Disrupting the construction industry: DIRTT Environmental Solutions builds export success with innovative technology and the right local partners

Disrupting the construction industry: DIRTT Environmental Solutions builds export success with innovative technology and the right local partners

Despite the company possessing a bold vision that enabled it to grow into a $236-million multi-national company with 1,000 employees in just 12 years, Scott Jenkins had hoped for an even faster trajectory to global success.

“Our expectations were that we would be larger and have more success on many fronts,” says the president of Calgary’s DIRTT Environmental Solutions Ltd., a leading technology-driven manufacturer of highly customized, pre-fabricated interiors for the commercial and residential construction sectors. “That’s a bold statement, but we think we are truly changing an industry, construction, that needs to be disrupted. But disruption can be a challenge because people are afraid of it. We are trying to change the status quo in a such a different way; that has been harder than we anticipated.”

Having the foresight to create a disruptive technology is one thing. Predicting the future is another.

Jenkins says the company, whose name is acronym for “Doing It Right This Time” didn’t anticipate the 2008 financial crisis or the resulting decimation of the global economy, which ultimately brought construction in the firm’s largest market, the U.S., to a standstill. Jenkins and his team also didn’t anticipate that the effort that would be required to convince potential clients of the many benefits of the company’s technology, end-to-end user experience and products.

At DIRTT, persistence and diligence quickly became mantras.

“We had perseverance and stuck with it. We did it right,” says Jenkins. “We’ve grown quite quickly, but we only have .01 per cent of the North American market. There’s a whole world of opportunity waiting for us.”

Today, the business has its head office as well as a manufacturing facility in Calgary, with additional fabrication facilities in Savannah, Georgia and Phoenix, Arizona. With more than 90 per cent of the company’s sales to the U.S., expanding its manufacturing capabilities south of the border was an important step in the company’s journey. The company also adopted a distributed manufacturing model – a form of decentralized manufacturing practiced by enterprises using a network of geographically dispersed manufacturing facilities coordinated through information technology.

“Having distributed manufacturing and having Canadian and U.S. operations means that we have the ability to service our clients better and faster,” says Jenkins, noting there are other benefits too.

When DIRTT opened its Phoenix facility, it was able to give its clients an eight per cent price reduction due to lower shipping costs. “It also meant that instead of a four-day shipment from Calgary, we could get to Los Angeles in six hours,” he adds. “That gives us a huge competitive advantage.”

Another gutsy move that ultimately added to DIRTT’s competitive edge came in 2009 when DIRTT opened its Savannah facility at the peak of the recession.

“While the rest of the world was reducing investment and ducking and running, we were full speed ahead,” says Jenkins. “We weren’t even profitable yet. It was a very bold move, but it paid off.”

Since then, the facility has almost tripled in size and now supports the firm’s northeastern seaboard including clients in Toronto, Montreal and Ottawa.

Looking beyond the 49th parallel, the company has completed projects all over the world. Its focus is mostly commercial spaces – universities, government buildings, secondary schools as well as other office interiors. However, DIRTT is branching into healthcare, manufacturing interiors for facilities in the Middle East, specifically 15 hospitals in Saudi Arabia. The firm is also moving into the residential space as well.

“Anywhere there is interior construction, we believe there is opportunity,” Jenkins adds.

Seizing opportunity in global markets has been bolstered through distribution partnerships, particularly with NMG Medical Planners in the Middle East, who has helped the company open up DIRTT Green Learning Centres (showrooms) in Saudi Arabia, Dubai and Lebanon. The company also has business development operations in Asia, India as well as the UK.

“Our global strategy is to move forward strategically one step at time,” Jenkins says. “Having boots on the ground is crucial. We aren’t parachuting in from time to time and hoping for the best. We try to find local partners, hire local team members and we do our homework.”

Nevertheless, going global isn’t a straight line or an easy path as every market has its own challenges, he adds.

The company’s export strategy includes focusing on markets that offer the strongest value proposition – namely high-rent cities where access to quality construction and construction labour is very challenging.

While some large foreign markets including Brazil, Taiwan and Japan are enticing, Jenkins says, “We wouldn’t know where to start, but we will be patient. We will get there.”

The company got its start due to a belief that there was room to improve traditional construction methods, in part, because the industry has not fully embraced technology, suffers from sustainability challenges, lacks consistency across jurisdictions and faces both cost and timing issues.

“If you’ve ever done a construction or renovation project, I will bet that it was late, cost more than you thought and the quality wasn’t what you hoped for,” Jenkins says.

DIRTT’s solution: a proprietary technology inspired by the video game industry, called ICE that addresses all of those challenges with customized solutions, cost certainty and with the flexibility to make changes in the future. It also results in minimal waste, adds Jenkins.

DIRTT’s software integrates engineering calculations with real-time pricing and feeds that information into the company’s manufacturing processes, all of which reduces the margin for error.

“All of these stages of the (traditional) construction process have human interface and input, and are fraught with error,” Jenkins says. “ICE is taking it off one dataset.”

This year, DIRTT has improved its software solution to create a virtual reality environment. Multiple users can now be immersed in the physical real world, over laid with the original construction file and have the ability to make real-time changes.

“That’s where we are a step beyond Pokémon GO,” says Jenkins.

While DIRTT customers won’t be chasing virtual characters around major cities, the company is intent on becoming a dominant player in construction industries worldwide.

“We want to be a proud world beater known for customized high-quality, technology-delivered, esthetically beautiful interiors,” Jenkins says. “We joke that we may start a new company called DIPTT—doing it perfect this time – because it hasn’t been perfect this time, but we’ve learned a lot of lessons.”

Get more export insights from DIRTT’s Scott Jenkins here.

Categories Infrastructure & Construction

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