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This episode explores ways to de-risk construction of mega manufacturing projects, reduce delays and cost overruns, and improve execution excellence and productivity in India.
In the latest episode of the EY India Insights podcast series, Mahim Chaturvedi, Partner, Consulting at EY India, discusses strategies to de-risk large capital projects and strengthen execution excellence in India. He highlights key challenges such as fragmented stakeholder ecosystems, operational delays, cost overruns, execution inefficiencies and limited mechanization. Mahim also emphasizes the need for India’s construction productivity to align with global benchmarks to improve project outcomes.
Innovative construction methods like modularization and mechanization can reduce cycle times by up to 30%, while digital solutions such as integrated platforms, 5D BIM, AI-driven monitoring and drone analytics can increase project visibility and decision-making, he adds. While successful digital adoption must begin with strong governance and world-class project management processes, policy interventions can incentivize technology adoption, skill development and financial support for contractors.
Key takeaways
Many large projects in India face delays, which puts the spotlight on the need for improved mechanization and technology adoption.
Modularization and mechanization can reduce construction cycle times by 10% to 30%, improving efficiency and reducing labor dependency.
5D BIM, AI-driven monitoring and drone analytics are some ways to enhance coordination, transparency and risk detection.
However, effective governance and project management maturity assessment must precede digitalization to avoid automating inefficient processes without real improvement.
Skilled labor shortages affect productivity. Structured training and skill development can boost labor efficiency.
Before embarking on digitalization, it is crucial to design and implement world-class project management processes and governance frameworks. Without that, pure digitalization alone will deliver limited results.
Mahim Chaturvedi
Partner, Consulting, EY India
For your convenience, full text transcript of this podcast is available below.
Pallavi
Hello and welcome to the EY India Insights podcast, I am your host Pallavi. In this episode, we are joined by Mahim Chaturvedi, Partner, Consulting, EY India, to discuss ‘De-risking mega manufacturing projects in India: Strategies for enhancing execution excellence.’ With over two decades of experience across manufacturing, metals, chemicals and infrastructure, Mahim leads large transformation projects focused on capital project delivery, operational excellence and risk management. As India moves forward towards its vision of Viksit Bharat by 2047, Mahim shares how organizations can de-risk complex projects, enhance coordination and drive execution excellence. Thank you, Mahim, for joining the podcast; it is a pleasure to have you here with us today.
Mahim Chaturvedi
Thank you, Pallavi, it is a pleasure to be here as well.
Pallavi
Mahim, to begin with, India’s ambition to become Viksit Bharat by 2047 is driving massive investments in sectors like infrastructure and manufacturing. However, many large-scale projects face significant delays and cost overruns. What are the key challenges hindering the projects’ success?
Mahim Chaturvedi
You are absolutely right. While there are a lot of investments happening, in reality, if I look at the current estimates; more than 40% of the projects have significant schedule overruns and at an overall level, (many) infra projects exceed the budgeted cost by close to 20%; that is the reality. If you look at the challenges we have across public and private sector, there are three or four key challenges which have impact. These are beyond the regulatory hurdles and supply chain issues which we are seeing because of the geopolitical uncertainties.
If I were to summarize the first part; it is the inherent complexity that is involved in the construction work. Such work would be done at remote sites; there are multiple stakeholders, contractors, consultants and hence multiple IT systems and manual systems, etc. More often than not, there is no single version of the truth. You do not know what is happening on the ground. This further accentuates the lack of comprehensive project management systems, risk management and governance mechanisms. This is one large bucket of challenges, if I may call out. The second set of challenges is pertaining to the limited availability of skilled labor and also low construction productivity which is plaguing our industry. If you look at India, there are a lot of fragmented contractors . So, it is a combination of issues which are posing these challenges to us.
Pallavi
Thank you, Mahim. Construction labor productivity in India is lower than the global standards. What are the key reasons for this? What can be done to improve this? Additionally, if you can give us some successful case studies from the industry.
Mahim Chaturvedi
Yes, absolutely, Pallavi. I think one of the leading reasons for low construction productivity in India is the limited adoption of advanced technologies or mechanization, as we say, with heavy reliance on unskilled workforce. I think that is the fundamental reason why our productivity is one fifth or one sixth of what China works at. That is something which needs to change. Currently, the prevalent approach in many of the projects is that we need to add more workers, extend the shifts and see how the entire construction work improves, but that is essentially a very short-term view and does not yield result because the bottom line is you will not get more people beyond a point in time. Fundamentally, if I were to look at how to increase the mechanization of construction work, modularization is something that helps in increasing the construction productivity. Techniques such as modular pipe works, prefabricated structures for process plants, precast segments, modular formwork for high rise buildings and so on.
These are various methods that are available, but when I look at the project landscape, they are also being adopted selectively. Not every company is doing so, but wherever it has happened, I think it has yielded wonderful results. For example, in a metals and mining company, they used skid mounted modular ETPs (effluent treatment plants) that reduced the installation time and labor by over 50% and that enabled faster commissioning. It was a huge success for the project team. Similarly, there was a prominent EPC company which was into power plant construction work and they achieved 20% improvement in construction productivity by implementing mechanization. They adopted different methods of welding, they got into offsite fabrication and assembly on site and that helped in achieving the project timelines. Similarly, there are other aspects as well. For example, use of admixtures that reduce the de-shuttering time significantly, automatic rebar cutting welding machines and so on. In our experience, if we effectively use modularization and mechanization, it can cut the construction cycle times from anywhere between 10% to 30%. That significantly reduces the dependance on manual labor.
Pallavi
Thank you, Mahim, for sharing successful case studies. While large contractors are adopting mechanization, small contractors often rely on manual labor. What are the key barriers preventing broader adoption of mechanized construction? How can industries address these challenges?
Mahim Chaturvedi
The fundamental reason at the root is the capital investment required. If you were to use mechanized methods, modular formwork, even at the basic level, all of these will result in a higher cost. The cost would be anywhere between 10% to 20%, 25% and so on. That is primarily the reason, since you do not have the scale available and hence the availability of these are also at a higher cost. Primarily, capital investment is required. If you look at our ecosystem in India, it is a combination of large contractor with many small contractors, which is different from China where you have large EPC players who are doing this and they can absorb these investments as part of their overheads and drive efficiencies.
Similarly, even on the owner side of things, as owners when these manufacturing companies deploy contractors, they also look at, can I reduce cost. The focus needs to change. The thought has to be: how do I include mechanization and modularization and such methods to improve construction productivity.
In some countries, the government has also come up with certain norms, where they have mandated use of certain modular construction works in, say, roadways and so on. So, it's a combination of mindset and current issues which we face with small contractors.
Pallavi
Thank you, Mahim. Pivoting towards digitalization; it has become a cornerstone for enhancing project efficiency. How can digital tools and platforms like AI-driven progress monitoring, 5D BIM and drone analytics improve coordination, transparency and accountability across project stakeholders?
Mahim Chaturvedi
Yes, you are right. Digitalization is the cornerstone of enhancing project efficiency. As I was mentioning in the beginning, there are inherent challenges with these projects; if you have far flung places where the projects are being delivered with so many stakeholders, contractors, disparate information systems and if you do not have a unified view of these systems into one single version of truth, you will never know what is really happening on the ground and you will never be able to drive the project efficiently. Hence, while there are point IT solutions, which you have mentioned in your question, like progress monitoring, drones and so on and they have a huge impact as far as the driving efficiency is concerned. But more importantly, how do we bring it all together into one cohesive integrated platform? I think this is something which is important. If I were to give examples, then you have 5D BIM solutions and they help in integrating design, cost estimation, scheduling, visualization, stakeholder coordination and through early clash detection, you ensure that you have the first time manufacturing setup coming up. Drone analytics is an important area, through which you can physically visualize what is happening and superimpose what is happening in your planning systems and corroborate if the construction work is actually progressing the way it should be. The LiDAR scans can corroborate the quality of the work on the physical side.
There are a lot of good use cases that exist. But as I was saying, fundamentally, you need to have project control; it should be like a unified data platform, which integrates all these elements, points solutions, whether it is about your planning system, construction monitoring apps or AI safety systems, or it could be the drawing management systems, all of them coming together into one cohesive platform. Then on top of it, you have artificial intelligence through which you can drive insights, predict outcomes, improve decision making and optimization.
Pallavi
Mahim, adding to the digitalization question, could you share some real-world examples for our listeners?
Mahim Chaturvedi
Yes, absolutely. There are many of them; the first one that comes to my mind pertains to a chemical factory. It was under construction and for which the digital control tower implementation was done. It facilitated early identification of execution bottlenecks, it enabled proactive measures such as renegotiating material deliveries, enhancing engineering productivity and ultimately, at the end of it, we were able to avoid a four-week delay within the context of the project, which would have meant at least 10% loss of revenue.
That is the impact of a good digital transformation in construction projects. There are many more as well. In a metals and mining project, a digital control tower was implemented that enabled work reprioritization, team redeployment, compression of the schedule, identification of the critical parts and that ultimately helped us in compressing the timeline by 12%.
Similarly, we had discussed this in terms of what is the challenge? As far as the regulatory approvals and hurdles are concerned, if you have good integrated systems which integrates your statutory approvals with construction progress and this is all digitally integrated with the supporting ecosystem, it has helped some of the companies proactively plan for regulatory approvals and with zero surprises at the end. There are many such examples, which I have discussed here.
Pallavi
Thank you, Mahim. For organizations that are planning to embark on the journey of digital transformation or operational excellence, how and where could they start?
Mahim Chaturvedi
Often, organizations say, “I want to implement this digital solution, I want to implement this app for capturing construction progress, I want to have the safety system here or there, I want to get into something.” Fundamentally, at the core of it, people who are constantly into projects, who are delivering these projects, especially if you have large EPC companies or if there is an organization which is going on a capex journey over the next 3 to 5 years, I think before moving into digitalization, it is very important to design and implement world class project management processes and governance mechanisms, because without that pure digitalization will yield limited results. I mean you will be just automating something which will not make sense and it will not yield the right result. A good way to embark on any of these digital transformation journeys is to carry out what we call in project management, maturity assessment. You can cover aspects pertaining to the organizational structure, the processes which govern these projects and also the technology readiness. There are multiple frameworks available for that. You can use frameworks, which are globally available, freely available, whether it is PMI, FIDIC, DCMA, even ISO has some of these frameworks. There are certain frameworks that consulting organizations like EY have. We have developed project management maturity assessment.
Having done that, redesign these processes, enable them, set the right KPIs, have the right operating model, have the right project control mechanisms and then adopt fit for purpose technology solution. I think that is the way to go for organizations.
Pallavi
Thank you, Mahim. Looking ahead, what should project owners, EPC companies and policymakers focus on to drive the success of mega manufacturing projects in India, especially as the country balances the demand for skilled labor with mechanized and digital solutions?
Mahim Chaturvedi
As I said, Pallavi, construction of these capital projects is extremely complex and it involves high stakes. As I was mentioning, there are challenges pertaining to the industry itself, multiple small players and so on and so forth. But the reality is that the skilled labor will never be enough to cater to the requirements of mega projects, hence the challenges need to be solved with a multi-pronged strategy; one pertaining to the innovative construction methods, tools and technologies related to the construction methods that we are talking about, second pertaining to the digitalization of construction works and third in terms of having the right process and governance mechanisms. Both EPC companies and owners should evaluate these strategies for investment costs versus benefits for these interventions.
Believe me they will pay for themselves. There are enough use cases that we have discussed during this podcast where people have put in money, they have gone with innovative technologies, newer construction methods and it has paid for them. Of course, there would be a role of policymakers in this regard, there could be policy frameworks focusing on skilling the construction labor workforce, even incentivizing investment in tools and technologies. What if we can have better financing support for all the contractors to move to better ways of construction methods, I think that is the way forward for all of us.
Pallavi
Thank you so much, Mahim, for sharing such thoughtful insights on how organizations can enhance execution excellence and de-risk large scale manufacturing projects.
Mahim Chaturvedi
Thank you.
Pallavi
That brings us to the end of this conversation. A key takeaway for our listeners would be that driving success in mega projects requires a balance of strong governance, skilled manpower and efficient use of resources with technology adoption. To all our listeners, we hope you enjoyed this episode of EY India Insights podcast. For more perspectives on manufacturing, infrastructure and sustainability, please do visit our website and follow us, EY India, on your preferred podcast platform. Once again, thank you, Mahim. Thank you for the audience for joining us. I am your host, Pallavi. See you in the next episode.
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