A McKinsey & Co. study gives construction industry low ranking for AI adoption.
Artificial intelligence (AI) has pervaded almost every industry; however, the construction industry is failing to take advantage of this technology, according to a 2018 report by the New York-based consulting firm McKinsey & Co.
When discussing AI in the construction industry, the report’s authors cite lack of resources as the impetus holding contractors back from embracing this technology. “Despite proven high return on investment (ROI) and widespread management interest in AI solutions, few [construction] firms or owners currently have the capabilities—including the personnel, processes and tools—to implement them,” the article states.
This may begin to change, as industries adjacent to construction, such as transportation and manufacturing, continue to advance AI. Because tools and solutions used in adjacent industries can be applied to construction, the industry may be forced to evolve and begin using AI, as well. “Stakeholders across the project lifecycle—including contractors, operators, owners and service providers—can no longer afford to conceive of AI as technology that’s pertinent only to other industries,” the article states.
Current state of AI in construction
Construction is falling behind in integrating AI into the industry. In a study conducted by McKinsey, researchers found that out of 12 industries, nine ranked higher than construction in the percent of firms integrating AI into their businesses. High tech and telecommunications led the industries with almost 32 percent AI adoption, while travel and tourism ranked last with about 11 percent AI adoption. Construction’s AI adoption rate was approximately 16 percent.
AI transferred from other industries
Because AI encompasses an array of possibilities, such as natural language processing and robotics, technology that has been formulated for other industries can be applicable to construction.
Authors of the McKinsey article explain that transportation route optimization algorithms can be transferrable for construction project planning optimization. Existing technology allows transportation companies to optimize routes and improve traffic navigation, the McKinsey article states, and once reinforcement learning—learning which allows algorithms to learn based on trial and error—is applied, more efficient methods of transportation may be created. “Such technology could be directly applicable to [construction] project planning and scheduling, as it has the potential to assess endless combinations and alternatives based on similar projects, optimizing the best path and correcting themselves over time,” the article states.
Retail supply chain has utilized AI to reduce manufacturing downtime, reduce oversupply and increase predictability of shipments, the article says. In the construction industry, this technology can be applied to inventory management of off-site materials.
Robotics is an element of AI that is already being applied in construction today; however, the article explains that there are opportunities for its uses to be maximized: “For example, robotics industry researchers have successfully trained robotic arms to move by learning from simulations. In [construction], this application might someday be applied to prefabrication techniques and maintenance operations for oil and gas as well as other industrial industries.”
Machine learning algorithms
Machine learning, both supervised and unsupervised, is an element of AI. The McKinsey study looked at various business applications where machine learning may be used.
One example the article cites is that owners and contractors can use supervised learning methods to aid them in decision making. “These applications can recommend to engineers and architects the use of a specific design, such as … architectural finishes (for example, curtain walls vs. window walls) based on various criteria (for example, total cost of ownership, timeline to complete execution, likelihood of defective construction mistakes during execution). The end result is that owners and contractors have more information with which to make an informed decision,” the article says.
How leaders can take advantage of AI
Stakeholders in the construction industry may want to consider implementing AI in their companies. Because of limited resources that construction companies currently have, AI should be used in the areas where it can have the most impact and where it can be most effective. The article also suggests that construction companies dedicate a portion of their research and development funding towards improving their digital capabilities. Without sustainable digitization, AI cannot flourish. McKinsey’s research found that companies with strong digitization efforts are 50 percent more likely to generate profit from using AI. Along with this, companies should be knowledgeable about what other industries are using AI for and consider if those applications can be translated to the construction industry.
Although the construction industry has not yet fully embraced AI, in the future, the industry may benefit from AI’s applications. Whether it be transferring existing applications from other industries or discovering applications unique to construction, AI can help optimize opportunities and increase revenues.