Changing Mindset

September 30, 2018

undefinedHerbert Fuchs has worked for some of the biggest companies in the world. General Electric and McDonald’s are just two of the big names that adorn his CV following a career that has seen him pass through industries as diverse as retail, lifesciences and shipping. Now, for the first time, Fuchs is tasked with bringing his particular set of skills to the construction industry. His challenge is to bring change to a sector notoriously resistant to it. It’s clear he has his work cut out for him.

ASGC hired Fuchs as its first chief information officer (CIO) last year with a brief to drive the company’s transformation into an organisation fit for the digital age. His introduction represents the next phase of the Dubai-based contractor’s recent evolution, which began under the leadership of current CEO Bishoy Azmy. On his watch the company has gone from focusing on traditional buildings to working on more complex projects, mainly for government-related entities in Dubai. Its roster now includes landmark projects like Etihad Museum, The Mohammed bin Rashid Library, Dubai Arena, Citywalk and Bluewaters Island among others. For this contractor, plain vanilla projects have become the exception rather than the norm.

When it comes to embracing technology, construction is ‘by far’ the most conservative industry Fuchs has ever worked in, he says reflecting on just over a year in the job. He describes what he found upon arriving at ASGC as almost like a ‘greenfield’ opportunity, a blank slate for him to work with. And in Azmy he found an enthusiastic backer willing to give him the support he needs to make his mark. The pair connected through a mutual acquaintance and immediately hit it off.

“The chemistry worked and we realised we seemed to be on the same page in terms of what we envisioned could be done in this industry,” says Fuchs. “He’s a very young, visionary gentleman and understands that there’s plenty of opportunity now in our industry to do things differently, to do things more cost effective, to automate, and to simplify processes.”  

Despite being faced with a huge amount to do, Fuchs defined a two-year digital transformation period, believing that to take any longer would risk some of the technology becoming irrelevant. He looked for the quick wins first, the low hanging fruit, giving himself more time to introduce complex changes.

undefinedSolutions deployed during his first year include an ERP (Enterprise Resource Planning) system for the entire ASGC group of companies. In addition to contracting, ASGC Group has subsidiaries covering MEP, interiors, steel engineering, concrete readymix, hardcast building systems and hard block manufacturing. These companies provide services to ASGC as well as to other companies in the market so it’s important they are profitable in their own right. Other initiatives Fuchs introduced included migrating core infrastructure into a cloud environment, deploying a corporate intranet and social platform and introducing a human capital management system.

Admittedly, these solutions are pretty standard and not specific to the construction industry. However Fuchs also deployed a brand new time and attendance system for ASGC’s 13,000 labourers. Not only that but it uses Internet of Things (IoT) technology to monitor labour productivity and safety as well as equipment tracking. It’s here that Fuchs believes that technology can make the biggest difference to the company’s operations.

“These are projects that directly touch our core business where I believe we’ve got real opportunity in terms of efficiency and cost optimisation,” says Fuchs. “When it comes to bespoke or industry specific solutions, we’re talking about labour related stuff such as safety and productivity. How people roam around, how people are assigned to tasks, how productivity is being measured. These are definitely areas where you can see a difference between a retail or manufacturing environment or a construction environment.”

Optimising labour activity begins with ensuring that workers get from their camp to the building site as quickly as possible. But it also means tracking movement on site, knowing whether a worker is in a productive zone or a rest zone or in a clinic if there has been an incident. Essentially, it involves monitoring the productivity of a worker relative to the task they’ve been assigned to do. The traditional way of doing this on a building site isn’t very efficient, Fuchs says.

“In construction everything is still very manual,” he says. “You’ve got someone with a sheet of paper assigning tasks and someone at the end of the day or the week checking manually on paper if they delivered what they were supposed to. Using this technology to keep track of people on site we know their idle times, their production times and how they deliver against the task they’ve been assigned.”

Another important benefit is the ability to monitor health and safety standards. For example, what if someone trained to work on the ground floor ends up working on the fifth floor using equipment they are not trained to operate?

Staying ahead of the field

undefinedASGC hopes that adoption of this technology will give it an early mover advantage over other construction companies in this region.

“It’s the goal of my boss to be among the early adapters to try to leverage these competitive benefits as soon as possible,” Fuchs says. “I think it’s fair to say that when we compare ourselves to our competitors we are very well positioned in terms of new projects, the profit margin that we have and so on. We want to do things before the others are doing them in order for us to have even more benefit because construction is a single digit profit margin business. So it makes a big difference whether you make 6% or 8%. The sooner we can do that compared to the competition the better.”

As you’d expect, introducing a host of new innovations on such a scale and in a short space of time involves a significant up-front investment. However Fuchs insists that the ROI is months rather than years. He strongly believes that technology has the potential to optimise labour productivity by as much as 20% by ensuring the right number of people are assigned to any given job and that properly qualified individuals are assigned to each task. “In many cases we may assign a more expensive resource to a task that requires less experience or expertise,” he says. “By eliminating mistakes you already have an opportunity optimised in your cost.”

Fuchs says he has already accomplished a lot with a relatively small team in a short time. And he’s optimistic that by the end of 2018, he will have laid solid foundations for the years ahead. However introducing fundamental change into an organisation demands flexible people, Fuchs says. One of the biggest obstacles to change is if people are set in their ways with a mentality of ‘we’ve always done it this way so why should we change now?’ But Fuchs says Azmy has delivered a clear message that, without a willingness to change, the company could become irrelevant in five year’s time.

With that in mind ASGC is considering how it can diversify its operations even further, which could enable it to overcome any road bumps in the next few years. This approach even extends to looking outside the world of construction.

“I strongly believe that by 2020, with Expo being done there’s going to be a slowdown in construction,” says Fuchs. “How many more hotel apartments does Dubai really need? There’s a limit to all of that. We need to be honest enough with ourselves to think about how we have to evolve as a company. What other business lines can we establish and how can we grow? There is an open mind about doing other things. We’ve started looking into alternative businesses and also international expansion and we’ve identified a number of great growth opportunities.”

Clearly, ASGC is laying the groundwork for its future in more ways than one.

 

 

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