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Industrialization and off-site production in construction? Why we build the way we do… and what we can do about it?
Christian Thuesen
dk.linkedin.com/in/matute
PM@DTU 2 DTU Management Engineering, The Technical University of Danmark
Order Chaos Disciplinary Interdisciplinary Hierarchy Network Standardized Unique Efficiency Creativity Linear Iterative Bureaucratic Dynamic Codifying Experimenting Repetition Innovative Class Individual Degeneration Stress
Challenges of Project based Production
PM@DTU 3 DTU Management Engineering, The Technical University of Danmark
Agenda □The development of construction
□Societal development
□Production practices in construction
□Off-site production in construction
□Is off-site production the right strategy?
PM@DTU 4 DTU Management Engineering, The Technical University of Danmark
Innovative learning
Enter the site:
http://m.socrative.com
And join room LC2013
PM@DTU 5 DTU Management Engineering, The Technical University of Danmark
Socrative Question What characterizes a building? Is it standardized or unique?
Standardized --------------------------------------- Unique
William Isaac Thomas
"If men define situations as real, they are real in their
consequences“
PM@DTU 7 DTU Management Engineering, The Technical University of Danmark
The structuring myths of construction “…a space of representation which bears no relation of continuity with the dominant 'structural objectivity'. Myth is thus a principle of reading of a given situation, whose terms are external to what is representable in the objective spatiality constituted by the given structure.” (Laclau 1990: 61) Reality
Myth
Modern construction (products and practices)
Standardized
Postmodern construction (products
and practices)
Unique
Source: (Thuesen et al 2009/2013)
PM@DTU 8 DTU Management Engineering, The Technical University of Danmark
Modern Construction
Standardized
Empire state building
Gellerup
Herlev sygehus
Timeschedule
Production
PM@DTU 14 DTU Management Engineering, The Technical University of Danmark
Postmodern Construction
Unique
↑ Hundertwasser Zoetermeer
Bispebjerg bakke
Timeschedule
Collaboration
PM@DTU 20 DTU Management Engineering, The Technical University of Danmark
□The development of construction
□Societal development
□Production practices in construction
□Off-site production in construction
□Is off-site production the right strategy?
Agenda
PM@DTU 21 DTU Management Engineering, The Technical University of Danmark
Socrative Question Are you similar or unique?
Similar ----------------------------------------- Unique
PM@DTU 22 DTU Management Engineering, The Technical University of Danmark
We are all unique … but also similar
Biologically Cultural
we are all, regardless of race, genetically 99.9% the same
PM@DTU 23 DTU Management Engineering, The Technical University of Danmark
How unique are we?
Source: Samsung
Source: Whats Next
PM@DTU 25 DTU Management Engineering, The Technical University of Danmark
Generation Me The book argues that those born after 1970 are more self-centered, more disrespectful of authority and more depressed than ever before… both as consumers and employees.
Some interesting quotes: • "In the early 1950s, only 12% of teens aged 14 to
16 agreed with the statement 'I am an important person'. By the late 1980s, an incredible 80%, almost seven times as many, claimed they were important“
• " 81,384 high school and college students ... completed questionnaires measuring what psychologists call 'agency': a personality trait involving assertiveness, dominance, independence, and self-promotion ... the average 1990s college student scored higher than 75% of college boomers from the 1970s“
• "Seventy percent of late-1990s high school students expected to work in professional jobs, compared to 42% in the 1960s ... In 1999, teens predicted they would be earning, on average, $75,000 by the age of thirty. The average income of a thirty-year-old that year? $27,000."
• Furthermore Twenge shows, high self-esteem is _not_ correlated (or maybe it's negatively correlated) with achievement in school or at work. It is correlated with criminality, narcissism, and bad relationships, though
PM@DTU 27 DTU Management Engineering, The Technical University of Danmark
Market development
Source: Stanley M. Davis, Future Perfect
PM@DTU 28 DTU Management Engineering, The Technical University of Danmark
The long tail …a consequence of a more individualized society
Mass production Mass customization
PM@DTU 29 DTU Management Engineering, The Technical University of Danmark
The long tail and “production” paradigms
Mass production Mass customization Individual customization
Ford Model T 1908 – 1927 Sale more than 15,000,000 Number of variations : 1
Mercedes E-Class: Introduced in 1993; currently on offer Sale more around 4,500,000 so far Number of variations: 3,347,807,348,000,000,000,000,000
Mercedes E-Class Mass production Mass customization Individual customization
Ford Model T 1908 – 1927 Sale more than 15,000,000 Number of variations : 1
Mercedes E-Class: Introduced in 1993; currently on offer Sale more around 4,500,000 so far Number of variations: 3,347,807,348,000,000,000,000,000
Mercedes E-Class
Aston Martin V8 1969 -1989 Sales number 4,021 Number of variations: hand crafted
Aston martin
Developed based on Anderson (2006)
Source: (Thuesen et al 2009/2013)
PM@DTU 30 DTU Management Engineering, The Technical University of Danmark
The long tail and construction
Mass production Mass customization Individual customization
Con
stru
ctio
n in
1960
-197
0
Traditional construction today
Source: (Thuesen et al 2009/2013)
PM@DTU 31 DTU Management Engineering, The Technical University of Danmark
□The development of construction
□Societal development
□Production practices in construction
□Off-site production in construction
□Is off-site production the right strategy?
Agenda
PM@DTU 32 DTU Management Engineering, The Technical University of Danmark
Socrative Question Is the management of construction significantly different
from management of other project activities?
YES YES&no yes&no yes&NO NO
PM@DTU 33 DTU Management Engineering, The Technical University of Danmark
Construction in the light of myths Standardized Unique
Societal frame Modern ► Postmodern
Timeframe 1900 – 1970 ► 1980 ->?
Driver of identity Classes ► Individualism
Architectural credo Form follows function ► Form follows fiction
Characteristic of the building process
Complex - but known ► Chaotic
Production paradigm Mass Production ► Individual Customization
Value chain Integrated ► Fragmented
Vehicle for realization Prefabrication ► In-situ
Management paradigm Scientific Management ► Project management
Productivity High ► Low
Implementation of Lean Long term planning
(Line of Balance) ►
Short term planning (Last Planer System)
Source: (Thuesen et al 2009/2013)
PM@DTU 34 DTU Management Engineering, The Technical University of Danmark
Are we better of with unique buildings?
Source: wulffmorgenthaler.com
PM@DTU 35 DTU Management Engineering, The Technical University of Danmark
… are buildings unique?
Ørestaden
PM@DTU 36 DTU Management Engineering, The Technical University of Danmark
Do we need to view them as beeing unique?
"If men define situations as real, they are real in
their consequences“
PM@DTU 37 DTU Management Engineering, The Technical University of Danmark
What if we view buildings as both standardized and unique?
“Mass Customization = producing goods and services to meet individual customer's needs with near mass
production efficiency". Tseng and Jiao (2001, p. 685)
Source: (Tseng and Jiao 2001, p. 685)
PM@DTU 38 DTU Management Engineering, The Technical University of Danmark
□The development of construction
□Societal development
□Production practices in construction
□Off-site production in construction
□Is off-site production the right strategy?
Agenda
PM@DTU 39 DTU Management Engineering, The Technical University of Danmark
The rationality behind Mass Customization C
osts
/ w
illin
gnes
s to
pay
Diversity in range of products
Unit cost
Customer value
Margin ?
Mass production Mass customization Individual customization
Source: (Thuesen et al 2009/2013)
PM@DTU 40 DTU Management Engineering, The Technical University of Danmark
Order decoupling points… and the long tail
Sta
ndar
d
Standard parts and modules
Configuration of
buildings
Standard products
Select variant
Norms and standards
Engineering
of product
Standard parts and modules
Configuration
of building parts
ETO
ITO CTO
MTO
Custom
ized
Mass production Mass customization Individual customization
Source: (Thuesen et al 2013)
PM@DTU 41 DTU Management Engineering, The Technical University of Danmark
Off site production network
Building concepts (top-down) • Think in terms of holistic architectural and system solutions and develop re-usable solutions which can be re-used
• Address the market and not just the individual building project
Transformation
Transformation
Transformation
On site assembly
System products (bottom-up) • Producers of building materials develop (sub)systems which are intended to be a part of a building
• Specify interfaces and design rules, so as to achieve configuration rather than engineering
Transformation
Top-down vs bottom-up
Source: (Thuesen & Hvam 2013)
PM@DTU 42 DTU Management Engineering, The Technical University of Danmark
Installation shafts
Source: (Thuesen & Hvam 2013)
PM@DTU 43 DTU Management Engineering, The Technical University of Danmark
Mass production Mass customization Individual customization
NCC Komplett
The German Platform
NCC Komplett The German platform 90% Fabrication 90 % Insitu
High fixed costs, unable to control costs
Low fixed costs but still 30% cost reduction
Couldn’t compete with traditional construction practices
Established a new market – high quality and low cost
Komplett vs. the German platform
Source: (Thuesen & Jonsson 2009)
PM@DTU 44 DTU Management Engineering, The Technical University of Danmark
Frankfurt/M. Munich
Berlin Hamburg
The German platform
PM@DTU 45 DTU Management Engineering, The Technical University of Danmark
Different markets – the same platform
The technical platform
60% 90% 100% Apartments Row houses Holiday immobiles
Source: (Thuesen & Hvam 2011)
PM@DTU 46 DTU Management Engineering, The Technical University of Danmark
The platform – a platform for growth Apartments Single family houses Holiday immobiles
High end product
Mid-range product
Low end product
Row houses
Source: (Thuesen & Hvam 2011)
PM@DTU 47 DTU Management Engineering, The Technical University of Danmark
Platform development through incremental innovation
Source: (Thuesen & Hvam 2011)
PM@DTU 48 DTU Management Engineering, The Technical University of Danmark
Experinces • Working with platforms is no rocket science,
substantial benefits can be achieved by using existing construction practices and tools
• No fancy IT-systems are needed for the implementation of platforms. The platform can be situated within a combination well defined skills and organizational culture.
• Implementation of platforms requires a strong commitment and loyalty from the whole organization
• Important to have a specific customer focus (target costing)
• Platforms require incremental and systematic innovation with a clear separation between the continuous development of and the production based on the platform.
Source: (Thuesen & Hvam 2011)
PM@DTU 49 DTU Management Engineering, The Technical University of Danmark
□The development of construction
□Societal development
□Production practices in construction
□Off-site production in construction
□Is off-site production the right strategy?
Agenda
PM@DTU 51 DTU Management Engineering, The Technical University of Danmark
Exercise: How many figures can you build using
6, 2x4 blocks of the same color?
915.103.765
Source: http://www.math.ku.dk/~eilers/lego.html
PM@DTU 52 DTU Management Engineering, The Technical University of Danmark
What is modularization? The anatomy of modularity •Modularity is an attribute of a complex
system that advocates designing structures based on
– Minimizing interdependence between modules and
– Maximizing interdependence within them
that can be mixed and matched in order to obtain new configurations without loss of the system’s functionality or performance (Baldwin and Clark 1997; Langlois 1992).
•Each module communicates and interacts with the others via standardized interfaces that allow modules’ decoupling
Source: (Campagnolo & Camuffo 2010)
PM@DTU 53 DTU Management Engineering, The Technical University of Danmark
Types of modularity
Source: (Campagnolo & Camuffo 2010 & Thuesen 2012)
Process modularity
Organizational modularity
Product modularity
Source: Thuesen (forthcomming)
Projekt
Aktører: Virksomheder: Arkitekter, Rådgivere, Entreprenører, Håndværkere Interesse Org: DB, FRI, Danske Ark, Tehniq, Muro…
Markeder: Nybyg, renovering Boliger, sygehuse, Erhverv Anlæg…
Aktører: Virksomheder: (producenter af bygge- materialer, grossister,) Interesse Org.: DI Byg, DB Bygge-materialer,
Regulering: Obligatorisk: BR (krav om styrke, brandsikkerhed og sundheden), DS (normer), MK, VA, ETA, CE mærkning Frivillig: Betonvare Kontrollen, Dansk Murstenskontrol… FSC, svanemærkning
Aktører: Energiselskaber (Gas, EL og Varme) Vandværker Renovation Regulering:
Krav om CO2 reduktion for energiselskaber
Regulering: Byggeloven, Bygningsreglementet Energimærkning
Markeder: Service (FM) Vand Varme EL
Forretningsmodel: Service, abonnement Høje variable/faste omkostninger
Forretningsmodel: Mass produktion, Høje faste omkostninger
Forretningsmodel: Licitation baseret, Engineer to order, Høje variable omkostninger
Markeder: Byggematerialer (beton, Vinduer, isolering,…) Distribution (Grossister, transport…)
PM@DTU 55 DTU Management Engineering, The Technical University of Danmark
BOT
DBO
PSS
System- leverancer
Projekt
BIM, LC, Partnering, OPP
FM Automation
ESCO
LCA
C2C
DGNB, LEED, BREAM
Source: Thuesen (forthcomming)
PM@DTU 56 DTU Management Engineering, The Technical University of Danmark
PM@DTU 57 DTU Management Engineering, The Technical University of Danmark
Central references Baldwin, C.Y. and Clark, K.B. (1997). Managing in an age of modularity. Harvard Business Review, 75, pp.
84–93.
Campagnolo, D. & Camuffo, A. (2010) The Concept of Modularity in Management Studies: A Literature Review, International Journal of Management Reviews, Blackwell Publishing Ltd and British Academy of Management, pp. 259-283
Thuesen, C. (2012) Understanding Project Based Production through Socio-technical Modularity, The Academy of Management 2012 Annual Meeting, Boston, MA,US
Thuesen, C., Jensen, J. S., and Gottlieb, S. C. (2009), “Making the long tail work—Reflections on the development of the construction industry the past 25 years.” Proc., 25th Annual ARCOM Conf., Association of Researchers in Construction Management, Nottingham, U.K., pp.1111–1120
Thuesen, C., Jensen, J. S., and Gottlieb, S. C. (2013), Enabling Mass Customization in Construction : Making the long tail work, In Piroozfar, P.A.E. & Piller, F. T. (eds.) Mass Customisation and Personalisation in Architecture and Construction, Routledge
Thuesen, C. & Jonsson, C. C. (2009) The Long Tail and innovation of new construction practices - Learning points from two case studies. In A.S. Kazi, M. Hanus and S. Boujabeur, (eds.) "Open Building Manufacturing: Key Technologies, Applications, and Industrial Cases", Manubuild
Thuesen, C. & Hvam, L. (2011) Efficient on-site construction: learning points from a German platform for housing, Efficient on-site construction: learning points from a German platform for housing", Construction Innovation: Information, Process, Management, Vol. 11 Iss: 3, pp.338 – 355
Thuesen, C. & Hvam, L (2013) “Rethinking the Business Model in Construction by the Use of Off-Site System Deliverance: Shaft Project” Journal of Architectural Engineering, Vol. 19, No. 4, December 1, 2013.
Tseng, M. M., and Jiao, J. (2001). “Mass customization.” Handbook of industrial engineering: Technology and operationmanagement, 3rdEd., G. Salvendy, ed., Wiley, New York.