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Home » How Offsite Manufacturing Could Revolutionize the Construction Supply Chain
ANALYSIS

How Offsite Manufacturing Could Revolutionize the Construction Supply Chain

February 8, 2020
Alan Griffiths, SCB Contributor
Analyst Insight: A quiet revolution is taking place within one of the slowest industries to embrace radical new technology. Until now, the construction industry has had one of the worst records for productivity, quality and predictability. Meanwhile, manufacturing sectors such as automotive, aerospace and discrete manufacturing have long been using modern techniques such as interchangeability of component parts, “right first time” for quality, and just in time for supply-chain integration.

One of the main reasons for not applying these efficient manufacturing methods in construction has been the difficulty of imposing them in outdoor conditions, with a range of tradespeople and a tradition of supplying material in near-raw form to site. Because many of the companies and personnel involved in traditional construction companies do not have a first-class manufacturing culture, it’s hard to impose them across the board.

Some innovative construction companies are introducing modern techniques through off-site manufacturing, where the controlled environment is more like a typical manufacturing shop using modern methods of construction. England’s Berkeley Homes has built a 150,000-square-foot facility to supply ready-made modules to 1,000 homes per year, both within its group and to external constructors. Because this approach requires a different culture, new entrants that are not historically known for construction are also entering the market. Among them is Legal and General Modular Homes, formed by the Legal and General financial services group. In the U.S., Amazon is providing funding for the startup Plant Prefab, which has built an offsite modular manufacturing facility in Rialto, California, and plans to integrate Amazon’s suite of voice-controlled Alexa devices into the homes.

The implications to efficiency and cost savings are impressive. GlaxoSmithKline recently combined with Bryden Wood to deliver a “factory-in-a-box” solution for plants and packaging facilities in Africa and Asia. The result is an estimated two-month reduction in construction time and a 30% reduction in costs. The EI engineering group quotes a 60% increase in onsite deployment speeds, and an 84% reduction in onsite construction hours, using offsite manufacturing.

It’s easy to see that traditional construction companies in the service and supply chain might find it difficult to adapt to new ways of working, but there’s room for the introduction of new approaches to managing complex projects and supply chains from which other companies could benefit.

By adopting modern manufacturing methods, offsite production can also make use of IT technologies used in those industries. These range from computer-assisted design and manufacturing and product lifecycle management at the design stage, through to enterprise resource management, project and materials management, and building information modelling at the construction stage; and internet of things (IoT) technology in the operations stage. The digital twin concept has clear value in construction, as the 3D model can be used to ensure that the build is precise, and IoT sensors can monitor the as-built status of the building and maintain it through life.

Outlook:

ERP and service provider IFS predicts that “within five years, 50% of all construction projects will use offsite manufacturing and/or 3D printing.”

In software technology, Cambashi estimates the current total available market at $10 billion, and doubling over the next five years.

Beyond applying these tried and tested manufacturing techniques, the construction industry is ripe for applications of 3D printing, IoT and blockchain, which can assist in connecting buildings, cities and supply chains.

Alan Griffiths is Senior Analyst with Cambashi.

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