With a focus on understanding customer and supplier needs across the offsite manufacturing ‘eco-system’, a roundtable hosted by ITW Construction Products Offsite, teased out some key industry themes to understand how the offsite supply chain can improve.
Any process developing unique systems and products should start with understanding its customers – what they do, how they operate and listen to where the bottlenecks and frustrations are in their specific operations. With the offsite industry changing and growing quickly, businesses working and collaborating together will evolve faster and be better placed to meet industry challenges and enjoy sustainable and organic growth.
As the offsite construction industry moves from a project to a more production-based approach – how can that business model be transformed to capture greater value and what important factors need to be understood when developing and delivering product innovation within the offsite sector?
Unlike a traditional construction site where products can be lost or damaged, items entering a factory facility can be easily tracked, with stock levels and locations carefully managed with cutting edge technology. This enables a business to know at the ‘press of a button’ where a particular component or product is at all times. “Purchasing for manufacturing is quite different to purchasing for a traditional site,” says Paul Bilbie, Factory Director, Countryside Properties. “We need just-in-time deliveries and more control of the materials. We need things as and when we require them. It is important to have relationships with suppliers with agreements in place and for them to be able to understand what we are doing now but also in the future.”
The factory environment has long been seen as a perfect location for prototyping and testing products – even down to creating a completed house within the factory. This delivers a greater degree of product and supplier confidence, and enables an organisation’s design and maintenance teams to understand exactly what they are going to be making, and how it will eventually be delivered and put together onsite. This is also where mistakes can be made on a smaller scale and design processes can be changed to respond to new regulations.
A key benefit from a manufacturing environment is continuous improvement and the speed of feedback from the shop floor to the design team and from the building site back to design. “The ability to continuously improve is what sets offsite construction apart from the traditional route,” says Nigel Banks, Special Projects Director, Ilke Homes. “Also, everyone operating in the industry is at a different stage of the journey and has different needs. What concerns us now will have changed in 12 months, or conversely a solution that we don’t need now, we may need in 12 months’ time.”
Changes in regulatory environment requirements post-Grenfell is driving many changes in product safety with additional focus on fire testing in particular. But across the built environment, the severe lack of accredited test facilities is often picked out as a major hindrance to introducing innovative products into the marketplace. “One of the issues that our industry has is the lack of accredited testing facilities both in the UK and Europe to do the tests with long timescales to get approval and certification,” says Scott McAndrew, R&D Manager, ITW Construction Products Offsite.
To a certain degree, there is also still a lack of maturity in buying decisions – although there is a sense that offsite systems and products are the ‘right solution for projects, there is not a lot of certainty of performance’, so instilling that certainty with performance data will boost client confidence and market maturity.
Creating the Right Eco-system In its wider sense, offsite manufacture versus traditional construction can be boiled down to a straight choice between predictable and unpredictable results. “Recent research on why developers would choose offsite over a traditional route picked out cost, quality, speed but also sustainability and carbon performance becoming important drivers,” says Jeff Endean, Director, Cast. “What connects all four of those is that clients are looking for an overall solution that they can be confident in and that the performance standards are visible and provide answers to the problems they face.”
Certainly improvements are required in the supplier and buyer ecosystem to bring higher levels of efficiency and success but what kind of changes need to me made now and in the future? “Innovation can be very expensive and if you do it on your own all the time it becomes too expensive,” says Ola Magnusson, Project Manager at Lindbäcks – a leading Swedish timber frame home provider. “So by collaborating more you can lower the cost. More transparency is needed between companies to solve problems with material flow within the supply chain – this can advance the supply chain and benefit both partners in the long term.”
Understanding what happens inside the factory environment is a critical element in building an effective supplier/manufacturer relationship. This can develop a better, open way to collaborate and find ways and opportunities to do things better and faster. “Getting to see your supplier and their factory is really important to change the culture within which you want to operate,” says Paul Bilbie. “It feels alien not to want to be closer to the supplier and teams involved in it.”
Nigel Banks agrees: “Seeing the factory, that is how you can innovate with the supply chain. If you can understand the factory and technology and understand what the capabilities are and where the costs and drivers are, then you can understand the problems that may be coming up or down the production lines.”
Some elements of the construction industry and its component suppliers, still have a long way to go in understanding what manufacturing businesses want and need. There is a general feeling that manufacturers need to understand what product developers are doing and what they are working on for the future – what systems and processes are in motion to aid an overall learning process. Ideally, there should be an open flow of communication and ability for suppliers and manufacturers to understand everyone’s respective capabilities.
Challenges and Successes Facing the Offsite Manufacturing Industry
“Improving the culture of collaboration and learning what manufacturers need is key but barriers remain in the procurement and business models,” says Jeff Endean. “Creating a route to scalable delivery is really important. You can’t design a scheme from scratch every time and expect to get efficient solutions out the other end. We need to see a pre-approved kit of parts with a procurement solution built around them, that enables the supply chain to have certainty.”
What do we do first? Collaborative and shared learning is an ‘interesting first step’. The Advanced Industrialised Methods for the Construction of Homes (AIMCH) project, funded by Innovate UK, is two years into its investigations in to homebuilding and has done a lot of good work around standardising and harmonisation/ specification of design, rather than ‘everyone doing things differently at different times’. It is clear that the volume of homes needed across the UK to meet Government building targets are not possible to achieve through the traditional supply chain easily. It will be even more tough with additional zero carbon targets factored in.
Of course, with offsite manufacture there is a vast array of products on the market ranging from sub-assemblies to full turnkey solutions and ‘all points between’. Future success will rest in many ways on the wider use of digitisation and more integrated ‘operator and machine automation’, the changing of skillsets and how to upscale overall productivity.
“While there is an emphasis on newbuild,” says Professor Robert Hairstans at Edinburgh Napier University and Founding Director at the New Model Institute for Technology and Engineering, Centre For Advanced Timber Technology. “There is a massive challenge for retrofit, especially around net zero carbon and embodied energy, the disassembly of structures and the circular economy. We need to understand factory capabilities and what products can be brought together, so you can standardise with a view to mass customisation, all relative to the context where they are used.”
“What is perfect is to approach a supplier to buy a function, not a product, material or tool, but a solution to a problem.” Ola Magnusson, Project Manager, Lindbäcks
The advent of ‘digital twins’ and the widespread use of BIM can play a major role in enhancing energy performance and predicting performance degradation over time. “We need to capture a wide range of stuff such as human capital, social value and productivity data, adds Robert. “Envisaging the ‘built environment as a living lab’ can help validate performance and make offsite more palatable to a wider audience.” The offsite sector has seen many new entrants, especially as housing providers, all trying to secure a share of a burgeoning market and the external challenges surround securing a pipeline of projects is commonly raised. Internally, every organisation has its own shifting pressures depending on where it is in the development cycle of its own business – whether it be start-up, attaining factory accreditation, or expanding the size of development from several pilot homes to multiple units on several sites across the country. “One of the big challenges once you get going and established is prioritising where to focus next,” says Nigel Banks. “Also, is the supply chain limiting the developments of your innovation? It’s good to look outside of construction sometimes for inspiration. Innovation and change occurs best when manufacturers and suppliers interests are aligned for common goals and needs.”
For Ola Magnusson, the benefits of offsite manufacture can be maximised by reusing a solution between projects and still make it attractive to the customer. “The more you can standardise the better but higher quality does come at a price, so how do you balance between customisation and standardisation? It should be choosing from a menu, not from a blank page.”
Improving Supplier Services
What ideally is a manufacturer looking for? Core performance needs – durability, safety and appropriate industry accreditation – plus the correct price point, and crucially, the capacity to deliver the volumes required. “Quality products arriving at the facility ready for use is key,” says Paul Bilbie. “Especially when it is in line with our ‘just-in-time’ process and delivery lines. We don’t want something that is going to be used in two/three days’ time and has to go back out to be remanufactured. It needs to right when it arrives.”
“It is also very important for the supplier to have the willingness to adapt to the offsite manufacturer,” adds Ola Magnusson “They have to adapt to delivery times or packaging needs and understand that our requirements are different to a traditional construction company. Delivering the right product, at the right time and at the right quality, can be tough. But the overarching theme is having a supplier that can join you on a journey of continuous improvement, with the desire to go through the testing and redesign with you. This results in higher levels of understanding – it is identifying that ‘getting a product into the factory is just step one in a long process’.
The offsite manufacturing industry has been going through an intense period of development and acceptance over the last five years with interest in offsite methods at an all-time high – where could it be heading over the next five years?
“A selection of low carbon and sustainable products will be a big driver to change,” says Jeff Endean. “Delivery platforms that aggregate demand and enable clients to come together and harmonise specification is also a way forward – there needs to be more innovation around delivery.” Certainly energy efficiency and changes to Part L and F of Building Regulations and the implementation of the Future Homes Standard, will mean a massive shift. Traditional builders will ‘struggle to achieve those standards’. “Our fabric is already at the new Part L,” says Nigel Banks. “So we are excellently placed. Zero carbon sites and integrating those technologies into the manufacturing line is key. There is also an opportunity for some of the solutions that have worked well in newbuild to be transferred to retrofit.”
The wide scale decarbonisation of the built environment will be a major change. Certainly with timber, the pressure on the supply chain in intense and the wider adoption of ‘homegrown resource’ and introduction of ‘timber first’ policies will become more popular. “There will also be more hybrid build,” says Robert Hairstans. “Timber with concrete, light steel frame with OSB cladding etc. It’s about bringing the right materials together in the right context. Add to this more circularity in material use and better carbon capture. The end point for me, would be a new educational model, so we innovate within that and change some of the silo mentality that exists of those that just understand traditional processes.”
With more digital tools, advanced technology and machinery predicted to be in use over the next decade, this will propel the wider automation of home production and result in more predictability and productivity. “There will be more integration between machine and materials,” adds Ola Magnusson. “Also we could see better test environments within businesses, rather than waiting several months for a test facility. This will improve innovation. More testing through digital twins will reduce disruption with on-going production. Don’t buy what’s on the market – but specify and buy what you need to deliver your solution.”
As the offsite ‘eco-system’ continues to develop and mature, the supplier/ manufacturer relationship will benefit from greater clarity around demand, improved procurement models and design harmonisation. But the core overriding theme is of collaboration – both as a way of making working processes more efficient and reliable but also as a way to introduce and maintain higher levels openness, innovation and quality.
Many thanks to ITW Construction Products Offsite for hosting the Virtual Roundtable Event and thanks to all participants for their time and contributions to the online discussion.