Who has given a bit of thought and researched the problems of the building industry has probably somewhere along the line seen the infamous graph comparing the productivity of construction to manufacturing. The departing two lines are depressing and often initiate heated debates about the impossibility of finding analogies in a car and a house with arguments such as — every building is unique, cars are all the same, copy-paste architecture is ugly, etc. True, the products are different and one of the best comparisons would be Steve Burrows’ during the AOC podcast interview:

“The car is a standard product made from custom parts and a building is exactly the opposite”

I fully agree with the statement but in my mind, this just makes solving all the supply chain issues easier, not harder. And it also further highlights that the problem of the construction industry is mainly in the process, not the product. Just as trucks, ships, and motorcycles are different products, they have similarities in supply chains and the way they are made. So if there is anything truly unique about the building industry, then it is its’ inability to learn, implement new management principles and leverage innovative technology.

Be that as it may, but I am personally beginning to think that while we are focusing on the issue of productivity, we are missing the point about what it means to create and measure value. Productivity can be a goal, but is it the right one? The article at hand is another attempt at contemplating the industry’s problems from a supply chain, data management, user experience, and automation perspective while trying to reach the point that construction is not LIKE manufacturing, but rather that it IS a form of manufacturing.

Construction vs Manufacturing

One of the underlying obstacles of the construction industry has been its’ necessity to define itself in a completely separate category and the contradictions usually start with the design process. Architecture is an emotional subject because it kind of belongs to all of us. Compared to “placeless” consumer products, it is difficult to ignore and when tired of the design hard to dispose of. It is long-lasting, occupies our urban space and has historically been burdened by symbolism. And although there are many different types of buildings, I would arrogantly divide contemporary architecture into two groups:

1. Icons — public buildings (opera houses, museums, town halls, etc.) and private residences (mostly villas) that don’t have to be limited by the predatory laws of capitalism.
2. Utilitarian — everything else (offices, affordable housing, commercial, etc.) where usually one of the stakeholders is a financial institution and that need to function by the rules of a market economy.

The first one does not and should not have anything to do with the problems of productivity or systemized solutions. Icons have “flexible” budgets, are unique one-off pieces of art and become breeding grounds for starchitects like Gehry and Hadid. The second one though doesn’t usually lead to a Pritzker price but can award itself by being a “home” or a place of work for the majority of people. But utilitarian doesn’t have to be ugly or bland. Its’ beauty and originality is not achieved by flamboyant free-flowing deconstructed forms but rather humble ingenuity and multidisciplinary collaboration. And whether we like it or not, for the second one to succeed it is critical for the involved parties to understand that it is not just about design and engineering, but at the end of the day, it is also business. So whenever I am talking (sometimes ranting) about the problems of architecture and comparing it to industrial design, I am referring to the second type.

But coming back to the point, manufacturing by definition is to make something out of raw materials by hand or by machinery, terminology which in my mind can just as well describe construction. The usual argument for buildings is that it is most often initiated by the client whereas, with cars or other consumer goods, it may seem at first glance not to have the customer as a stakeholder. The first point of this misconception starts usually with the image of the Ford Model T mass-production lines where the end customer was not known and naturally he or she did not have any choices. The modern car though has become a mass-customizable product which means that the process is very much initiated by the end client. The product itself has become technology on four wheels and also the industries’ supply chain with lower model life cycles, an increasing reliance on supplier products and available options for the end customer has no resemblance with the days of old.

People sometimes think that the car industry has been improving since the beginning of the 20th century. In reality, there have been many ups and downs and the American car industry didn’t understand what hit them when the much higher quality Japanese vehicles entered the market in the second half of the previous century and overtook them by production volume in the 1980s. I will not go into more detail here about the specifics and chronology but probably everybody knows by now that the modern principles of Lean Manufacturing — something that has transcended into every modern industry — have their origins in the aforementioned period. Ironically part of the origins of the Japanese miracle can be traced to one or two Americans, like W.E Deming (I recommend reading about him and the TQM movement).

It is important to note that it was not about raising productivity, but about improving quality.

And a somewhat funny aspect is that the OEMs (original equipment manufacturer) are moving in a direction resembling the Main Contractor in construction who does not build almost anything themselves but delivers value through digital tools, engineering knowledge, and contract management. There are many reasons for the past and present developments in the car industry supply changes, but one thing is clear, with all other objects in our daily lives innovating at an incredible speed, the customer expectations leave no alternative. Naturally, productivity is important since it defines the price, but besides making the sales transaction possible, it bears no value for the customer experience.

Construction User Experience

As mentioned previously, construction is a service that turns standard raw materials into a technological product. For the product to be fit for purpose, it must satisfy several needs of the end-user. Firstly functional, providing the inhabitants’ shelter and protection from the natural forces and secondly aesthetic, evoking emotions of comfort and inspiration. Good design balances between the two, taking into account all the constraints, including cost. If the building and its parts work smoothly, it gives us pleasure and if not, frustration. And with building services, as well as material technology, getting more complex, so is the task of providing an enjoyable user experience. So how we design and plan the products or services should be first and foremost guided by trying to lower the risk of product failure. When this risk would be unacceptable — like with airplane manufacturing and shipbuilding — construction would not think of approaching variation so carelessly. But since the industry accepts the status quo without doing any root cause analysis almost as if given by a higher power and there is no real control over the process, there is an enormous amount of wasted energy, rework and warranty issues leading all to budgets, which are full of buffers.

When we look at the construction value chain, it has several client handover moments. There is the end client who is living or working within the product and then there is the developer/owner who initiates the process in the first place (of course one could argue that the market is the actual initiator). Since the business client comes along for the ride and is part of the process, what he or she is mostly experiencing during that period are services like design, project management, assembly, logistics, etc. Unfortunately, it is very common in construction for the client to have a negative experience because of the inherent fragmentation and extremely inefficient information flow. Regular design-bid-build contracts do not create prerequisites for collaboration and the most logical step would be towards the IPD (integrated project delivery) direction. This, of course, takes time and is quite complex because it requires a mindset shift.

Complexity is a point of view

In the meantime though, what we have found at Welement, is that offsite construction has the potential to involuntarily change the user experience of the project owner as well as other parties in the value chain. The product is still the same, but how you get from A to B is different. Of course, even with it prefab the experience can be negative and the risk is even higher with timber structures. But mostly it should be seen as a litmus test. If the project team has failed to plan and collaborate effectively, it will immediately show up during the start of the onsite construction period.

This risk is higher with new clients coming to offsite construction, in which case there is always a longer educational phase and sometimes it is difficult to explain why we are asking certain questions so early. But once they look at it from another point of view and see the positive effects, the change in thinking is not just pragmatic, but emotional as well.

By changing the process, the mindset will follow.

The process itself forces us to collaborate and make important decisions before the onsite work has begun and if the information flow works well, data is collected correctly and responsiveness is high the whole experience of construction can be pleasurable. The main point is that it does not just increase productivity by doing work faster, it makes us work smarter by using time more efficiently without unnecessary waste.

Creating and Measuring Value

The problem with time is that each day we all have the same 24 hours to spend as we see fit. For construction, as well as manufacturing, time is a constant in the productivity equation and the only difference is how we allocate resources during that period we call “working time”. From the clients’ purchasing perspective, it is divided into value-adding (client is willing to pay for), supportive (doesn’t add value but is still necessary) and non-value-adding (waste) time. Construction has been trying to solve the productivity problem by keeping the process the same and push more out of the value-added activities. Manufacturing on the other hand, through the collection of data and statistical analysis, understood that at some point it makes much more sense to focus attention on minimizing and eliminating the non-value-added activities or “waste”. The goal should be dematerialization or in other words provide the greatest amount of value while utilizing the least amount of resources (materials, time, money, energy, etc.). The reasons are so obvious that it is almost pointless to write about it, yet for construction, this all seems almost radical.

From the building industries’ perspective, the main question for starting improvements is how do we know where to focus our attention, or more specifically, what is behind the 57%? The obvious answer is to collect data but this again leads to the next question. How do we know the data is accurate and meaningful and we can rely on it to make the right decisions? Leaving aside the uncontrollable weather conditions, building sites are scattered around cities and countries, with often varying management styles more linked to the project teams’ professionality and PMs character than a unified corporate process. Sometimes it may seem as if each project is a separate company within a larger corporation.

Managing the flow of information and materials

With so many possible variables and connection points in the construction supply chain, bringing in an offsite construction company (OCC) helps to alleviate the volume of information and flow of materials. The OCC almost becomes like a distribution center or a Tier 1 supplier in the car industry. Distributing the end product into manageable “containers” means you are also distributing the data processing loads and instead of one party having to focus on minimizing the non-value-added time, the task is shared.

Case Study: When we started collecting more data about non-value-added activities on the shop floor, the hypothesis was that the main reason for stops is design errors. What turned out eventually, is that it is just 25% of the problem and a big proportion was the allocation of transportation machinery and not having the right material at the right time at the right place. The latter two problems are much easier to fix with better planning and digital tools. PS! If you want to read more about how we manage data at Welement, you can check our LinkedIn articles.

So one of the main reasons for choosing offsite construction and raising the degree of prefabrication as high as possible for the project is to be able to have control of the value creation process and minimize waste. Some of our partners are the biggest construction companies in Scandinavia and for them, time is extremely valuable. But because safety and consistency of quality are just as important, they can not afford to just push the onsite workers to move faster. So there is a reason why Sweden is one of the most developed offsite markets in the world and this is where automation comes into play.

A specter is haunting the world — the specter of automation.

Like with AI and machine learning, automation is among the major buzzwords of today, and like with every good hype, it brings about many misconceptions. To consider automation as a standalone corporate goal is nonsense, to say the least, and by now the fear of robots rendering people useless is beginning to fade. Automation, whether on the software or hardware level, will not take away jobs, but merely change how we manage and design them on the level of tasks. I recommend reading the McKinsey report which brings out five factors affecting the spread of automation — technical feasibility; costs to automate; scarcity, skills, and cost of labor; benefits beyond labor cost (superior performance, better quality, etc.); regulatory and social acceptance.

So whether to automate or not, is a much more complex question than comparing the existing labor cost to the cost of machines. Mechanical automation goes hand in hand with digitalization and with both the biggest challenge is linked to enterprise culture. Some of the aspects need a leap of faith before, and an open mind during implementation. And most importantly an understanding that it is not a race with a finish line, but a way of thinking and working.

Another interesting aspect of the McKinsey report is the automation potential by different sectors and divided into seven different activity types. Below is the graph showing the construction and not surprisingly the most difficult activities to automate are related to management. Also, not surprisingly data processing and data collection have a high potential for construction and are underutilized.

A high proportion of construction work is done in unpredictable environments and one way how to solve this is to try to advance technology to a level in which automation would be just as feasible in unpredictable environments and hence the potential of automation would rise considerably. But why not just raise the degree of prefabrication instead and try to do as much work as possible in a predictable environment? And wouldn’t that also involuntarily increase the potential of data collection as well?

Calling BS on printing houses

Nevertheless, it has been interesting to keep an eye on how construction is trying to solve the productivity issue and approach automation and robotics. Looking at the progress the question arises, what problem is actually being solved — raising the productivity of the relatively small value-added time proportion or dealing with the large non-value-adding waste? Collaborative robots like SAM are raising the productivity of masonry, but Steve Burrows in the aforementioned interview brings out a good point. We are developing a robot that could easily lift tonnes, to lift and assemble a tiny component (brick) with the size and weight designed for the human hand seems a bit absurd. Why not precast the whole supporting wall and add the facade layer in the factory? So the real question is, are we approaching the whole job of a classic mason in the right way and maybe we are trying to cling on to something that should completely be reformed?

One of the other predictions for the future of manufacturing is the growing use of 3D printing and it seems to have become a hot topic also in construction. As these technologies progress it probably makes complete sense for complex parts manufacturing because it generates practically no waste and does not require massive molds etc. We should, of course, emphasize that this rhetoric is limited to complex (and probably expensive) parts of what is most likely an even more complex whole (engines or airplane wings or sth). We will never start printing the entire car because it is a multi-component product (aluminum, carbon fiber, class, wires, plastic, rubber, leather, etc.) and this exact logic also applies to buildings. While it is fun to fantasize about buying a house’s AMF (additive manufacturing file) on Amazon and then just with a push of a button the house pops out, this will never become reality if not for economic reasons, then for the simple contradictions in supply chain logic.

But just to be clear why I am against it. When we are talking about 3D printing houses, we are talking about large scale additive manufacturing or in more simple construction terms, layer-by-layer concrete extrusion. The first problem is the material itself and its’ environmental impact. Secondly who has physically worked with concrete (I started my career as a site manager for concrete works), knows what it means to pour supporting structures when it is too hot or too cold. The second issue as mentioned before, a modern house is a multi-component product constantly increasing in complexity. So even if we would be able to figure out how to make the machinery set-up and supply chain technically and economically feasible, there is still the issue of all the other parts besides the supporting walls. Looking at the whole concept from the end user’s point of view, then most of the value comes from the coordinated functioning of the building services (HVAC, MEP), quality of the insulation and window joints as well as interior materials which are all creating the interior climate and henceforth are the main prerequisite for general wellbeing for the inhabitants.

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So how is offsite construction, automation, process control, and supply chain management all connected with data? I would like to paraphrase Carly Fiorina, the former CEO of Hewlett-Packard on this.

The goal is to turn data into information, and information into insight

What the manufacturing industry understood a long time ago is that to make the right decisions for improvement, you need meaningful data. Data alone is just raw material and we need to process and visualize it to enable insight.

In every system there are variables and it is constantly drawn towards entropy. To make accurate predictions, we need to have control over as many variables as possible to reduce the fluctuation. But even within the controlled factory environment, you have one inconsistent machine, who gets tired and as a result, makes mistakes or gets damaged. The strongest component of this machine is the brain and its best ability is creative thinking. To lower these risks for this fragile machine and enable it to use its’ strengths as best as possible, robots can help take over the repetitive and heavy-duty jobs. But robots still need the human machine to look after it and make sure it follows the given commands. Accurate data turned into actionable insights can help root out friction within the system, control entropy and concentrate on value creation. Soon offsite construction will become the norm and one of the first questions in the project life cycle will be “What and how much can we prefabricate?”. The outcome will be a better product experience for the end-user and enjoyable service for the project owner.

If you bothered to read to the end, the reward is further reading and listening material suggestions:

1. The Art of Construction Podcast. Some of the episodes are quite interesting.
2. Keep an eye out, what is happening with Katerra. The factory closure is probably just a practical business move, but one of the co-founders leaving is a bit more worrying.
3. If you are interested in more detail how we handle data at Welement, just go to our LinkedIn page, I wrote a 4 part article on the subject.
4. Some of the other McKinsey reports on automation and offsite construction are well worth the read.
5. Recently finished “Why We Build” by Rowan Moore and I recommend it to anybody in the industry who is interested in architecture.

Why & How Should We Automate Construction? was originally published in welement on Medium, where people are continuing the conversation by highlighting and responding to this story.

There is a growing demand to use timber and more specifically mass timber on large scale construction projects. This puts the emphasis too much on just changing materials of the building envelope, whereas the focus of construction should be on the rearrangement of processes in the overall value chain. Timber as a construction material has many positive aspects but the gains are easily nullified when the management principles fail to look at the supply chain as a whole. To increase productivity the industry should shift the focus from unit face values to time and process management. Prefabrication or in other words, offsite construction, is one of the best solutions for achieving this because it consolidates a large part of the value chain and automatically forces the involved parties to plan ahead. Although prefabrication as a concept has been around for several decades, it is going through a major new wave driven mostly by the urbanization megatrend and enabled by development of digitalization tools.

Most of the issues that limit the implementation of new systems and technology as well as the solutions are actually relatively simple with the barriers more linked to cultural habits within the construction discourse. Technology is social before it is technical, so the shift towards innovation is limited first and foremost by the established institutions within the building community of a specific region or country.

Technology is not something that determines the destiny of people but is the manifestation of people.

The misconception that technology has a life of its own is especially prevalent in building culture where the process of construction has not shifted dramatically in over 60 years (Smith 2009).

Buildings are becoming machines

Like every other product in our lives, so have buildings become increasingly more complicated. Especially the complexity of building technical systems and the energy that is required to make the different parts work harmoniously. The cost of technical systems is now approaching 50 percent of a building’s overall cost (Kieran & Timberlake 2005) and we are adding new systems every year. Not only do the systems cost a lot by themselves but getting them to work, all together completely coordinated and integrated within a building is the biggest contributor to complexity, cost, time delays and supply chain management issues (Kieran 2018).

The construction industry has up to now spent a lot of energy trying to convince everybody that it is nothing like manufacturing, that there is nothing to learn from these sister industries and that a process of erecting a building is far more complex compared to most consumer products. Because of similarities related to physical size and project budgets, the comparison of construction with the shipbuilding, airplane as well as the car industry is actually very justified. A modern car or a plane has an enormous amount of small parts and processes with an extreme focus on precision and quality. The fact that in one case the end product has to move safely through space and is not fixed to the ground, just makes the point even stronger. What started off as simple line production with Ford has evolved into complex modular assemblies and moved away from vertical integration. Production is divided between multiple tiers of suppliers which deliver the prefabricated chunks to the OEM(original equipment manufacturers), who then puts them together. These subassemblies can be on different continents, controlled by complex IT and ERP systems and today a car actually becomes a whole at the very end of the final manufacturing process.

It is almost counterintuitive that the more one attempts to undertake at the point of final assembly, the more difficult it is to control quality.

This increasing complexity is one of the main reasons construction productivity has lagged behind and also why it should start looking for answers from the manufacturing industry which has developed its supply chains in correlation with the development of the product. Compared to OEMS (original equipment manufacturers) in the automotive world, building contractors, as well as architects and product engineers, are still in the nineteenth century. Buildings continue to be assembled largely piece by piece in the field, in much the same way that the car was put together before the advent of mass production (Kieran & Timberlake 2004). One of the key aspects behind this lack of innovation is that mainstream construction, compared to other major industries, has almost neglected research and development (R & D). As with technology, innovation does not happen on its own but takes a lot of energy and continuous funding. The technology and IT sector has spearheaded product development and innovation with enormous funding possibilities because the end products are easy to scale. In construction the scalability effect seems extremely difficult to achieve because of all the cultural and normative differences of various countries as well as simple variations in climate and soil parameters effecting the structural parameters of the product. There has been development in material science and BIM software, but these are just tools, not solutions. This dead-end cycle has kept construction regionally restricted to a homogenous cultural area and it is time the industry starts finding solutions and services that are scalable.

One of the main questions in construction is who among the biggest value chain influencers: the client, the architect or the main contractor — has the economic and psychological incentive to take the lead and force innovation. The assumption that it should be the client or owner who initiates this and knows the detailed requirements and expected outcome in the initial conceptual phase is frankly not very competent. Like a patient visiting a doctor to know the diagnosis, the architect and the engineer should be educated to be the professionals that guide the client to the right path, helping him navigate the complicated process and ending up with a product that for the right price achieves all the economic and aesthetic purposes.

The abstract at hand will try to contemplate on the possibility of the two remaining parties: the designer (meaning architect and structural engineer) and the contractor (meaning main contractor or more specifically the project manager) — taking the leading role for improving productivity and bringing innovation to the industry. Also propose an alternative strategy where nobody actually takes the lead, but the different alignment of processes in the form of offsite construction will itself lay the foundation for improvement and a gradual mindset shift.

The perfection of the image versus the reality of use

Architects, compared to engineers and legislators, tend to have a higher level of social empathy and better contextual understanding, which is important because we are talking about products that dominate our public space and last several lifetimes. Living in the Anthropocene there is no other artform that trough the ideas about physical space have more power to influence our everyday lives at a subconscious level than architecture. We enjoy spending time in a room with beautiful details, sufficient light and a form which is in harmony with the surroundings. Architects have the power to create spaces that inspire learning, bring together people as well as add layers to the philosophical concept of a home. Yet often the initial architectural idea never becomes a reality because it gets redesigned and deconstructed by the realities of cost, legislation and supply chain possibilities.

The misalignment of architectural design concepts is also one of the root causes why the productivity benefits of prefabrication often cannot be fully utilized, and the first critical point where we should focus our attention to improve all the other processes downstream. Whereas in the prefab design and engineering sector, Design for Manufacturing and Assembly (DfMA) is a generic knowledge, it is still a fairly new principle for general architects and design engineers. This means that when the client hands over the architectural drawings to the prefab company, the projects usually have to be redesigned to optimize the costs of manufacturing and logistics. This type of rework is unnecessary waste contributing to the overall cost of construction and should not be allowed to happen in the first place. What is even more, if the design has to be altered too much, it might lead to new permits and approvals and a loss of valuable time. Understandably if the banks are already involved in the process, the developer has no incentive to return to the Kafkaesque bureaucratic municipality administrators and NIMBY attitude of the neighbours.

There will always be some level of cognitive dissonance between the perfection of the image and the reality of use and the possibilities of the client budget. One can almost say that the less an architect tries to express unique creativity with each project, the less he or she is thought of as an artist. Since it may seem that architects have to compromise with all the other downstream members, this game of egos and miscommunication is deeply rooted in the system, generating huge amounts of friction and waste of resources. The philosophical problem with prefabrication and building systems is that it leads us to the question of good vs. bad architecture and a one-off product is still perceived as a handcrafted work of art, and the repetitive industrialized house does not conjure up images of the beautiful home (Knaack et al 2012). Architecture is not black or white, so there is no reason for admitting defeat and separating affordability from beauty. It would be quite unfortunate if aesthetically pleasing form and space would only be possible with either public money or as an elitist hobby for rich clients. Nevertheless, just as much as architects need to understand the basics of construction and economics, so do the builders and engineers need to understand the cultural importance and fundamentals of good design. This would help to lay the foundations for mutual respect and allow engineers to understand and help architects find the middle ground between the two apparent extremes.

It is important to note that this abstract does not focus on the design and delivery of cultural landmark public buildings but on affordable housing, more specifically low to mid-rise residential and commercial real estate. This means that these specific design principles must fall into the framework of basic capitalist supply and demand logic. Whether architecture, starting with education up to the practitioners’ mindset, should be part of liberal arts or product design is a bigger debate. Yet it is not difficult to assume that the root cause to some of the most underlying problems is in the educational system which seems to focus more on unique form and not supply chain possibilities. With consumer goods we celebrate the value of good design just as well, but we seldom emphasize a single creator as the artistic hero. There are of course pioneers and great examples from Dieter Rahms to Chris Bangle and Jony Ive, but they are to a large part great because they have never pretended to work in a vacuum separated from the realities of manufacturing, supply chain efficiencies and basic capitalist profitability.

System thinking in construction and architecture

The new client desires choice, expression, individuality and the ability to change our minds at the last minute. Most commercial product industries already answer to this client mandate. By breaking down the product into smaller parts and by using supply chain management and information technology, they can tailor the product to the customers’ choice with reasonable time and reasonable cost (Kieran 2014). With similar principles of modularity and standardized interfaces, almost every product around us today, is in some form, mass customized based on personal or regional choices. A lot of the times these modules are difficult to comprehend, but the underlying principle is to combine the low unit cost of mass production processes with the flexibility of individual customization.

One should never underestimate how relatively effortlessly and unreasonably cost increase happens during the design phase. What makes it worse is that every project in construction is a one-off prototype and because most of the knowledge is project based, these mistakes, even if eliminated, will happen again and again in a slightly altered form on different project. This does not include the basic human errors and design clashes that are to a certain extent unavoidable and understandable. In this case the error is usually caused by the lack of knowledge of a single intellect and it takes just one small principally wrong decision or an idea that fails to take into consideration the directly or indirectly related costs. Even if this type of miscalculation is found during the building or procurement phase, each corrective step is nevertheless waste. The solution is to build in systems organized around a main idea or concept. Only by working in a systemized way of combining readymade modules is it actually possible to noticeably lower the time and efficiency of the construction value chain. It not only speeds up the actual process but ensures that the possibility of mistakes is lowered to a manageable level and these mistakes can be traced back to the source.

A mass-customized building system should abide by the following supply chain rules:

1. All possible solutions and components are within a “platform of possibilities” creating a specific system of solutions or a concept.

2. If the concept platform does not contain a solution or component, it must be developed taking into consideration all the necessary constraints from the effected down-and upstream supply chain members.

3. The new solution or component must be modular, meaning that the interfaces (not necessarily the shape) must be standardized based on the network of solutions within the concept.

4. If the new solution cannot connect with a critical number of existing solutions within the concept catalog it is either left out or it forms itself another catalog of solutions.

The benefits and limits of mass customization and its related supply chain operations must be understandable to all members in the construction value chain. To achieve real benefits the first goal must be to keep all phases of the design of a building within certain boundaries of the specified platform. Besides the architects and design engineers, this applies of course also to the client, who is composing the initial program, but also to main contracting project management, who tends to focus only on unit face values. Raw materials and labor costs will not get cheaper, so the only aspect we can actually control and improve, is lead time. In order to achieve this and the increased efficiency we should first fix as many of the variables as possible and more often than not the interfaces, not the general dimensions, of the modular components are the key to the puzzle.

Project Management

Traditional Project Management, or the so-called waterfall method, is the most common form of project management technique in the construction sector today. Everything from planning, budgeting, the contract methodology and risk management works around the simple assumption that the project value chain is sequential in nature and all the workflows are divided into very distinct stages or milestones, with each process only moving “downhill” towards project completion, much like an actual waterfall. At the same time everybody participating in the building process knows these assumptions are only theoretical and the general expectation is that the schedule as well as the budget will not hold.

Whereas other industries such as manufacturing and especially software development has increasingly moved away from this method by accepting the volatility in the system and working with agile methods and collaborating in teams, construction is still for some reason repeating the same process and expecting different results. There are some ‘Lean Construction’ methods like the ‘Last Planner System’ which is very similar to ‘Scrum’ planning and project management method prevalent in the IT and start-up industry. Yet this form of planning and project management remains a niche and is not considered as a norm starting from the university education. The natural human reaction to all these failing assumptions is to start blaming everybody up and down stream and this is also one of the main causes for the misconceptions between architects and engineers, clients and builders, main and subcontractors etc. This reaction means that all the fragmented members are trying to minimize risk. The powerful members in the value chain try to put as much as possible on the downstream members and the weaker members translate this into extra money which raises the overall cost of the value chain and the one who actually pays for this is the end user. How to create incentives for real collaboration so that the information about cost and the best-case solutions from downstream members who actually build the houses, is communicated to the front? Modern contractual methods with shared risks and rewards are showing promises but it still keeps the knowledge project based. The most effective way for managing risk could be the emergence of powerful offsite construction companies who incorporate architects, designers and procurement specialist in the creation process of building solutions so that the design can take into consideration how to assemble the buildings more efficiently and how to manufacture and transport with all the best practices already part of the initial conceptual design.

Construction Supply Chain Management

The building industry thinks of supply chain management as simple logistics, just moving products from point A to B. Shipments being late and with poor quality, materials being damaged with double handling and temporarily storing on site are all just part of the regular day-to-day operations of construction. All these mistakes lead to extra cost which is accepted as unavoidable collateral and the data is almost never collected for systematic improvements. All other advanced industries have harnessed information technology to have complete control and visibility over supply chain operations. Long term partnerships with suppliers allow companies to work on time and quality and continuously improve efficiency.

Whereas a building is location based, the components don’t have to be. In the future buildings will be built in factories and only assembled on site. The size and complexity of the components will be limited by the distance from the offsite factory to the site. The question from the beginning should already not be if offsite methods should be used, but how large is the degree of prefabrication (DOP) on specific projects. The DOP level of a component or module depends on many parameters within the supply chain: architecture, available time and information, transportation distances, manufacturing and logistical constraints etc. This is why timber is an excellent material for offsite construction. It is lightweight, widely used, easily accessible and therefore the price is controllable. Timber is also quite robust and handles logistics very well. When something is wrong with a prefabricated unit it is easy and fast to make alterations, so that assembly can continue. Like any other material, timber has pros as well as cons. Moisture, Sound and Fire are the top three. Fire and sound are mostly manageable in the design phase. Moisture on the other hand becomes a problem mostly when project management and risk analysis techniques are inadequate. This problem can actually have a positive effect because it instinctively forces the project team to tackle this risk by planning ahead and act as fast as possible.

Wood is also a great material for automated production of modules and elements. The industry providing machinery for prefabricated timber frame panels is well-developed and embraces innovation, especially in Germany and Sweden. We should of course be critical in this sense that we should not go into extreme with the use of timber as a construction material. The selection of materials should be guided by their best mechanical properties and functional characteristics and not just because. Mass timber for instance should not be propagated for low- to mid-rise buildings and probably in most of these cases hybrid structures, like combining concrete with timber, will form the most optimal solution.

Summary

In the near future the construction industry has to start improving productivity to provide buildings more quickly and in mass quantity with acceptable quality. This all starts with a shift in the mindset and in practice the most foreseeable and efficient improvement is to figure out how to take the construction activities that traditionally occur on site to a factory. Offsite construction methods are one of the best solutions to solve this problem and the productivity gains are easy to comprehend with simultaneous subassemblies and only the final assembly left to be done on site. The higher the degree of prefabrication, the more control is automatically forced in the hands of one player with an incentive to streamline the process. Volumetric modular unit manufacturing companies already control a large part of the value chain, but the reality is that a lot of the times they don’t control the initial pre- and conceptual design which means that they have to compromise and redesign around abstract constraints. In order to achieve the full benefits of prefabrication the whole value chain of a building must be looked at as a whole and the knowledge of downstream specialist must be brought to the first conceptual design phase. To achieve the real benefits of economies of scale and streamlined processes the initial design must stay within the limits of a systemized building solution that considers DfMA principles (Design for Manufacturing and Assembly, including Logistics). This all means that the whole framework of processes, project management methods including the contractual agreements and risk management that actually define the collaborative human relationships, must be redesigned.

At the moment the construction industry is at a developmental point where is should not be hoping to get all the answers right and solutions solved but instead understanding what are the right questions. How to approach architecture of affordable housing and how to rearrange the processes in the construction value chain are just some of the immediate ones.

1. Changali, Mohammad & Nieuwland. 2015. The Construction Productivity Imperative
2. Smith. 2009. History of Prefabrication: A Cultural Survey.
3. Kieran & Timberlake. 2009. Refabricating Architecture.
4. Kieran. 2018. The Future of Cities podcast. Series 1, Episode 3
5. Knaach, Chung-Klatte & Hasselbach. 2012. Prefabricated Systems

The future of construction will be offsite and wood will be an important part of the change was originally published in welement on Medium, where people are continuing the conversation by highlighting and responding to this story.

Lately it seems that every piece of news about construction innovation starts by highlighting the McKinsey reports on the construction labor productivity or the enormous opportunities that the industry is facing in the near future. Should be obvious that the paradigm has already shifted and the revolution is not just a quiet theoretical uprising of the few. Construction is a high turnover, low profitability industry with average operating profit at around 1,5–4%. Huge projects with budgets running into billions, each percentage point gained in productivity adds up to enormous amounts of money, so the potential gain in financial terms is almost ridiculous. But what is productivity, the “thing” construction is so much lacking off and what can the industry really do to make an impact in the foreseeable future?

A Hero Emerges, Finally!

A great example of the mindset shift is the recent 865 million dollar funding of Katerra, the hottest construction “start-up” at the moment. Whoever is interested in the story of Katerra, might want to listen to the recent ArchitectureTalk podcast. The interesting part about Katerra is that they are actually not doing anything revolutionary from the perspective of technology and manufacturing industry. It is disrupting simply because all the principles of supply chain management, ERP systems and leveraging technology, have never effectively been implemented on the whole value chain process of the building industry. Almost ironic that it often takes somebody from outside the industry to just start doing things differently because they simply are not aware of the hidden obstacles. In most cases, these obstacles are nothing more than comfort zones that established professionals are enjoying. So why is Katerra probably going to succeed — by combining vertical integration (complete control of the value adding processes from design to finish), offsite construction and digitalisation. Using information about the capabilities and limitations of transportation and offsite factories and putting this knowledge into practice already in the architectural design phase. By breaking down the made up barriers between fragments, forming long-term partnerships with suppliers, developing solutions with the DfMA mindset. In addition to everything else one of the most important impacts of Katerra is the “butterfly effect” it will have on the whole industry. Now construction finally has the Apple/Tesla example, the poster boy that everybody can (over)use as an example in presentations and finally turn into an innovation cliché. The European equivalent with a similar potential to disrupt could be CREE, so keep an eye out on their progress. The only thing these companies probably can not control are regulatory hindrances, municipal inefficiency and political incompetence but this will also change soon enough.

Productivity and time

So that this article would not be a complete rant about the failures of the construction industry let’s contemplate a simple question — what can Katerra or any other innovative companies in the sector actually drastically improve? It would be unfair to simply say that there has been no innovation at all in the industry. Construction has improved and developed in terms of more advanced materials, more efficient HVAC systems etc.

But the industry has neglected and taken for granted the simplest resource, which is TIME!

Why is time in this sense relevant? Because the construction industry has mostly been focusing on face value — choosing the cheapest sub-contractors and material unit values — instead of focusing on the fastest solutions and the best life cycle value propositions. It’s not that the industry doesn’t want to be faster and more productive. The problem is that it has been tackling the issue by doing the same jobs in the same sequence but faster. The end result is lower quality and unsatisfied participants. The cost reduction to meet the affordability aspect should come from process innovation, looking at the bigger picture instead of squeezing the sub-contractors.

By using offsite construction methods the industry can not just reduce time but also use it more efficiently — better delivery certainty, improved quality etc

A game changer in Europe will come in 2020 when all the new buildings must be Near Zero-Energy. This means that either buildings will rapidly become more expensive for the end client or some companies will finally start increasing productivity and build affordably to provide affordable housing. This is of course already happening, but mostly in countries where time costs a lot.

Time Value

Simple as it may seem but only now are we really seeing the implementation of Lean principles, supply chain management techniques etc. in construction. The industry is finally understanding that it does not have to be similar to manufacturing, it just has to start thinking differently and with an open mind incorporate all the applicable principles that have shifted entire industries. The core idea of Lean is to maximise value by minimising waste, to use available resources in the most efficient way as possible and to focus on eliminating every non-value adding activity. It is simply doing more with less time. In general economic theory the quantitative value of time is understood very pragmatically. In the financial sector, time is a key aspect of investing (it effects everything from risk analysis and is usually measured with interest etc.).

Unlike goods and services, we don’t own time and we can only affect how productive we are within a given period.

In the real economy — the shop floor businesses producing the goods and services that are linked with actual income for people etc — time is appreciated by businesses who collect data and constantly link time with the output. Since construction projects are usually long-term and the process fragmented and the cause-and-effect information is lost or neglected.

House printing — the future of construction?

For some reason, people have started playing around with the idea that maybe printing houses would be one solution to the productivity issue. This is just as reasonable and realistic as if in the future we would start printing cars or smartphones. Everybody can Google and look at the videos about the Chinese companies doing the “printing”, but before getting all excited I would recommend thinking about the actual processes it solves and the extra work it causes etc. More specifically when we talk about house printing we are actually talking about putting up concrete walls without formwork, and whoever has experience with the concrete formwork process (the effect of heat, cold, quality etc) understands that it is more complicated than just pushing a button. Especially in our climate — where we need to insulate, pressure test and thermoscan the final product. The point is not to bring the factory to the building site, but to divide the house into parts — whether there are volumetric units or panels or any type of modules — that can be manufactured with factory precision and assembled on site. So it is actually wrong to say that the use of automation and robotics has eluded the construction industry. On the contrary, we are just interpreting the use of “house printers” and robotics wrongly because we expect to see some cool Terminator type AI machines swinging around in the city landscape.

The use of robotics in construction is already happening, it is just not happening on the construction site. It is happening in controlled factory conditions instead of outside in the rain and cold. And it is happening with timber, not concrete.

Who will lead the charge

The question remains who will take the lead to drive the innovation when the process begins with design? The architects and structural design companies? Usually, the first one is and should be preoccupied with aesthetics and the second one is hoping for BIM to change the game. BIM is not a solution, but just a means, a very logical part of the overall construction digitalisation and software alignment process. BIM is something like the shift from typewriters to computers. It does not make content better per se, it just helps to streamline the whole process.

As Katerra shows in practice you need a more powerful protagonist with proper funding to take the initiative, to change the rules of the game and to communicate the constraints effectively to the other members in the value chain, to fix as many of the variables as possible and then start optimising the use of time.

How the construction industry is finally beginning to understand the value of time was originally published in welement on Medium, where people are continuing the conversation by highlighting and responding to this story.

Climate change, government legislations, slow permit & approval process, shortage of skilled labour and energy constraints are just some of the problems affecting the future of construction. At the same time increasing demand from migration, urbanisation, demographic and consumer preference changes are putting enormous pressure on the real estate industry to build faster and provide affordable housing. The productivity of construction has shown no improvements whereas manufacturing has almost doubled over the same period. Is the industry really failing to accept that it is time for change or is it already happening before our eyes?

Oranges and apples

Whereas manufacturing has for a long time used sophisticated ERPs and monitoring systems, construction has always found excuses why it is impossible. One of the main problems in construction is that project managers and developers are often simplifying the cost comparison of various building methods to euros per square meter and don’t take the cost of time, safety and quality into consideration. True, every building is in some ways unique but more often than not the processes are 95% the same. The industry has for a long time failed to understand that by not collecting the invaluable data during the course of the project life cycle it is difficult (if not impossible) to plan accurately and link the cause and effect scenarios and indirect costs at the analysis and feedback phase (if there is such a thing at all).

Basically it has been difficult to continuously improve or invest in R&D because without reliable data there hasn’t been a starting point baseline to measure the improvement from.

It has begun

Construction has been stagnant and lacking innovation for too long, but in the recent years there has been a noticeable change. Naturally the industries giants have their part to play, but the interesting and innovative applications always spring up at the grassroots level. Increasingly more young civil engineers are not accepting the status quo and most likely in the next 5–10 years a bottom up revolt will shape the future of construction more than we can imagine. In the broader sense the industry is going through a quiet revolution by being disrupted by digitalisation, modern methods of construction and new value chains. But most exciting is the nascent shift in mindset.

From prototype to system

Sweden’s big construction giants (Skanska, NCC, Peab) have developed actual building systems for housing which is a great step from the “prototype industry”. Whether the systems are perfect or not is irrelevant, what matters is that the houses are actually being planned and designed with the intention of finding a solution that has standardised interfaces but allows enough flexibility to match the market demand. Most importantly that the solution is built and can be analysed, improved and replicated. This system will not be applicable to architectural landmarks (F.Gehry, Z.Hadid etc.) but instead to affordable housing.

That does not mean that all the houses have to look the same, it just means that this type of architecture has to find aesthetic solutions within certain constraints and be in line with concepts such as Design for Assembly, Design for Manufacturing, Design for Logistics etc.

It might not be the next Guggenheim, but the approach will be key to solving affordable housing to tackle urbanisation.

Three-letter acronym

The whole concept of BIM has been somewhat overhyped and a little misused in construction and it has given a false implication that it is going to solve most of the inefficiencies and waste on site. Mostly all the attention has gone to the Modelling part and nobody is talking about the most important word — Information, more specifically the quality of the information. Luckily we can see that it is not anymore about just BIM but the whole digitalisation of construction. There are more and more applications popping up that are designed already with the mobile first principle in mind so that it would work on the site. Digital tools for site engineers to help teams collaborate and collect information. At Rand & Tuulberg we have tested PlanGrid and GenieBelt on a couple of smaller projects and they actually seem to work. R&T is also implementing the use of Bauhub, an innovative drawing and document handling system which will help navigate through the design changes during the construction period. Recently we had a demo meeting with Leansite, a project management and team collaboration tool. These are just some of the innovations that try to solve some of the issues and of course there are a myriad other problems that the industry needs to tackle. The mere fact that we can talk about these examples from all over the globe shows that something serious is cooking and it is not just a theory anymore.

Offsite

How can we build houses more sustainably and do it faster and smarter without increasing the price?

It can not happen by just doing the same on-site jobs quicker, something fundamental needs to change. Naturally it will be a collective effort and all the interconnected links of the construction value chain have to take on the challenge. At Welement we are working on the whole user experience of prefabricated units.

To us it is not just about the quality of the timber elements but helping our partners find the appropriate level of prefabrication and dealing with the whole process of offsite construction.

At the same time we see that for us to succeed we need the design industry to develop BIM to its full potential and work out the quality issues. We also need our clients — developers, contractors and engineers to start questioning the status quo and look at the existing problems from a different angle. We will try to continuously improve the mindset — our own, our partners and our clients

Mindset shift in a stagnant industry was originally published in welement on Medium, where people are continuing the conversation by highlighting and responding to this story.

While it might be that digitalisation is the most important trigger initiating the construction revolution, it will not be enough without rethinking the processes and re-evaluating the whole construction value chain. True, today the design of a building is mostly ones and zeroes and if the information quality is high enough it can generate enormous value, but at the end of the day it is a physical product, which manifests with and is perceived by human senses. Instead of thinking about the application of BIM as an end, we should merely consider it as a means of achieving a wider restructuring of a dysfunctional industry.

More haste, less speed

The housing industry faces a huge challenge of responding to the growing demand in urban environments. The common reaction to this seems to be just pushing the same old machine faster and faster. Instead it should be about systematically reducing all sorts of waste and not looking at costs at face value. The affordability aspect is often linked with the problem that each building is architecturally and structurally unique and every time the invention of the wheel starts from zero. Although building systems have been — and increasingly are — used in the construction business, it is mostly still a “prototype” industry, which makes achieving economies of scale virtually impossible. With so many constantly changing companies in a building’s value chain that all have different motives it is natural that nobody actually has the incentive to take the lead in developing a solution that could be reused in future projects and improved over time. By definition a system is an organised, purposeful structure that consists of interrelated and interdependent elements (components, entities, factors, members, parts etc.). These elements continually influence one another (directly or indirectly) to maintain their activity and the existence of the system, in order to achieve the goal of the system.

The interchangeability of building components is essential to the overall design of a product of mass customization (1).

The challenge is to create a system so that complex connections work in simple ways and even when the size and visual parameters of the components vary, the efficiency of assembly remain.

Architecture vs. system building

After the initial idea from the developer or client every building process starts with design so the challenge first and foremost is for architects to figure out how to create a customised product with a finite number of parts within a system. Naturally the spectrum of different types of buildings is wide and mass customisation can not easily be applied to for instance infrastructure projects or landmark buildings like museums or opera houses. Sadly the words standardised and building can generate a mental picture of an Orwellian dystopia with grey uniform buildings from the USSR. Talking about the visual aesthetics of buildings can be problematic and understandably so because the space around the buildings is often public and “beauty” is a subjective opinion. So whatever the solution it must come with options and variety but at the same time if one of the key criteria is affordability, then variety has to have certain limits and rules. A simplified example here is Lego, which has an endless possibility of combinatorial solutions but the interfaces constrain certain “freak” movements (round objects or weird angles etc.) Construction in a very plain sense casts new Lego pieces with new connections for each new building. It is a common misconception to think that system building brings about a tradeoff with architecture and a standardised process requires visually copy-paste buildings with minimal variety.

Affordability and aesthetics don’t need to contradict, they just require ingenuity and knowledge of certain principles (like Design for X) from the beginning.

Degree of Prefabrication

To benefit from offsite construction the degree of prefabrication must be as high as possible. At the end of the spectrum we have volumetric modular units where all the primary systems are done at the factory. The degree of onsite work is the lowest, but it sets a limit to the dimensions and complexity of the building. Between large-format 3D modules and on-site masonry units there is a spectrum of panelised systems. Precast concrete units can perform some, but not all the functions of a wall. For instance prefabricated timber frame walls can be fitted with windows and cladding at the factory. Compared to modules they are cheaper to ship to the site, but require more onsite work. In other words, the higher the degree of prefabrication the more different components are handled by a centralised source and the easier it is to control quality and plan reliably. Already the mindset of prefabrication makes the project team plan more elaborately since it systematically forces the counterparts to communicate and plan ahead.

(1) Prefabricated Systems — Knaack, Chung-Klatte, Hasselbach

Building with Systems was originally published in welement on Medium, where people are continuing the conversation by highlighting and responding to this story.