Time to embrace the digital revolution
Building services is particularly conservative in its outlook and this is hindering its development in a ferociously competitive business world.
The full potential of the HVAC sector is, I believe, being hampered because it stubbornly remains a traditional industry, refusing to move with the times and resisting change. As a supplier, for example, we still receive orders written out on the back of an envelope with a photograph taken of the component and then faxed through. We even have people coming into our trade counter with pieces of cardboard ripped off a delivery box and then a product code and quantity scrawled on with a felt tipped marker. We accept that this is the way many in the industry work so are well equipped to support our customers, however they choose to work with us but I can’t help but think we as an industry are missing a trick but not utilising the technology we embrace so willing in transactions we make outside of our working lives.
I’m not sure why the sector is so old school – whether it’s down to unfamiliarity with technology or whether it is for more practical reasons. After all, wearing gloves and other personal protective equipment on site is hardly conducive to typing an order into a phone or tablet.
Besides, connectivity on site can be compromised; in these circumstances, it’s easier to build a list on a scrap of paper that it is to try and connect to a website.
On top of this, few sites have a host of computer terminals readily available for all and sundry to use. This makes people reliant on devices like tablets which must be ruggedized in order to provide protection from site conditions, which is another obstacle because it adds significantly to the cost.
But the traditional approach adopted by many in the sector does not relate only to technology. It is also relevant in terms of pipe jointing – for example, press fit or push fit versus soldering and brazing. The former has taken a long time to catch on and, even now, many plumbers still prefer to solder.
It’s a puzzle to me why the industry, particularly in the UK, remains so obstinately conservative because it is responsible for placing the UK at the bottom of the European league table in terms of project costs. It may be due to a skills gap or I sometimes wonder whether it is due to the relatively static nature of the industry with few newcomers coming into it.
Procurement is a particularly pressing issue. Here, ‘stuck-in-a-rut thinking’ can lie not only with purchasing, but also with the supply side. It is legitimate to ask who is challenging the status quo, who is being a pioneer or creating a stir?
Of course, I could be charged with special pleading here, but I would argue that my own company is one of the very few that is breaking new ground. Our website, for example, has more of a consumer focus than most, with products available and a simple-to-use ordering process to suit its users’ needs rather than simply being a provider of information. Customers can select the most appropriate delivery method for their project and see proof of delivery. Our website in essence becomes a central platform that enables our customers to take total control of their supply chain which removes friction between site and office and reduces admin cost.
The idea is to make it more convenient for our customers to procure components and keep them one step ahead.
After all, building services could be two-thirds of the value of the structure of the building, but too many suppliers continue to offer components as if all the value is in the shell.
Just think about what is available in other industries in terms of computer technology. Electronic data integration (EDI) in the automotive and aerospace industries, for example, allows just-in-time ordering which eliminates expensive stockholding and frees up space in the factory. We have none of this sort of integration capability on offer in the HVAC sector.
I believe that Building Information Modelling (BIM) will, by default, lead the market in that direction, but, even here, there is so much more that could be done in terms of integration.
BIM – the ‘virtual’ modelling and management of a building project throughout its lifecycle in a single building information model – encourages collaboration among all members of the project team. This makes it a powerful ally in the battle for greater productivity, risk management and sustainability. It also helps reduce waste and cut costs.
BIM with end-to-end integration has huge potential to revolutionise the way the industry works. For example, it could potentially create a bill of materials that suppliers can fire off as a quote or reserve as an order. Wholesalers & manufacturers could then use that information to have a picture looking down the supply chain in order to create a forecast of when orders are likely to arise, improving the entire purchasing process to the benefit of everybody in the supply chain.
Of course, there are always the early adopters – those who take up new ways of working as technology progresses. They will find better, faster, smarter ways of working which will give them a significant competitive advantage.
But too few businesses are prepared to take a technological leap. Taking it to the extreme, you could effectively cut an entire section of work out of the industry – all of the admin associated with purchasing could be removed because it would all be done by the computer system.
The buyer would, perhaps, then be more focused on the negotiation side. His or her role would be more concerned with supply chain management – the management of the flow of goods and services, from point of origin to point of consumption – than with the day-to-day management of purchasing. A lot of this can be done by the user who is receiving the product and relaying that directly back to the supplier.
Because we, as an industry, are not investing sufficiently in cutting-edge technologies, we are still too reliant on labour. We are not using existing technologies as well as we could and we are not innovating to improve matters. As a result people are not being resourced such that they focus on more productive area such as value engineering the project or managing the supply chain – working on the project rather than in it.
Take this example: one of our customers had a particular issue where communication was working in a triangle; the three points were the site engineer or user, we as the supplier, and the purchasing department.
Because there was a three-way discussion, it became quite complex to ensure that everyone was in the loop. The site engineer knew exactly what he wanted, we as the supplier were able to identify that, but the purchasing department was not a specialist in the area.
As a result, the site engineer ordered a component, purchasing selected a cheaper alternative, we supplied this as requested and the engineer was unhappy. In this situation, cutting out middleman (disintermediation in the jargon) promoted two-way communication which was simpler to manage.
Technological change is unpredictable. Take the mobile phone – when Motorola launched it in the US in 1983, it was dismissed as a rich person’s toy. It cost $4,000 ($10,000 in today’s money), weighed two pounds, stood at a foot tall, took 10 hours to charge, and delivered only 30 minutes of talk time.
But look how far we have come in just 35 years. Today’s smart phones are more than just a communication tool. They perform all sorts of functions that would have been unthinkable in the early 1980s from browsing the internet to offering directions via GPS.
This illustrates the fact that, as technology develops, we can adapt. But beware – those who fail to interact in an increasingly digital working environment will inevitably find themselves left by the wayside.