A Joint Venture Revolutionizes Construction Logistics

Construction logistics have traditionally been complicated, intensive, and error-prone and, until recently, there was little indication that this was going to change.

Ordering can be maddening, delivery points are often overloaded, and larger construction companies average 150,000 receipts annually.

Processing those receipts has long been a challenge in itself.  Many older systems required each delivery receipt to be entered manually, adding time but no value.

Over the years, construction companies and suppliers attempted to solve these challenges by developing individual online solutions. The problem was that each one had different user interfaces, and practices were not interoperable.

This meant that a greater burden was placed on construction site foremen and team members, who had to learn multiple non-standardized applications, in addition to contending with paperwork.

Some of these paper-based notes were at risk of becoming unreadable or even lost in bad weather. And missing or illegible instructions could lead to flaws in the construction itself.

Then, last year, two industry heavyweights formed a joint venture to bring about a new solution to reduce the number of apps and interfaces and increase communication along the supply chain, establishing a smooth, digital workflow.

The development had an instant impact, transforming logistics across the entire industry.

Conceiving a floor plan

Starting in 2018, one of Austria’s largest construction companies, PORR AG, began working with enterprise resource planning software specialists SAP. Although the initial goal was digitizing PORR’s paper processes, there was a more ambitious plan that would influence construction operations everywhere.

To realize that plan, PORR formed an Industry Consortium, which, in 2019, began holding design thinking workshops to consider a variety of perspectives, including those of architects, foremen, dispatchers, construction clerks, and truck drivers.

Eventually, Consortium members were comprised of representations of construction, supply, and rental companies, as well as machine manufacturers.

As part of its mission to digitize daily operations in the construction industry, in 2021, PORR entered a joint venture with 150-year-old Austrian manufacturer and distributor Umdasch Group Ventures, which – in addition to also serving the retail industry – builds formwork and scaffolding.

The collaboration was given the name SEQUELLO.  Its goal: create a long-needed, universal Construction Logistics Platform (CLP).

Caulking the gaps

The CLP would be powered by SAP’s Business Technology Platform (BTP), which merges data and analytics, application development, artificial intelligence, automation, and integration in a single, unified environment.

Ambitions included closing the digital gap in daily work between construction and supply companies in every phase in the order and delivery of such products as concrete, crushed stone, sand, crushed gravel, asphalt, form works, transporter, and landfill.

Because everyone involved was using a single interface, each participant – even those without substantial IT resources – could enter the digital workflow. Yet, the data knowledge between construction companies and suppliers would remain secure.

Building to the rafters

Once the CLP was deployed in September 2021, foremen, managers, and finance departments could anticipate challenges beforehand and reported that the new, digital delivery process saved eight minutes per receipt. 

The reduction of multiple interfaces resulted in a 90% decrease in ongoing costs for maintenance and support.

Foremen could now use their smartphones to order materials directly from particular suppliers, using the app to monitor delivery status changes, saving the time spent calling dispatchers or waiting on hold.

For finally developing an industry-standard platform, SEQUELLO was designated a finalist in the 2022 SAP Innovation Awards, commemorating organizations using SAP products to make a difference.

And with the portfolio still developing and branching out into new areas, SEQUELLO is already planning other releases, continuing the transformation journey.

Observed PORR’s CEO, Karl-Heinz Strauss, “The concept has already had a very positive reception. This achievement allows us to see the future in practice.”

You can read all about SEQUELLO’s remarkable accomplishment in their SAP Innovation Awards pitch deck.

Digital Transformation