Historic Infrastructure Bill Presents Opportunity for Building Materials, Construction Industry
BY Tarun Nimmagadda
In addition to serving as the largest investment in roads, bridges and passenger rail in more than a half-century, the Infrastructure Bill recently made law represents the largest federal investment in public transit, clean drinking water and wastewater infrastructure in American history. S&P Global Ratings estimates that the bill would lift productivity and economic growth, adding $1.4 trillion to the U.S. economy over eight years.
Federal agencies will receive the majority of funding and be tasked with implementing the legislation, including the disbursement of funds. State and local officials will be held accountable in designing and building the assets, tracking the funding sources across projects, and hiring additional workers to complete the jobs. The issue that the heavy building materials and construction industries face right now is recruiting enough additional workers to complete the work.
Find Skilled Labor
The crippling worker shortage has been a long-standing industry issue that has been further exacerbated by the COVID-19 pandemic. Nationwide, 92% of contractors report “moderate to high levels of difficulty” finding skilled workers, according to the U.S. Chamber of Commerce’s quarterly construction report. More than a third of the participants in the research study also report having to turn down work due to labor deficiencies.
While it’s estimated that the Infrastructure Bill will create 2 million jobs over the course of a decade, it’s also estimated that the industry could face a shortage of at least 2 million workers through 2025, per data firm, Construction Industry Resources. This poses a challenge to filling these new job opportunities and delivering on the expansion of the nation’s infrastructure. Check out the deep dive into immediate and long-term workforce development ideas in last month’s edition of AsphaltPro.
Lagging Construction Productivity Threatens Success
A shortage of labor inflicts challenges on this ambitious Infrastructure Bill, but there’s good news and there’s bad news.
The bad news is fixing the worker shortage is not going to come overnight, and it might not even come within the next decade. The good news is companies can turn to the use of technology to make the process of building new infrastructure more efficient, cost-effective, and to reduce—where possible—the amount of labor required to complete these projects.
There’s been a productivity lag in the construction industry for decades—one that costs the global economy $1.6 trillion annually. Lack of technological advancements, lack of communication, coordination issues, and an inefficient use of time are all issues that serve as the Gordian knot in construction productivity. Technology can cut through the complexities.
Within supply chain processes, communication is key to success. If materials show up to the job site and construction personnel are not ready to receive or use the materials, work can be delayed or come to a halt. If materials arrive on time but do not meet the project specifications, additional deliveries have to be dispatched and construction teams will be idled as they wait on replacement materials. With improved communication, materials are easily located and on track for use at the right place for the right operation; and clear visibility into traceability of material properties and orders ensures that products arrive in the best possible quality, reducing delays and productivity lags.
Command Alkon Launches CONNEX Insights Business Analytics for CONNEX Platform
Businesses can ensure complete delivery and materials traceability and uncover smart insights for decision-making with connected logistics solutions. Drivers have the information they need at their fingertips, including their next ticket, so they can be back on the road to their next job as soon as their current delivery is made. To create more efficient fleet operations, companies are using tracking solutions to map the location of trucks in real time, as well as telematics devices to monitor truck performance parameters, such as engine speed and coolant temperature. These devices provide visibility into fleet operations, monitoring the unloading and loading of trucks and wasteful idling while in traffic or at the job site. Once management understands the cause of nonproductive hours in their operations, they can revamp processes for greater efficiencies, including using route planning and mapping solutions to avoid traffic delays.
Waiting on paperwork also hampers productivity. If processes are automated so that operations flow quickly and easily, workers don’t have to sit around and wait for paperwork to arrive.
The “Everyday Counts: Innovation Initiative” issued by the U.S. Department of Transportation in 2017 combined eConstruction with so-called Construction Partnering (aka E-C&P) in an effort to accelerate the adoption of electronic processes. E-C&P calls for training and aid for decision-makers and other key stakeholders, such as state DOTs, contractors, and consultants. Electronic material ticket management systems automate manual practices across the industry, eliminating tangible paper tickets and addressing the challenges created by outdated methods for tracking materials and truck assets.
Many successful pilots of eTicketing have occurred nationwide since the implementation of the “Everyday Counts” initiative, and the exchange of electronic ticket data has bridged the eConstruction gap that exists between public agencies and building materials suppliers.
Digitally collaborative technologies and tools that work on cloud-based desktops and mobile platforms provide clear insights into how materials and manpower are moving, placed and working. The Infrastructure Bill poses an opportunity to not only upgrade the country’s infrastructure, but also to upgrade the tools and systems that we use to build our infrastructure. The old ways of working are no longer aligned with the new rules of success, and to close the gap between trading partners on projects, all industry players need to go digital.
With the $65B investment in broadband access, production facilities that are located in rural areas do not have to rely on on-premises software that runs locally at the facility without requiring internet connection to operate. This is an opportunity for all players in the industry to take advantage of the latest and greatest technologies in cloud and mobile computing, rather than relying on on-prem software that does not provide a single source of truth to all trading partners. With more broadband access, the industry can accelerate the adoption of cloud computing and mobile computing and eliminate the limitation of data exchange amongst trading partners on a job.
Command Alkon is in a perfect position to champion construction firms in completing the goals of the new legislation because we have aligned our products to equip each constituent in the infrastructure supply chain—DOTs, contractors, suppliers and haulers—with digital tools and an open, data-sharing network to promote end-to-end digitization and supply chain collaboration enabling real-time visibility to mitigate risk, identify issues before they become failures, and provide actionable and operational insights.
Data sharing and increased knowledge promotes better decision-making. With sufficient accurate data, construction companies can easily compare projected profitability and efficiency to performance. Contractors can use the collected data to increase bidding accuracy by finding and calculating hidden costs. Data analysis of historical performance records can improve asset utilization.
The Infrastructure Investment and Jobs Act (IIJA) includes money for advanced digital construction management systems and related technologies. The program is funded at $20 million per year, for a total of $100 million, over five years. This funding is a clear indication of the critical role that technology will play in designing and building better, cost-effective infrastructure. A boom in U.S. construction will play a major role in reviving a battered global economy, and it’s time to empower limited workers with solutions that help them to work more productively and avoid pitfalls and schedule delays to make the most of this investment.
Tarun Nimmagadda is the VP of Product Strategy at Command Alkon. Before being acquired by Command Alkon, Tarun served as the CEO and Co-Founder of Ruckit.