Is there a place for AI in precast?

Hello again and welcome back to Connected Concrete. I am writing this while waiting for my flight on the way back from attending the Precast/Prestressed Concrete Institute CEO Summit. (Great conference PCI!) It seems that Midway Airport is becoming my writing place!

I had planned on writing about the capabilities of AI and how they will advance more quickly than most people expect, transforming virtually every industry over the next five years.

However, the conversations at the CEO Summit provided me with a different slant. I will draw from what was discussed at the Summit and relate how AI will:

• Provide new market opportunities; and
• Address some of the construction industry's most pressing problems.

What'd ya learn?

Listening to industry CEOs and presenters over the past two days I learned that:

1. The macro market for construction has held up recently and the outlook for the next 5 years is good due to the Infrastructure Investment & Jobs Act (though IIJA funds have been slow to flow);
2. There is a need to promote overall industry growth through the value proposition of precast concrete, not just federal funding;
3. The biggest industry problem is labor- hiring and retention; and
4. That old ways of doing things need to be reconsidered in order to adapt to changing markets and the labor problem.

Maybe it is similar to seeing many others driving the same car you just bought, but I was actually surprised to see how AI found its way directly or indirectly into each of these.

How so?

In the following ways...

The macro market has held up and the outlook is good.

Ken Simonson , Chief Economist of the Associated General Contractors of America, provided a presentation on the state of the economy and, specifically, the construction market. His presentation included one detail that caught the group's attention. Construction of data centers has increased by more than 60% year over year. This was 3x the growth of the second leading sector. Suspecting I knew the answer, I asked what was considered to be the underlying driver of this construction activity. Not surprisingly, large data centers are being constructed to offer data-intensive AI services.

Pierre G Villere , principal of Allen-Villere Partners (a mergers and acquisition firm specializing in building products), provided his assessment of the state of the market. He is very positive about the macro outlook for the construction market. His view is that we are in a continuation of a 40+ year period of technology-driven productivity gains from the following technology advances:

• Personal computer;
• Internet;
• Cellular telephony; and now (wait for it...)
• AI

Need for growth through the value proposition of prestressed concrete.

The group consensus was that the industry needs to continually promote itself as a superior alternative to other materials and means of construction (timber and pour-in-place concrete, to name two). In the course of discussion, some members disclosed that they had found opportunities in niche sectors where the precision of precast pieces is integral to the construction process. Two CEOs spoke of success they've had in constructing microchip manufacturing facilities. In my conversation with Perri Petricca , I learned that Unistress has become recognized as a leader in this niche.

How does this relate to AI?

The manufacturing facilities are being constructed to develop the advanced microchips necessary to support AI services.

The industry's biggest problem is finding and retaining labor.

No surprise here.

Discussion about solutions boiled down to three themes:

• Develop internal cultures that prioritize training and internal support;
• Working closely with local high schools, community colleges and universities; and
• Automation

AI was not specifically discussed in this context but it is a natural tool for the training, internal support and administrative automation that will be integral to achieving these solutions.

I suspect that AI will first find its way into precast by offering ways that can enable precast manufacturers to do more with less dependence on the availability of labor and skills, including:

1. Designing the most efficient workflow processes;
2. Creating the most efficient production scheduling;
3. Providing immediate feedback in training and on-the-job support; and
4. Enabling self-help training programs for skill building and professional development.

The old ways of doing things must be reconsidered.

The discussions revealed great awareness that the world is in a period of rapid change. Naturally, there was some palpable discomfort with the unknown that this creates.

But an understanding that old solutions do not necessarily apply to current challenges was evident in listening to these industry leaders.

While there was no specific mention of AI in these discussions either, it was clear that many CEOs are open to considering solutions that have not been tried before. (After all, isn't that what real leadership is?)

This is so important to the future of the industry because AI is coming with a speed and impact that we can't really comprehend right now.

Next up, EOS

I love reading books about business models and novel business practices. When Cheryl Lang and Chad Petro praised the book, Traction, in a side conversation at the Summit, I was intrigued.

I've already started reading it and am immersed. In my next post, I will pass on what I learn about the Entreprenerial Operating System, author Gino Wickman's simple management system for producing greater focus, improved internal communication and accelerated growth.

Until then, thanks for reading and have a great weekend!

Jeff