Anil Tyagi is the founder and CMD of Nuberg Engineering, global engineering, procurement, construction (EPC), fabrication and project Management Company, specializing in chemical process plants across sectors. With over 3 decades of vast experience spanning EPC projects worldwide, Anil is a name to reckon with, in the chemical industry. Anil's pioneering work and engineering prowess has catapulted Nuberg to innovate in in-house technology for Chlor Alkali, Sulfuric Acid, Hydrogen Peroxide and Calcium Chloride Plants. Driving force behind is an aim to develop and offer large scale, excellent industrial solutions at affordable costs.
CXO Outlook, September 2021
Globally construction is the second largest industry at 13% of global GDP. Construction includes Engineering and Procurement by default, thus making EPC industry second only to financial services globally. While growth in the industry was hit globally due to the pandemic, CRISIL expects revenue of EPC companies in India to spurt by 20% this fiscal.
Historically, the complexity of EPC had frozen innovations in the sector. EPC productivity thus grew in incremental steps compared to 50-70% productivity growth for the overall economy. Construction has seen a meagre productivity growth of 1 percent annually for the past two decades. Time and cost overruns are the norm as per McKinsey. The considerable risk of cascading issues when making simple changes due to the high stakes involved did not allow rapid innovation. The longer testing requirements for reliability and precision also made it difficult and time consuming to incorporate innovations. While the engineering and procurement stages gained with the advent of smarter software and online marketplaces the construction phase of EPC is industry is only now gearing up for careful transformation.
The transformation winds in construction have gathered pace due to the pandemic induced industry stress which has made innovation an imperative. Thus, long pending innovations are now reaching fruition faster. In the article below I will give a window in to the innovations under way.
Innovation cycle for the construction phase needs to come into effect even before the actual construction starts. Intensive use of digital capabilities is helping visualise larger percentage of the completed project with all the moving parts, schedules, resources, permissions, and documentation requirements. This preparedness is helping compress timelines and anticipate delays thus creating a high degree of predictability for clients and enhancement in market reputation.
An innovation that has been strengthened due to the pandemic is the compression of on field construction phase. The on-field construction phase has many cost components that are time based. These include skilled labour costs, engineers and supervisors length of stay at project site, use of construction infrastructure with rental and productivity implications and many other cost components. Now EPC organisations are focussing on lining up more of the field tasks to be ready for on-field execution for an accelerated construction phase. This is resulting in significant cost and time savings in addition to reducing workforce exposure to safety and infection paradigms.
Another construction phase innovation is focus on Safety. It may sound odd to club safety as an innovation practice for construction however experience shows otherwise. Safety innovation needs to backed by best practices, upgradation of processes from learnings and usage of the latest most practical safety equipment. The resultant mental assurance for workforce that the EPC organisation is absolutely focussed on their safety gives returns in terms of their motivation and commitment. The productivity impact of this innovation on safety focussed EPC organisations is seen in their on-time project completions and was noticed more in their management of difficult timelines during the pandemic lockdown.
Skid-mounted plants as an innovation are replacing many of the traditional stick-build on-site assembly processes. Different machinery sub-assemblies are pre-mounted on rails, pallet, or a frame at the point of manufacturing itself. This reduces the on-field construction requirements and further compresses the construction timeline. EPC players are able to assemble the sub-plants including complex piping, delicate valves, and other valuable components and ship them protected by the frame. Additionally, skid mounted sub-assembly enables pre-construction testing and assurance of the whole machine system as opposed to only the sub-components, thus reducing the time-loss due to the need to wait for replacement in case on of any issues. Skid-mounting also enables flexibility in architectural planning of equipment location and ability to adjust manufacturing facility placements mid-project.
Innovation with productization is also showing sizeable benefits for us. Productization here refers to having a dedicated off-site facility that pre-assembles components traditionally requiring on-field assembly. Thus, the more efficient workforce at the off-site plant coupled with now available better transport logistics creates improvements in the construction phase.
Larger centralisation of construction sub-phases innovation as opposed to the current practice of treating each project as a completely separate entity. The separate entity approach forced a segregation and thus duplication of processes and talent. The centralisation enables economies of scale in different sub processes like in the case of productization. It also enables faster ramp-up and faster time to delivery while minimizing errors.
Software driven construction innovation is another area that is rapidly gaining currency. This ranges from ERP to Artificial Intelligence at the other end of the spectrum. All working together to create efficiencies, predictability, and speed.
3D printing is believed to be fit only for small objects, yet in industrial EPC 3D lead innovation is a magic wand. When faced with specific non-standard or difficult / time consuming requirement, 3D printing comes to the rescue. Advances in material have enabled 3D printed objects to have tremendous physical properties that are fit for the industrial stress requirements.
Construction exoskeletons are another technological marvel that is transforming speed and safety of construction phase. Workers are able use non-human strength with near human precision and dexterity.
Latest generation construction equipment is also doing their bit in increasing productivity, capability, and safety in the construction phase. It is important for EPC organisations to invest in the latest and well-maintained equipment. Some of the most common equipment include Excavators, Backhoe, Dragline Excavator, Bulldozers, Graders, Wheel Tractor Scraper, Trenchers, Loaders, Tower Cranes, Pavers, Compactors, Telehandlers, Feller Bunchers, Dump Trucks, Pile Boring Machine and Pile Driving Machine amongst many other.
Nevertheless, at the end of the day all innovation focus and execution is delivered on the backs of the engineering strength. EPC organisations that invest more in engineers than the industry norm will stay ahead of the innovation curve.
© This article was first published in CXO Outlook, September 2021.
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