Grading and Excavation Contractor

John Trotti

By John Trotti

As computers began to make their presence felt in construction, their impact for the most part mirrored what was taking place elsewhere in the business world. The changes they wrought—stunning as they seemed at the time—were evolutionary in nature, allowing for a greater degree of control over the same sort of data that had been used for decision making for decades. But beneath the surface, seemingly unrelated forces have been at work—high definition positioning systems, electrohydraulic equipment controls, broadband communications systems, and enterprise-level software and data management suites—that in aggregate are rendering obsolete the way we’ve done business in the past.

Industry Resets Its Sails
One factor that became clear during my recent visits with equipment manufacturers is that all see their role in the marketplace changing. While turning iron into machines is deeply rooted in what they do, it is no longer their only—and in some cases not even the primary—focus of their business models. For example, Caterpillar has been saying to customers, “We’re a solutions provider, not just an equipment manufacturer,” demonstrating this commitment through its dealer network; changes to its brand image with the imposition of standardized design and industrial engineering initiatives in its products; strengthening its rental presence through arrangements with other OEMs (partners); and entering into joint ventures to expand its already commanding presence in the marketplace. Elsewhere, we see similar activities, including Doosan Infracore’s acquisition of Bobcat and Volvo Construction’s purchase of Ingersoll Rand’s road-building division. All of these point to a new vision of the marketplace and what it will take to address it in the future.

What Is Seen and Not Seen
Perhaps the most visible element of change lies in the emergence of machine control and the automation of geospatial tasks for converting digital plans into finished projects through machines able to translate computer-generated data into actual onsite elevations. This is exciting stuff that is at long last coming into broad acceptance, and what will, in many eyes, constitute a revolution. In the next five years, the acceptance of digitally enhanced/controlled equipment and the underlying understandings of its use should be virtually universal, but this is but the entry ticket into the arena where the real change lies ... the real-time digital job site and emergence of highly flexible, nonlinear project management processes, techniques, and visions.

In my March/April 2007 Editor’s Comments [http://www.forester.net/gx_0703_editorial.html] I laid out the primary conditions for this to occur: (1) clear and simple explanations, easily understood by contractors; (2) delivery from the factory of machines plumbed for the control equipment; and (3) the mobilization of a cadre of “consultants” to carry the job site understandings into the field.

Now, to these three I would add a fourth—consolidation in the contractor ranks—as an increasingly necessary component in the equation.

Why Consolidation
The most obvious reason for consolidation is the increasing cost of equipment and the software and systems necessary to direct them. While it is true that the productivity potential of today’s machinery is increasing steeply as well, this is not the same as getting that potential to the bottom line. This takes people with the knowledge, skills, and most of all the vision to make the transition ... and it’s here that our greatest shortages lie.

In some cases, consolidations will follow the time-honored tradition of buying out the competition, but this may not be the way of the future. Those who understand the emerging opportunities and demands of flexible project management in terms of equipment, processes, and strategies will hold a competitive advantage over those who don’t ... regardless of their size. Such knowledge, it seems to me, will be the real capital of the future, whether you’re the consolidator or the consolidatee.

GEC - September/October 2007

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