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Be Optimistic About Civil Construction Profitability

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In the civil construction sector, the primary goal for contractors, regardless of their company’s age or size, is profitability. This often hinges on efficient project management and a keen understanding of competitive advantage to secure bids and successfully deliver projects.

Recent Financial Trends: According to the CFMA’s 2021 Annual Financial Survey, 282 U.S. civil construction companies reported an average net income before taxes of 8.1%, a rise from 6% in FY2019. Return on assets (ROAs) increased from 10% in FY2019 to 13% in FY2020. These companies typically generated sales twice the value of their assets, maintained a leverage ratio of 2.0, and achieved a 26% return on equity (ROE). Compared to other professional services organizations, which might achieve 30-40% operating margins, a McKinsey Insight report suggests that engineering and construction companies could reach 20-30% margins by focusing on profitability rather than just utilization.

Internal Challenges: The CFMA report pinpointed several internal performance challenges, including accountability shortfalls, talent management issues, inconsistent performance management, reluctance to adopt new technology, and resource utilization problems.

External Factors: While contractors can influence internal factors, they should also be aware of external elements like fragmented value chains, extensive subcontracting, complex portfolios, and competitive pressure.

Tools to Enhance Profitability:

Machine Control and Automatics:
- Automatic excavator control for mixed fleets.
- Compaction control systems for efficient rolling patterns.
- Motor grader automatics for fine grading on complex surfaces.
- Dozer Horizontal Steering Control for improved accuracy and productivity.
Jobsite Connectivity:
- Enhancing monitoring by connecting workflows from design to construction.
- Using machine control and surveying systems as data sensors.
- Reducing rework and ensuring data consistency across projects.
Civil BIM Software:
- Reducing inefficiencies and capitalizing on new infrastructure project demands.
- Integrated BIM tools for real-time updates in planning, design, scheduling, and budgeting.

Getting Started: To boost profitability, contractors should:

Utilize machine control technology for efficient machine use.
Seek real-time operations visibility.
Minimize construction waste.
Assess the total cost of equipment ownership.
Invest in staff training.
Implement construction management software systems.

Consider Subscription Options: When exploring tools, consult with a local construction technology partner about the range of options, including subscription models. Subscriptions can provide a flexible, all-inclusive, and connected construction solution in a predictable contract, as opposed to purchasing hardware as a depreciating asset.

In conclusion, with the right approach and tools, there’s ample reason for optimism in the civil construction industry’s profitability. Embracing technology and efficient management practices can significantly enhance productivity and margins.

Challenges and Benefits of Implementing GNSS-Based 3D Machine Control in Construction.

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The construction industry, one of the world’s largest manufacturing sectors, has embraced automation slowly. However, integrating more innovative technologies, such as 3D positioning and guidance, is crucial for automating the industry, boosting productivity, and delivering impressive ROI for contractors. Here’s how we can assist in overcoming the challenges and reaping the benefits of GNSS-based 3D machine control.

Traditional vs. Technological Approach: Traditionally, construction sites relied on surveyors to stake grade level points, followed by heavy machinery grading to these levels, often accidentally removing stakes in the process. While effective, this method lacked efficiency and safety. The evolution of GNSS-based 3D machine control technology has transformed this process. Equipping heavy machinery with a complete GNSS system eliminates guesswork between stake points, allowing for real-time cut/fill operations, enhancing job accuracy, productivity, and efficiency.

Barriers to Entry and Our Solutions: The adoption of 3D machine control faces challenges, primarily the high initial investment and the complexity of the technology. Different machines require multiple configurations and features, which can escalate costs. However, we can help justify these costs by demonstrating the significant productivity gains and ROI benefits for various applications.

The learning curve and technical expertise required for these systems can be daunting. We offer comprehensive training and support, making these systems more user-friendly and intuitive. Our team assists with technical preparations like data preparation, site calibration/localization, and RTK setup, ensuring maximum effectiveness right from the start.

Benefits of 3D Machine Control: The competitive edge gained from using 3D machine control systems is substantial. These systems enable contractors to set up job sites quickly and efficiently. The precision of GNSS-based systems results in less rework and increased job time efficiency.

Operational costs are reduced as operators can achieve the desired grade faster, using less fuel and resources. Additionally, completing work within the safety of a machine’s cab promotes a safer work environment and significantly boosts production.

In summary, while the challenges of adopting GNSS-based 3D machine control in construction are real, the benefits far outweigh the cons. With our expertise and support, contractors can navigate these challenges, harnessing the power of this technology to achieve safer, more efficient, and cost-effective construction processes.

Why Connected Construction Gear is All the Rage in 2023 and Beyond

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Let’s dive into why machine control is the hot ticket in construction right now, thanks to a combo of digital advancements, emerging products, and big economic trends.

The 2023 State of the Industry Construction Technology Report tells us that contractors are already getting amongst connected equipment tech, and they’re planning to use it even more. About 13% of those surveyed are already using interconnected gear, and another 62% reckon it’ll be key for them in the next decade.

So, what connected equipment tech are these tradies using or planning to splash cash on? More of them are using machine control tech straight from their equipment OEM than aftermarket options from the likes of Trimble, Leica, Topcon, and others. Experts reckon the construction machine control sector will jump from $4.4 billion in 2022 to $5 billion in 2023, and then to $7.6 billion by 2027.

Automation to Tackle Staff Shortages This growth isn’t just about new tech and products hitting the market. It’s also because machine control is a solid answer to a big headache in construction – finding enough staff. As of February 2023, contractors need to hire about 546,000 extra workers to meet this year’s demand, says Associated Builders and Contractors.

McKinsey’s research by Garo Hovnanian, Ryan Luby, and Shannon Peloq highlights that the Bipartisan Infrastructure Law is expected to create 3.2 million new jobs in nonresidential construction and its supply chain. But with a tight labor market, other sectors have seen productivity dips. Not great timing when there’s a surge in demand.

Tech that cuts down on the hours needed or the skill level required for projects is already making a difference. This includes not just automated machine operation but also equipment guidance products like Cat Assist.

An early study at the University of Southern Mississippi found that automated machine guidance offered:

66% time savings for grade checking
85% reduction in or elimination of staking
30-50% time savings through uninterrupted earthmoving
66% reduction in survey staffing and 100% increase in speed

Equipment Guidance as a Stepping Stone Equipment guidance is bringing real labor and time-saving benefits, and more products are on the way. Some, like Trimble’s Siteworks Machine Guidance, can be upgraded later for more autonomy.

Jack Young from Trimble Civil Construction says, “This is machine guidance, not full automation. But it’s a stepping stone to more advanced tech. It’s buildable and not a dead end.”

This approach makes the tech more accessible, even for contractors with just one machine. Trimble and others are also offering it as a service, which might be more appealing for those cautious about investing big or wanting to try the tech without fully committing.

More Autonomy and Robotics on the Horizon While equipment guidance is great on its own, tech that automates the business end of construction gear or even the steering is now mature and proven, especially for earthwork and paving.

Emerging tech is pushing the boundaries even further. Built Robotics, for example, is automating excavators for utility trenching in solar farms. They’ve also launched a robotic pile driver at CONEXPO.

Sarcos Technologies is another player in this space, focusing on supervised autonomy for repetitive tasks. They’ve got machines for grinding, spraying, hydroblasting, torque tooling, and surface prep.

Underlying Tech Advancements Electrification is another big shift in construction gear, driven by environmental and sustainability goals. This could speed up the rollout of new machine control tech.

Electrification is changing the game, especially for lighter gear. It might lead to more efficient electromechanical actuators replacing hydraulics, which are smaller, lighter, and don’t need all the hydraulic kit.

Electromechanical actuators could first appear in lighter equipment due to their capacities. They offer more precise movement, which could make automated gear more accurate and easier for operators in tight spaces or complex tasks.

The Future of Autonomous Construction Gear While some companies are unleashing fully autonomous machines for specific tasks and others automate steering and production, the future could see gear that operates entirely on its own in more complex and dynamic job sites.

History of machine control

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From self-grading diggers to autonomous trucks, machine control tech is shaking up the construction game. But what’s the go with this tech?

First up, let’s crack into what ‘machine control’ means and why it’s a big deal. In simple terms, machine control hardware and software are there to figure out where a machine is sitting on the planet and how that stacks up against the planned design. It uses data from satellites or total stations and 3D models to make sure operators can put their machinery right where it needs to be, check the grade, automate some of the grunt work, and gather data. With a bunch of positioning sensors and a display, machine control gives operators a clear picture of where their machine’s bucket or blade is in relation to the planned design.

This tech has been helping the construction mob with earthworks since the late ’90s. It lets decisions be made based on solid data, not just the traditional guesswork or how skilled the operator is. This means operators can get more done, more accurately.

Machine control on excavators, dozers, and graders saves time, cash, and fuel, thanks to being more on the money and working better. With solution platforms, operators can mix and match total stations or GNSS with different types of machinery, giving them heaps of flexibility.

Machine control’s getting a run on all sorts of construction gear now – like graders, dozers, and more recently, excavators. Before this tech came along, operators had to manually check everything – a process that was slower, less accurate, and riskier because the grade checkers had to get up close and personal with the machines. When 2D and 3D tech started getting better, early machine control tech came along too. It gave operators simple visual guides, like systems showing how deep to cut, and let dozer and grader blades be controlled to stay on grade.

Back in the day, rotating lasers were used to send signals picked up by sensors on the machines, giving operators the basic info they needed. But compared to today’s machine control, these early systems were pretty limited and often too pricey or complex.

Challenges in the Construction Industry Today: Fast forward to now, and the construction industry’s facing a few hurdles. There’s a real struggle to get young people into the trade, leading to a shortage of skilled operators. This could mean a big gap in skills, affecting the quality and productivity of projects. To hit construction targets and tackle this skills gap, the industry’s leaning more towards automated machine control.

Automated Machine Control: This isn’t just about giving operators a visual guide; automated machine control actually moves the blade to grade by controlling the machine’s hydraulics. This puts the responsibility for accuracy and speed on the tech, not just the operator. So, even newbies or less-skilled operators can work like pros, and the seasoned operators can work smarter and faster.

Adoption of Automated Machine Control: Looking at the construction scene today, it’s clear that machine control automation isn’t being picked up at the same rate across all machines. While graders and dozers are getting automated, excavators are lagging behind, with only about 10% adoption in Europe, compared to over 50% for dozers. In the past, with plenty of skilled workers around, the push for automation on excavators wasn’t huge. But now, with a need for more productivity and fewer skilled operators, it’s time for the construction industry to get behind the benefits of investing in automated machine control.

“Reasons to put Machine Control into Your Fleet or Next Buy”

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QuipTech Machine control tech is a ripper for businesses looking to up their game in productivity and slash costs – and it’s not just for the big gear like dozers, but for the compact kit too.

Machine control tech has come a long way since it first hit the scene, and if you haven’t chucked it into your fleet yet, you might be missing out on a fair dinkum advantage. It’s a beaut way to wrap up projects quicker, cheaper, and with top-notch accuracy. It’s a smart investment that usually pays for itself after just a few jobs and saves you a stack of time and money over the life of the machine. In a market that’s getting tighter, it could be the edge you need for your next job.

We’re going to have a squiz at the reasons why you should think about adding machine control tech to your current fleet or your next purchase.

Nail It the First Crack: Nothing’s more of a headache (or hits the wallet harder) than having to redo work. With machine control, you’re on the money with the right amount of material at the right height, every time. Redoing work can be a costly drama, affecting not just one crew but the whole workflow on site.
Better Predictability and Control of Job Costs: Machine control lets you nail down the exact amount of time and materials needed for a job. This means better use of gear and your crew, and keeping a lid on material costs. For example, if you cart off too much dirt, you’re not just wasting time and effort but also cash to bring in new stuff.
Less Wear and Tear: The more you flog your gear, the more it wears out. Machine control means you can do the job in fewer goes, saving on engine hours, filter and fluid changes, and wear on blades and undercarriages.
Better Use of Equipment: Working smarter as mentioned above means you can use your gear more wisely. Maybe you’ll find you need one less dozer on a job, freeing it up for work elsewhere.
Up the Ante on Productivity: Quality trumps speed, but let’s not kid ourselves: machine control helps you get the job done quicker. Each job’s different, but the boost in productivity is a solid reason to get on board.
Cut Down Operating Costs: All the points above boil down to lower operating costs. Whether it’s doing more with less effort, cutting out rework, saving on maintenance and fuel, or getting more out of your fleet, machine control tech makes it all happen.
Boost Operator Performance and Cut Training Time: Finding and training operators for bulldozers and graders is a tough gig. Machine control tech shortens the learning curve and lets less experienced operators do quality work.
Dig with Confidence: Outfit an excavator with machine control, and it becomes a beast for fast and accurate digging. It’s a winner for trenching, letting the operator hit the exact depth without needing someone in the trench to check.
No More Re-staking: Re-staking a site can chew through the budget. With machine control, your design stays put in the system, saving you a packet on re-staking costs.
Fine-Tune Work with Compact Gear: Machine control isn’t just for the big stuff. It’s a gem for compact gear too, like excavators digging next to foundations, skid steers doing final grading, or tractors on sports fields.
Better Data Sharing Between Trades: Big job sites are like mini-cities, with heaps of contractors doing their bit. Sharing a single model of the site means everyone’s on the same page, cutting out confusion and mix-ups.
Easier to Add When You Buy: Back in the day, machine control was often an add-on from a third party. These days, many manufacturers have it baked in or have teamed up with machine control suppliers. This makes it a breeze to add when you’re buying new gear.
Easy to Scale Up: Starting with machine control can be a bit daunting, but entry-level systems are set up for easy upgrades. You can start with a basic setup and add bits as you go, scaling up to a more advanced system when you’re ready.

If you’ve been umming and ahhing about machine control on your heavy gear, or thinking about adding it as an aftermarket option, it might be time to have a yarn with us and see how we can give your business a leg up.