A $20 Billion, 2000-Ton Problem

Today I'll be taking look at an industry that generates 160 million tons of waste annually[i], 70-80% of which is destined for landfill. You guessed it: the construction industry.

Some facts: The average new construction project yields 3.9 pounds of waste per square foot of building area, or 97.5 tons of waste for a 50,000-ft² building.[ii] Every year in the US, approximately 5 billion square feet of new construction is built.[iii] That’s 9.75 million tons of waste from new construction each year.

Now you may be saying to yourself, “That's one industry that could benefit from an overhaul,” and this is probably true. But for now I’d like to look at one area of the industry that is often hidden from the casual observer. This is the way information is transmitted during the construction process.

Ever wonder how building plans get from an architect’s drawing board to the construction site? If you’re like me, you may have had a quaint idea of rolled-up blueprints being hand-delivered, unrolled, and voilà! And it turns out you wouldn’t be far off.

Construction file-sharing still operates much as it did over the last century. Architectural plans are now drafted in CAD programs, yet being too large to email, are usually printed through a process called reprography (think “photography”) and delivered to the numerous parties involved. With the advent of “modern” technology, plans can now be sent from headquarters by CD, or an information-sharing platform known as an FTP (File Transfer Protocol).

Reprography is clunky, to say the least. It requires bulky machinery and heavy-weight paper that often cannot be recycled. Now, if you’re like me, you’re curious how many trees this disposes of and how much waste is produced. Well, I did my research (actually, someone had handily done the research for me) and the 37 million blueprints printed annually in the US alone come to 42,000 trees, or a line of felled trees stretching from New York to DC.[iv]

I calculated the waste that must result. At an estimated 1182 in² of paper per blueprint (paper sizes range from 18x24” to 36x48”) and 187,000 in² per 20-lb roll, this adds up to over 2000 tons of non-recyclable waste each year.

Now, I have some trouble imagining what 2000 tons looks like, so I went online for a visual aid, and came across this video of engineers moving a 2000-ton gantry crane:

Now, truly, in comparison to the 160 million tons generated annually by US construction, or even the 10 million tons generated by new construction, this figure is just a drop in the bucket. A 2000 ton drop, but a drop nonetheless.

Will evidence of this sort be enough to switch the industry to a less environmentally-costly method? I don’t believe so. To be fair, cost savings to the construction companies themselves should be demonstrated first.

To evaluate this, I will use a tool published by Osterwalder and Pigneur in their handbook “Business Model Generation”, called the Business Model Canvas. It sums up the activities engaged in, customers targeted and value generated by a company, all in one picture. A sample canvas for the construction industry might look like this:

Next, Osterwalder and Pigneur propose coupling their canvas with the Blue Ocean Strategy conceived by Kim and Mauborgne. This is a strategy which quite simply advocates reducing and eliminating cost items, while raising and creating new revenue streams.

Put in other terms, what can a company do to deliver the same (or a better) value proposition while incurring fewer costs and increasing revenue?

Right now, the largest delays occur before construction even begins, while project managers send blueprints to subcontractors in order to receive estimates. This process can take up to 1-2 months to complete. Add printing costs at around $30,000 per project, and you begin to see where some cost items might be reduced or eliminated.

Enter new technology. Software exists to take the struggle out of file-sharing. It’s just a matter of putting it into practice.

Andrey Nokhrin and Konstantin Novikov, co-founders of BuildersCloud, a startup I work with, are pioneers of such a technology. Working as a construction project manager for 5 years before starting his company, Nokhrin underwent all the hassles of communicating through outmoded technology. As he says, “$4 billion a year is spent in the US on paper plans alone, $10 billion a year on rework caused by outdated drawings, and $5-10 billion a year in wasted time. Altogether, it’s about a $20-25 billion/year problem.”

Based on his understanding of the biggest barriers in construction file-sharing, their software includes takeoff and estimating tools that allow subcontractors to compile quotes while skipping the printing step. It solves the file-size issue by storing projects in the virtual cloud, and gives contractors and clients an avenue of connection through a Yammer-type networking platform.

Will the industry adopt such technology, even if it promises savings on this scale? It depends: among bidders, who will clients pick? The company with the month-long delay and $30,000 in reprography printing costs? Or the one who has figured out how to eliminate these?

BuildersCloud is banking on the latter. Will software like theirs become the new industry standard? We'll soon see if their instincts are correct.

Construction documents range from 5 MB to several 100 MB[v], too large to be emailed. As it is, hundreds of files per project are printed, or sent by CD or FTP to subcontractors. However, this process can take weeks, and with file changes or corrections, months. With emerging software like this PlanViewer from BuildersCloud, blueprints can be viewed, corrections made and takeoff measurements performed instantaneously from a range of mobile devices.

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[i] “Buildings and their Impact on the Environment:  A Statistical Summary.” US EPA

April 22, 2009 <http://www.epa.gov/greenbuilding/pubs/gbstats.pdf>.

[ii] Monroe, Linda. “Diverting Construction Waste.” Buildings. March 1, 2008 <http://www.buildings.com/ArticleDetails/tabid/3321/ArticleID/5758/Default.aspx>.

[iii] “A Historic Opportunity.” 2030 Architecture. 2011 <http://architecture2030.org/the_solution/buildings_solution_how>.

[iv] Neal, Houston. “The End of Blueprints.” Software Advice. 10 Dec. 2009. <http://blog.softwareadvice.com/articles/construction/the-end-of-blueprints-1121009/>
[v] FTPforArchitects. <http://www.ftpforarchitects.com/>