Bringing the factory to site

 

80 Mod Project rough sketch Value Stream Map (VSM)

This VSM from my last post was developed to highlight how, with a 20 minute white board sketch, clear insights can used to direct a company's strategy. It helped highlight the issues with the factory focus of recent years where getting the factory output running has been the main focus without the same level of focus on the site install and completion of projects, ensuring keys are reaching the hands of their customers.
The take away from this quick VSM clearly showed the inventory levels in red at each step of the process, with a factory outputting 3 modules a day and delivering a project every 6 weeks. This requires 4/5 active sites running at any one time and up to 400 modules of unfinished inventory to consume that relatively low factory output. The historic approach from all the factories I've visited and worked in has been to try and increase factory output, often with targets to double output in this quarter or that. If successful with this example it was budgeted to cost somewhere in the region of £4 million and site was just left to the same methods and processes, meaning that we would have needed 8-10 building sites open at one time. So that's 8-10 site teams, scaffold installs, cranes, logistics support, QS, procurement, design support, on hire equipment, and worst of all risks, problems, weather, and delays.

When we use Goldratt's 3 metrics to see if a company is 'making money',

'Increase throughput while simultaneously decreasing inventory and operational expense'

It's clear that doubling the factory output isn't going to work and it's no surprise that the losses from the likes of L&G, Ilke, TopHat, Urban Splash, Swan, Lighthouse, and the rest of the mid 2010's wave of offsite manufacturers, adds up to easily a £1 billion if not more.

So what do we do? the first step is to go back to the Value stream and spend a bit of time proposing a future state VSM. Something like this.

Future state VSM for site process

Setting a target reduction in lead time of 15weeks, from 21 week to 6 weeks to match the factory we are aiming to balance site with the factory.
In a Lean transformation it is important to set ambitious targets that give a true competitive advantage and develop a sound strategy and plan to achieve them, the tool commonly used for this is Hoshin Kanri also know as Hoshin planning. It's powerful for strategic planning as it also ties into the lean culture and when done right helps guide the whole company in the right direction. Robert Camp's book the "lean leader" covers the Hoshin process in a good level of detail that's easy to follow and I highly recommend it.

First up is to set Breakthrough objectives, in this case we'll only look at the one and that is to balance site and factory lead times. From that we need to create strategies each with appropriate tactics to deliver their breakthrough objective. I discussed the first obvious one in my last post, the elimination of the 4 weeks of snagging. Snagging is rework, it's pure waste and Lean's 'built in quality' pillar offers the solution, practices like 'in station control' and 'error proofing' works well to ensure a right first time approach and remove the need for snagging. This can be delivered through training, short improvement events (Kizan events) to tackle common problems, and quality gateways to ensure no fault is passed forward. One of the big benefits of reducing the number concurrent active sites is that you can really focus on developing a crack install and finishing team, and if you're not already working like this at the factory it's great time to get the benefits both at the factory and onsite. Plus you can deliver both for less than £40k a fraction of the factory ramp up mentioned earlier.

So a strategy of 'eliminate snagging' gets the Tactics of Training, a focused Kizan burst (multiple events in a short space of time), and quality gateways. Lastly for snagging will be the Measurement targets, zero snags past the gateways and 100% defect recording at the gateways and anything afterwards, with 100% investigations on any snags that do slip through.
This all sounds like a tall order but I've actively delivered these results in a factory when implementing a quality gateway before the finishing line. I've never been prouder at work, than when I got to tell a decorator that "he was giving me the best module I've ever inspected" as he smashed my targets. The next day though someone else gave me an even better one really showing what was possible and we where only a portion of the way through the process.

The thing about Hoshin planning is that the strategies don't have to deliver the whole breakthrough objective in one go, the objective timeline could easily (and likely will) span multiple years. So a strategy or it's tactics can be focused on taking a step toward that goal. In this case we want to reduce 5 weeks install and 10 weeks of finishing to 28 days. That sort of change, is not going to happen over night, and will require steps in the right direction. In Lean this is know as the PDCA cycle as described by the American Society for Quality (ASQ)

The Plan-do-check-act Procedure

Plan: Recognize an opportunity and plan a change.

Do: Test the change. Carry out a small-scale study.

Check: Review the test, analyze the results, and identify what you’ve learned.

Act: Take action based on what you learned in the study step. If the change did not work, go through the cycle again with a different plan. If you were successful, incorporate what you learned from the test into wider changes. Use what you learned to plan new improvements, beginning the cycle again.

With that in mind a sensible mid point is to bring the VSM closer to the future state diagram, by separating internal and external finishing. Completing the external finishing alongside the install all within a target of 6 weeks without any weather downtime and zero water ingress.
Now I mentioned a couple of posts back that I'd been talking with Paul Richards from GUR and he has exactly the kind of solution that could offer these results whilst forming the foundation for further strategies and PDCA cycles. 

Thunderhaus by GUR (photos curtesy of GUR)

The Thunderhaus is more than just a building site in a tent, it is intended to bring the factory conditions to the building site. With a clean and stable flooring, access walkways, integrated gantry cranes and storage it opens up so much potential.

Inside of the Thunderhaus (photos curtesy of GUR)

Immediate results protect the site from weather, a gantry crane designed for module handling and safe access systems. The conditions from the basis for so many Kizan events and the implementation Standardised work and 5S directly on site, factory style jigs and fixtures along with quality systems and further 4.0 solutions. Then in the future the possibilities extend alongside the best of factory innovations as a solid platform for robotics and automation. Every improvement in the factory there is the potential for matching ones onsite, to help keep the balance once it's achieved and ramp up from that 3 modules a day.

With deployment and development of the Thunderhaus as a tactic to help install and protect the modules a second tactic can be used to develop the process towards a full external finish at the end of 6 weeks is needed. This could well involve looking at DFMA and premanufactured Value (PMV), often there is an attempt to get as much external work completed in the factory, but this then leads to issues on site. Insulation and external cladding installed in the factory needs module to module zip up which can be a jigsaw of bits or a lot of cutting down standard sheets. Complex factory roofing work directly installed to the modules, can also cause issues in the factory. One tactic to help alleviate these problems could be the use of 2d panellised facades, using a specialist supplier. A company who's expertise is in a watertight envelope has a lot of potential, installed with the cranes, it's design wouldn't need to match to the module layout giving a lot more architectural flexibility.

A combination of Kizan and DFMA is also likely a key part to reducing the finishing time from 10 to 6 weeks for the intermediate step and beyond. I've worked on a number of solutions, material selections and design choices and then can be quite long projects. At this point getting the basics right is key and the same tactics for zero snagging can have a massive impact on lead times for finishing works, especially well managed quality gateways so it's worth rolling the 6 week finishing and 0 weeks snagging together at this stage.

These quality gateways are also key to the reduction of the hand over time, from weeks to just a couple of days, This is where the value of industry 4.0 and digital solutions can really shine, as information is updated to the client as each stage is finished. In my next post I'll be looking at the top line of the VSM, the tracking of information, and the golden thread in more detail. In my experience it's the failure to understand what's needed, when it's needed and where it comes from that caused all of the biggest delays and problems on projects.

For now though the Breakout objective, Strategies, Tactics and measurements are recorded in an X matrix. Following this, project teams and accountable people are assigned to the tactics, they then develop the plan to deliver and the key performance indicators (KPIs) that will track results. Throughout this PDCA cycles will run and the information in the current state VSM will get updated with more and more details to help identify further strategies, tactics, and measurements until the Breakout objective is achieved.

And if you find these articles interesting and would like to discuss more or are interested in support for your offsite Hoshin Kanri, please feel free to leave a comment or message me on LinkedIn.

Delivering the Value

Recapping the previous post, we explored the misconceptions surrounding Lean and its applicability to offsite construction. Unlike the mass production of Henry Ford, Lean was created specifically to manage lower volumes and higher variability. We also discussed how the ideal Lean system can be adapted in the beginning, with continuous improvement to move towards that ideal.

Many definitions of Lean exist, but few provide context for our industry, it’s not surprising that these misconceptions exist and the lack of clarity can lead to confusion. That’s why I’m passionate about getting back to the basics and digging into what makes lean work. This series aims to set down some key ideas to follow and give them context within our industry. These key ideas are intended to help start the journey into lean principles and build a strong foundation, both in practice and company culture. 

In their book ‘Lean Thinking’ Womack and Jones[1] introduce the ideas that form the core of lean along with guidance through the process, ‘Lean for Dummies’[2] defines this as a 4 step process. 

1. Scrutinize the value stream
2. Keep it Flowing
3. Pulling through the system
4. Striving for Perfection

Earlier this year Autodesk released their guide[3] with 5 steps (they separate ‘identify value’ from the ‘value stream mapping’ (VSM) in step 1 above). The Autodesk construction cloud has a number of good resources on the subject. I may not totally agree with everything they say but it’s worth reviewing.

However, no matter how you approach it, the first step is simply to understand what you need to do to deliver the customer what they want. This value is defined by the customer and what they are willing to pay for as defined by Womack and Jones[1].

‘A specific product (a good or a service, and often both at once) which meets the customer’s needs as a specific price at a specific time’

The value stream is the process that answers the question, the customer wants something how do you get it there? Or in simple terms what activities are needed to take the raw parts and convert them into the final product. The terms value adding (VA) and non-value adding (NVA) activities are used to describe these activities, defined by Sayer and Williams[2] value added activities must meet three criteria

• The customer must be willing to pay for it
• The activity must transition the product or service in some way
• The activity must be done correctly the first time.

Install of Modules on site, VA or NVA?

Value stream mapping is the documentation of this process, when discussing how important considering the whole system is I briefly introduced VSM in part 2 of ‘Exploring the lean house’. The common approach is detailed and in-depth. Typically, at the beginning of a lean transformation this may be a section of the manufacturing process know as the model line. This gives a demonstration of the power of Lean, and the success of the model line then garners enthusiasm and commitment from the wider company. Those involved and trained on the model line will take their learning and expand lean practices through the company. This typical transformation is commonly applied to an established company in an established industry. 

The construction sector however is relatively new to industrialisation with more in common with Industry 1.0 than modern manufacturing. So, the question is how do we get started? Like the situations in my last post there are benefits to bending the standard approach to get started and then use continuous improvement to move towards the ideal.

“Let’s carry out a detailed value stream map to identify the low hanging fruit”

This is a genuine quote from a former co-worker, it’s clearly contradictory but helps illustrate the issue with detailed VSM projects early on. By definition ‘low hanging fruit’ should be obvious so spending time detailing out a VSM to find it is unnecessary. Then, solving those issues will likely have a big impact on the VSM details, making all the studies, time data and detailed evaluations obsolete. Much better would be to sketch out a high level map to help prioritise the issues, and as you work on each problem record your results and improvements to increase the detail you hold in the VSM.

This approach offers several advantages. Firstly, you can quickly sketch the entire system at a high level. This allows you to prioritise issues and focus on the areas that will have the most significant impact on project delivery. By asking the question does the solution increase 'throughput' while simultaneously decreasing 'inventory' and 'operational expense'? Starting with challenges closest to customer handover helps ensure earlier solutions have a real impact on overall efficiency, preventing bottlenecks and unnecessary inventory. Then, as you tackle each problem, record your results and improvements, adding valuable detail to the VSM while also getting the benefits of the improvements.

Adopting this approach at a high level in the business will also promote a good culture, when making critical decisions on project timescales it’s good practice to ask the questions around the three metrics and if this choice deliver to our customer sooner? It’ll help cement a problem solving culture, one that won’t self-sabotage by pushing inventory into the system just to be seen to be doing something.

Lastly there is another layer beyond the processes that need to be completed, across the top of the VSM information flow is recorded, where it’s produced and where it’s used. By understanding this and working from the customer end, delays and problems can be avoided. Particularly around final sign offs from warranty providers, building control and the local fire brigade. When you know what they will want to see you can make sure you are collecting that info and evidence in advance without the need for potentially destructive inspections.

80 Mod Project rough sketch VSM

If we look at this on an example project, an 80 model block of flats, in a factory with a solid design that’s understood and known it’s not too difficult to get to an output of 3 modules a day. With a 6 day lead time for the first module on the line to leave the building those 80 modules can be built with a 2 week pre-flight and 6 weeks of main production. Typically that 2 weeks prep time overlaps with the end of the previous main production run so having a project finished every 6 weeks isn't out of the question.

Then a typical install currently can manage 5/6 modules a day for a floor a week and then the roof (5 weeks), this is followed by finishing work both internal and external, which can easily take 12 weeks or more and then snagging for another 4 weeks and a couple of weeks for final handover. Now this is some very rough timings and possibly quite generous to many with the current industry performance. But that site time of around 21 weeks means that to consistently use the factory output at least 4 active building sites need to be running at any one time.

All of that means a large stock of unfinished inventory (320-400 modules), lots of concurrent operational expense and poor throughput. Using the VSM approach it very clearly highlights that we need to focus our efforts on the site side of volumetric and MMC in general. This whole exercise took about 20 minutes and it very clearly illustrates an obvious risk, yet companies setting up factories have spent jaw dropping amounts of money on factories and factory infrastructure and clearly haven't been able to grasp this concept. From this simple VSM we can see that investing in a factory that produces 6 modules a day by automating will have a small impact of at best 3 weeks to the total lead time while driving up inventory as now 8 sites would need to be active, whereas targeting the non value add of Snagging has the potential to eliminate 4 weeks, reducing inventory while costing orders of magnitude less to achieve. And none of this even accounts for the most unpredictable and very costly risk to the site side, our delightful British weather.

Snow falls on site

In my next post I'm going to explore how the lean company can approach these risk and problems utilising this knowledge to tackle the low hanging fruit. How the senior team can set out a companies goals and strategies with Hoshin Kanri, targeting the model line to make the biggest bang and even look at a fantastic solution and foundation for revolutionising the site process.

And if you find these articles interesting and would like to discuss more, please feel free to message me on LinkedIn.

[1] Womack J.P., Jones D.T., (2007) Lean Thinking, Simon and Schuster.
[2] Sayer N., Williams B., (2012), Lean for Dummies 2nd edition, John Wiley & Sons, Inc.
[3] Autodesk, (2023) Discover Lean Construction: Why and how your construction teams should go Lean, Autodesk construction cloud