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Introduction of innovative technical solutions in construction on the basis of the concept of engineering To cite this article: Alexandr Orlov 2018 IOP Conf. Ser.: Mater. Sci. Eng. 365 062020

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FORM 2018 IOP Publishing

IOP Conf. Series: Materials Science and Engineering 365 (2018) 062020 doi:10.1088/1757-899X/365/6/062020

Introduction of innovative technical solutions in construction

on the basis of the concept of engineering

Alexandr Orlov

Moscow State University of Civil Engineering, 129337, Yaroslavskoye shosse, 26,

Moscow, Russia

E-mail: [email protected]

Abstract. Introduction of innovative technical solutions in construction is an important

element in improving the competitiveness of construction companies. The main impediments

to the introduction of innovations in construction were defined. The concept of engineering in

construction is disclosed, and a possibility of using it as a development instrument in

construction to solve the actual problem related to increasing the operating efficiency of

construction process participants was analysed. The purpose of the article is to define a

mechanism for the assessment of the effectiveness of innovative technical solutions

introduction in construction on the basis of the concept of engineering. The article uses data on

the results of the research in the area of studying of modern innovative solutions in

construction conducted in 2017. Over 50 solutions were analysed, including new and improved

building materials, constructions, technological solutions, modern solutions in the area of

building engineering systems. A comparative express analysis of traditional and innovative

solutions by qualitative characteristics, novelty and efficiency was carried out. The results of

the study made it possible to define a set of basic options for effectiveness evaluation for

different types of innovative technical solutions in construction, including local solutions and

complex ones that can have a significant impact on the effectiveness of a construction project

as a whole. A mechanism for the selection of innovative technical solutions in construction on

the basis of developed criteria for an effective engineering solution was proposed. The

necessity of assessing the efficiency of innovative technical solutions in construction at all

stages of the life cycle of a piece of property considering the total cost of ownership was

substantiated. Principal directions for the integration of engineering instruments into the

activities of development companies in construction were proposed.

1. Introduction

In modern economic conditions the problem number one is to ensure the competitiveness of

construction companies [1, 2]. This applies to all participants of the investment and construction sector

- from manufacturers of building materials to contractors and developers responsible for the final

result of construction projects implementation. The most important issue in increasing the competitive

advantage is introduction of innovative solutions in the construction sector [3-5]. At the same time

innovations can be divided into two types by nature: these are technical innovations [6, 7] and

innovations in the area of final product value. Technical innovations include production of new or

improved building materials, use of modern machinery and mechanisms in the construction process,

introduction of new technologies in construction. In turn, value innovation is a specific type of

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FORM 2018 IOP Publishing

IOP Conf. Series: Materials Science and Engineering 365 (2018) 062020 doi:10.1088/1757-899X/365/6/062020

innovation [8-10], which development is based on the Blue Ocean Strategy concept and involves

creation of new value and utility to the consumer, sometimes without introduction of significant

technological innovations. This concept is used in various fields of activity, including construction. As

examples of value innovation one can mention projects in the area of residential real estate [11, 12],

including SMART housing [13] implemented in the Russian Federation. Since technical and

technological aspects of new solutions in construction are primarily considered within the framework

of this article, the first type of innovation was chosen as the subject of research.

Considering the process of construction from the point of view of a developer, one should note the

relevance of principles of green [14, 15] and sustainable [16-18] construction. The main elements of

the concept of sustainable construction are presented in Figure 1.

Figure 1. The concept of sustainable construction

In order to follow the principles of sustainable construction to the fullest extent and ensure

competitiveness in the long run, developers need to work over three elements of effectiveness: cost,

construction project implementation time and the quality of products (finished construction project).

Introduction of technological innovation, as previously noted, is a tool for competitiveness provision,

which helps improving one or more elements of effectiveness, as is the case with additive technologies

[19, 20], under certain conditions, reduce construction time and simultaneously reduce construction

costs.

It should be noted that the main obstacles to the introduction of technical innovation solutions in

construction are as follows:

 An increased level of risk and uncertainty when working with innovative technologies.

 Lack of necessary experience of investment and construction process participants (designers, general contractors, subcontractors, etc.) when working with an innovative

solution.

 Complexity of assessment of the effectiveness of innovative technical solutions, especially in conditions of insufficient initial data for the calculation.

 In a number of cases there are problems of underdevelopment of innovative solutions introduced into mass production, which causes their low quality and inefficiency.

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FORM 2018 IOP Publishing

IOP Conf. Series: Materials Science and Engineering 365 (2018) 062020 doi:10.1088/1757-899X/365/6/062020

 High cost of innovative solutions at the initial stages of introduction into production. To overcome these obstacles and ensure a more reasonable assessment of the effectiveness of

innovative technical solutions, it is proposed to use engineering tools. The concept of engineering is

considered in this paper as a conceptual approach, on which developer's activities should be based.

The purpose of the article is to form a mechanism for the assessment of the effectiveness of innovative

technical solutions introduction in construction on the basis of the concept of engineering.

2. Materials and methods

The methodological base of the research is presented by methods of scientific analysis and synthesis,

qualitative and quantitative analysis, includes statistical processing of the data used. To assess the

effectiveness of innovative solutions, we used comparative analysis, tools for technical and economic

analysis and investment evaluation.

The research is based on the use of the concept of engineering. When it comes to the concept of

engineering, it is widely used in various sectors: power engineering, machine building, chemical

industry, high technologies. The methodology and engineering tools are actively used in the

construction industry. However, the concept of engineering is rather blurry. It can include various

types of activities in the area of construction: civil engineering, engineering construction [21, 22], re-

engineering construction [23, 24]. The term of engineering can also be used to refer to various job

profiles, such as, a construction engineer and a civil engineer.

Within the framework of this paper engineering is considered as a more global conceptual model,

an activity aimed at an increase in the effectiveness of implementation of projects in the area of

construction based on introduction of optimal innovative solutions. In turn, the concept of engineering

takes into account main provisions of lean construction, value management in construction and

effective quality management in construction.

For the purposes of correct assessment of the effectiveness of technical solutions, it is proposed to

use the model of the overall life cycle of the facility, which includes the pre-investment and

investment stages, the operation stage followed by subsequent reproduction and/or utilization of the

item of immovable property.

Criteria for the selection of an effective technical innovation solution (K1, K2, K3) presented on

Figure 2.

Based on the identified criteria research work on the collection and systematization of information

about innovative technical solutions in the area of construction, implemented or planned to be

implemented in Russia was carried out in 2017. New or improved building materials and structures,

equipment, construction technologies were considered as solutions. In total, 56 innovative solutions in

construction were considered, which correspond to the preliminary analysis, criteria of novelty and

quality. As sources of initial information mainly secondary data were used for the research:

information provided by developers of innovative solutions and, if available, reviews of such solutions

in scientific and technical publications, as well as testimonials of construction companies having

experience of working with data technology solutions. As a result, taking into account available initial

data for each innovation, a rapid analysis of their efficiency was carried out in comparison with

conventional technical solutions. The aim of the research was to systematize information on

innovative solutions in construction and justification of the general methodological approach to the

assessment of the effectiveness of introduction of innovative technical solutions in construction on the

basis of the concept of engineering.

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IOP Conf. Series: Materials Science and Engineering 365 (2018) 062020 doi:10.1088/1757-899X/365/6/062020

Figure 2. Criteria for the selection of an effective technical innovation solution

3. Results

Types of considered innovative solutions are presented in Table 1.

Table 1. Types of innovative solutions

Type of innovation Number of

solutions,

pcs

Share of

effective

solutions, %

Thermal insulation

materials

12 91.7

Glazing with special

properties

10 80.0

Waterproofing

materials

8 100.0

Sound insulation

materials

5 100.0

Construction

materials

5 100.0

Engineering

equipment

6 100.0

Technological

solutions

2 100.0

Integrated solutions 8 100.0

The effectiveness of an innovative solution was considered in relation to the implementation of a

particular building solution, and this solution was considered effective if the final result from

introduction in accordance (1) (c) exceeded zero (for all solutions, except integrated ones). Integrated

solutions are solutions that presupposed introduction of a set of innovations (a minimum of three)

within the framework of one construction project, while the total costs for these solutions amounted to

at least 15% of the total investment budget of the project. In this case, effective solution were solutions

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FORM 2018 IOP Publishing

IOP Conf. Series: Materials Science and Engineering 365 (2018) 062020 doi:10.1088/1757-899X/365/6/062020

that ensured an increase in the net present value (NPV) relative to the option without applying

innovations.

Then, all considered effective innovations, except integrated ones, were combined into one group -

local innovative solutions. The impact of all solutions - both local and integrated - on project NVP was

assessed, and standard deviation as well as error margin for the confidence level of 95% were

calculated. The results are presented in Table 2.

Table 2. Efficiency of innovative solutions

Group of

innovations

Number of

solutions

𝑑𝑁𝑉𝑃̅̅ ̅̅ ̅̅ ̅̅ , % Standard

deviation (S)

Limit of error

Local 45 0.23 0.15 0.04

Integrated 8 2.03 0.41 0.29

In spite of the fact that sampling for integrated innovative solutions was small, it can be concluded

that it is reasonable to assess these solutions by changes in economic efficiency indicators, such as

NVP, internal rate of return (IRR), payback period (PP) and profitability index (PI), provided that they

make a substantive contribution to the investment value of the project. In general, the following

conditions (2) shall be fulfilled when calculating all these indicators:

( ) 0

( ) 0

( ) 0

( ) 0

inn tr

inn tr

inn tr

inn tr

dNPV NPV NPV

dIRR IRR IRR

dPP PP PP

dPI PI PI

    

    

       

(1)

Where: indicators followed by inn are calculated for the construction project taking into account an

integrated innovative solution.

indicators followed by tr - without this solution, using traditional materials, constructive,

technological solutions, machinery and mechanisms.

When conducting a rapid assessment, it is possible to use one of the above indicators (usually IRR

or NPV).

The following expression presented in its general form (3) should be used for local innovative

solutions:

 1 tr inn

tr inn

tr inn

I I E dI dC A C C A

t t

          

  (2)

Where: E1 is the overall economic effect from the implementation of the innovative solution (rubles

per 1 year of the planned life cycle of the innovative solution).

dI is a change in specific investment costs when implementing the innovative solution (rubles per 1

year of the planned life cycle of the innovative solution).

dC is a change in annual costs associated with the operation and maintenance of the innovative

solution during its implementation (rubles per 1 year of the planned life cycle of the innovative

solution).

Itr is costs at the investment stage associated with the implementation of the traditional solution

(rubles).

ttr is the life of the traditional solution (years).

Iinn is costs at the investment stage associated with the implementation of the innovative solution

(rubles).

tinn is the life of the innovative solution (years).

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FORM 2018 IOP Publishing

IOP Conf. Series: Materials Science and Engineering 365 (2018) 062020 doi:10.1088/1757-899X/365/6/062020

Ctr is annual costs associated with the operation and maintenance of the traditional solution (rubles

per 1 year of the planned life of the traditional solution).

Cinn is annual costs associated with the operation and maintenance of the innovative solution (rubles

per 1 year of the planned life of the traditional solution).

A is additional annual benefits (if any) associated with the introduction of technical innovation

(rubles per 1 year of the planned life cycle of the innovative solution).

When E1> 0, we can talk about the expediency of implementation of the innovative solution. It

should be borne in mind, however, that the expression (2) can be transformed as follows (3) for

solutions associated with the use of innovative machinery and mechanisms at the construction phase,

new technological solutions, where there is no effect at the operational stage:

2 E dI dT  (3)

Where E2 is the overall economic effect from the implementation of the innovative solution

(rubles).

dI is a relative change (decrease) in investment costs when implementing the innovative solution

(rubles).

dT is an additional effect associated with the reduction in the duration of the investment project, if

any (rubles). This effect can be indicatively calculated by means of saving funds allocated to servicing

debt financing of construction (rubles).

In some cases introduction of an innovative solution can be feasible even if E1<0. Typically, this

refers to a situation when an increase in costs (both investment and operational) is accompanied by a

more significant increase in qualitative characteristics of a construction object, and this increase is

critical from the point of view of the developer and owner of the object. This applies particularly to

specialized real estate, infrastructure facilities and facilities, to which hightened requirements for

security provision are imposed, such as nuclear power plants.

In this case, to evaluate the feasibility of implementation of an engineering solution, the following

formula (4) can be used:

e

dQ K

dZ  (4)

Where Ke is an indicator of the effectiveness of the engineering solution.

dQ is an increase in the integral performance index in case of implementation of the innovative

solution (in %, can be calculated on the basis of expert estimates).

dZ is an increase in the total unit costs for the implementation of the engineering solution,

including investment and operational costs per 1 year of the planned life cycle of the innovative

solution.

Value Ke> 1 is the condition for the expediency.

Based on the results obtained, a generalized mechanism to evaluate the effectiveness of

implementation of innovative technical solutions in construction on the basis of concept engineering

was proposed. The algorithm of assessment carried out at the level of the project developer is shown in

Figure 3.

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FORM 2018 IOP Publishing

IOP Conf. Series: Materials Science and Engineering 365 (2018) 062020 doi:10.1088/1757-899X/365/6/062020

Figure 3. Assessment of the effectiveness of innovative technical solutions

4. Conclusions

The obtained results can be used by development companies within the framework of justification of

the effectiveness of the innovative solutions used. The proposed mechanism for rapid assessment of

the effectiveness of innovative technical solutions in construction allows integrating engineering tools

into development and, in the long term, result in increased competitiveness.

It should be noted, however, that the solutions proposed in the paper require additional elaboration

and refinement. In particular, the task related to the assessment of the effectiveness of innovative

solutions at different stages of the life cycle of the innovation solution including an analysis of

possible risks and opportunities is in priority. On the one hand, introduction of the most advanced and

promising developments in the area of construction can create additional competitive advantages for

the participants of the investment and construction process. On the other hand, qualitative and

reasoned initial data for the qualitative assessment of the effectiveness of proposed solutions are

usually missing at early stages of an innovation life cycle.

It should also be taken into account that introduction of technical innovations is an important but

not the only one tool to ensure competitiveness in construction. Within the framework of this article,

other aspects of increasing the effectiveness of development activities, such as value innovation, HR

management, GR (government relations) and other management tools in the investment and

construction sphere were not considered.

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pp 842-59

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