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Jack Hopper

The modular construction industry is growing. Modular construction includes off-site manufacturing, fabrication, and assembly of standardized building components, which will later be installed on-site.

FREMONT, CA: Modular construction is becoming increasingly popular among construction firms. Modular construction, also known as off-site construction, penalization, or prefabrication, involves manufacturing and assembling standardized building components off-site before they are installed on-site.

This approach is more like Engineer-to-Order (ETO) than traditionally built-to-order construction. The ETO model is more complex, requiring process planning, inventory management, and manufacturing best practices to ensure quality and timeliness.

Why Modular Construction Is Sweeping The Construction Industry

Construction firms are under intense pressure because of record-high demand, new buildings, and tight deadlines.

Companies can overcome operational challenges like these by implementing an assembly-line process into their project built on manufacturers' playbooks. The construction industry can achieve faster and more profitable project construction by manufacturing prefabricated modular panels and components and then assembling them on-site.

McKinsey's research says modular construction projects have already accelerated project timelines by 20 percent-50 percent, thereby reducing costs and resources.

The practice of precision engineering not only allows construction companies to operate more efficiently but also results in stronger components. Moreover, some constructions require greater creativity due to space constraints, but traditional construction methods limit them. A modular component offers greater freedom and flexibility for architects and builders since it is built to exact specifications.

Construction firms are experiencing unexpected bottlenecks when executing off-site builds as more embrace modular manufacturing.

According to a recent survey of 113 senior construction professionals, four main factors hold back ETO projects: automation, ineffective material resource planning, costing, and real-time shop floor data collection. Only 1 in 10 construction executives reported their ERP provides complete visibility and analytic insight into off-site ETO manufacturing.

What Is Lean Manufacturing?

Lean manufacturing aims to maximize productivity while minimizing waste within a manufacturing operation. This principle simplifies operational processes, allowing them to be more easily understood, performed, and managed. Some examples of lean manufacturing processes in action include these tools—point-of-use Kanban systems (visual cards denoting the status of production), value-stream mapping (visual map of manufacturing processes), 5S visual management tools (color-coding/floor/wall marking/bins), and total Productive Maintenance (systems that predict, prevent, and automate equipment or tool maintenance).

Further, lean manufacturing can improve communication by providing—waste reduction, a faster production rate, enhanced safety, high-quality and better performance, better financial tracking and reduced costs, and less rework and errors.

Modular Construction: Stages Of Lean Manufacturing

Lean manufacturing is often associated with large manufacturing facilities, but it significantly impacts modular construction, such as improving communication and efficiency.

Construction firms can avoid mistakes by using lean management strategies and spotting defects before they happen on the job site. Modular construction involves multiple locations, so its lean management requirements differ from manufacturing ones.

The American Society of Civil Engineers recently published a review of five ways in which modular projects can adopt lean manufacturing strategies:

Standardization is used in Lean Design Management to minimize customizations and complexity in product design.

In Lean Supply Chain Management, raw materials, and supply usage are tracked using inventory management systems and software. Data is also used to reduce supply shortages, extended lead times, and shipment delays by better planning with suppliers.

Value mapping is one method of creating and analyzing production workflows, improving safety, and creating a more efficient manufacturing environment through Lean Production Management.

Transport and storage are more reliable and cost-effective when Lean Transportation Management monitors travel distances, weather conditions, site access, and traffic congestion.

A Lean Site Assembly Management technique, uses 5S principles to reduce manpower, improve ergonomics, spot defects, and improve production flow.

Traditional BTO software systems often have limitations when executing the above items. Many construction software solutions are not designed to manage inventory, machines, and work centers or transport and off-site assembly components. Lean strategies cannot succeed unless the right software tools are implemented.

Driving Lean With The Right Technology

For decades, the construction industry has been considered conservative and slow to adopt new technologies. This has resulted in the industry falling behind many others regarding productivity, efficiency, and sustainability.

Construction companies are beginning to invest in and adopt digital technologies to enable them to embark on new ventures, such as off-site modular manufacturing, as uncertainty in the industry persists.

A construction company, however, must invest in applications and technology that correspond to those of a manufacturer if they want to operate as efficiently as a manufacturer. Most construction companies still rely on standalone accounting, job costing, scheduling, and servicing systems. The lack of connectivity between these applications results in significant insight gaps and substandard decision-making abilities.

A construction firm must integrate technologies that will enable it to employ lean management successfully to get the most out of these projects. Microsoft Dynamics 365 Business Central, for example, allows businesses to centralize critical business data, analyze that data, and customize reporting dashboards.

In the digital age, firms can eliminate data silos to gain visibility into processes and improve operations—all to reduce inefficiencies, improve workflows, and streamline processes.