Construction is really a manufacturing industry. Roads, buildings, bridges, highways, pipelines — all are manufactured. But compared to other industries such as automobiles, telephones, electronic goods or computers, the construction industry is very antiquated. If you walk into production facilities of any of these industries, everything is automated, whereas construction and agriculture, which are the two largest manufacturing industries in the world representing between USD 8 to 10 trillion a year, are the least automated of the manufacturing industries.
Look at how other industries were automated in the 1960s and 1970s — measurement instruments and machines were integrated to automate whole processes. Look at how cars are built by auto robotic arms — it is all integration of positioning technology and machinery that goes into the process. Then think about the construction industry in the civil engineering world!
Automation to be a standard practice
When I joined Topcon in 1993, I was anxious to connect an instrument manufacturing company [which Topcon was] to the machinery in order to realise this vision of automation of the construction industry. Of course, I didn’t think it would take 20 years. But today, with the connection of optical instruments, GPS and machinery manufacturers, there are very few civil engineering jobs in the developed countries that do not have integrated machine control technology. In many cases, this has led to exponential savings in productivity and a 50 to 100 per cent improvement in cost savings.
Until the last five-to-six years, most of the integration of machinery and measurement instruments was done in the aftermarket. Now, most major machinery manufacturers have started making these equipment available in-house. So we have seen a transition from pure aftermarket to integration of specified products, software and solutions. When that happens, you know you have reached a certain critical mass and it has become a standard for the world industry. In most developed countries, this is an accepted practice, and as the technology cost comes down, it will increasingly become a standard practice.
The industry is readily embracing this technology and understands the importance of automated machines. We are going to see more and more machines — bulldozers, motor graders and excavators — being automated. In the next five years, every major machine supplied from the factory will have the option to come automated as all major construction companies will use this technology — they will have no choice given the changes in the marketplace and the savings that can be realised.
Cost saving and productivity gain
There are tremendous savings in terms of time, manpower and environment. That translates into a more profitable business. If you can do the work in half the time, you are burning half the amount of fuel, too. You are dropping more money to your company’s bottom line. Machine control drastically cuts costs of doing fine-grading in construction, or sowing of seeds or harvesting in agriculture. There is a 30-40 per cent gain in productivity. Some of our customers report doubling of productivity; that means an average of 50 per cent reduction in costs in the specific area this technology being used.
Imagine the 3D system that goes on a bulldozer; it costs USD 60,000-70,000 and a company investing in that technology will get the investment back in as short as three months. Today, with the cost of the machines, fuel, labour and everything else going up, how do you make money? Your answer is to focus on productivity improvements, i.e. technological advances.
Our industry is moving from a productand- technology industry to a solutions-oriented one where customers are demanding not only hardware but also integrated solutions and compatible software. A look at some of these machines will tell you why. They do all the scheduling; not only controlling the machinery but also connecting them to local offices and contractors where they schedule what a machine is doing, which part of a project it is working on and how much work is being done. Integrated systems speed up machinery.
Every total station that we produce is connected via telematics. So information about any change can be immediately available to engineering. That integration is an important part of making it a seamless solution. I see that part of the business not only continuing but growing rapidly — precision and seamlessness through execution and through expansion.
This is just the beginning
The industry is still in its infancy. When you look at all the construction going on all over the world — highways, infrastructure, buildings, pipelines — the cost of constructing that infrastructure is a fraction of the cost of maintaining them for a lifetime.
Until recently, we didn’t have a good way of capturing all the data so that people responsible for managing all that infrastructure could capture, handle and manage the data throughout the life of the projects. But the business is growing exponentially because the technology is getting better and the ability to manage huge amounts of data and processes has improved in the last five years.
The biggest and the fastest growing industry for us at the moment is agriculture though the opportunities are endless in construction. In 2000, the agriculture industry’s use of precision measurement equipment was probably less than USD 100 million; last year it was more than USD 1 billion.
There are a lot of things we, as a company, can do to build the market, expand it more rapidly in more areas, expand our networks, standardise data formats and educate the emerging markets. You have to be smart enough look into the future to make sure you continue to grow your business.