We are living through an inflationary hard cost environment. In speaking with one of our cost consultants the other week, he was predicting that overall we could see another 9-10% increase next year here in the Toronto area. Now, who knows what will ultimately happen. But this is top of mind for everyone in the industry and it will continue to impact how and what we build.
One of the challenges with construction -- and this is will documented -- is that unlike the manufacturing industry, which has seen sustained productivity improvements over the years, the construction industry has seen relatively little productivity growth over the last half century. In fact, you could argue that it's been mostly negative in recent history.
The obvious thought is why not just apply what we've been doing in manufacturing to construction. There is, of course, a long standing tradition of trying to do this, with varying degrees of success. But at the end of the day, building a house remains different than building something like a car.
Probably the key difference is that every construction site has unique constraints and conditions and so the process is constantly changing. Whereas the innovations that Henry Ford pioneered were centered around interchangeable parts and a well-defined process that could be repeated millions of times to generate the exact same output.
From what I can tell, there seems to be two ways in which we can think about improving productivity. One, we can try to be more Ford-like and drive standardization. This means more off-site factory construction and more standardization. This is the typical "pre-fab" approach and companies like R-Hauz, as well as many others, are already successfully doing this. The trade-off is less design flexibility.
The second option has to do with better software and hardware. What if we had significantly better "digital twins" for our buildings such that we could see and experience it in 3D before it is physically built? I'm thinking strap on VR goggles and do a walkthrough with the team. This could allow us to pinpoint all of the issues before they actually happen on the job site.
In parallel to this, what if we had far better on-site automation and robotics to then execute on the above digital twin? Think 3D printing concrete instead of using traditional forms. This is all happening and being worked on, but it doesn't seem to be at a point where it is changing our industry. But it is exciting to think that it may one day.
I recently discovered a New York-based startup called Floored. What they do is create “interactive, online 3D models for real estate.” They take spaces that may or may not exist yet, and turn them into interactive experiences that can be accessed online from any browser.
Here’s one they created for ClearRock Properties and Cushman & Wakefield, designed to show how two adjacent retail spaces would look if they were combined into one.
There’s been a lot of talk over the years about how limiting 2D floors plans are for communicating space to potential tenants and purchasers. But in the same way that virtual reality has never really taken off, neither have 3D floor plans, interactive walkthroughs, and other more sophisticated tools. When people buy a new condo, for example, they still buy it based on a floor plan.
However, as the technologies get better–and perhaps as BIM supersedes CAD as the dominant platform for architects and designers–I think we’ll see these 3D tools become standard in the industry.
And one of the things that I think it will allow us to do is be much more iterative in the way we design and build spaces. Right now it’s almost impossible to test different iterations of a building in the same way that, for example, a web developer might test different websites. Construction is a pretty permanent act. But 3D could open up that possibility.
We are living through an inflationary hard cost environment. In speaking with one of our cost consultants the other week, he was predicting that overall we could see another 9-10% increase next year here in the Toronto area. Now, who knows what will ultimately happen. But this is top of mind for everyone in the industry and it will continue to impact how and what we build.
One of the challenges with construction -- and this is will documented -- is that unlike the manufacturing industry, which has seen sustained productivity improvements over the years, the construction industry has seen relatively little productivity growth over the last half century. In fact, you could argue that it's been mostly negative in recent history.
The obvious thought is why not just apply what we've been doing in manufacturing to construction. There is, of course, a long standing tradition of trying to do this, with varying degrees of success. But at the end of the day, building a house remains different than building something like a car.
Probably the key difference is that every construction site has unique constraints and conditions and so the process is constantly changing. Whereas the innovations that Henry Ford pioneered were centered around interchangeable parts and a well-defined process that could be repeated millions of times to generate the exact same output.
From what I can tell, there seems to be two ways in which we can think about improving productivity. One, we can try to be more Ford-like and drive standardization. This means more off-site factory construction and more standardization. This is the typical "pre-fab" approach and companies like R-Hauz, as well as many others, are already successfully doing this. The trade-off is less design flexibility.
The second option has to do with better software and hardware. What if we had significantly better "digital twins" for our buildings such that we could see and experience it in 3D before it is physically built? I'm thinking strap on VR goggles and do a walkthrough with the team. This could allow us to pinpoint all of the issues before they actually happen on the job site.
In parallel to this, what if we had far better on-site automation and robotics to then execute on the above digital twin? Think 3D printing concrete instead of using traditional forms. This is all happening and being worked on, but it doesn't seem to be at a point where it is changing our industry. But it is exciting to think that it may one day.
I recently discovered a New York-based startup called Floored. What they do is create “interactive, online 3D models for real estate.” They take spaces that may or may not exist yet, and turn them into interactive experiences that can be accessed online from any browser.
Here’s one they created for ClearRock Properties and Cushman & Wakefield, designed to show how two adjacent retail spaces would look if they were combined into one.
There’s been a lot of talk over the years about how limiting 2D floors plans are for communicating space to potential tenants and purchasers. But in the same way that virtual reality has never really taken off, neither have 3D floor plans, interactive walkthroughs, and other more sophisticated tools. When people buy a new condo, for example, they still buy it based on a floor plan.
However, as the technologies get better–and perhaps as BIM supersedes CAD as the dominant platform for architects and designers–I think we’ll see these 3D tools become standard in the industry.
And one of the things that I think it will allow us to do is be much more iterative in the way we design and build spaces. Right now it’s almost impossible to test different iterations of a building in the same way that, for example, a web developer might test different websites. Construction is a pretty permanent act. But 3D could open up that possibility.
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