrated construction process without all the waste.  Many AEC software companies are working on it, while companies like Dassault, which already have the technology in other industries, are working on an “AEC Adaptation” of it.

Agile Fabrication, or “design for fabrication” is one of the leading strategies contractors are seeking to eliminate waste, errors, and project delays.  The more they can fabricate off-site, the higher the quality and lower the costs.  But this does add more coordination complexity because you’ve gone from one manufacturing site (building location) to multiple manufacturing sites (fabrication factories). Also, up until now, it has been very difficult to re-use 3D BIM data for fabrication.  Generally, this information has to be recreated or reformatted in order to fabricate in a factory.  This is why it is important to design with fabrication in mind, keeping the end in sight.  After all, the owners do not want a model (or drawings)—they want a high quality, cost-effective building.

The figure below shows an example of a real building (a basic multi-story office building) that was built by the Shanghai Urban Construction group.  They wanted to implement a Lean Construction process and decided to simulate prefabrication of the building using differing levels of off-site fabrication.  They chose to run a simulation with 30% fabrication, 50%, 70%, and 90%.  One would think that 90% would be the optimal solution, but it was not.  It was 70% and that’s what they executed.  The owner would get the same building in either scenario, but at 70% fabrication they achieved optimal cost, schedule, and quality.  This simulation was run using the same design/construction data that was created for the project, and it was enabled by VDC technology, which allowed minimizing (or eliminating) rework that leads to waste.

Agility and Mobility

Business agility is the ability to change your processes and/or technology as fast as market conditions dictate.  According to Gartner Group, this is the primary reason organizations are adopting the cloud.  With a pre-built cloud infrastructure, it is actually possible to rollout technology capabilities faster than people can absorb them.  But what that also means is that firms now have the ability to spin up a lean construction infrastructure very quickly to begin realizing the benefit. Using an analogy from the real estate industry, you are able to rent space in an existing building rather than designing, building, and operating it yourself.  Setting up your own LEAN construction suite could take 6-12 months plus you are saddled with ongoing support.  Setting up VDC in the cloud could happen in 2-4 weeks and you don’t have the burden of support.  You can focus on the matter at hand, which is building a structure.

Also, the reality of modern construction projects is that they are all over the place.  And many times, the skilled resources to build the building are also all over the place.  Wouldn’t it be nice if I could have access to my LEAN construction applications, process, and data from any location—office, hotel, jobsite, client offices, coffee shop, etc?  With VDC in the cloud, this is now possible. 

Collaboration

How many construction projects have all the designers, consultants, manufacturers, project managers, contractors, and subcontractors all in the same physical location?  Very few.  And if that is achieved, it is very costly to bring everyone together, not to mention the toll that it takes on the personal lives of the staff that are living away from home.

With a centralized, hosted cloud, all the IT resources that are needed to design and build the project are physically co-located in one datacenter.   No longer do we have to move people.  We can move the IT and let the people get to it remotely.  It is commonplace to set up a project cloud consisting of 20 people and have those people scattered all over North America.  You only have to be on-site when you need to be and not the entire construction team.

Another problem plaguing the construction industry is that it is highly fragmented.  For a typical project, you’ll need 5-10 different firms collaborating to achieve the end goal of a building.  When the team is fragmented, the IT for the team is fragmented.  Ten firms have ten different IT infrastructures managed by ten different staffs.  With the cloud, we have one IT infrastructure and the project is securely setup so that only project members that are authorized to the project can see the files.  This, in effect, virtually co-locates the entire construction team even though they reside in different firms.   Each firm brings their own software licensing to the cloud (BYOL) and can point their cloud desktops to their respective license servers. 

Cost Reduction

 We all know that IT isn’t cheap.  Plus, it is a major hassle to have to design/build a solution for every project.  If I have a project that has five stakeholders in as many offices, each one has to have IT personnel dedicated to the VDC environment.  Then they have to buy all the desktops, servers, storage units, and software.  All these parts are shipped to customer locations and assembled.  Many times, the project leaders have to provide a full-suite of VDC products for each staff member, even though they might not be using the tools 8 hrs/per day.  When you marry a private cloud to a VDC solution, you are able to consolidate all your servers, desktops, and storage to one location.  One office of IT costs less than five.  This is IT 101.

In order to consolidate your IT, you have to be able to get to it from a remote location.  With modern cloud computing technology, this is now possible even for demanding applications.  The more locations (or jobsites) you have, the more you save.

Software license management is another issue. While some of the VDC tools are named-user based, some have concurrent licensing models.  And many of them are changing to adapt to modern usage-based models.  When your IT is centralized in the cloud, you are now able to take advantage of any/all the licensing options that are available to you.  The days of buying a big chunk of software are numbered.  Call it “agile” software licensing—I get the software, quantities, and duration I need for the length of the project.

Also, as the cost of hardware is dropping, software vendors are taking advantage of multiple CPU’s, gobs of memory, and high-power graphics cards.  This triggers a constant upgrade cycle.  I have an 8gb computer, now I need a 16gb computer with a better graphics card.  While hardware may be “cheap”, most firms can’t afford to upgrade it for their entire staff every year.  But at the same time, you don’t want your hardware to limit your ability to capitalize on a market opportunity. When your VDC solution is running on a flexible cloud, it is very easy to bump your workstation resources from 8gb to 16gb+.  Many times, it is as simple as logging out, the Cloud provider does their magic, you log back in and have more resources.  The user just got a new workstation in about 10 mins.  Prior to the cloud, this request would take 1-2 weeks by the time management approval was received to buy a new computer, order it, configure it, and deploy it.

The digital footprint of construction projects is not getting smaller. If fact it is getting much larger, especially as more 3D modeling is done coupled with simulation, animation and rendering files.  You want your VDC cloud to be able to grow as fast as your project data is growing.  Expanding your database or file system storage is as easy as giving you more desktop memory.

And finally, most construction companies struggle with their jobsite technology.  It can be very costly and time-consuming to duplicate the IT infrastructure that you have back at the home office.  Rather than setting up a “mini cloud” in the jobsite, you can simply gain access to the private VDC cloud back at the home office.  That way any changes that happen, the jobsite can see them in real time.  All they need is a window, i.e., a terminal into that VDC infrastructure.  Then the jobsite becomes very simple and easy to deploy.  A broadband circuit, a data switch, and a “cloud access device” like a terminal, laptop, or iPad is all you need to be productive.

Leveling the Playing Field

Traditionally, setting up a VDC environment has been very costly.  Early on, the construction team had to be physically located together in order to execute a VDC project.  And that assumed that all the servers, storage, IT support, applications, and licensing had been agreed on by all members of the construction team.  For a decent sized project, these costs could easily run into thousands of dollars.  Only the very largest construction companies with robust IT staffs could even hope to achieve this level of sophistication. And those that did had a constant struggle to figure out how to pay for this capability.  Was it a corporate IT overhead expense or was it a project expense?  Corporate IT didn’t want to pay for it and the projects couldn’t absorb all the costs.

With the cloud, all that has changed. Just like a small firm can rent “class A” office space in a nice location, similarly they can rent “class A” cloud space from a reliable provider.  You don’t have to build it all yourself and can share the “common space” with other tenants.  A small to medium sized contracting firm could win a job and quickly setup a Lean construction cloud for only what they need.  Thus, the playing field has been leveled. Even smaller firms can bid on very sophisticated projects with the technology just as sophisticated.  The barrier to entry has been removed.

Conclusion

These are exciting times, indeed. Virtual Design and Construction (VDC) is very much like a large ERP (Enterprise Resource Planning) implementation in that it is hard to do and very costly.  But usually the things worth doing are not easy.  In the AEC industry, just like the software tools are maturing for total Building Lifecycle Management, so too are the IT infrastructure options via the cloud.  Firms no longer have to get bogged down in the bits and bytes of building an “IT building.”  They can stay focused on what their clients are hiring them to do—build them a structure to achieve their owners’ business or organizational goals.

The “VDC in the Cloud” strategy is not looking at the current construction processes and asking how they can be improved.  Rather, it is stepping back, looking at the process in its entirety, and then asking how a high quality structure can be built in the shortest timeframe for lowest cost?  The AEC industry is now able to leverage strategies that have already been proven in other industries. Firm owners or CIOs now have more options at their disposal:

  • Firm buys the Lean Construction technology and implements it in their offices
  • Firm buys the technology and an authorized reseller implements in their offices
  • Firm buys the technology and implements it in firm’s cloud
  • Firm rents the technology from a cloud provider for as long as the project needs it

Any size project can benefit from using Lean Construction and “VDC in the Cloud” strategies, because after all, how big does a project have to be before wasting time and money matter?

 

About the Author

Chris France, President of Advance2000, has specialized in Information Technology for over two decades. He started his career at IBM Federal Systems as a software and systems engineer and progressed to project manager of major DOD systems. From IBM, he traveled to Charlotte to work for Bank of America and then Wells Fargo, where he led efforts to merge and consolidate the information technology of financial and capital markets divisions. After working in Fortune 100 companies, Chris spent 11 years as the CIO of Little Diversified Architectural Consulting, a medium-sized A/E firm headquartered in Charlotte, NC.

As President of Advance2000, Chris leads the charge for “private cloud computing” and is a published author on cloud computing for the AEC industry.  He is able to bring the innovation, capabilities, and economies of scale of enterprise cloud computing to both large and small companies.

Chris holds a bachelor’s degree in computer science from The Ohio State College of Engineering and a master’s degree in business from the State University of New York at Binghamton. You can connect with Chris at: http://www.linkedin.com/in/christopherfrance.

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