DIGITAL ENTERPRISE Local construction equipment suppliers are being more enterprising with regard to digital tools compared with renters
Digitalisation is playing a limited role in the procurement and mobilisation of construction equipment for capital projects, University of Pretoria (UP) project and quality management senior lecturer Dr Giel Bekker tells Engineering News.
“Apart from built-in equipment information and tracking systems, digital technology has not been leveraged beyond capital equipment to improve the productivity of construction projects.”
Bekker – also the director of the Africa chapter of Texas, US-based nonprofit consortium Construction Industry Institute (CII-Africa), Bekker says construction equipment is expensive to own, operate, maintain and store.
Therefore, when the profitability and survival of construction companies are threatened by a lean and fluctuating project pipeline, currently evident in South Africa, limiting operational and overhead costs becomes ever more important.
A lack of productivity and cost containment struggles remains major challenges for local construction companies, Bekker highlights.
“Digitalisation can help tackle these challenges by addressing three categories of optimisation – project complexity, processes and inventory control.”
Digitalisation is playing a significantly limited role in mobilising construction equipment to site in South Africa, despite this being the area where digitalisation can improve productivity the most.
Bekker highlights that, while some of the country’s larger construction companies are investigating the use of digital platforms to improve the mobilisation of construction equipment to site, thus far, none have deployed any solutions of their own.
Factors influencing the adoption of digital tools include uncertainty, a propensity not to challenge the status quo, being unaware of the available solutions, the slow adoption and acceptance of technology and procurement processes.
Research conducted has found that construction companies do not always rent the nearest and cheapest equipment for a specific project, but often transport their own equipment, accompanied by maintenance crews, to site over long distances.
To address this, the digital equipment rental platform Dibz Rental, located in Tijger Valley, Pretoria, was developed to enable companies to locate the nearest, reputable and cheapest construction equipment supplier in proximity to a construction site, says Bekker.
“Multiple construction equipment types are listed on this platform, along with their current location, rates and terms and conditions.”
The local uptake of digital tools for the selection, procurement and operation of construction equipment is undoubtedly in the initial stages, with suppliers being more enterprising, compared with renters.
Bekker says procurement processes and protocol are probably the biggest constraint to the adoption of digital platforms by local construction companies.
Therefore, to reap the benefits of digitalisation, he suggests that the time-consuming bureaucratic red tape of procurement, involving the prequalification of suppliers, quotation requests and reviews, short-listing, price negotiations and the confirmation of contractual agreements, will need to be challenged to affect change to realise the potential benefits.
“Digital platforms provide a direct link between equipment owners and renters, limiting agent intervention. Subsequently, the supply chain is shortened, allowing for cost savings.”
Further, digital platforms enable construction companies to not only obtain immediate quotes but also receive confirmation of equipment availability, while facilitating deposit payments and the timeous provision of equipment and final payment on completion of its use.
“In addition, suppliers and renters listed on online platforms can be evaluated, providing the opportunity for immediate feedback and references for future users,” Bekker points out, noting that equipment owners and renters face two different, but related, challenges.
Equipment owners often complain about not receiving payment for services rendered, while renters complain about owners failing to mobilise equipment to site on time, or even at all, regardless of whether a deposit has been paid.
Therefore, the payment capability on digital platforms allows for the management and control of payments based on deliverables and milestones.
“Payment can be set up to protect both parties. For example, an order can be confirmed only once the renter has paid an amount into the platform’s account. Upon payment confirmation, the order is processed and the owner is notified to mobilise the specified equipment to site.”
The Graduate School of Technology Management at UP and CII-Africa are undertaking various studies on the digitalisation of the project management industry, and have initiated research on the impact of digitalisation across the complete project management life cycle, in conjunction with CII-Africa member organisations.