Between the Poles

RICS BIM: Status of the UK Government's BIM initiative

Yesterday at the Royal Institution of Chartered Surveyors RICS BIM National Conference 2013, Prof David Philp, Head of BIM Implementation, Cabinet Office, UK Government gave the keynote address on the status of the Government Construction Strategy 2016 BIM objective.  The overarching aim of the Government's initative is to reduce the cost of Government construction projects by 20% (cost is king) and to reduce the UK's carbon intensity (carbon is queen) in line with its EU carbon committments. 

Digital Built Britain

To reach its goal for the construction industry the UK Government has undertaken several initatives, one of which is a commitment to embrace Building Information Modelling (BIM) in Government projects over a 5-year time frame, to encourage industry to participate in this effort, and to position the UK to become a world leader in BIM.  Dr Philp sees BIM as essentially value creating collaboration through the entire life-cycle of an asset, supported by the creation and exchange of shared 3D models and the intelligent, structured data attached to them.  The inital focus is on the design/build part of the lifecycle, but the government has said that "the 20% saving refers to CapEx cost savings however we know that the largest prize for BIM lies in the operational stages of the project life-cycle"

The UK Government has explicitly targeted Level 2 BIM in the maturity ramp, defined as “file based collaboration and library management.”  Level 2 BIM is a series of domain specific models (e.g. architectural, structural, services etc) with a single environment where structured data can be shared based on COBie UK 2012.

The Government's BIM roadmap is aggressive.  In 2012 it focussed on discovery through pilot projects, notably the Ministry of Justice Cookham Wood project, a £20 mllion project where it is estimated that BIM saved hundreds of thousands of pounds in CAPEX costs.   In 2013 BIM uptake is expected to accelerate so that by 2015 all government departments will be fully BIM Level 2 enabled.  In the initial phases the UK Government is taking the leadership role, but it is encouraging industry to take an increasingly more important role in leading the initiative.

Dr. Philp annouced a number of supporting documents and collateral wil be available by Feb 28, 2013, most notably PAS 1192 Part 2.  PAS 1192/2 supports the Construction BIM Strategy to achieve Level 2 compliance.  It specifies requirements for achieving BIM Level 2, sets set out the framework for collaborative working on BIM enabled projects and provides specific guidance for the information management requirements associated with projects delivered using BIM.  The intended audience for the PAS includes organizations and individuals responsible for the procurement, design, construction, and delivery of buildings and infrastructure assets:owners, managers, designers, and contractors.

It was interesting to hear that the EU seems to be investigating following the UK and Dutch BIM initiatives in mandating BIM for public construction projects.

Why are utilities implementing analytics programs and how are they doing it ?

At  the Data Analytics for Utilities conference in Toronto yesterday, several speakers explained what is driving utilities to invest in analytics programs, and gave some real world examples of how utilities are implementing analytics programs.

Why analytics ?

In a nutshell, as a number of speakers emphasized, the goal is to enable utilities to make decisions based on information derived from the increasing volume of reliable data that is available to utilities as a result of their smart grid activities, rather than "gut" intuition, which is what utilities had to rely on in the past because they had limited and out-of-date data.

Lloyd Tokerud of Hudson Energy referenced a seminal paper, an MIT Sloan Management Review "Big Data, Analytics, and the Path from Insight to Value" that found that top performing organizations are twice as likely to apply analytics to activities. 

The study also found that the biggest challenges in adopting analytics are managerial and cultural.  Lloyd pointed out that to enable an analytics prorgam to be successful, it is necessary to educate people on the use of data and to promote a data-driven culture rather than intuition.  The important benefit is that an anlytics program can enable the utility to make better decisions faster.

Lloyd also said that analytics requires people with different skills than traditional IT.   He called them  "purple people".  Purple people understand both IT (red) and the business (blue).

Guidelines for implementing an analytics program

Mary Rich, who was responsible for smart grid and analytics initiatives at Centerpoint Energy in Texas gave a very insightful overview of how Centerpoint implemented their first anaytics program subsequent to their rollout of smart meters and AMI.

Based on her experience at Centrepoint she made several points that are important for any utility planning to embark on an analytics program, 

First of all, implementing an analytics initiaive is not a departmental exercise, it has to be company-wide.  It needs top-level support and strong governance.  Without these it will either fail or drag on for years.  Seondly it is not cheap.  It requires new tools and new people.  The big payback will not be short term, but long term.  Creating a data-driven culture is a cultural transformation that requires breaking down traditional data silos in engineering, operations, GIS, and across the company. 

One of the most important objectives is ensuring that the data is accurate and comprehensive.  Most importantly there can be only one authoritative source for each piece of data.  Conflicting reports are not going to help management make decisions rapidly and even worse they will raise red flags with the regulator.

How did Centerpoint Energy implement an analytics program

At Centerpoint they created a team comprised of subject matter experts (SMEs) from all divisions of the company.  It was ensured that these people were relieved of some of their normal committments so they could devote quality time to the analytics initiative.

The team spent about a month and a half identifying areas which potentially could benefit significantly from the application of analytics.  They then winnowed these down to the top 25.

For each of these opportunities they wrote detailed use cases,  Mary emphasized that this was not easy.  It was time-consuming and often required external support people to help SMEs who were not familiar with writing use cases.

As a practical example of implementing a use case, ons of the uses cases related to what Centerpoint refers to as "diversion" and what others call non-revenue-generating, non-technical losses.  With analog meters Centerpoint had to rely on the meter readers to note signs of tamperring with a meter and to report a possible diversion problem to Centerpoint.  A crew would roll a truck and investigate,but in many cases it would turn out not to be a diversion probem.  Wth smart meters meter tampering can be detected auomatically., but it is an involved process because it is necessary to make sure that there isn't an outage or a crew working in the area, because these can trigger events that look like meter tampering.  The SME team working on the use case estimated that by using autmated techniques they could increase detection by 20%.

The reality was quite different. They found that their autmated algorithms were much more effective than expected, because they were able to identify real diversion events with 80% accuracy.  They found that the big business benefit was fewer truck rolls.  Mary strongly recommended that every utility should know the cost of a truck roll because reducing truck rolls is one of the most important areas where utiltiies can reduce costs, often dramatically.  Mary said that in Houston alone, they were able to eliminate 4.5 million truck rolls.

Productivity, knowledge transfer, and 3D model-based design in the electric power industry

Productivity has become a major challenge in the $7 trillion construction industry.  Recently McKinsey reported that construction productivity has stagnated in the EU, Japan, and Korea, and declined in the U.S.

In the utility and telecom industries productivity has become a critical issue partly as a result of the aging workforce.  Organizations are losing experienced workers to retirement faster than they can replace them with younger, less experienced workers.  This means that they are not only facing reduced headcount, but also less experienced workers.  In 2007 a Booz Allen Hamilton study predicted a 20% decline in productivity in the US electric power industry.

The share of workers 55-and-over in the workforce has reached an all time high of over 21 % (BLS Labor Force Statistics from Current Population Survey).  The labor force growth has been affected by the aging of the baby-boom generation, people born between 1946 and 1964. In 2012, the baby-boom cohort is between 48 to 66 years old. This age group has grown by over 4 times the rate of growth of the overall labor force. Over the past decade the share of the 55-and-older age
group has increased from 14.3 % in 2002 to over 21 % in 2012.

There are two important trends affecting the electric power industry.  One is what is referred to as the aging workforce, which is affecting many of the world's advanced economies.  In countries like Germany and Japan, the population is aging and shrinking.  In others such as the US, in the 90's the participation rate declined as life expectancy increased.  The problem is exacerbated in the utility industry, where the age of many utility workers in the world's advanced economies is over 55.  The second challenge is that as we expand and replace our existing electric and other utility networks with renewable energy and intelligent networks (smart grids), new skills, especially digital technology skills, are required.

In 2009 I graphed some statistics from the US Bureau of Labor Statistics (BLS) to compare productivity in the electric power industry to non-farm industrial productivity through 2007.  I've updated the results with the latest data from the BLS comparing productivity in the non-farm and electric power utilities sectors through 2010.  The resuls, which are shown in the attached graph, show that productivity in the electric power industry increased more rapidly than non farm industrial productivity through 1998, but that since 1998 productivity in the electric power industry has ben fairly flat.

I suspect that productivity might even have declined as projected by the Booz Allen study of the electric power industry in 2007 if the participation rate of workers 55-and-over had not increased significantly from 30% in the 90's to 40% in 2011 for the general labor force.  Even the participation rate of workers 65-and-over has increased significantly, from about 12% to over 18%, in the same time period.

The challenges that utilities are facing is how to increase productivity while capturing the knowledge and experience of experienced workers and transferring it to the next generation of engineers and designers. 

In the sphere of design utilities are finding that 3D model-based design technology can help.  The next generation is conversant with communications, media, and digital technologies, having been brought up with the internet and gaming technology, PSPs, XBoxes, and Wiis. Modern 3D model-based design applications, which use 3D visualization tools that were developed for the gaming industry, provide an environment that is much more familiar and stimulating for the millennial generation, who may perceive traditional 2D design and paper construction drawings as something left over from the dark ages.

For example, a large U.S. utility, which is developing 3D models for all of its 3000 substations as part of a program to increase the productivity of their substation designers, has found that 3D model-based design faciliates knowledge transfer between experienced designers and recently hired, young designers. They have found that by forming substation modeling teams of young designers who are comfortable with 3D model-based design but have limited experience in electric power design together with an experienced electric power designer as a mentor, they can optimize the transfer of knowledge and experience in the process of developing 3D models of their substations assets.  The good news is that because there is a trend for experienced workers to remain in the workforce longer, there is still time for utilities to implement programs like this one.

Webinar: Improving the design process at utilities

In the new world of rapid infrastructure change driven by smart grid, renewable energy, and increasing demand for low carbon electric power, clean water, and energy efficient transportation networks, utilities are striving to improve the quality of designs and to optimize the design workflow flow within the organization.  The additional challenge of a rapidly aging workforce means that design productivity, enabling experienced workers to be more productive and bringing younger, less experienced workers up to speed faster has become a prioritiy. 

Brockwell IT Consulting and Spatial Network Solutions are offering a webinar specifically for utilities interested in improving their design process.  The webinar will show best practices for improving the design process, staking, and GIS asset management through automation, .  Utility engineering, staking and GIS professionals will see how they can use the Utility Design Maturity Model to benchmark their organization’s process.

The webinar will take place July 26th at 12:00 noon CST.  You can register here.

Manufacturing jobs of the future

I blogged previously about an interesting analysis of job creation by the "App Economy" has been conducted for TechNet by Dr.Michael Mandel of South Mountain Economics LLC.  The Technet analysis suggests that there were 155,000 tech jobs in the App Economy as of December 2011 including developer and tech support jobs at both dedicated app developers and at large companies who create apps for them or for others.  This implies that there are roughly 311,000 jobs in App Economy firms, including tech jobs, which require app-related skills, and the corresponding non-tech jobs.  With spillover included, the total number of jobs created in the App Economy is estimated at 466,000 jobs since the iPhone was introduced in 2007.

There is an interesting article in the Washington Post that makes the case that this kind of transformation is going to happen to many manufacturing jobs.  In the future the types of jobs that need to be filled will be different from the jobs that are being filled by workers in the emerging economies of the world. These new jobs in industries that we have not yet even conceived of will require fewer workers with very different skills.  The one thing that is certain  is that we will require a workforce with much different skills and education than what was required for the manufacturing jobs of the last 50 years.  Malaysia is an example of a country that understands this better than most.

New materials, processes and integration

Carl Bass of Autodesk sees three key developments that will define these new manufacturing jobs: new materials, new processes, and complex integration of automated systems.

New types of materials such as carbon nanotubes, ceramic-matrix nanocomposites, and new carbon fibers are being used to create products that are stronger, lighter, more energy efficient and more durable. These materials require new manufacuring processes and more highly skilled employees to manage the more complex manufacturing processes.

In conventional manufacturing, artifacts are produced by "subtractive" manufacturing processes using equipment such as lathes, drills, and milling machines that cut shapes from solid blocks of materials such as steel or wood.  These processes result in a lot of waste material.  In a new method called “additive manufacturing,” parts are produced like you would make a snow ball, building the object up by adding layers of material.  The best example is 3D printing. The process doesn’t produce waste material in the way that "subtractive" manufacturing processes do.  This new manufacturing environment will need 3D designers and operators who can operate and maintain sophisticated computer-based equipment.

Factories will have to become smarter in much the same way that the electric grid is becoming smarter and this means that we will need people will different skills. As in the electric power industry, there will be  greater use of simulation to analyze how manufacturing systems respond to changes such as introducing a new material or changing a feature of a product. Manufacturing engineers will need to become more adept at dealing with virtual control systems, simulation and other such technologies.

Reducing cost of infrastructure by improving construction productivity

At the Global Infrastructure Leadership Forum, a very interesting presentation was given by two consultants from McKinsey on the major trends in global infrastructure development and some suggestions of ways to address some of the challenges they have identified.

First of all they are anticipating a massive spend on infrastructure, something on the order of $7 trillion annually.  The infrastructure spend in the developing countries market is just as large as in the developed countries market. But infrastructure spending growth is significantly higher in the developing countries market.  In many countries there is a shortage of infrastructure funding from governments, which sets the stage for greater private investment.  Complex regulations and politics together are slowing infrastructure development.  For example, in the US it can take 12-20 years to build a new transmission line.  There are significant impediments preventing private capital from playing a greater role in funding infrastructure. For example, several speakers expressed doubts about the future of private-public partnerships (PPP), suggesting that a new paradigm for private investment is required. McKinsey singled out poor construction productivity as an important factor in eroding returns on infrastructure and making infrastructure less attractive for private investment.

McKinsey says that construction productivity has stagnated or declined in many countries and gave historical construction productivity data for the European Union, Korea, Japan, and the U.S.

McKinsey suggested that governments and infrastructure investors could reduce risks and increase returns by focussing on three areas,

• Improving priductivity of existing and new assets

For example, by tuning the regulatory and market structure to improve efficiency and expand capacity.

• Making the economic model more attractive to investors

By being smarter about matching capacity expansions to demand and  finding additional sources of revenue.

• Reducing cost and risk by improving project delivery

By allowing more competition, pushing more risk on to contractors, and encouraging engineering, procurement and construction (EPC) companies to increase their build capabilities.

Several speakers reiterated that one of the major problem in the infrastructure sector is the lack of data for comparing efficiency of construction and operation across projects.

McKinsey suggested that more private sector involvement in infrastructure projects could result in an estimated 30% improvement in construction productivity over 5-10 years, resulting from the combination of 5-15% reduction in the cost of design and planning, 5-10% in engineeering, 5-10% in materials purchase and sub-contracting, 3-5% in construction, and  3-5% from organizational enablers.  They estimate that this would translate into a 20% reduction in overall infrastructure spend.

Worldwide Challenges Facing the Construction Industry

There are some very serious challenges facing the construction industry that are motivating new approaches to how we design, build, operate, and maintain buildings and infrastructure.  While these new technologies are designed to address challenges in the construction industry, I think that they are going to profoundly affect other sectors such as operations and maintenance, emergency planning, first response and urban planning.  In this first blog on this subject I am only going to outline what some of the major challenges are. 

Construction Industry

Just to give you some feel for why the construction industry is so important as a market, the annual construction spend is estimated to be $2.3 trillion of which $1.2 trillion was spent in the US alone in 2006/2007 US Annual Construction Spend. 

Challenges Facing the Construction Industry

There are several important challenges facing the construction industry that are motivating the adoption of new technologies such as 3D rendering and simulation, model-driven design including building information modeling (BIM), standards for interoperability for example LandXML.org, International Alliance for Interoperability (IAI), and  Open Geospatial Consortium (OGC) standards.

Global Climate Change

The share of Americans calling global warming the most important environmental issue rose from 11 percent in 2003 to 35 percent in 2006 Global Warming Survey.  In the United States alone, buildings account for 39% of total energy use, 68% of total electricity consumption, and 38% of total carbon dioxide emissions Green Building.  The construction industry is faced with the challenge to replace or renovate buildings to minimize environmental impact, for example, achieving carbon neutrality,  while at the same time yielding a respectable financial return on investment.  Some people are calling for reducing fossil fuel consumption of buildings by 50 percent by the year 2010 with a goal of achieving carbon-neutral buildings by 2030 News.  This requires new approaches to designing new buildings and renovating existing buildings.   For example, the Leadership in Energy and Environmental Design Green Building Rating System LEED, developed by the U.S. Green Building Council (USGBC), provides a suite of standards for environmentally sustainable construction. Since its inception in 1998 and as of July 2007, LEED  is now incorporated in 14,000 projects in 50 US States and 30 countries covering 1.062 billion square feet of development area (July 2007 USGBC figures).

Aging infrastructure

Aging infrastructure is expected to be an increasing prominent issue in many parts of the world.  Every two years the American Society of Civil Engineers (ASCE) prepares a Report Card for American Infrastructure 2003 2005.  One of the sectors the ACSE evaluates is roads, highways, and transit.  In 2003 the ACSE awarded this sector a grade of D+ and in 2005 a grade of D, which translated means just barely passing.  To put this in context, the ASCE estimates that traffic congestion costs the US economy $67.5 billion annually in lost productivity and wasted fuel.  Even more seriously, the Federal Highway Administration (FHwA) reports that outdated and substandard road and bridge design, pavement conditions, and safety features are factors in 30% of all fatal highway accidents.  In the US on average, there are more than 43,000 fatalities every year.  The ASCE also reports that motor vehicle crashes cost U.S. citizens $230 billion per year, or $819 for each resident for medical costs; lost productivity; travel delay; and workplace, insurance and legal costs.

The  ASCE estimates that an investment of $1.6 trillion over five years is required  to bring US infrastructure to good condition.

Shrinking workforce

Statistics Canada predicts that in Canada by 2016 there will no longer be enough new workers to replace retirees.  In the US a Conference Board study Managing the Mature Workforce predicts that by 2010, the number of workers aged 35 to 44 will decline by 19%; aged 45 to 54 will increase 21%; and aged 55 to 64 will increase 52%.  This is a world-wide phenomenon.  The number of workers aged 35 to 44 is expected to decline by 27% in Germany, 19% in the U.K., 9% in Italy, 10% in Japan, and by 8% in China.  A recent study from the American Public Power Association (APPA) Work Force Planning for the Public Power Utilities: Ensuring Resources to Meet Projected Needs reports that the loss of critical knowledge and the inability to find replacements with utility-specific skills are the two biggest challenges facing the industry.   In the utility industry the average age of utility workers is close to 50 and by 2010, as many as 60 percent of today’s experienced utility workers will retire. A survey conducted in 2005 by the Carnegie Mellon University Electricity Industry Center found that human resources executives in the utility sector overwhelmingly listed the aging work force as their number one concern.

In the construction industry a report prepared in 2004 by the U.S. Department of Labor Employment and Training Administration (ETA) entitled America’s Construction Industry:Identifying and Addressing Workforce Challenges Report of Findings and Recommendations For The President’s High Growth Job Training Initiative in the Construction Industry reported that “industry leaders noted that the construction industry is experiencing a shortage of workers. This current shortage is complicated by two trends: the growth of the industry, and the retirement of the “baby boomers.”  The ETA projects that the construction industry will grow at an average annual rate of 1.3 percent between 2002 and 2012, adding over one million new jobs.  The U.S. Bureau of Labor Statistics projects that the number of jobs in construction will increase by 800,000 in the next ten years from 2004 (6,964,500) to 2014 (7,756,900.)  The shrinking workforce problem affects utilities as well as the construction industry.  According to the BLS the overall number of jobs in utilities is projected to be roughly stable over the next ten years 2004 (570,000) to 2014 (562,500) which implies that most new employment will be replacement as more experienced workers retire.

Declining Productivity

The construction industry is highly competitive, and firms must continually improve their productivity to remain competitive.  This challenge of continual productivity improvement has reached crisis proportions in the US where statistics published by US Bureau of Labor Statistics show that the productivity of the construction industry has actually declined in the last 40 years while non-farm productivity has increased by over 200% in the same period, see Paul Teicholz.

Islands of Information

The traditional facility lifecycle involves planning, designing, construction, operations and maintenance, and decommissioning.  Facilities include buildings, highways and roads, network infrastructure such as telecommunications, power, water, wastewater, and gas networks.  There are many different disciplines with discipline-specific software applications that are required to build and maintain a building or a network.   For example, in the case of a building, disciplines involved include land developers, architects, heating and ventilation specialists, plumbers, telephone companies and utilities, and road departments of local governments to name a few.  The software applications they use include architectural design, structural engineering, civil engineering, land development, geospatial, and surveying applications. Traditionally each discipline has been isolated from the other and each has maintained its own island of technology or silo of design and engineering information.  However, the facility lifecycle, whether we are talking about a building or a telecommunications network, is being compressed.  In addition organizations especially owners and operators are concerned about the costs of operating and maintaining facilities, which over the lifetime of the facility as a rule of thumb are 90% of the total cost of the facility.

Disciplines such as architecture, structural engineering, construction, civil engineering, and GIS are classic information silos.  Each maintains its own information island comprised of design applications and data.  This has created a nightmare for operations and maintenance, emergency planners and responders, urban planners, and others who require seamless access to urban terrain including building interiors and exteriors, roads and highways, and above ground and underground utilities.  The biggest challenge is not typically data, because the data that would help these folks already exists because much if it is created when buildings and infrastructure were designed.  The biggest challenge is that islands of information and technology make it difficult to integrate existing data in a seamless view. For example emergency responders need immediate and seamless access to information about the building where an emergency is occurring, including interior, surrounding buildings and access roads, and telecommunications and utilities, aerial as well as underground.  At the present time they would need to have been trained in many applications from a multitude of vendors to be able to access all of the different design and geospatial files that would help them deal with an emergency.

As a concrete example, all of the world’s utilities and telecommunications firms manage infrastructure in essentially the same way and are facing similar challenges.  In analyzing  the information flow in these organizations, the most striking problem is islands of information.  The engineering group uses CAD applications, construction uses large format paper, the records or network documentation group may use GIS tools, and operations uses paper or a handheld viewer.  The information flow between these groups is more often than not paper.  The result is a very inefficient process characterized by data redundancy, redundant processes, and poor data quality.

Several years ago the National Institute of Standards and Technology (NIST) commissioned a study  on Interoperability to attempt to quantify the efficiency losses in the U.S. capital facilities industry resulting from inadequate interoperability including design, engineering, facilities management, and business processes software systems and redundant paper records management across the entire facility life-cycle.   NIST estimated that in 2002 poor interoperability cost the US capital facilities industry $15.8 billion.  In addition additional significant inefficiency and lost opportunity costs associated with interoperability problems were identified that were beyond the scope of the NIST analysis which suggested to NIST that the $15.8 billion cost estimate developed in the study is likely to be a conservative figure.  The NIST estimated that two-thirds of these costs are borne by owners and operators, predominantly during ongoing facility operation and maintenance.