Accelerating Built Environment

Industry in Technology Adoption

towards High Income Nation

Girish Ramachandran 15th March 2023

Executive Director
27 Advisory
 Speaker Profile

Girish has 28 years of diverse experience in the field of management

consulting, corporate restructuring, corporate finance & socio-
economic analysis.

Prior to founding 27Advisory and its affiliate firms, Girish worked in

various management consulting organizations. This include the
accountancy-based firms such as EY, PwC and RSM, as well as built
asset & engineering consultancy firm - Arcadis.

He has in-depth experience in the industries of Digital Technologies,

GIRISH Construction, Agriculture, Oil & Gas, Petrochemical, and Rail.
RAMACHANDRAN
Some of Girish’s notable consultancy projects in public policy
Founder & formulation include the Smart City Framework for KPKT,
Executive Director Competitive City Master Plan for Kuala Lumpur, as well as the
27GROUP National Policy Framework for 4th Industrial Revolution for the EPU.

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 Performance gaps exist in global construction industry. Malaysia’s lacklustre
construction industry productivity levels need radical improvements
Construction labour productivity, 2015
USD/hour worked by persons employed

• A number of countries have

achieved healthy productivity
levels and growth rates with
emerging economies like China
and South Africa increasing
productivity rapidly while Brazil
and Malaysia are falling behind.

• Malaysia’s construction
industry growth still lags
behind total economy where it
falls under the “laggard”
quadrant with labour productivity
way below international
average.

• To move from “laggard’’ into

Construction labour-productivity growth, 1995 – 2015 ‘accelerator’, Malaysia has a lot
Annual growth in real gross value added per hour worked by persons employed
of catch-up to do
Size indicates total country construction Sector productivity growth lags behind total economy
500
investment, 2015, USD billion
Sector productivity growth exceeds total economy

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 The construction industry worldwide employs about 7% of the
world’s working-age population, but challenged by productivity issues
Economic value lost as a result of the gap, by region
(USD Trillion)
• Construction is among the least digitised
0.07 0.05 0.03 sectors in the world.

0.44 • Lagging construction productivity which

trailed that of other sectors for decades,
costs the global economy approximately
0.46 1.63 USD1.6 trillion a year.

• Common productivity issues, especially facing

0.58 smaller players are projects suffering from
overruns in cost and time.

North Europe Asia Middle Central & Africa Total

America Pacific East South • If construction-sector productivity were to catch
America
up with that of the total economy, it would boost
Global Economy versus Construction Sector the sector’s value added by an estimated
Average value
added by USD1.6 trillion, where 27% of the opportunity
employees per is in the Asia Pacific.
USD37/hr USD25/hr
hour worked
Global Economy Global Construction Sector

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 Labour-productivity growth in construction has averaged only 1% a year
over the past 20 years, compared with world economy growth of 2.8%

Compound Annual Growth Rate

Construction-related 1995 – 2004, %
spending accounts for
Boosting Productivity

13%
of the world’s GDP
3.60%

+2.6% 1.
1 Reshape policy & regulation
2.80%
2.
2 Reskill workers
3.
3 Rewire contracts
…but the sector’s
annual productivity 4.
4 Redefining procurement &
growth has only
supply chain
increased
1.00%
5.
5 Rethink design
1% USD25 USD37 USD39
6.
6 Reinforce onsite execution
over the past 2 7.
7 Adopt technology & innovation
decades Hourly Rate (USD)

Moving some parts of the construction industry

to a manufacturing-style production system can
boost productivity by 5 – 10 x

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 In Malaysia, the construction industry forms an integral part of the
economy, where value of construction as of 2022 recorded RM 121.9 bil

Over The Value of Work Done in Construction Sector • The Civil Engineering Sub-sector
2018 – 2022 recorded the highest growth at
120
200 50.0%
8.8% 20.8% and followed by Non-
180 5.1% 0.6% -5.0% residential buildings which was
Industries rely on -19.4% 0.0%
160
19.0 % in Q4 2022
construction industry

140 -50.0%
• In line with the positive growth in
120 civil engineering, the sub-sector
-100.0%

9.5%
of workforce
100

80
contributed 37.9% of share in
contribution.
-150.0%
145.5 146.4
60 117.9 121.9 • The construction industry
112 -200.0%
continued to be dominated by the
40 private sector at 62.6% share with
Approximately -250.0%
value of RM 20 billion compared
20

90%
of firms are SMEs
0
2018 2019 2020 2021 2022
to the public sector with 37.4%
share at RM 12 billion.
-300.0%

Value of work done in construction sector (RM billion)

% Change (YoY)

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 Industry Outlook Going Forward – Riding on the IR 4.0 bandwagon

What is it? Why we need it? How we do it?

Industry 4.0 and BIM are It is a chance to catch up with our Leverage fully on technology and
Shaping the Future of the competitors & deliver transformational maximise/build knowledge via training
Construction Environment growth in productivity programmes

• Construction 4.0 is fundamentally • It represents a move to a world in which • Start by reskilling our construction
Construction Industry’s version of technology from artificial intelligence to employees over the next two decades,
Industry 4.0 advanced robotics to autonomous vehicles from trades vulnerable to technological
will transform how our businesses operate change to new roles created by
• A move towards digitisation in the and how our buildings are created. technology.
entire value chain and associated
processes such as workflows and • This revolution should radically improve • Top-down approach - our industry must
approvals. the productivity levels of our industry, work with all stakeholders, training and
improve quality, safety and the impacts on education providers and with government
• Prefabrication (IBS), automation, the environment. to transform how we train workers.
3D printing, virtual reality,
drones, sensors, robots for
repetitive or hazardous process
and data, etc. adopted in the
industry to better carry out tasks,
manage resources and make
decisions.

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 How can an
enterprise thrive in
the face of rising
energy prices,
uncertain supply
chains and natural
disasters?

90% of companies with a well-defined 4 times as many decision-makers

resilience strategy invest in digitalization and and employees agree than disagree
automation to become more resilient – 50% that there will be more frequent and
higher than those without a strategy severe disruptive events in the future.

Findings based on quantitative data was collected from 23 markets through 9,200 online interviews held with respondents aged 18
and older, in Australia, Brazil, Canada, Chile, China, Colombia, France, Germany, Greece, Hungary, India, Indonesia, Italy, KSA, Malaysia,
Mexico, Singapore, South Africa, Spain, Sweden, Thailand, UK, and US.
Source: Ericsson - IndustryLab – The Voice Of Business, Industry And Society : Time To Rethink Resilience

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 There existing various emerging Technology Disruption & changes in Market
Characteristics that will drive the transformation in Construction Industry
Industrialisation New Materials New entrants Digitalisation of products &
New production New-material New breed of players processes
technology which technology, which disrupt current Digitalisation of processes & products
Emerging enabling industrialisation new, lighter-weight business models and shift towards more data-driven
Technology and shift toward off-site materials enabling decision making which impact:
production improved logistics • Operations
Disruption
• Design
• Construction / Production
• Channels

Product-based Value-chain control & integration with

Specialisation Internationalisation
Industry approach industrial grade supply chain
Dynamics
Customer-centricity Investment in Investment in
Consolidation Sustainability
& branding technology & facilities human resources

Customer demand Construction inputs Market rules & regulations

• Increasing complexity of projects
Changes in • Evolving customer needs & greater
Market focus on Total Cost of Ownership
Characteristics • Increasing Sustainability requirement
• Increasing cost pressure from public
budget & housing affordability concerns
• Scarcity of skilled labours
• Changing logistics dynamics &
market outlook for new
materials and modules
• Stricter regulation on safety &
sustainability aspects
• Changing regulations &
incentives for modern methods
of construction, enabling more
standardisation

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 Key Trends in Built Environment

Prefabricated & Modular

Prefabricated and Modular building systems are
becoming increasingly popular as they offer a cost-
effective and time-efficient way to build a wide
variety of structures. CONTECH
• ConTech refers to the use
of new technologies
Digital Twin & BIM during the construction
Digital Twin and BIM technology allow architects, process.
engineers, and construction professionals to more • ConTech is about process
quickly and accurately design, visualize, and innovations that make the
construct projects in a virtual environment. construction phase more
efficient.

3D Printing
3D Printing is revolutionizing the construction
industry by allowing for the rapid fabrication of
complex building components with greater
accuracy, speed & cost-efficiency than ever before.

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Industrialized Construction - Prefabricated and Modular

What does it do?

• Industrialized Construction (IC) is “a building system that uses
more innovative techniques and processes to enable structural
components to be manufactured offsite, then transported and
assembled at the build site”.

• It includes emerging processes such as off-site prefabrication,

modular assemblies, and other design for manufacturing and
assembly (DfMA) processes

• In Malaysia, it’s more commonly known as Industrialised

Building System (IBS) which promotes the advancement of
construction processes by employing mechanization and
automation in the design and production processes.

What are the benefits?

Decrease of execution Easier maintenance & Increased sustainability Reduction in

time quality inspections due of the project due to occupational accidents
to standardized design limited waste & less
Source: Deloitte - Shaping the Future of Construction and Real Estate, ING, CNBC
construction materials
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Industrialized Construction - Prefabricated and Modular
Construction Progress
Sample Use Case
Day 1 (Jan 24)
Commencement
of Construction China is building two hospitals in less than two
weeks to combat coronavirus

• Construction began on Jan 23, 2020 to build two temporary hospitals in

Day 5 (Jan 28) Wuhan, China, which are prefabricated buildings. Once finished, they will
Erect the frame provide 2,600 beds to treat coronavirus victims.
for the hospitals
• In February 2020, China caught the world's attention with the impressive
construction of two hospitals in the pandemic's epicenter, Wuhan, in less
than two weeks in order to isolate and treat COVID-19 patients.

Day 7 (Jan 30) • Consisting largely of

Maneuvering of prefabricated rooms and
Modular pieces components, the two-story
structures were dubbed
“instant hospitals”.

Day 11 (Feb 3)
Completed &
delivered

Source: Deloitte - Shaping the Future of Construction and Real Estate, ING, CNBC

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Advanced Building Methods – Digital Twin & Building Information Modelling (BIM)

What does it do?

• ‘Digital twins' – a full three-dimensional model for an existing
asset or an asset under construction.

• This allows those involved in the project to test and plan

alternatives and next steps in a virtualized environment,
supporting and enabling processes that in the past could not be
performed on physical assets as a stand-alone.

• The most common and widely-used type of digital twin in the

construction space is the process of BIM – a model and digital
representation of assets made before construction on-site or
specific stages begin, whereas full 'digital twins' can also be
updated in real time to reflect the picture in the field.

What are the benefits?

Cost and resource Improved Greater efficiency & More opportunities for
savings communications and shorter project prefabrication and
coordination lifecycles modular construction
Source: Deloitte - Shaping the Future of Construction and Real Estate, BIM Community

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Advanced Building Methods – Digital Twin & Building Information Modelling (BIM)

Sample Use Case

Rebuilding Notre-Dame Under a 3D BIM Model

• Following the fire that destroyed part of the French Cathedral of Notre Dame
in Paris in 2019, the reconstruction process, which started two years ago, has
adopted digital models and innovative tools.

• Before the tragedy, the company Art Graphique & Patrimoine (AGP) already
had data to create a digital twin of the building & completed another
Picture courtesy of Autodesk study to capture the geometry of the damaged building.

• The US software company Autodesk Inc. worked on a 3D BIM model, helping

to create a historical digital record by using the data obtained from the pre-
fire reality to obtain recent scans for comparisons.

• Taking a digital approach also enabled cloud-based collaboration among

stakeholders. This common data environment will serve as a central
repository for all project information and provide all stakeholders with
access to the most current data and plans.

Restoration of Notre-Dame

Source: Deloitte - Shaping the Future of Construction and Real Estate, BIM Community

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3D Printing (Construction 4.0 / Additive Manufacturing)

What does it do?

• 3D printing, referred to at times as Additive Manufacturing
(AM), is the computer-controlled sequential layering of materials
to create three-dimensional shapes.

• Concrete 3D printing is set to reshape areas in the construction

arena as the application of this technology in construction could
bring significant economic, social, and environmental benefits.

• 3D printing in construction offers significant potential to increase

efficiency in the building sector, especially in the following
aspects:
 Speed  Waste Reduction
 Design  Security

What are the benefits?

Shorten the Provide unprecedented Waste Reduction - Reduce worker injuries

construction timeframe design freedom to Environmentally friendly & fatalities due to more
architects practice programmable &
Source: Deloitte - Shaping the Future of Construction and Real Estate, 3DPrint.com, COBOD, Forbes
automated construction
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3D Printing (Construction 4.0 / Additive Manufacturing)

Sample Use Case

COBOD - World leader in 3D construction printing

• COBOD is a globally leading company within the 3D construction printing

segment.

• In 2018 PERI Group acquired a minority stake in COBOD. In 2020, using a

First 3D printed home in Wallenhausen, Germany using a
COBOD 3D printer
COBOD BOD2, PERI realized the first 3D printed home in Germany and the
biggest 3D printed apartment building in Europe.

• COBOD—backed by the $1.8 billion PERI

Group—is also the supplier for GE, which recently
built the world’s biggest additive construction
facility to 3D print concrete bases for wind
turbines.

• In 2022, COBOD has signed a distribution

agreement with Siam Cement Group, which is the
largest cement manufacturer in ASEAN &
Thailand to promote COBOD & 3D
construction printing in the region.
A 3D printed concrete wind
Europe’s first 3D printed three-story apartment building in with turbine base made using
a COBOD 3D printer. the BOD 2 3D printer for GE.

Source: Deloitte - Shaping the Future of Construction and Real Estate, 3DPrint.com, COBOD, Forbes

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Thank You

Girish Ramachandran 15th March 2023

Executive Director
27 Advisory