John Dyson challenges the manufacturing and construction industries to break down barriers, cooperate, and create a dynamic, modern building sector using the best of modern digital technologies.
Few physical structures are more symbolic of a cleft between worldviews than a wall. From Hadrian’s and the Great Wall in China, to the recent East-West divide in Berlin, they represent literal and metaphorical divisions.
We tend to view a wall’s defining moment as its construction, but just as important (or even more important) is a wall’s breach or destruction. I believe that we are now witnessing the ancient wall that divides the construction and manufacturing industries finally crumbling.
The result will be liberation from outdated thinking, providing great opportunities for both industries.
These two sectors are part of a wider business ecosystem which identifies and creates a demand for products and services, and then looks to deliver the offering effectively and efficiently through a unified supply chain.
The industrialisation of manufacturing, fuelled by growth in population and demand has driven enormous improvements in productivity, quality and cost. In contrast, relatively little has changed in construction.
However, the need for more housing, schools, transport and energy infrastructure has created demand that current business models cannot meet. This failure to supply is not simply a question of quantity, but also productivity and value.
Now though, the coming of age of componentised, lean and modular construction, combined with the adoption of digital design, delivery and asset management has created the right conditions for a surge in the construction industry’s evolution.
Manufacturing has a huge part to play in this evolutionary period. The ‘off-site’ revolution will drive increasing demand for manufactured construction industry components, sub-assembles and products, as well as driving up the value of those who have manufacturing and supply chain expertise.
The key to growth will be both industries aligning their whole ecosystems on the back of the digital revolution. To achieve this, three steps are needed.
Step one: two industries or one?
The technological gap between construction and manufacturing has widened radically in the past 100 years. In just the past 20 years, manufacturing productivity improvement outpaced construction by 360%.
Whether it’s making bottles of beer or advanced electronics, product design, lean techniques and advanced technology have driven improvements – all underpinned by understanding customer needs and the demands of hard commercialism.
Now, at last, construction is starting to catch up. Indeed, if you read the construction headlines in the past year you would be forgiven for thinking it was practically the same industry.
Companies such as Laing O’Rourke and Legal and General are investing in and opening new factories; the huge Crossrail project has deployed 3D printing for curved concrete panels that will line the inside of passenger tunnels and stations; and robots are now being deployed in factories and on sites.
Construction industry philosophy is changing too – increasingly, we hear about ‘product design’ and ‘design for manufacture’, and at the Manufacturing Technology Centre in March this year a fascinating book was launched, Platforms – Bridging the gap between construction and manufacturing.
Even government is now getting involved, and for the first time is investing directly in this sector’s R&D. The myth of separation between manufacturing and construction needs to be – and is being – dissolved, so that the two sectors are seen as one extended value chain.
Step two: digitally joined
When companies consider how to start their digital journey, projects often provide a golden opportunity to begin the process. Starting the investment process with diligent data analysis requires a relatively small investment and can generate a huge upside.
It helps to maximise return on investment and as an important fringe benefit it begins to clarify where data can transform performance.
Here, construction has much to learn from manufacturing. For example, described by McKinsey as a world-class ‘design to value’ company, GSK (GlaxoSmithKline) map their financial model directly to their manufacturing processes.
Through modelling different demand profiles, they can understand in any potential asset where value is created and cost is incurred.
They know what assets to invest in while gaining insight, through digitisation, into which assets to exploit.
Likewise, in construction, the Highways Agency found that analysing the data they already captured about their roads not only allowed them to save money in upgrade projects, but also helped them develop an improved digital strategy for their management.
It’s now clear that across all industries – including construction – a digital design approach can yield great benefits in short-term delivery, as well as the long-term value of creating a parallel digital asset.
This is the foundation of manufacturing under IR 4.0, and all the opportunities it offers. Each project can deliver part of a company’s digital vision for value creation, and this is a lesson construction must take on board.
Step three: flow – the supply chain
Modern manufacturing organisations have a sophisticated knowledge of supply chains and how they can be aligned to drive highly effective and efficient delivery of value. This expertise needs to be carried over to construction. Where this has been achieved, and with the vision and will of the client, and the best forward thinkers in construction, amazing results have been delivered.
Ten years ago, research looking at key pharmaceutical assets (including research laboratories, drug chemical processes and medicine making and packing) demonstrated that all the buildings involved could be made from 900 parts.
This idea was realised in 2015, when 20 Gurkah soldiers built a test pharma facility from component parts in 12 weeks. In 2017, a second and real facility was built with just four workers in 10 weeks and at a cost 30% less than the benchmark.
The challenge for UK industry is that we are not alone in this revolution. There is an argument that we are already late to the party with countries like Japan having exploited these techniques for 30 years. China has a growing manufacturing-construction industry, which is making inroads into the UK.
Chinese industries are supplying the concrete sections for the new Forth Road Bridge and winning projects for student accommodation in Newcastle – there is real competition and we need to move fast.
Manufacturing organisations are in a unique position to benefit from the new landscape created by the collapse of manufacturing-construction sector divide.
As key clients, the manufacturing industry can collaborate with the construction industry on a strategic and not just project level. Manufacturing is crucial in co-creating a vision for the efficient delivery of highly effective and digitally advanced assets – and providing the expertise to make it happen. If we get this right it could transform the productivity of UK plc.
We will be revisiting this topic in our next issue. If you have any inputs you think are of interest, please contact firstname.lastname@example.org