Digital, fast, efficient: construction companies are rethinking their approach

Laura Lammel from Munich relies on teamwork and cooperation

Construction must become more digital. Our building contractors will then maintain their good international reputation in the future. The big players in the industry have long since positioned themselves. But construction in Germany is primarily characterised by medium-sized businesses. Medium-sized companies like Lammelbau from Munich recognise their opportunity: they are working on a long-term corporate strategy for the digital construction site. And they are using new technologies, continuing to rely on cooperation and the partnership of all those involved in construction.

Rising land prices and a lack of new talents

The dream of owning one’s own home, designed and planned by an architect and realised according to the individual wishes of the builder, can come true for everyone. This is true insofar as building money is cheaper than ever before. Even full financing without equity capital is possible in the current economic climate and at almost all German banks. The loose monetary policy of the European Central Bank (ECB) makes it possible: the banks are literally swimming in cheap (construction) money. But at the same time, building plots in sought-after locations, and far beyond, have become extremely expensive.

Two prominent examples that impressively demonstrate this are Munich and Berlin. The city and surrounding area of the Bavarian capital have always been expensive. However, the fact that in Unterschleißheim, for example, building land prices almost doubled in just four years (2014 – 2018) from 870 to 1,600 EUR/m2 makes building impossible for many. The situation is similar in our federal capital Berlin. In 2018 alone, the standard land values rose by an average of 20% compared to the previous year, as determined by the Gutachterausschuss für Grundstückswerte. Berlin’s Morgenpost reported at the beginning of 2019 that this puts the average price for building land at 2,000 to 2,500 EUR/m2, and 15,000 EUR/m2 in city centre locations.

Percentage development of land prices in Berlin 2012-2019

Among other things, the standard land value has a direct influence on the purchase price, for example for a flat in an apartment building. As the average value of the prices of several plots of land in a certain location, the standard land value is decisive for the total costs of buying a plot of land or a house. Rising prices for raw materials such as sand, cement or steel as well as higher technical standards due to the Energy Saving Ordinance (EnEV) or new fire protection requirements have a further increasing effect. Added to this is the high level of capacity utilisation at construction companies and in the skilled trades, combined with a shortage of young talent and skilled workers. Building is thus becoming more expensive year after year. This is clearly noticeable.

Construction companies learn to rethink

This background is important to understand where the costs are “built into” the building. For it is not overpriced architects or specialist planners who drive up fees hand in hand with profit-oriented building contractors. On the contrary: the profit margins on the part of contractors are low and have been in the single-digit percentage range for years. As a result, construction companies can repeatedly find themselves in economic difficulties despite a good order situation.

Gross domestic product (GDP) and construction investments in the respective prices

Construction investments by construction sector 2018

One of the companies that continues to successfully assert itself as a medium-sized enterprise in this environment is Lammel Bau from Munich. The family-run construction company has been managed by Laura Lammel for over 10 years. The energetic and likeable boss consistently introduces her employees to the digitalised construction of the future. A decisive advantage of medium-sized companies is the proximity of the management to their own employees and the joint discussion “at eye level”. Laura Lammel makes it clear: lean administration, direct contact with colleagues on the construction site and quick, binding decisions – which are supported by everyone – are the order of the day at her company.

Digitisation starts at the desk

Digitised planning and construction is currently often confused with BIM. However, BIM is only one, albeit important, aspect. After all, internal processes in construction companies, among specialist tradesmen, in production, transport and construction site logistics can also be digitised to a greater extent. Making construction more digital therefore begins at the desk and not just with the excavation pit.

This does not just mean the contractor’s desk. As Laura Lammel points out, the planners and architects have to do important preliminary work. Thanks to their good planning, construction companies either have a smoothly running construction site or, if planning is inadequate, a “chaotic construction”. Added to this is the growing shortage of skilled workers, which affects the entire German economy and insufficiently trained graduates. These are criticisms that are also voiced again and again by architectural firms. Laura Lammel: “We suffer immensely from the lack of skilled workers. We lack people who are prepared to think on the building site. Who take responsibility and see themselves in a position to compensate for mistakes that happen to architects and engineers every day – even through planning periods that are too short or too little experience – and who rely too heavily on digital tools.”

BIM offers new qualities

Whoever thinks that digitalisation in construction means that everything will become electronic and robotic is wrong. The growing digitalisation of planning and construction processes has not yet replaced people on the construction site or communication between the planners and the builders. Nor does the BIM method lead to fewer planning errors. However, they become visible earlier than before and can be corrected sooner. BIM creates a low error execution and detail planning through diverse test processes and clear framework conditions – as long as everyone consistently relies on the method.

Investment in the company remains important

In the near future, even the digital BIM-based building application is conceivable. Geometries, minimum and special building requirements are checked in a rule-based manner. This facilitates the building application for approval planning as well as communication between planning and realisation. However, it is not only the architects and planners who are challenged here, but also the construction companies. Laura Lammel sees the challenges; digitalisation must succeed. Nevertheless: “The cost issue is very important for all construction companies. We feel this with ourselves as well. The money we invest in our digitalisation is not easily returned to us as profit in the projects. But if you see a long-term future in it, you have to go this way. No matter how the company changes then: You have to do something to function in a connected world.”

The digital construction site is getting closer

That the digital construction site is moving ever closer towards Germany is already evident in various places. Construction scheduling can be simulated with a BIM model checker, construction machinery can be used efficiently and with less downtime, and excavations have been dug for years with GPS-controlled excavators. And digital development continues apace. It does not stop at the house from the concrete 3D printer nor at the construction trade.

Conclusion: our future is becoming much “smarter”

The examples given are close to everyday construction sites. However, the future is likely to be much smarter than before. Further acceleration of computing technology and data transfer rates for mobile applications will enable possibilities such as “mixed reality” applications on the construction site. Mixed reality technology interactively blends digital content with real objects. Building products will be able to be sampled virtually, directly in the shell. For information service providers like Plan.One, who are active in this area and provide building products, 3D models, BIM data or further planning information, new “golden” times are dawning. After all, their offers will be highly flexible and mobile on all end devices. In the virtual reality of the building model as well as in the augmented reality, directly on the construction site.