Tune in to learn about trends in the AEC industry and how an integrated software solution can increase productivity for building information modeling (BIM).
Technology has drastically transformed how construction is undertaken from the planning to the building stages. Today, you can see how a house will look in 3D and even create different design variations before its built. However, the cost of construction and the efficiency of the process hasn’t changed much with the introduction of such sophisticated technologies.
On this episode of the Next Generation Design podcast, our host Jennifer Piper is joined by Derek England, NX Product Manager for AEC and BIM at Siemens Digital Industries Software. He’ll help understand the current trends in the AEC industry and the impact they are having. He’ll also help us understand how NX from Siemens DISW addresses the challenges faced by the industry.
In this episode, you’ll learn why the construction industry lags in per-person productivity improvement. You’ll also learn about some of the latest technologies introduced in the AEC industry and the gaps they are expected to fill. Additionally, you’ll hear about how the digital twin is applied in the AEC industry.
What You’ll Learn in this Episode:
- Challenges facing the construction industry
- Latest innovations in the construction industry
- How Metaverse impacts the construction industry
- Best practices that the construction industry can learn from other industries
- A use case that makes Siemens’ NX stand out
- How integrated multi-discipline Building Information Modeling (BIM) works with the digital twin
There are a lot of benefits if I have an integrated solution between the design and the manufacturing. Whenever I make a change in the design, the manufacturing just updates. And then the same with simulation as well; if I make a change to the model, I don’t have to go reapply all the boundary conditions or loads anymore, I can just update them because I’ve got an integrated set of tools.
– Derek England, Siemens Digital Industries Software
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Derek England: The AEC software companies are growing really fast, like 10% to 50%, who wouldn’t be envious of that? And it’s a highly profitable segment of the market. But with all these integrated individual tools that are disparate and don’t really work together, who’s left to do all the hard work to integrate all this stuff together? Well, it falls on the end user; he’s got to be the one who connects all the dots.
Jennifer Piper: Welcome to another episode of the Next Generation Design podcast. I’m your host, Jennifer Piper. Today, we’re talking about the architecture, engineering, and construction industry and why tech advances there have been relatively stagnant over the past few decades. In this episode, I’m talking to Derek England, NX Product Manager for AEC and PIM at Siemens Digital Industries Software. In part one of our three-part series with Derek, we’re discussing trends in the AEC industry, improving tech implementation, and why integration may be the key to widespread adoption.
Jennifer Piper: Before we begin, let’s meet today’s guest. Derek, would you like to introduce yourself and tell us about your role?
Derek England: I’m Derek England. I’m the NX Product Manager for AEC and PIM at Siemens Digital Industries Software. I’ve been doing this for 25 years now. And I’ve had the privilege of working with some of the most innovative companies in the world, understanding their workflows, and helping them achieve their goals. And my job is really to understand these and then make and suggest enhancements to our product to make it even better so that they’re even more productive.
Jennifer Piper: Thank you, Derek, for joining today and talking to us about the challenges facing AEC companies as they evolve and streamline the design, engineering, and construction processes. Can you give us a bit of an overview of the topic?
Derek England: It’s a challenge today to make sure that these projects are done on time and on budget. One of the big challenges is coordinating these design activities, especially between general contractors and subcontractors, and ensuring that we’re all working from the same page. It’s particularly challenging because there are just a lot of user errors and inefficiencies. And the really innovative companies that are really pushing the envelope, trying to get best practices and best processes utilized in their company, they aren’t satisfied with the current set of tools out there. It feels like these tools are disconnected and disjointed. And in trying to pull together all these disparate tools, it’s a real challenge.
Jennifer Piper: What key trends do you see emerging in the AEC industry? What do some of those challenges look like in a real-world setting?
Derek England: Some of the challenges for the construction companies that are in this are the profit margins are really thin. So, if you can compare it to automotive, aerospace, or machinery, the profit margins are on the level of retail. So, these are companies that must be really efficient; they don’t have room to go over budget and lose on these projects. But they also experience a lot of project overruns and delays because of issues that they discover on-site. But it’s also a really innovative industry.
Jennifer Piper: Can you tell us about some of the recent innovations you’ve seen?
Derek England: There are so many new innovations and improved software and new construction technologies. They’ve got stuff like some of the scanning technology. They’ve got 360-degree cameras. They’ve got drones that are scanning worksites, making this process of scanning just so much easier. They even have a robotic dog that walks around scanning stuff through hallways. It’s right out of sci-fi. It’s really cool stuff. We also see a lot of use of virtual reality now too. You see owner-operators are able to put on VR headsets and start immersing themselves in the design very early, which is great because when they’re there and they can see it, they can visualize it accurately. So, as things progress, they don’t say, “Oh, I’m surprised by this. I wish this was different. Maybe we should change this.” Because they know very early what the final result is. So, this gives us a much better way to interact with the owner-operators in fewer things.
Jennifer Piper: Are there any real-world examples you can give us of this kind of process at work?
Derek England: It was really cool, they have this one example where a guy sat down in a theater that they were designing and he said, “What does the stage look like from this vantage point?” And then he moved over or sat somewhere else and he could see what the stage look like from that vantage point. What are the beams or columns that are obstructing the view? And you could see that right from the seat. So, it was really fascinating and great use of VR technology.
Jennifer Piper: What advancements in this area are you seeing in regard to the metaverse?
Derek England: Metaverse is really cool because like in construction, software has its place; we design it, and then it goes off to construction, and you can use it to refer back to their original design and things like that. But metaverse is all design, it’s all software. So it gives you this, “This is our world now. Our software is used to design things.” And then you explore that world in the metaverse. So, really, this is a great opportunity for us. There is no construction site, it’s just software, just creating. So, it gives you a lot of flexibility for people too to explore and create these worlds that you couldn’t otherwise. You think about in LA, I like cars, the Petersen car museum is really cool. But most of the cars are down hidden away in a garage that you don’t really go see. Wouldn’t it be cool to have this infinite-size showroom where you can highlight different cars? So, instead of having a finite spot where you can showcase cars in their museum, you can have almost an infinite space to showcase things. So, the metaverse is really pretty exciting, and it really hits the target market for design.
Jennifer Piper: Are there any other particularly exciting themes you’ve been watching emerge?
Derek England: Modular and prefabricated construction. I mean, this is really evolving and accelerating. If you have to build on-site, you have to take a whole crew and move them somewhere, put them on-site for a period of time, and it can take a long time. Especially in remote areas, it’s really difficult. So, to be able to build in a factory setting and then assemble it on-site within a period of a day or two, that’s changing the industry.
Jennifer Piper: With all those innovations, what impact have you seen on the construction industry in particular?
Derek England: you see lots of these point solutions getting creative, so it does improve that particular need. But we also see construction productivity over the last 20 years hasn’t really improved, according to Deloitte. They did a study and they showed what’s going on productivity-wise in construction versus general machinery and then also automotive. And what you see is companies that are doing automotive, per person, they’re 60% more productive today than they were 20 years ago. But in construction, it really is still pretty flat. Now, it’s not just because of software, but it calls out that, basically, we’re not getting more efficient in the construction area; we’re pretty flat. And all these point solutions are improving little steps of the process. We’re not seeing the big dramatic gains as we see in automotive and other industries.
Jennifer Piper: Why do you think that is? That this new technology isn’t being implemented as expected?
Derek England: You do see companies are investing in improving their design processes. They really are trying to leverage these new capabilities. Sometimes it’s pushed by government regulations — like governments will say, “You need to have a 3D model to represent this project.” So, they are adapting it because they’re required to. But we still see the old same processes are still there as well — so, it’s like, “Yes, you need a 3D model, but I also want to have 2D drawings as well.” And the 2D drawing is the master. So, they are realizing some steps, small elements of improvement, but not big gains like you’d expect. And it’s a little bit mystifying because it’s not like they’re not spending money on software because the AEC design software business has been growing at a very high pace. So, the software is growing at 10% to 15% but productivity is not increasing by 10% to 15%. So, there’s a mismatch. It seems like, yes, we’re providing solutions here. But the solutions aren’t having a big impact, they’re having small impacts.
Jennifer Piper: You said there was a bit of an improvement in AEC productivity, but not nearly as much as other industries. Why do you think that might be?
Derek England: So, Deloitte estimates that there’s a 5% improvement over this time, and automotive is about 60%. So, there’s a dramatic difference there. CEOs are starting to scratch their head and say, “Why is there such a large discrepancy? What can we learn from these other industries? What can I learn from automotive? What can I learn from machinery? How do they do things? Is that something we can adopt? And is it so different that we can’t leverage some of their best practices and design production or manufacturing techniques in construction?” So, it’s a tricky question. They’re still struggling to try to figure out why aren’t we getting better productivity.
Jennifer Piper: Are there best practices used by other industries that can be leveraged in engineering and construction?
Derek England: Some things are unique with AEC. There are a lot of local regulations. So, you’ve got local, you’ve got state, you’ve got government, federal government type regulations for construction. So, some of those things take time to do inspections for all the different disciplines. That is an impact, and that doesn’t go decrease over time. It’s always more. So that’s impacting some of the productivity because you need to have these checks and balances as part of AEC. So, it’s not just on the software side. There are also challenges in the labor market. We’ve seen that for every two people that retire from the labor market, we’re only getting replaced by one. So, they’re struggling and they’re saying, “I need to be more productive. I have to get to this level where I can do twice as much with one person because that’s what I’ve got available to me now.” But in addition to that, there are so many opportunities for us to improve the design process in the digital space as well.
Jennifer Piper: With the lack of adoption and implementation so far, where do you see space for these improvements to be made?
Derek England: There’s this funny article. I’ve seen it on Huffington Post and I’ve seen it on Pinterest and things like that. It’s a RadioShack ad from 1991. This page shows 15 different products that were on sale for Presidents Day. And you look at all these products and they’re individual products. So they had things like a phone, they had an answering machine, they had a camera, they had a clock, they had an alarm clock, they had headphones, they had all these different products. And then you look at that now and 13 of the 15 of these products are probably on your smartphone right now. Your phone can certainly make phone calls, it can do voicemails, it can take pictures and videos, record your voice, it can play music, it’s a calculator, it tells the time and weather, it can be used for word processing and playing games. All these things can be done on your phone. So, over time, things got better. What’s really cool is that a lot of these things are integrated together. So, I have a contact, I can look up “Jen Piper” on my contact and I can just say “call her” immediately. I don’t have to write down her number, go over to a different device, and then call. If I wanted to take a picture and store that, it’s not like I have to take a picture, scan it, and then put it on my computer. All these things integrated together just offer a ton of benefits, that they’re all integrated together. And all these point solutions have really become obsolete.
Jennifer Piper: It really is pretty incredible how much those capabilities have changed over the last 30 years and the innovations that have been made. So, what can we learn from Radio Shack about the AEC market?
Derek England: Today, in the AEC software market, there are lots of these innovative capabilities being developed. And these companies, like I talked about, the AEC software companies are growing really fast, like 10% to 50%, who wouldn’t be envious of that? And it’s a highly profitable segment of the market. But with all these integrated individual tools that are disparate and don’t really work together, who’s left to do all the hard work to integrate all this stuff together? Well, it falls on the end user; he’s got to be the one who connects all the dots — like, “I’m going to integrate all these things together.”
Jennifer Piper: It seems like better, more cohesive integration might just be the key to this problem. Are you seeing steps being made to actively work toward this?
Derek England: Software vendors are beginning to recognize this weakness. Even last year, the Autodesk CEO, in response to an open letter to Autodesk saying “we’re frustrated” from the users, he basically came out and said, “Autodesk still has a lot of work to do on the technology that supports its products. The company has scores of different software titles used by different kinds of architects, engineers, and designs, and not all of them share data easily.” So, he laid out a five-year plan to put this thing together.
Jennifer Piper: Do you see that as a reasonable timeline for such a major advancement?
Derek England: As somebody who works in the software segment, and who have gone through many acquisitions in integrating the software into core software, it’s hard work; you have to get the data models lined up. And to be able to have this seamless, integrated ability to work seamlessly in between these applications, five years is credibly optimistic. It’s hard work. Or the other option is you don’t really build a tight integration and you have some kind of neutral file that you’re sharing behind the scenes, which doesn’t really give you a robust way to share data or build tight integrations between the product. So, it’s a lot of work to do by the AEC company side to pull together and integrate all these things. And we just haven’t seen an appetite in most AEC companies to integrate their products; they’re happy to have them be point solutions.
Jennifer Piper: So, if their productivity is so profoundly affected, why do you think there hasn’t been bigger pushback from these AEC companies?
Derek England: That was part of the open letter, but it is kind of quiet angst going on with the users. There was an open letter to the Autodesk CEO a couple of years ago, but you also see that presentations at conferences. HOK is this large US-based architectural engineering firm, and Greg Schleusner is the Director of Design and Technology, and his job is constantly valuing technology to make sure they have the best processes for HOK employees. And he gave this great presentation called “Road to Nowhere” based on the song, I think, by Talking Heads. And he used that as kind of his mantra. So, he was just talking about how you have this integration of products, and every single product is a place where you dump data into a hole. And then the humans are left to pick up the data out of one hole, configure it, and dump it into the next hole. And it’s just a constant process that is moving data from point A to point B, and they’re at the heart of the ones who have to move this data. And his feeling is like, “Why does the human have to be at the center of this to connect all these different tools?”
Jennifer Piper: Derek, with all these issues you’ve identified for us so far and the possible solutions, I’m curious about what you’re hearing first-hand from our Siemens customers.
Derek England: I noticed that we had these customers, not from our traditional industries like aerospace and automotive and machinery, that we’re using our product for doing things like bridge design, tunnels, or railways. And it got me curious, like, why are these companies using something that’s not a traditional BIM tool to do BIM work? BIM is Building Information Modeling. Most people see BIM as the pinnacle of “I’ve got a rich 3D representation of my model with all the information required for the manufacturing and construction embedded into the model.” That’s the information part of it. So, if you have that rich set of data, you can start to build this digital twin because you’ve got all the information on the design side that can be extracted and leveraged throughout this digital thread, through the whole digital twin.
Jennifer Piper: And what was the feedback that you got from them?
Derek England: I’ve met with several of these customers, and I’ve been working with them over the years now. For example, Max Bögl, they are a 100-year-old German construction company. One of the largest construction companies in Germany. It’s a $2 billion annual revenue company in Germany. About 10 to 15 years ago, they realized that their designs were becoming really complex, and it was really too difficult and air prone to design, document, and manufacture complex designs with their current set of tools. So, they said, “Well, what would happen if we explored an integrated set of tools?” So, they initially started with NX for manufacturing, and then they realized, “Well, there are a lot of benefits if I have an integrated solution between the design and the manufacturing. Whenever I make a change in the design, the manufacturing just updates. And then the same with simulation as well; if I make a change to the model, I don’t have to go reapply all the boundary conditions or loads anymore, I can just update them because I’ve got an integrated set of tools.” And it just saved them so much time that they decided that we’re going to go with NX and start using NX more and more. And then when it came time for their modular department, Max Modul, they said, “Well, we need to integrate the structural, we need to do electrical, we need to do piping, we need to do concrete. There are all these different disciplines together, what do we use?” So, they decided to go ahead and use NX. For them, they say, “Teamcenter and NX is really the ultimate BIM solution.
Jennifer Piper: So, it seems like that concept of collaboration between technologies really remains the key piece to the whole puzzle.
Derek England: I just bought a used home, it was about 20 years old, and everything needed to be replaced. When I did it, I replaced all the appliances. It was like, “I’m gonna do high-end appliances.” I did all the smart appliances. So I have a smart oven, a smart fridge, a smart washer and dryer, a smart lock on the front door, I’ve got a smart doorbell, I’ve got a smart thermostat, and I’m like, “Man, this is so cool.” Even got my teenage son’s attention, he’s like, “Dad, it’s so cool! We’ve got a smart house.” So, my son was telling me how cool our smart house was. I think the washer stopped, the cycle was over, and it popped up on my TV screen. And he’s like, “Oh, Dad, it told me my washing was done on the TV.” It’s so cool to have a smart house. And my wife, she’s always very skeptical, and so she said, “Oh, how smart is it?” She goes, “Alexa, turn the thermostat down to 75 degrees.” And then Alexa says, “I don’t know what you’re talking about.” So, how smart really was this? And yes, eventually, I could build that integration. I could teach Alexa how to interoperate with these things. And that’s effectively what a lot of these companies are doing. The tools don’t naturally talk to each other out of the box, so you have to teach them and there’s a lot of rework, and there’s customization that needs to occur.
Jennifer Piper: And that integration isn’t necessarily the simplest thing to implement, is it?
Derek England: That’s the challenge is that you have these great individual solutions, and they can kind of talk to each other. But when you roll it all up, do you have that smart, tightly-integrated set of products? And that’s the challenge that we see. That’s just my house. Imagine what a building has to do with fire sensors and plumbing for fire suppression, understanding whether doors are open or closed — all these things that need to be monitored. And who’s going to monitor it? How do you pull this together?
Jennifer Piper: I would imagine it’s even more complex, then, on the AEC level.
Derek England: They have these capabilities for electrical, they have capabilities for plumbing, and they have ones for HVAC and structural steel, all of these things, they have these individual tools. And then on top of that, you need to analyze how they work together, and then you need to simulate that. It’s a really difficult situation trying to integrate all these tools to get a good solution. It feels a little bit like some of the software vendors are a little adept to this challenge. It’s only now being highlighted in the last six months that you hear anyone talking about this challenge. But it’s really at the heart of where these challenges occur and the lack of productivity, achieving improved productivity. I think that’s really at the heart of why we can’t improve productivity.
Jennifer Piper: You mentioned briefly before the use of the digital twin. I’d like to know how integrated, multi-discipline BIM design works with the digital twin?
Derek England: The BIM is really just the capturing of the data, making sure you have all the data in one location with all the information required to flow downstream. So, the digital twin really enables the loopback mechanism. So, I want to make sure that if I find issues during the construction process, I can build that back into my original design so that future projects will look for these issues and ensure that we avoid these issues. So, the digital twin really enables me to capture this information and knowledge and embed it so that next time I could learn and be better and more productive.
Jennifer Piper: Can you expand a bit on that concept of the digital twin as a loopback mechanism?
Derek England: Today, every single project is a bespoke project. And it feels like we tend to make the same mistakes over and over again because we’re not able to learn to put into our design process the things we learned from past projects. That’s what the digital twin enables us to do. It enables us to actually realistically simulate in the physical world in the digital space. So, if I had a problem in the physical world, I could go immediately to my digital twin and say, “Okay, what’s impacting that? What’s connected to that?” And I can find everything that’s associated with that problem because it’s all tied together with a digital twin. So, that’s a little bit about digital twin. The digital thread, we don’t talk a lot about like in the area of AEC, but it really is the ability to flow this information between all the applications. Today, there’s talk about open BIM, having a standard that basically everybody writes to so we can all read this. So, today, things like neutral file formats like IFC are promoting openness. So, if everyone outputs IFC, that’s great, and then we can read this information. And a lot of that data is preserved BIM information that’s embedded into the geometry, and then you have the geometry as well. But really, what’s the level of integration there? Am I going to be able to identify, like, manufacturing operations were applied to this face here during a change? Am I going to understand how to react to that change? What about the labeling of faces and edges to enable simulation to update automatically when I make a change? So, that digital thread, you want it to be really robust so that when you make a change, it propagates to all the applications.
Jennifer Piper: Before we go, I’d like to look forward a bit. Where do you see some of these AEC trends taking us?
Derek England: Definitely, like we talked about today, integration between disciplines has to improve. I think that’s a huge inhibitor to making great productivity gains. Currently, you hear a lot of vendors talk about an open standard. And that’s really the easiest thing to do is I don’t have to worry about integrating it; I just output something and then somebody else has to move it from one application to the next. So, a lot of people talk about this open standard, but not really taking accountability of how that’s going to work with the next downstream application. So, I think that’s what’s going to change as people are not going to be happy having a person at the center of this, moving data from here to here, and having to do the hard work of integrating and finding changes. That’s hard work and there’s no value added there, it’s just trying to replicate what I have in this system in this other system. And I have a lot of work to do that. And I don’t want to have to do that, nobody wants to do that.
Jennifer Piper: Where do you see an end-point for that integration obstacle?
Derek England: Today, people are still convinced that this best-in-breed type solution where I buy an application that’s hyperfocus does exactly what I want to do. And for somebody that does steel structures, that’s all I do, it’s great, I just used this, and then I throw it over the wall to my general contractor and say, “You deal with it now.” And so the general contractor has to deal with it. And if there are issues or changes, he has to communicate it back to that person. So, if everybody uses their own tool, it just throws it over the wall, that mentality can’t exist in the future. There has to be this idea of integration. And you see this more. It used to be very design, bid, build — that was the working method in this industry. Now you see a lot more design and build. So, the person who designs it has to also build it. So, there is more collaboration working now, but it’s still being done with disparate tools. And when you try to do with disparate tools, and you’re trying to use some kind of common open tool to open format to connect these things, the whole process is only as good as your weakest link. So, I feel like things will get better a little bit by a little bit, and then somebody is just going to say, “This is not workable. This is not scalable. I need to have a tightly-integrated solution. I need a software vendor who’s going to understand this and provide me with an integrated set of tools so I can accomplish these things and make changes very easily.” And the impact of these changes are well-understood and communicated to all the different downstream applications. So, I think you’ll see a lot more people looking to say, “Okay, I understand, we need to look at this holistically, not discipline by discipline.”
Jennifer Piper: So, Derek, this is just part one of our conversation. I wonder, can you give our listeners a preview of what we’re going to talk about in the next installment?
Derek England: We’re going to talk about collaboration between people. Today, we talked a lot about the collaboration of tools and different software. But tomorrow, we’re going to talk about just the challenges with people collaborating together and working together in a shared space.
Jennifer Piper: Thank you so much to Derek for joining us today, and please stay tuned to Next Generation Design for part two of our three-part conversation with him. Thanks also to our listeners for tuning in to today’s episode. Join us next time for more discussions about the latest in design innovation and software applications. I’m your host, Jennifer Piper, and this has been Next Generation Design.
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