One of the first things we did at Spar Point was to develop a framework for the cost/benefit analysis of using laser scanning-based methods to capture existing-conditions data. Since then our research has let us start to quantify these benefits. Before we get into the arithmetic, please beware that the arguments that follow are based on order-of-magnitude estimates. We think the arguments hold regardless of this uncertainty. Here’s a high-level snapshot of our latest thinking.
The value of non-residential construction put in place in the USA is estimated to be approximately $440 billion in 2002, according to the U.S. Census Bureau. These are the most current figures. The worldwide value of non-residential construction has to be close to a trillion dollars; it may well exceed this. The cost of survey for this construction varies significantly by project – it may be as little as 0.25% of the total installed cost (TIC) for revamp of a large power generation plant or it may be 10 times that for a reasonably complex transportation infrastructure project. For the argument that follows I estimate survey fees, conventional or otherwise, to be 1% of TIC, or $4.4 billion in the USA.
The total cost of services for 3D scanning is something like $100 million or approximately 1% of the worldwide survey market. We estimate the incremental value that is delivered by using advanced 3D scanning to be something like 10 times the expenditure, i.e., $1 billion.
Survey value estimates
Worldwide of put-in-place non-residential construction: approximately $1 trillion
Worldwide expenditure on survey: approximately $10 billion
Expenditure on 3D laser scanning: approximately $100 million
Total incremental economic value delivered by 3D laser scanning today: approximately $1 billion
Penetration of 3D laser scanning-based work processes: less than 1% of projects
The economic benefit of using advanced 3D scanning comes in four main areas:
Potential direct savings in survey cost and time can sum to hundreds of millions
The first area is direct cost savings compared with conventional or manual survey methods. The evidence we’ve collected is anecdotal, but direct savings from using 3D laser scanning on the order of 10-20% are not uncommon. In cases where access is difficult, for example offshore platforms, savings can be much higher. For routine survey of civil and transportation infrastructure, savings of order of 15-20% are reported. Saving 10-20% of the survey budget is a big deal to those responsible for survey budgets and service providers, of course, but in the overall scheme of things, it’s not a lot of money – a mere $440 million. We’re so early on in the adoption of 3D scanning that only a small fraction of this is being realized today. However, the time taken to collect the data can be reduced from weeks to days – this schedule compression is a big deal if the survey work is in the critical path.
Construction impact means billions of potential savings
The second area of economic impact is in the construction phase of a project. Here we have documented and validated numerous examples of savings on order of 5-10% on total project cost through the use of laser scanning. This is a big deal. Schedule reductions on order of 10% have also been documented. The cost and schedule savings devolve from reduced errors and rework on revamp projects. Much construction work is rework – we don’t have hard data on this, but in some industries such as process manufacturing in North America, estimates are that 60-80% of all work consists of revamping existing assets. Savings of just 5% on the TIC of U.S. non-residential construction represents a whopping $2.2 billion potential savings every year. We believe this is a conservative estimate. Most of this value is still on the table, waiting to be reaped by construction firms and asset owners who drive the adoption of the technology.
Asset operation and maintenance benefit can dwarf construction and survey benefits
The third area of direct economic impact is on the operation and maintenance of capital assets. Better metrology can reduce direct maintenance costs. Why? Components such as piping that are stressed at installation time corrode more quickly and wear faster. Sometimes these stresses can be traced to poor dimensional control at fabrication time or poor dimensional specification at design time. In either case, laser scanning has been proven to bring relief.
On the operations side, high-fidelity visualization of existing assets is key to effective operator training. CAD geometry is often out-of-date, nonexistent, or too difficult to manipulate for these purposes. For civil engineering projects the operational value of accurate 3D existing conditions data can take many forms, from the development of automated permitting systems to more sensible maintenance planning. The realization of asset operation and maintenance benefits for laser scanning is in its infancy. Big Oil, Big Power and Big Civil are just starting to realize these kinds of values on some small pilot projects. In our view, these benefits in time will dwarf the other benefits of using laser scanning.
Safety dividend is biggest driver in some markets
Unless you are an actuary (which I’m certainly not) it is hard to put a dollar figure on the value of improved safety. However, improved safety is one of the biggest drivers to use laser scanning. The safety dividend is expressed differently in each industry where laser scanning is used, but in the field this means fewer surveyors working next to fast-moving traffic directly in harm’s way, reduced radiation exposure on modifications to nuclear facilities, reduced rappelling over cliff faces, etc., all of which add up to improved safety. Project safety is a big deal in nearly every project worldwide – increasingly it drives the use of 3D laser scanning and other remote data capture technologies.
We estimate today’s 3D laser scanning services market, which is approximately $100 million in size and growing at 35-40%, is just beginning to deliver on its promise of serving up tens of billions of value on a worldwide basis. Our best guess is that 3D laser scanning and other advanced dimensional control technologies are used on 1% of the projects where it would make economic sense to use them – it seems clear to us that the best days of this industry are directly in front of it. The market may readily grow to 20 or 30 times its current size or even more.
What will enable the fulfillment of the demand for the value scanning delivers? No doubt 3D scanning instruments will get more capable, lighter, faster and less expensive in time. Clients will continue the march to 3D work processes. However, service providers and clients alike who are waiting for these transitions to take place before retooling their work processes to use 3D scanning are leaving money on the table and risk missing the train altogether. Asset owners who can create the correct incentives to drive adoption of the technology will reap the most value. geovisit();