Speaking with the industry

Digital collaboration and more sustainability in the construction industry - the networked value chain

Caroline Sturm shares with us her experiences on automating processes along the value chain for more sustainability

Digital collaboration and more sustainability in the construction industry - the networked value chain

Cross-value-added networking should be a central concern of the industry. This is the opinion of Caroline (Charly) Sturm, who moved from CG Elementum AG to REHUB FORGE GmbH as Managing Director in April and is Vice Chair of PropTech Powerhouse e.V.. For five years, the digitalisation expert has been transforming the construction industry with a focus on planning and construction processes. In our interview, Ms Sturm discusses the intelligent networking of the value chain, especially in connection with digital solutions such as automated planning with generative design. Generative design is a technologised process for creating designs that a computer calculates based on rough targets and dependencies. Also learn how to achieve more transparency and sustainability in the industry and the role of the platform economy and start-ups in this.

The overall view of the value chain in construction: What are the problems to be overcome?


Initiatives such as PropTech Powerhouse e.V., which was founded last year, show that the digital transformation of construction, planning and operating processes depends above all on an end-to-end view in order to promote digital and sustainable real estate in the German market. This view includes, for example, the first, initial planning, as well as the finished part that is delivered to the construction site and the utilisation phase of real estate. 

Why is this approach so important? This becomes clear when one looks at the various problem areas in the construction industry. First of all, there are challenges such as the housing shortage, combined with an enormous need for renovation of the existing building stock in Germany and the goal of reducing the CO2 emissions caused by the construction and real estate industry. In addition, there is the frequently discussed need for the industry to catch up in terms of digitalisation and the ever-increasing shortage of skilled workers. Against this background, Ms Sturm sees speed above all as a decisive factor in overcoming the challenges mentioned, because sustainable and "digital" buildings are needed now and not in ten years' time. The PropTech Powerhouse e.V. underlines this aspect with the motto "Greener. Smarter. Now". But how exactly can a networking of actors along the value chain help to overcome these challenges? 

Why networking along the value chain is important 

Although a successfully completed construction project also depends on the smooth interaction of a wide variety of players, teamwork is still practised far too rarely in the construction industry. Ms Sturm and the PropTech Powerhouse e.V. also address this problem: In order to be able to use a collaborative way of working as a key to success and to promote cooperation between players in the future, the association is pushing forward the networking of players in the construction and real estate industry. This includes start-ups as well as project developers and building and property owners who are members of an association network. Above all, the transfer of knowledge between these actors is promoted, as well as the development and implementation of practical solutions, detached from
acquisition intentions and competitive pressure.

A fundamental approach for the industry can be derived from this association activity: In order to achieve cross-value-added networking, common foundations must be created for the new topics in the construction and real estate industry. In the association, this is developed jointly through pilot projects, as innovation work is usually very time and resource intensive for individual companies alone. So in order to be able to plan and implement pilot projects in this framework, e.g. on the topics of energy, climate and the environment, fundamental questions should be answered by all the actors involved: 

  • How can a building or a building portfolio be (digitally) recorded at all?
  • What happens to the data?
  • Which data structures, standards and guidelines (DSGVO etc.) are the basis or need to be defined? 

As long as this foundation is not created, there can be no collaboration along the value chain. But why this process is so important and what benefits can result from networking and collaboration for all actors becomes clear when we take a closer look at the challenges in planning and development, i.e. the beginning of the value chain.

Advantages of cross-value-added networking: a relief for planning 

The basic problem of a lack of networking can be seen particularly in the planning of construction projects: The fragmentation of the industry has resulted in many different planning processes that have to be thought through in the early phases of construction projects in order to enable consistent networking. Architects and planners today face the challenge of taking into account a lot of information that could only be needed and used later on the construction site or elsewhere along the value chain. The value of this information therefore only becomes visible later. Ms Sturm formulates the problem as follows: 

"How, for example, is the architect supposed to know at the project planning stage what the material pass looks like in the documentation used by the subcontractors? Ideally, this information must be available from the beginning to minimise complications. But they often don't do that yet. There is a lack of standards."

In this context, she also refers to a paradigm shift towards Building Information Modelling (BIM) and emphasises that BIM as a common standard can also pave the way for a better connection of actors. Furthermore, the development of standardised databases,
, to which all actors have common access, can advance networking. 

Intelligent linking of the value chain, especially in conjunction with digital solutions, can make planning even easier. For example, when it comes to the sustainability of different materials, the effort of manually recording this information would be disproportionately high. Here, the comparison of different variants of a building and the seamless evaluation of these variants according to different factors such as the floor plan, the CO₂ balance, fire protection measures, planned materials or even the comparison of different energy systems is an option. This process can also be (partially) automated by algorithms. Even with computer-aided design (CAD), the manual effort quickly reaches its limits. With automated generative design, on the other hand, you can create several variants at once within a few minutes and compare different scenarios with each other, or check existing plans for optimisations. If you then provide individual building components with the necessary attributes for later tenders, purchasing and logistics, the technology saves an enormous amount of work. Even if this process of intelligent networking appears complex at first glance, thanks to sophisticated programming work, end applications are created that are intuitive to use. The potential offered by this approach is enormous. This is shown by a practical example from Ms Sturm's project work: automated planning. 

Practical examples: Automated planning 

Based on Ms Sturm's experience with automated planning, she describes a fundamental requirement for software solutions that are increasingly used in this area in the early planning phase: 

"In Germany, every building plot is different and every project has its own individual requirements and challenges, so there cannot be a "one-size-fits-all" solution for planning; rather, intelligent software solutions are needed, using the generative design approach."

This means, among other things, that plots of land, at least in Europe, are not usually created "on the drawing board" and software solutions must do justice to this individuality. The modular approach that many want to use to speed up planning and construction often does not make optimal use of plots, which is uneconomical in view of scarce land and rising land prices. 

Collaborative use of digital tools such as automated planning can create even more benefits and synergies that drive networking. Digital solutions make it possible to access various key figures relevant to a project at the touch of a button. In turn, all stakeholders involved in a building can benefit from this directly available and uniform data basis, from the financing department to marketing. From a holistic perspective, such solutions can save both time and money, as well as map and specifically promote sustainable construction. 

With the shared use of digital solutions, it could also be possible to avoid large feedback loops and long waiting times, since the work is done on a model, for example, that is available to all actors. At this point, according to Ms Sturm, it is also possible to move away from planning during construction, as work is already done with the best results from the beginning and everyone is clear about the final product:

"There has to be a change in thinking when it comes to planning during construction, i.e. this type of planning should really no longer exist. When a digital twin is finished, it's finished. Then it goes into production. Then we have a design freeze, and then the project has to be implemented."

With regard to the potential benefits of collaborative use of digital tools such as automated planning, transparency is also an important aspect. 

More transparency along the value chain: New ways of thinking and technical requirements

The problems along the value chain in construction described at the beginning also include a still very low level of transparency, which inevitably goes hand in hand with the prevailing competitive thinking, unclear communication structures and decisions that change at short notice, starting with the contracting authority and ending with the end customers. Disagreements along the value chain are often the result of a lack of information in the project. This is precisely where the cross-value chain networking of actors, for example with digital tools, can come into play. For the introduction of such tools, however, it is advisable to hold workshops, which is also confirmed by Ms Sturm's experience with automated planning.

Thus, not only a uniform database and consistent key figures are essential for working with digital tools. Another requirement can also be derived for other digital tools. In order to be able to check and optimise plans as cost-effectively and time-efficiently as possible, all actors must be guaranteed easy access to the digital solutions. This is also the only way to create transparency along the value chain. Ms Sturm emphasises that it is important to be able to integrate end applications into companies as seamlessly as possible. This means, for example, that extra software does not always have to be downloaded, installed and trained. In addition, sharing content and results (a sharing function) with colleagues from other departments is also very important when using an end application. Ms Sturm highlights the use of a digital solution: 

"We strongly believe that ease of use is a key factor in digital transformation and that we need to remove technical know-how barriers. Our approach empowers project developers to produce initial designs themselves at the feasibility study stage, without architects. But another aspect is the result itself."

This means that transparency can also result when houses or buildings are planned with BIM from the very beginning. To meet this standard, the 3D files generated by a software solution should be able to be easily exported and transferred in various formats. This results in further simplifications, Ms Sturm knows: 

"This simple handling and exchange of files is a liberation for project developers, because it means they no longer have to rely so heavily on feedback and special knowledge or even on expensive CAD programmes. With automated planning, they can then help themselves, with a simple software environment that enables an initial assessment of the sustainability of the floor plan, for example, in a straightforward way."

More transparency along the value chain is therefore linked to various aspects, both on the side of the users and on the technical side. In order for digital solutions to be used optimally for this purpose, the role of digitalisation should be fundamentally considered. 

The digitalisation of the value chain: What is digitally possible and how can potentials be identified?

It is no secret that the construction industry in particular is increasingly confronted with the challenges of the retirement of the baby boomer generation, especially at management and project management level. In this context, it can be quite challenging for people with decades of experience in a specific field of work to recognise digitalisation potentials of their own work and to formulate corresponding requirements for digital solutions for future generations. Ms Sturm also sees this as a major challenge: 

"At the beginning, we first have to get people to define what they need, when and how they need it, and from whom. That is one of the most difficult points we have, i.e. to formulate what is needed when and how along the value chain.

Only when these processes have been described can it be worked out in a further step how they can be automated and digitalised or whether these processes should be digitalised at all. Ms Stum makes this clear: 

"We have to remain realistic: I don't think we'll be able to programme the "egg-laying willy nilly" these days. But we have to make sure that we communicate well with each other. Because in principle, digitalisation is the supporting actor, with the task of improving communication and the information situation and controlling processes.

Based on this, digitalisation potential can be identified along the value chain, e.g. on the basis of the question: What do the decision-makers need in the various service phases in order to obtain a transparent and as complete as possible basis for decision-making? This requires well-functioning, digital processes that ideally have open interfaces, so-called application programming interfaces (APIs), and simplify networking. In this context, Ms Sturm promotes a basic understanding of the terms 'Digitize' and 'Digitalize': 

While the term digitisation refers to the conversion of analogue information such as objects or images into a numerical or machine-readable format, digitise describes a transformation process, e.g. the further development of existing business models and processes using digital technologies towards digital business models and processes that would not be possible at all in analogue form. 

With this basic understanding, the construction industry can also be made fit for the future and processes along the value chain can be digitalised more precisely. Digital platforms and the platform economy can play an important role in this.

Platform economy as a driver of value chain networking and more sustainability 

Up to now, the software landscape of companies in the construction industry has been characterised by many, sometimes highly specialised, solutions for small-scale process steps. This can lead to information silos and media discontinuities that are more error-prone than automatic networking. Especially with a view to cross-value-added networking, some changes should be set in motion in the future - open interfaces and a collaborative mindset have already been mentioned.
For these changes, uniform standards are again crucial, because an interconnected solution along the value chain is only possible by using the same data standards.
For Ms Sturm it is also clear: 

"In the future, we will not be able to get around a material cadastre or urban mining marketplaces. We need well-structured, standardised databases for raw materials, production, construction sites and operations. Different platforms must also be interconnectable and truly networked. Then we can get the maximum out of them."

The platform economy thus offers the potential to better manage capacities and resources in planning, construction and operation and to handle valuable materials more carefully. Platforms can be used, for example, to realise just-in-time delivery, i.e. delivery just at the right time, by linking the production of prefabricated parts with the logistics programme of freight forwarders and ideally also directly with construction sites. Here, Ms Sturm recommends taking a cue from other sectors such as the logistics industry:

"I know that the construction industry is extremely complex because there are many different players involved in a project. But let's be honest: is the logistics industry less complicated or less complex? There, too, you have a lot of subcontractors who still manage to deliver the package anywhere in the world within 24 hours if they have to. Everyone knows this privately, but also the globally networked industry with its supply chains.

Last but not least, start-ups contribute to advancing cross-value-added networking in the construction industry and minimising the complexity described for construction companies. 

Working with start-ups: the role of ConTechs along the value chain

Compared to software companies whose products have been on the market for decades, start-ups have a different approach to companies in the construction industry. Ms Sturm describes it this way: "I think with all the tech start-ups, whether PropTech or ConTech, we now have a completely different speed and a completely different mindset" . Against the background of the digital transformation of the industry, a rethink should take place: Digital solutions must be customisable and simple. This is precisely where cooperation with start-ups can offer the opportunity to leverage previously unused potential. Start-ups in the construction industry rely on technologies that are quite new for the industry. They aim to win new customers by addressing individual customer needs accordingly. 

How this cooperation between a construction company and a start-up can look can be well illustrated by an example: ConTechs, which focus specifically on the problems of construction companies, know their need for digital solutions and are usually more specialised than large software companies. In a close exchange, for example, existing problems with supplements, which are associated with high costs and resource expenditure due to incomplete bills of quantities, can be solved. Start-ups therefore have an important role to play as an actor along the value chain: their digital solutions can contribute to the networking described above by, for example, considering tenders and material costs together. The focus of cooperation between solution providers and construction companies should therefore be on linking data. For Ms Sturm, cooperative collaboration is enormously important. Only when all actors are networked can processes be designed to be as sustainable as possible. Ms Sturm uses the example of bills of quantities: Only with a proper and complete bill of quantities can construction projects be tendered as efficiently and successfully as possible. And start-ups that help to create a common data basis for this are an important link in the value chain. 

Published by

Maximilian Burger

9.8.2022

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