Contractors are building high-tech platforms to support the weight of hefty industry demands. A continuous flow of retail development, expansion and renovation projects is keeping contractors busy these days.
"Obviously, there is a lot going on," says Gus Vratsinas, CEO of Vratsinas Construction Co. in Little Rock, Ark. The boom in demand is wreaking havoc on the supply side of labor and construction materials. Add to that continued requests for fast-track schedules, and most contractors have their hands full.
"In retail, the opening date is sacred, which means all of your people have to be on their toes to overcome any obstacles," Vratsinas says. One solution for contractors has been to streamline processes with the help of high-tech tools that range from integrated software and digital cameras to e-mail and the Internet.
"In today's competitive construction market, the local contractor market no longer exists," says Bill Pratt, director of business operations for Tampa, Fla.-based Walbridge Aldinger. "We set up websites for our projects that include change orders, schedules - which are so important in retail construction - and shop drawings, so we can get many sets of eyes on them."
According to Pratt, in June 1998, Walbridge Aldinger was the first company to gain International Organization for Standardization (ISO) 9000 certification. These standards, now used in more than 90 countries in the Americas, Europe and the Far East, define 20 key elements of a quality system for engineers and construction contractors, ensuring that all company processes and procedures are monitored and controlled according to certain industry standard requirements.
As part of its own, in-house quality controls, Walbridge Aldinger also ensures that all its employees receive a company-specified amount of computer training annually. A current project where the company is putting its high-tech tools to work is for a Miromar Outlet Center under construction in Fort Myers, Fla. Pratt describes the project as ideal for leveraging new technologies, "because the center is high-end and has an innovative owner."
As with any new means of distributing information, the new high-tech tools usually are not embraced by all sectors of the construction team in the same time frame. As CarlJohnson, president of Lake Elsinore, Calif.-based Near-Cal Corp., describes, "Using the Internet and other technologies is kind of like the advent of the fax machine. We thought it would never catch on with everybody involved in a project, and now it's virtually indispensible." Near-Cal is beginning to leverage new technologies in its current West Coast work on Edwards cinemas, such as a new 20-screen cinema the company is constructing in South Gate, Calif.
"The technology aspect is something that we have focused on greatly, especially in regard to handling information," says Rob Oldach, senior vice president at Colorado Structures Inc. in Colorado Springs. The company launched its web-based planning room concept in January 1999. The virtual planning rooms integrate a web-based project-management site along with other high-tech features such as video and digital photo images. A secure web page is established for a specific project, and all members of the development team can access plans, drawings and changes throughout project design and construction.
One advantage of the web-based system is that it allows management to observe activity at the construction site in real time, Oldach says. Colorado Structures recently used the web planning room to build a Wal-Mart Super Center in Castle Rock, Colo. The project had tremendous participation and support from all aspects of the development team.
"We were able to effectively distribute the updated project information, such as schedules, meeting minutes, change bulletins and photos, all through the website," Oldach says. Ultimately, the goal is to store all of that project data to a CD-ROM that can be handed to the property manager, and everything they need to know about the building will be at their fingertips, he adds.
The move to embrace technology is driven, in part, by a need to overcome labor and materials shortages, as well as to combat price- and schedule-related pressures.
"Many times we're seeing it get to be an unrealistic schedule," says Jeff Strom, senior vice president of business development for RAS Builders Inc. in Englewood, Colo. Few owners are willing to recognize or accommodate the obstacles contractors are facing, he reports. "It's a demanding marketplace today. Our job is to overcome all those issues - and still provide a quality and efficient project to those owners."
Industry challenges The two main hurdles facing the construction industry are labor and materials shortages. "Labor has been, and will continue to be, a challenge in the future," says Darrell Ball, vice chairman of Taylor Ball Corp. in Des Moines, Iowa.
Contractors are not only vying with one another to attract labor, but contractors also are competing with firms in other industries for those skilled employees and general laborers. "What we've looked at is a regional use of training programs to solve the problem on a long-term basis," he says.
"We have some critical matters facing our industry in the next 10 years, and it's going to come down to primarily people," agrees Jim Sattler, CEO of EMJ Corp. in Chattanooga, Tenn. The construction industry is a people business, and finding skilled trades and technical people is going to create a real dilemma in the future, he adds.
It is already difficult to find specific tradespeople in the current market. "When subcontractors need to beef up because they are behind, they can't find the skilled people to do it," Sattler continues. Some of the most noticeable shortages are in areas such as masonry and civil engineering equipment operations, as well as in drywall and concrete working. Electrical and mechanical trades have adequate staffing, but even those areas are expected to experience a similar labor crunch over the next decade.
Materials shortages also have plagued the industry in recent years. Drywall, steel and cement are some of the common materials in short supply. "Most of these are demand-driven problems. But if the economy stays hot, these are going to be problems that we're going to have for some time," Ball says. "And shortagesare going to crop up in other materials. We just don't know what they are yet."
The shortages are creating longer lead times for fundamental construction materials, as well as traditional specialty items such as elevators and escalators. "Nobody seems to be shortening those lead times," Strom confirms.
In addition, lead-time problems are compounded by the active construction market. RAS Builders, for example, is in the midst of multiple projects across the country, including an $18 million redevelopment project at Foothills Mall in Tucson, Ariz. The company also is working on a Sega GameWorks in Columbus, Ohio, Bed Bath & Beyond in Irvine, Calif., and a multi-store rollout of Montgomery Ward's newly renovated store concept.
Owners want the best of both worlds: the most efficient price and a high-quality product. However, that goal is becoming more difficult to achieve in today's competitive bid process, where the lowest bid isn't necessarily the best bid.
"You may get the low bid, but is that person qualified to meet the scope of the project?" Strom asks. "That's why we've grown our company the way we have."
RAS Builders' diversified geographic base of offices allows the firm to set up strong relationships in each local market it serves. "You have to be smarter at your business, and you have to pay much more attention to all the details of your business to make sure they're covered," he says.
One result of the industry pressures is a greater focus on team-oriented delivery systems. In the past, those team-oriented measures, such as design-build or other at-risk approaches, have been initiated to meet fast-track schedules. Now, teaming is being used as a means to better control the labor and material flow needed to keep a project on track and on budget, Ball says.
A second result of industry pressures has been a push to adopt technology to boost productivity and efficiency.
Embracing technology EMJ is no architect, but the general contractor has added computer-aided design (CAD) abilities that allow the company to receive drawings sent electronically from the design team. EMJ can download the drawings, make changes and send the updated drawings back electronically.
"That is a very key ingredient because you can get an immediate response," Sattler says. "It is definitely a help, because otherwise it would take sending something overnight." The time savings is a valuable incentive to implement new high-tech tools. "My motto is, 'A day lost is a day you can never gain back.' As a result, you can't afford to lose a day."
Electronic communication is particularly important for firms such as EMJ that work closely with the design team - architects and engineers - as plans are created. The electronic communication allows EMJ to get a clear picture of the building as it emerges. For example, EMJ can view the latest building changes as they occur, and then turn around and make sure that a specific architectural feature or building material meets budget requirements.
Within the next six months, EMJ also expects to distribute plans for bidding to subcontractors via disk, or to make information available for downloading from a website, Sattler reports.
Colorado Structures is already using the Internet to relay documents. The company places construction documents online at a secure site starting at the bidding phase, and the firm continues to post documents through project completion. During the bidding phase, the website becomes an online planning room. Subcontractors can download plans and project specifications whenever they want. "They also can download the items they want without being restricted on the information they can access," Oldach says.
Most general contractors don't send out a complete set of documents to each subcontractor. For example, an electrician might receive only the electrical sheets. However, the website would allow electrical subcontractors to download any project documents they wish to review. The construction documents continue to be available at a secure website throughout the job, and any pertinent information can be posted on the web in a timely manner. Change bulletins, for example, can be distributed and implemented in the widest-reaching and fastest mode possible, Oldach says.
Essentially, the website complements the normal chain of communication that exists between a general contractor, subcontractors, designers, engineers and clients. "The biggest advantage is the efficiency, not only for our own operations, but getting subcontractors to a different level in their own companies," Oldach says. "This is about getting our subcontractors to a level where they are not searching for scraps of paper in the seat of a pick-up."
Another advantage of the web planning room is that it provides a single source for all of the necessary information and all the history involved in a project.
Vratsinas Construction utilizes construction software and project-management databases to help keep its projects on track. "We utilize technology to know where things are, but it still takes people to follow through to make sure you don't have any surprises," Vratsinas says.
Vratsinas Construction runs collaborative software on its Lotus notes platform, which has several modules that share information. Field operations can post information that interacts with accounting, and even clients are able to access information via the web on their specific jobs.
Improving efficiencies Technology tools, such as integrated software, help cut down on paperwork and time spent on routing information. Vratsinas Construction's software helps information flow through the company in an almost seamless path, says Elias Abdo, information services director for Vratsinas Construction. For example, project managers can enter information into the system and that information then moves to accounting.
"Once they enter the information, anyone who is allowed access can see that information regardless of where they are or what time it is," Abdo says. The entire construction team is linked with the same software. All of that information can then be e-mailed directly to all parties.
The software also has helped Vratsinas Construction standardize its procedures so that each project is handled the same way, and so that everyone has easy access to files. "These kinds of advantages have helped our company grow," Abdo says. Vratsinas Construction also takes digital photos of projects in progress that can be posted on the company's server, which allows everyone on the design team to see a project's progress via the web.
RAS Builders recently introduced an integrated software system aimed at improving its own internal efficiencies and inter-departmental communications. "Our communication and efficiency issues are made more difficult just because of the geographic diversity of our company," Strom says.
RAS Builders operates nine regional offices around the country. The next step for the firm is to link all of its offices to the same computer network. "We've explored doing project web pages, but I think it takes a special project for that to be successful," he says.
The cost efficiencies of the web planning rooms work best on big projects that involve a significant amount of communication. Nevertheless, adding a web-based system to improve communication is on the drawing board for RAS Builders.
Taylor Ball uses digital cameras to transport information almost instantaneously from the job site to all members of the development team. "This also gives an owner an update of what's going on at the project," Ball says. The photos, which are transmitted electronically via e-mail, are used to aid in problem solving.
Taylor Ball also uses teleconferencing to link its job site to regional and head offices, as well as to other members of the design team. "Websites are becoming a popular way to transfer information," Ball admits. However, Taylor Ball sets up project-specific websites only for those jobs that might have a unique need to improve communication, such as a remote job site. The company also is moving toward CD-ROM to transfer and store information such as shop drawings and plans.
Slow evolution The construction industry is still evolving in terms of technology.
"I think we've got a long way to go before the 'haves' outnumber the 'have-nots.' But eventually, I think the market will demand it," Strom says. "One of the big hurdles is getting other firms to embrace the technology. The bottom line is that the subcontractor trades do all of the physical work."
Only the most sophisticated subcontractors have embraced technology. The smaller the trades, the less likely they are to have high-tech systems in place. "It makes it very difficult for them to get on the Internet when the president is out working a job, not back at the office doing information systems," Strom says.
"The hardest thing with this aspect of developing technology is getting the rest of the industry, subcontractors in particular, to take an interest in this rapidly emerging technology," agrees Oldach. Colorado Structure's web planning rooms are utilized on all of the company's projects, but to differing degrees depending on tenant interest, design team participation and the number of subcontractors involved in the project.
Colorado Structures has taken an active role in helping dozens of its top subcontractors add technology and assist in setting up their information-management systems. The contractor assembled a team of consultants with a wide range of technology expertise, such as Internet, hardware and software providers, to help subcontractors analyze their own applications, select new equipment and train employees.
Oldach is optimistic that within two years the entire industry will be up to speed with the Internet, and online communication will have replaced much of the paper transmittals that the industry relies on today.
However, while technology can go a long way in improving efficiency, it can't replace the importance of human contact. "Sometimes electronic methods work, but sometimes you miss the interaction of people," Ball says. It is easier for someone to tell you what you want to hear on the phone, compared with standing face to face. "You can do a lot of things electronically, but you still have to get people in front of people."