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Supply Chain  Modularity

Supply Chain Modularity






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    Supply Chain  Modularity Supply Chain Modularity Document Transcript

    • Construction Modularity: Cases from the UK Healthcare Sector Dr Des Doran Brunel Business School Uxbridge Middlesex des.doran@brunel.ac.uk Abstract Purpose: The paper aims to examine the application of modular practices and principles in the construction sector, an area currently underrepresented in the academic literature. Design/methodology/approach: Case studies of three module manufacturers were undertaken in 2009 using semi-structured interviews with key respondents. Interviews were analysed and compared across a number of conceptual areas in order to provide cross-case analysis Findings: The findings suggest that whilst demand for modular building solutions is growing there are a number of opportunities for the sector to provide modular solutions that can compete more effectively with traditional, on-site solutions Relevance/contribution: The paper articulates modular construction within the context of existing concepts, principles and practices and demonstrates that construction modularity is underrepresented amongst both the academic and practitioner communities. Key words: Modularity, Construction, Product Architecture Introduction The primary aim of this paper is to explore the application of modular practices and principles within the module construction sector, an area currently underrepresented in the extant literature. In particular, the research aims to address the following research questions: 1. How is modularity defined within the construction sector? 2. How does „modular‟ construction differ from traditional non-modular construction? 3. What are the operational dimensions of construction modularity and do they differ from the modular practices and procedures found in other sectors (e.g. automotive and computing)? The growth of modular production and modular development has gathered significant pace during the last twenty years and seems set to dominate those sectors where product complexity is high and consumer demands are constantly changing. The rate of such growth can be attributed to a number of factors, including the potential for increased flexibility, increased speed to market, reduced cost, the ability to configure new product variations quickly and to accommodate the increasingly sophisticated demands of consumers in global markets. Despite a plethora of research examining modularity in the automotive and computing sectors, there has been very little research investigating the potential to apply the same principles, practices and procedures within the multi-billion pound construction sector. In 1998 a report examining the scope for improving the quality and efficiency of the UK construction industry was published by Sir Robert Egan. The report – “Rethinking Construction” urged the construction industry to improve performance through standardization and off-site (Modular) production (OSP) and to mirror practices commonly
    • used within the automotive sector, particularly the application of lean processes and procedures. OSP is defined here as the production of panelized and volumetric systems, and major prefabricated components within a manufacturing environment. In essence, modular buildings are constructed away from site (hence the term off-site production) and in a controlled production environment. The completed modules are then transported to site and positioned onto pre-prepared foundations. Research by Goodier and Gibb (2007) indicated that the total value of the offsite market in the UK in 2004 was €2.2bn. By far the largest value area of the off-site market related to non- volumetric pre-assembly items (which includes cladding panels, building services, precast concrete bridge sections. Non-volumetric items are all preassembled, but non-volumetric, since they do not enclose usable space). The largest sector of the OSP market relates to new builds, particularly hospitals, surgeries, nurseries and schools. Pasquire & Connolly (2002) note that the benefits of modular construction can be categorised as Off-site benefits (reduced labour, reduced waste, reduced storage requirements and reduced welfare facilities provision), Programme benefits (including increased up-front commitment (from manufacturers and suppliers), increased quality (due to factory quality control systems), increased efficiency of installation (fewer installation processes) and increased delivery reliability) and Manufacturing benefits (including improved working conditions, improved productivity and improved performance (cost, quality, safety and delivery). From an environmental perspective, Long (1999) found that modular solutions led to a 30-60% reduction in time on-site, a reduction of 50% water quantity and material usage, greater recycling activity, a reduction in CO2 emissions and the potential for reutilization and reuse of prefabricated elements. The demand for modular building solutions has gathered pace under the current United Kingdom (UK) government which has allocated in excess of €2bn per year for the building of new hospitals and surgeries. Aligned to this capital expansion hospital trusts are continually seeking low cost and high quality buildings that address the specific needs of users and that will continue to provide much needed capacity within an expanding and continually evolving healthcare market. Unsurprisingly, it is this sector that has attracted increased interest of the modular building industry as it seeks alternative markets in a sector that has been severely affected by the current economic downturn. Despite the clear potential for the growth of modular solutions a report commissioned by Constructing Excellence in 2004 concluded that the growth of modular solutions has been limited. Similarly, Pan, Gibb and Dainty (2007) observed that the barriers to the increased use of modular building solutions include difficulties associated with complex interfacing between systems, the inability to unfreeze design decisions, site access constraints and higher capital costs. In addition, there still exist attitudinal barriers due to historic failures, the nature of the UK planning system and manufacturing capacity. Defining modularity within the construction sector In order to make sense of what actually constitutes modular construction this research first attempts to define construction modularity and then explores the characteristics associated with modular construction. Instructive in this regard is the work of Langlois (2002:19) who described modularity as “a very general set of principles for managing complexity. By breaking up a complex system into discrete pieces – which can then communicate with one another only through standardised interfaces within a standardised architecture.”
    • In a similar vein, Baldwin & Clark (1997: 84) define modularity as the process of “building a complex product or process from smaller subsystems that can be designed independently yet function together as a whole.” Modularity according to Schilling (2000: 312) is “a general concept that describes the degree to which a system‟s components can be separated and recombined, and it refers to the tightness of the coupling between components.” Cautiously, Camuffo (2002:8) describes modularity as “… a vaguely defined and ambiguously used term.” Unlike the automotive and computer manufacturing industries there is no clear and distinct definition of construction modularity. Instead, construction modularity is often described as Off-site production (OSP) or Off-site manufacturing (OSM). Modular buildings can be prefinished in the factory to include all fixtures and fittings, requiring a very limited amount of installation work on site. Within the context of this research OSM and construction modularity are used to represent the same activity and will be used interchangeably. In essence, OSM involves the production of buildings within a manufacturing environment which are then transported to site and placed upon pre-installed foundations. Modular product architecture Since modular construction is required to accommodate the varying and often sophisticated demands of its healthcare clients it is important to understand the role that product architecture plays in terms of satisfying and articulating such demands. Product architecture has been described as “the scheme by which the function of the product is allocated to physical components, that is, the arrangement of functional elements, the mapping from functional elements to physical components, and the specification of the interfaces among interacting physical components.” (Ulrich, 1995: 420) The author further states that the scheme can be divided into three distinct elements: (1) the arrangement of functional elements (the function of a product is what it does as opposed to what the physical characteristics of the product are), (2) mapping from functional elements to physical components (a component is defined as a separable physical part or sub- assembly. Physical components implement the functional elements of the product), (3) the specification of the interfaces between interacting physical components (an interface specification defines the protocol for the primary interactions across the components interfaces, and the mating geometry in cases where there is a geometric connection). Exploring the nature of interface functionality, Sanchez (1997) noted that modular product architecture is created when the interfaces between functional components are designed to allow the mixing and matching of different components to rapidly configure product variations. A desktop computer is cited as a familiar example of a modular product architecture in which a range of parts can be combined to offer a vast number of product variations without incurring those costs that traditionally accompany product variation and flexibility. Research approach The research reported in this paper reflects an interpretivist approach since the topic of construction modularity is complex and cannot be reduced to a series of law-like generalisations. Such an epistemological position naturally lends itself to subjectivist ontology since the goal of this research is to determine the application of modularity within the construction sector and as such is exploratory in nature. The research strategy involves case studies of three UK-based module manufacturers which accommodates cross-case comparisons.
    • Data was systematically collected in each case study using site visits, interviews with executives, in-depth analysis of company archival records, documents and observation (Eisenhardt, 1989; Yin, 1994; Gill and Johnson, 1997). Formal collection procedures ensured data quality and perceptual triangulation assured data validity. A case study database was developed to facilitate cross-case analysis and explicit links were made between the questions asked, data collected and the conclusions drawn to increase information reliability (Miles and Huberman, 1994; Yin, 1994). The main data sources were interviews with key operational respondents across the module supply chain that then led to extensive analysis of archival records and documents. Interviews were semi-structured and explored the nature and scope of modularity within the healthcare construction sector. Archival records and documents were then used to test these opinions with quantitative and qualitative data Case rationale and selection The rationale for case selection was based upon the growth of modular activity within the UK healthcare sector and the targeting of this market by module manufacturers keen to exploit a market that requires speedy and often low cost solutions to very specific user needs and requirements. The cases ranged from a full service design, build and install operation through to a basic build and deliver operation thus providing the opportunity to compare and contrast capabilities across the modular continuum. Each of the three case operations provided modular solutions to the healthcare sector and viewed this sector as a target for strategic growth. A summary of the case operations is provided table I. Table I – Case details Company Details Respondents Company A Large company with fully Senior Operations Manager integrated facilities, Senior Engineer including R&D, design services, frame manufacture, fabrication facilities, transportation, ground preparation and assembly Company B Small scale company with Senior Operations Manager assembly facilities Company C Medium sized company with Senior Operations Manager assembly facilities Technical Engineer (HVAC supplier for Company C) Case study findings Semi-structured interviews were conducted on-site with operations managers of each of the case study manufacturers. Questions focussed upon defining modularity (essential for understanding the essence of modularity within the construction sector), distinguishing between modular and non-modular building solutions, the modular design process, the role of the client in the modular procurement process and, finally, the limitations associated with modular construction solutions.
    • Defining modularity A number of questions were designed to assist the development and understanding of modularity within the healthcare building sector. Such questions were designed to explore the fundamental differences between modular and non-modular building solutions, the modular design process, client involvement in the modular design process and the constraints associated with the modular paradigm. The first question in this section required respondents to define modularity within the context of their operations. In many ways responses to this question in reflected the fact that the case operations had, on the whole, only operated as modular operations and did not offer non-modular solutions. The Company A respondent provided a simple but informed summation of building modularity by noting that: [Modularity] “is taking a number of processes and developing them into one module. The concept is almost similar to creating „Lego‟ style modules that come together quickly to deliver a building and its services.” The Company B respondent provided a broader description/definition which articulated some of the characteristics associated with building modularity: For us [modularity] is quite a variable thing. We don‟t have a prescriptive fixed size, we have preferred sizes which is a 3m wide module with 2.4m ceiling height, 6m long going up in 1m increments upto 12m; that‟s our basic standard portfolio of module sizes. We also have special sized modules which are used for a variety of service applications. They are what we would like to build as they go through the factory with no real issue and no real redesign Then we get the customer that comes along with a super job that we can‟t say no to and we will build modules to any size as long as they fit on a lorry. A more concise definition was provided by the Company C respondent who stated that: “Modularity is offsite construction. It is completing as much of the building as possible in sections that are transportable to site so that we can manage the amount of work that is done on site so that we can control the environment and maintain quality.” Distinguishing between modular and non-modular building solutions In order to extend and inform the understanding of modularity within the building sector the respondents were asked to describe how modular buildings compare to non-modular buildings. This question was designed to seek a greater understanding of how modular building is distinguished from traditional on-site construction and to gain insights into the characteristics of modular buildings. The Company A respondent provided a useful and informative distinction between modular and non-modular solutions which focussed upon the perceived limitations of the modular approach: “There‟s going to be some restriction on dimensional attributes and layout given the way in which the modules are manufactured. Transport is a key limiting factor.
    • The lightness of the structure is often seen as an Achilles heel in two main senses - one is the feel of the building in terms of solidity, although we have started to improve that by offering concrete floors that are poured here on site and transported. Secondly, the effects of summer overheating which can be overcome with the right ventilation systems and the right use and combination of materials.” A second respondent from Company A focussed more upon the performance characteristics associated with the modular approach: First issue is speed. Modular buildings can be delivered up to 50-60% faster. You would struggle to tell a modular building from a traditional build. The customer is getting all the benefits of off-site construction, which is essentially cost, quality and speed. We work to the same building regulations, HTM‟S [Health Technical Memorandum‟s] and insulation (Part L2) requirements of a traditional build. What you are delivering with modular solutions is certainty. In the last 5 years we have delivered 96% of our projects on time and 94% of our projects to cost. Traditional build projects have an on-time completion rate of around 40%. Modular causes minimum disruption of time and in some cases at a lower or equal cost. Interestingly the Company B respondent providing a much briefer insight: “There can be no difference. I‟ve worked on jobs where a multinational has worked on buildings where part of the building has been built on site and another built off-site. The customer has not known the difference. They would be visibly and serviceably identical.” The Company C respondent tended to focus upon the benefits of the modular approach by stating that: “We don‟t have to contend with the elements outside. We don‟t have to contend with vast changes in temperature which can create problems. This affects things like rendering; if temperature is severe we can‟t render [whereas with a modular approach] we can maintain output.” The modular design process In order to move beyond the basic elements of defining modularity and differentiating between modular and non-modular construction the respondents were asked to discuss the steps involved the modular design process. This line of enquiry was designed to gain an understanding of how modular buildings are designed, procured, manufactured and installed – in essence soliciting responses relating to the nature and scope of value creation activity within this sector. The Company A response reflects, to some degree, the completeness and extent of the company‟s modular capabilities: “Assuming that you have got the modular system in place then we have commercial project teams which consist of multi-disciplinary people, architects, space planners, M&E staff, manufacturing planning staff that will take a scheme from the client or can be done from scratch. We will overlay the scheme with our modules in conjunction with our space planners.
    • The next stage is to transfer these details into the manufacturing system so that the parts can be made and brought together. The time to complete can be as little as 6-8 weeks. One of the reasons clients come to us is because of the time it takes to complete a modular building, which is far shorter than a traditional on-site build.” Similarly, a second Company A respondent stated that: Within a healthcare context, we will work with the architect, the client and other stakeholders in order to arrive at a sensible and rational modular solution. In some circumstances where the rationalization process suggests a traditional build solution we will not proceed on a modular basis, due to the solution not being design effective. It is helpful to be involved from an early stage so that we can provide suitable advice on the way in which modular solutions can be applied to the project. The Company A approach was, to a large degree, reflected in the description provided by the Company C respondent: “We tend to get a drawing from an architect with their impression of what they want. In the case of healthcare projects this might include bathroom and en-suite provision, isolation units with specific types of facilities, disabled provision with appropriate dimensions. The first thing we do is take the drawing and we try to modularise it. By modularising we try and cut it up in sections that suit the building layout and that can be transported. Limitations of construction modularity Whilst the limitations of modularity are well documented within the automotive and computing sectors there is little or no research examining the constraints associated with the provision of modular buildings for healthcare applications. In order to address this issue respondents were asked to discuss the constraints/characteristics associated with the provision and maintenance of modular healthcare solutions. The Company A respondent focussed upon the dimensional transportation difficulties: “Transport is the immovable object. There is an absolute size that you can transport. We are limited by the 16ft 6in and obviously the width. When you get to 6m wide you need a lot of additional provisions - Highways Agency involvement which is very complicated and expensive. Weight is also an issue when providing more complex modules with M&E, concrete floors etc which requires a fairly substantial crane to move the module around on site. We spend more time considering the feel of the building, the acoustics, the thermal management of the building, the cleanliness of the environment, the ease of cleaning surfaces. Vibration is also an issue for modular healthcare buildings. We have to install thicker concrete floors for some areas of a hospital, for example surgery rooms. This view was extended by another Company A respondent: “ Some of the key challenges we have are in terms of clear internal spaces. We have issues in terms of our grid size and modular size when compared to on-site traditional solutions. What we struggle with is high reception areas with the “wow” factor.”
    • The Company B respondent expressed similar views but returned to the issue of logistics difficulties when describing the constraints of modularity: “The things you can‟t do with modular are buildings with really high ceiling height and really big spans. For example sports halls and supermarkets. Those types of buildings don‟t lend themselves to three dimensional modular buildings. It doesn‟t mean to say that those types of buildings can‟t have elements of offsite construction but this is not really a modular solution. We can do about 3.3 heights, 16m on one horizontal dimension but it would have to have some wind shear walls and cross-bracing.” This view was echoed by the Company C respondent who returned to the issue of transportation and the differences between off-site and on-site construction approaches: “The modular constraint is what you can get down a British road or under a British bridge. Off-site modular buildings are “signed off” straight away within the design process. This means that decisions relating to wall colours, door types, floor finishes window sizes etc are signed off at the start of the project rather than during say a 6-12 month period that is standard for traditional on-site building projects; this necessitates a change of mindset amongst architects, stakeholders and clients who may be used to making changes as a project takes shape. Such changes are more difficult to accommodate with a modular build because we start building the modules from the moment the contract is signed.” Discussion This paper has sought to articulate the dimensions of modularity within the construction sector and in so doing contribute to the understanding of modular principles and practices within an underrepresented area of modularity. The research was designed to explore how modularity is defined within the sector, what constitutes construction modularity and how modular principles are applied within the sector. Defining construction modularity elicited a number of insightful, but essentially varied, responses which ranged from a series of processes, a variable entity constrained by distinct size categories and offsite construction. These views are summarised into the following definition of construction modularity: The provision of modular solutions constructed off-site using modular principles and practices and delivered, installed and commissioned on-site to a pre-determined modular plan. Such a definition encompasses the key characteristics of modular construction and assists understanding of the modular design process. A fundamental characteristic of the modular design process is the need to overlay plans onto predetermined module templates in order to arrive at the most optimal solution. In essence this is where compromise is reached and where differences between off-site and modular solutions are most pronounced. Clients seeking modular solutions have to accept the dimensional limitations that such solutions necessitate. The research then explored what actually constitutes construction modularity and in so doing set off-site modular production against traditional, on-site construction. The findings were instructive. In terms of benefits, the key issues cited included the speed at which modular buildings can be constructed, the certainty associated with delivery, less on site disruption and, more recently, the potential for modular solutions that have visual as well as functional appeal. The key negatives centred upon restrictions associated with dimensional attributes, constraints associated with transportability (road widths and bridge heights), the lightness of the structures, difficulties with climate control (overheating in summer and cold in winter) and floor vibration issues (particularly evident in operating theatres where accuracy is of the upmost importance).
    • An overriding theme of this research has been the issue of product architecture, manifest in the shape, size, function and material construction of the modular buildings produced and designed by each of the manufacturers that participated in this research. The architecture of the modular buildings examined in this research can be articulated by applying Ulrich‟s (1995) modular scheme: 1) The arrangement of functional elements. The function of a modular healthcare building is to accommodate the provision of healthcare services. This can be divided into sub-functions (consultation rooms, treatment areas, storage facilities, plant rooms and other patient related services). The research has demonstrated that most modular buildings use extant procedures and practices when considering functional elements 2) Mapping from functional elements to physical components. The functions described above are manifest in HVAC modules (designed, manufactured and installed using modular principles), shower modules (again, produced off-site and simply positioned within a module framework and connected to services (electricity and water) and complete operating theatres using standardised interfaces and other client specified modules (fully fitted and ready for use operating theatres, staff welfare services, reception modules) 3) Interface connectivity specification. This element of the scheme relates to decisions concerning how modules fit together, connect and communicate. In many ways one can see that connectivity, (for example, to existing services (water, electricity, gas etc)) is standardised and reflects industry and HTM specifications. The modules themselves are supplied to fit together through the use of standardised bolting techniques. Clearly modular building manufacturers exist to sell the modular concept and to take market share from traditional on-site building solutions. To do this they need to continually strive to offer products and services that can closely replicate on-site, often bespoke solutions, but in a modular and cost effective manner. This is where the tension lies; how do you provide an on- site solution to an off-site, modular build? The answer appears to lie in the development of hybrid solutions that offer a more tailored modular approach whilst maintaining the modular architecture, modular manufacture and modular build ethos that is so ingrained in the modular build sector. At the moment the sector appears to work to standard sizes which are accommodated by the modular building manufacturers. This often results in more rigid product architecture and/or increased costs due to product waste and increased production time (due to the need to cut down materials before installation). In conclusion, the research presented above provides insights into the area of modular construction, an area that is poorly represented in the extant literature and an area that has the potential to provide an interesting addition to the field of modular enquiry. In this regard the contribution to operations theory has been to define construction modularity, develop an understanding of modular practices and principles and to highlight the application of construction modularity using Ulrich‟s modular scheme. Whilst modular construction has a number of inherent limitations but there exists a great deal of potential to substitute on-site solutions if the product architecture and transport infrastructure issues can be dealt with in an imaginative and sophisticated manner.
    • References Baldwin, C & Clark, K. (1997), “Managing in an age of modularity.” Harvard Business Review, Sept-Oct, pp. 84-93. Camuffo, A. (2002), “Rolling out a World Car: globalization, outsourcing and modularity in the auto industry”, IMVP Working paper, available at http://imvp.mit.edu/papers. Constructing Excellence (2004), UK capacity in offsite manufacturing. A report published in conjunction with the DTI and Imperial College, London Egan, R (1998). Rethinking Construction, Construction Industry Board Eisenhardt, K.M (1989), "Building Theories from Case Study Research," Academy of Management Review (14:4), pp. 532-550. Gill, J., Johnson, P (1997), Research Methods for Managers. Second Edition. London: Paul Chapman Publishing Goodier, C & Gibb, A. (2007). Future opportunities for offsite in the UK, Construction Management and Economics, June, 25, pp. 585-595. Langlois, R. (2002), “Modularity in technology and organization”, Journal of Economic Behavior & Organization, Vol. 49, pp. 19-37. Langlois, R and Robertson, L (1995).Firms Markets and Economic Change: A Dynamic Theory of Business Institutions, Routledge, London. Long, K. (1999). EU funds EuroHouse Research, Building Design, 1382, 12/02:5 Miles, M, Huberman, A (1994), Qualitative Data Analysis: An expanded sourcebook (2nd edn.), Sage:London & Thousand Oaks, California Pan, W., Gibb, A. G. F. and Dainty, A. R. J. (2007) Perspectives of housebuilders on the use of offsite Modern Methods of Construction. Construction Management and Economics, 25(1-3), 183-94. Pasquire, C & Connolly, G (2002). Leaner construction through off-site manufacturing, Proceedings IGLC, Gramado, Brazil. Sanchez, R. (1997). Preparing for an uncertain future: Managing Organizations for Strategic Flexibility. International Studies of Management & Organization, 27 (2), 71-94. Schilling, M (2000), Towards a general modular systems theory and its application to interfirm product modularity, Academy of Management Review, Vol 25, No.2, pp 312-334 Ulrich, K. (1995), “The role of product architecture on the manufacturing firm”, Research Policy, 24. pp. 419-440. Voordijk, H, Meijboom, B de Haan, J (2006). Modularity in supply chains: a multiple case study in the construction industry, International Journal of Operations & Production Management, Vol. 26 No. 6, 2006, pp. 600-618. Yin, R. K (1994), Case study research: Design and methods. Thousand Oaks, CA: Sage.