Digital processes are taking over the procurement, production, order fulfillment, and delivery of heavy building materials to the jobsite. In Latin American economies, the construction industry will see renewed growth after a three-year decline.
To stay competitive and sustain growth, businesses need to be on board with these new technologies.
The Latin American construction industry will see renewed growth after three years of decline, according to Business Monitor International. Last year, BMI expected a real growth of 1.9 percent in the construction industry, which would lead to the first steps in recovering the 5.2 percent loss the industry suffered since 2014. Between 2018 and 2022, this real growth is expected to accelerate to an annual average of 2.6 percent. This sustained growth will be supported by an increase in commodity prices, private capital infrastructure developments through Public Private Partnerships (PPPs), a model that is gaining popularity in the United States, and the overall economic uptick described above.
There are numerous projects in the Latin American pipeline — roughly 3,000 projects, which equate to about $1.2tr. However, Latin American construction firms will need to ramp up their technology in order to keep up with the pipeline. Improving efficiencies, productivity and profitability can be had by automating business processes.
Eliminating paper-based and manual processes takes inefficiencies out of operations. Reducing waste is another way to improve efficiencies. Without automated batching systems, some concrete producers mix products by hand. Imagine not knowing how much material you have or whether the quality is any good. With poor quality, the entire batch would be thrown out, wasting money, time and materials.
Seven Types of Waste
Toyota developed the concept of Lean within manufacturing that eliminates waste from supply chains, citing the seven wastes to be: transportation, time, overproduction, defects/rework, inventory, movement and extra work. Probably the biggest root cause of waste in the construction industry is the continued use of manual processes. This wastes time, resulting in increased labor costs, but also has a negative effect on data quality (accuracy, timeliness, and completeness) that results in other forms of waste.
Do you know how many labor hours can be attributed to manually entering data into computers? And how many additional hours are needed to correct errors from entry mistakes?
Another waste within construction can be attributed to poor communication and collaboration. Multiple businesses work on a jobsite — there are raw material providers, concrete producers, managers and contractors and more. All of these people and businesses need to connect in order to better communicate and collaborate. A Collaborative Network allows information sharing and improves on the level of trust that business partners need to be successful. By sharing information, companies gain operational transparency and boost efficiencies.
The Outlook
For Latin American construction firms to keep pace with the growth of the industry, inefficiencies and wastes need to be removed. More and more businesses will undergo a digital transformation to automate business processes, which will eliminate wastes. Tools that improve visibility and support collaborative approaches will be implemented to help improve efficiencies within a construction firm.
Victor Garza is sales manager for Command Alkon’s Latin America region.
