Tella Firma: Blog

DISRUPTION FOR CONSTRUCTION? Part 2

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Jim Fontaine, CEO, Tella Firma Foundations

There are big changes coming that will affect building and construction.  In part two of a two-part series, Jim Fontaine discusses future trends, including how technology is poised to transform the construction of foundations for residential buildings.

Start at Ground Level: The Foundation

Foundations represent one area where technology can step in and help eliminate some of the challenges we face in construction. Beyond the scarcity of labor felt throughout the construction industry, foundations are prime for disruption based on several factors.  First, building a foundation is an inefficient process, and inefficient markets tend to offer the greatest opportunity for change. Second, costs are increasing – not only labor costs due to demand for higher-paying jobs, but also materials costs including the concrete needed to build foundations. Third, in an attempt to keep up with demand, corners are often cut, reducing the quality of the foundation and potentially leading to foundation failure in the future.

Residential_Construction_TellaFirmaAlmost half the cost of installing a residential slab foundation is related to the cost of concrete, with the remaining costs from steel rebar, cables, and slab make-up labor.   Over half the cost of installing a concrete pier is driven by labor. But what if there was a way to consistently install a high-quality foundation while reducing both concrete and labor costs?

Our company’s work during the past few years proves that an advanced foundation solution – utilizing technology to reduce both labor costs and the amount of concrete used – can offer a cost-effective alternative to traditional construction methods. This approach utilizes a hybrid model featuring an elevated slab-on-grade foundation that introduces a commercial quality solution to residential construction.

One key to this solution has been the introduction of a helical pier rather than a concrete- or steel-cased pier, which offers a number of benefits:  faster installation, less dependence on weather, and reduction of labor-related errors. It also uses less concrete and is less dependent on labor than other methods. As such, the cost is reaching the tipping point where the investment in technology is cost-competitive with more traditional options.

Is There a Drone in Your Future?

Are there other areas of construction where we should be looking for similar solutions?  Most certainly, and we should embark in that direction. We’re already seeing an impact from the use of drones for surveying and tracking progress at building sites, and some builders are beginning to examine the potential for pre-fabricated construction more seriously. 3D printing may hold promise for future construction of various types of projects, while other advancements in automation – robotic bricklayers, for instance – could one day improve productivity on site.

These developments hold some promise. And while some builders may choose a trade-off, perhaps sacrificing quality and reliability for lower cost, our goal as industry leaders should be to achieve the highest quality available for every project. I’m convinced we can achieve this result, while also reducing materials and labor costs, through improvements in technology.

The impending housing shortage indicates that demand for construction will be strong for the foreseeable future, yet the building industry will be competing with other sectors of the economy for a limited labor supply.  The time is right for us to harness solutions that can revolutionize the building industry, reducing costs while improving quality.

DISRUPTION FOR CONSTRUCTION? Part 1

By | Blog, Residential Construction | No Comments

Jim Fontaine, CEO, Tella Firma Foundations

There are big changes coming that will affect building and construction.  In part one of a two-part series, Jim Fontaine explains some of the trends and factors contributing to disruption in the industry.

Construction_Worker_TellaFirmaOver the past decade, technology has been credited – or blamed – with disrupting any number of industries. While some old-line industries have felt threatened by these new ways, the smart players recognize how to harness new uses of technology to improve processes or to gain a competitive advantage.

I believe we’re about to witness this exact type of change brought about by disruption to the construction industry. Let me explain.

One of the biggest challenges facing our industry today is the shortage of labor. According to some projections, as many as one million new construction workers will be needed over the next five years to meet the demand for building, particularly in housing. But unemployment is already near record lows, and demographic and immigration trends aren’t helping to produce an adequate supply of workers. The result? It will be difficult – if not impossible – to fill the need for construction over the long term.

Where Have All the Construction Workers Gone?

There are almost a third fewer construction workers today than there were 10 years ago. The potential for a stricter immigration policy could reduce the pool of labor even further. Foreign-born workers represent close to 30 percent of all construction employment, and the percentage of foreign-born laborers is even greater for specialists, such as roofers and plasterers, skills that are key for residential construction. Overall, the shortage of labor has already had a negative impact on the rate of new home construction, and is the number one challenge builders face when planning new residential housing projects.

What can this industry do to meet the demand we expect to see in the future? The answer has to come from technology.

In many segments of the economy – manufacturing is a notable example – technology has been used to automate some tasks and improve efficiency. But with few exceptions, we haven’t seen these types of improvements within the construction industry, and certainly not on the residential construction side. Although many people have speculated about what automation might bring, we’re still building homes and apartments pretty much the way we did 50 years ago.

The Technology Tipping Point

I believe the situation is about to change. We may finally be reaching the tipping point where technology can step in and help eliminate some of the challenges we face in construction. This tipping point will come when return-on-investment in technology becomes cost-competitive with existing methods of construction.

Look where venture capital funding is being directed in the construction industry, and you’ll see a clear focus toward technology solutions. Globally, financing of construction technology companies has experienced dramatic growth, registering a fivefold increase from 2010 to 2015. So far, much of this technological innovation has been directed toward the front end of the process – areas such as design, project management and logistics instead of the construction process itself. But there are other areas where technology is poised to make an impact during construction.

Next week:  Jim examines technology trends that will affect construction, including new developments in how foundations are built.