Richard Lyle, Director, Turner & Townsend Suiko considers the growing opportunity for end-to-end Lean Factory Thinking in the offsite manufacturing supply chain.
The main principles of Lean Factory Thinking are commonplace in most manufacturing industries worldwide. Clearly, organisations within the traditional manufacturing sectors that have effectively embraced Lean have developed a healthy competitive advantage, whilst significantly reducing cost and increasing profit.
Similarly, in other leading sectors where the business benefits of adopting a Lean Factory Thinking mindset have been commandeered into the organisational and operational DNA, the associated rewards are undeniable. The results are evident in the step-change in productivity, product quality and value, not to mention the array of behavioural and cultural improvements.
The benefit of applying Lean Factory Thinking in construction is diverse and far-reaching. However, when it comes to the industry as a whole and the opportunity, Lean is comparatively still in its infancy. Whilst the sector does not lack innovation, there is a general reluctance to fully embrace change. As a result the uptake and adoption of Lean is slow and remains difficult to instil across the supply chain.
Offsite Growth Opportunity
The offsite market is set for dramatic growth with a predicted outlook of £9bn per annum by 2018. It is clearly visible how the uplift in preassembly and prefabrication could revolutionise the industry and provide a solution to the housing shortage. Equally, significant benefits could be greatly realised in the commercial sector with large-scale infrastructure projects such as HS2 and Hinckley Point currently successfully championing offsite methods.
The potential for implementing Lean strategy in construction is vast with offsite being one of the enablers, but it is not without its complexities which may account for the industry dragging its heels. Adopting Lean practice will clearly have follow on effects up and down the supply chain, influencing procurement behaviour, tendering and pricing, not to mention the environmental impact from overseas manufacture.
The urgency to reenergise and innovate within the industry has never been greater, however as with all emerging markets, offsite sector growth is intrinsically aligned to having the right operational and behavioural industry drivers in place to make it happen. It is not a case of business as usual. Simply moving the myriad of traditional construction problems and issues along the current supply chain is not a viable or sustainable solution. Industry-wide connectivity is vital in order to rethink current practice. Fundamental change is required to effectively support and sustain the forecasted growth and critically to prevent large-scale efforts from being derailed.
Factory thinking vs. Traditional construction
At entry level, we see the main issues concerned with the basic processes and practices of ‘manufacture’ vs. ‘construction’. The entire ethos of factory assembled manufacture is a far cry from traditional design and build techniques; not to mention the different skill sets and associated behavioural cultures involved. In simple terms, preassembly happens in a factory and not on a building site, thus it requires alternative rules of engagement, and in our view a completely different approach.
As a factory-based process, we see many best practice synergies directly attributed to the manufacturing sector. From automation, synchronisation, repeatability and greater predictability through to mass customisation and standardisation, key operational principles that govern and safeguard our manufacturing industries are now equally relevant to offsite. As a result, we believe much can be learned from direct sector knowledge transfer.
A significant shift in culture is required before volume, large-scale offsite projects can be entirely and effectively delivered via an assembly process. Despite the fact that construction operations and supply chains have inherent differences to those deployed within manufacturing, the principles of Lean can equally be applied.
The new rules of offsite assembly are all encompassing and in our view are non-negotiable. The risk associated with getting offsite wrong is significantly higher compared to traditional construction techniques. Assembling and transporting large-scale modular pre-engineered systems requires a whole new level of sophistication.
Holistic planning, sequencing, control and logistics all have their critical parts to play to ensure every fine detail of the project is factored in from initial concept through to the delivery to the client. Working to exacting standards and tolerances, factories and building sites will need to be fully fluent in each other’s operative language, integrating and working to the pull of the customer and single piece flow.
In our experience, offsite projects and developments operating without the ‘right first time’ Lean seal of approval are in danger of reaping potentially catastrophic results. For example as tenders frequently do not take account of shorter delivery and erections times, a modular housing system arriving to site prior to adequate groundwork preparation could derail the entire project before it has even started. Equally, back to the drawing board mistakes are costly. A prefabricated bathroom pod designed to the wrong specification cannot simply be remodelled or re-engineered onsite.
There is also the added implication of transport which is fit-for-purpose. Modular buildings are often governed by the sizes that can be lifted and transported safely to site and equally governed by feasible transport routes, roads and site access. A project that is running to schedule and assembled on time could dramatically fall at the final hurdle if transport from the factory to site is not planned in with the same level of logistical consistency and environmental assessment.
We are supportive of the recent Get It Right Initiative, supported by ICE, which is gaining momentum in the industry with the move towards tackling the waste and avoidable error which costs the UK economy billions each year.
Future Proof Strategies
Some of the criticisms and barriers to why offsite has not been adopted more widely in the sector stem from the concern that all building sites and developments are different and the complexities are too great to factor in.
Contractors are frequently not involved early enough to influence the design process, but equally the adversarial culture which often exists within contractual and commercial behaviours in many cases prevents early engagement and collaboration. We have seen first-hand the robust benefit to the contractor through the adoption of Lean Factory Thinking, which has culminated in the significant improvements to the bottom line whilst gaining an enviable competitive advantage. The contractor is an important conduit for collaboration within the supply chain working intuitively with all counterparts. However, for this to happen, the end-to-end supply chain must be fully engaged and on board.
We strongly advocate that instead of focusing on the crippling differences, a cohesive strategy should be employed to unite the supply chain, allowing greater transparency to exploit the similarities and synergies.
Driven by Lean principles, through improved process and the reduction of cost and waste, we suggest the offsite industry proposition now needs to step up a gear with an uncompromising focus on designing and building client centric ‘right first time’ solutions. Industry collaboration is a critical success factor. The offsite market is dominated by a small group of key players with a mature supply chain – we encourage the move towards best practice though wider partnering, the cross fertilisation of ideas and collaboration across the sector to eliminate the current fragmented approach.
The offsite market needs to focus on delivering value as opposed to being price-led. We advocate a switch in focus to comprehensively eliminate all elements within the supply-chain that do not add value. Tuning in the right skills, design capabilities, technological expertise and applications within the process is equally paramount. To future proof the supply chain, and ensure we are all ‘offsite ready’, it is essential that clear end-to-end Lean strategies and policies are now defined, understood and effectively embedded.
Original Link - Offsite Magazine