Evolving Expectations in the Industrial Sector
In an age where online orders can be delivered within hours of purchase, speed is the name of the game. Over the last five years, industrial facilities have transformed from rudimentary pick-and-pull systems to sophisticated, AI-informed structures that can move products over 40 miles per hour. With so much change in so little time, how are construction partners keeping up with the rapid changes, exciting innovations, and unfolding challenges of building in the industrial sector?
BALANCING ACT
With a rise in ecommerce and cutthroat competition between retailers, the demand for industrial buildings—and the materials they’re constructed with—has never been higher. Today, contractors are managing unprecedented lead times and supply shortages while trying to deliver a predictable price, schedule, and outcome for their clients.
Eric Nay, Executive Vice President, National Building Group, Layton Construction
“The industrial market today is rapidly changing, fast-paced, and increasingly transactional in nature wherein our approach has also evolved to deliver a more comprehensive approach to information management, innovative technical tools in estimating and on-site, and integrating real-time data into our decision-making processes. We’re bidding, building, and turning over projects across the country which creates a very large net of information, pricing, intuitive variabilities, and valuable data that drives more predictability to our projects in any region. We embrace the collection and utilization of data in our processes and strategies as a major differentiator for the outcomes of our customers.”
“It’s unbelievable the amount of technology that is integrated into industrial buildings now, and the material handling equipment (MHE) vendors are much more integrated in our processes than they used to be. Our MHE partners are involved early in our pull planning sessions, and we coordinate with them on their needs for utilities, power upgrades, phased turnovers, and safety on every project. These automation systems are so complex and so critical to the success of the project that often our job as the general contractor is to not only ensure the success of the core, shell, and fit-out, but also to ensure the MHE installation is commissioned successfully. This focus on MHE integration is part of our dedication to our customers’ success.”
PRIORITIZING TEAMWORK
To succeed in this continually evolving sector, industrial contractors are focusing more and more on building the perfect team. From meticulously vetting subcontractors to incorporating owner-supplied vendors into the building process, working hand in hand with the right partners is key.
CARBON COMMITMENTS
Sustainability has become a major consideration in the industrial space. With ambitious goals to minimize the sector’s environmental impact, industrial clients are turning to their building partner to help them build green.
Scott Frank, Project Executive, LF Driscoll
“When building in a new market, we are extremely careful in soliciting subcontractors. We look into their previous work, discuss their current workload, and most importantly, help them understand the requirements and deliverables of the project so they can manage their resources. It’s about ensuring an ontime, top quality result for our clients while also helping our sub partners understand that these jobs aren’t just 16 to 17 months long—they’re marathons.”
“Our clients are committed to delivering on their sustainability commitments, and we do everything we can throughout construction to make sure those goals stay on track. We’re not just tracking what happens on-site, we’re looking at the embodied carbon required produce and deliver each material. On a recent project, we even developed an off-site recycling yard because there wasn’t a local waste management company that could recycle our construction materials without added cost to the owner.”
CLOSER TO CUSTOMERS
As clients continue to lean into the last-mile delivery model, industrial space in metropolitan markets is becoming more scarce—and expensive. In an industry where time, money, and space need to be completely optimized, contractors are getting innovative in order to deliver the speed to market this sector demands.
Jeff McKinnon, Senior Director of Corporate Development, Govan Brown
“For our industrial clients, proximity to the end user is extremely important. We’re seeing quite a few malls in the Canadian market being repositioned for that type of last-mile delivery. Cost per acre of industrial land is also higher than ever, so maximizing the density of these industrial facilities has become a key part of the conversation. In Toronto, there are several proposed multi-story industrial projects, which used to be unheard of. Vancouver is also seeing multi-story industrial builds starting up as well.”
“Sustainability and environmental, social, and governance (ESG) initiatives have become top of mind for a lot of our clients. Whether they’re aiming to be carbon neutral by 2040 or trying to reduce their footprint in general, it’s our job to support those goals during the construction process, both on the procurement side and the building side.”
Jason Quinn, Senior Vice President of Estimating, Pavarini McGovern
“Here in New York City, we’re seeing a lot more adaptive reuse across the five boroughs. With existing framing and foundations, and the right loading and column spacing, we’re able to get our clients moved in much faster than with a typical, out of the ground job.”
“One of the ways we’ve been able to manage the scheduling and cost impacts of the supply chain is by leveraging STO Building Group (STOBG)’s national network and expertise, while leaning on local relationships. Being able to pair that national data with our local knowledge of the subcontractor base is a huge benefit when navigating these supply chain challenges.”