Understanding and implementing these will make you more profitable.
When I was twelve years old, my favorite video game was Donkey Kong. It was a Nintendo arcade game in which Mario tries to reach and rescue a princess by dodging barrels hurled at him by a huge gorilla.
I loved this game and would sometimes play it for hours on end. And I got pretty good at it. I didn’t use any shortcuts or workarounds — it was just my practiced skill and cat-like reflexes versus the machine.
Nowadays, (or so I’m told) most video games can be hacked by what are known as “cheat codes”: secret codes which, when unlocked and entered into the game console, access otherwise unavailable abilities, shortcuts, or weapons that make the game far easier to win.
What does this have to do with offsite construction? The answer is that the industry can be viewed as a game — the game of construction. It’s a game that is more easily won with the use of legal and ethical “cheat codes.” These codes are only available to offsite manufacturers, but those manufacturers must unlock them in order to use them.
Below are seven cheat codes available to you as an offsite construction operator, as well as the keys to unlocking those codes. Using them will make you virtually unstoppable.
Cheat Code #1: Reduced Waste and Cost Savings
Traditional construction sites often generate substantial material waste, leading to increased costs. Offsite construction excels when it comes to reducing that waste. According to research by the National Institute of Building Sciences, offsite construction can reduce construction waste by up to 90%, resulting in substantial cost savings.
Unlocking the Code
To maximize this advantage, factories should work on implementing Lean methodologies such as Value Stream Mapping (VSM), which will help them identify and eliminate waste in their processes. VSM includes the optimization of material handling and using just-in-time inventory management to minimize the overproduction of units. In addition to reducing wasted time and materials, just-in-time management can also reduce excess inventory, leading to significant cost savings.
Cheat Code #2: Faster Project Completion
Offsite construction is known for its speed. The fact that prefabricated and modular components are produced quickly in a controlled factory environment leads to shorter project times when compared to site building. In fact, a 2019 report by McKinsey & Company, “Modular construction: From projects to products”, highlighted that offsite construction can reduce project schedules by 20% -50%, leading to time savings and quicker returns on investment.
Unlocking the Code
To capitalize on the speed advantage, offsite construction factories should implement a pull production system, in which modules or components are produced only in response to customer demand, reducing lead times.
Concurrent engineering and modular design — wherein various teams (architects, engineers, manufacturer, etc.) collaborate from the project’s early stages to design, engineer and produce building components simultaneously — can further streamline the process, enabling faster project completion.
Cheat Code #3: Enhanced Quality Control
In traditional construction, quality can vary due to factors like weather, skill levels of on-site workers and human error. Offsite construction reduces quality problems by providing a controlled and repeatable manufacturing environment. According to the Lean Construction Institute, defects in offsite construction can be up to 80% less frequent compared to traditional methods, resulting in higher-quality buildings.
Unlocking the Code
Quality control in offsite construction can be improved by implementing Total Quality Management (TQM) principles, such as customer focus, continuous improvement, employee involvement, process focus, data and leadership commitment. Continuous training and skill development programs for factory workers can help maintain consistently high quality. Additionally, investing in advanced inspection and testing equipment and procedures can ensure that defects are minimized.
Cheat Code #4: Safety Improvements
Offsite construction reduces on-site work activities, lowering the risk of accidents and injuries. The Occupational Safety and Health Administration (OSHA) reports that offsite construction can reduce workplace injuries and fatalities by 30% – 40% compared to traditional construction.
Unlocking the Code
To maximize this advantage, offsite factories should prioritize safety by implementing 5S, a Lean methodology that ensures a safe workplace by emphasizing cleanliness, organization and the elimination of clutter. Integrating other safety protocols into the production process and regularly conducting safety audits can further reduce the risk of accidents.
Cheat Code #5: Energy Efficiency
Offsite construction can optimize energy efficiency through design standardization and the use of advanced materials. Research from the International Energy Agency (IEA) suggests that offsite construction can lead to energy savings of up to 30% in building operations, reducing carbon footprints.
Unlocking the Code
Maximizing energy efficiency involves using Lean principles to optimize energy usage. This can be achieved by reducing energy waste through better insulation, energy-efficient equipment, and sustainable construction materials. Implementing energy-efficient lighting and HVAC systems in the factory can also contribute to energy savings.
Cheat Code #6: Consistency and Predictability
Offsite construction can enable predictability and standardization through implementation of a manufacturing process. Unlocking the Code To maintain consistency and predictability, factories should standardize their processes and invest in technology like Building Information Modeling (BIM) to ensure accurate designs. Regular process audits and continuous improvement efforts can further refine production methods, ensuring a predictable and consistent product.
Cheat Code #7: Customer Satisfaction
Offsite construction’s potential to deliver high-quality, defect-free buildings in less time can lead to higher customer satisfaction. A 2020 study by Dodge Data & Analytics entitled “Prefabrication and Modular Construction 2020” found that 65% of owners reported being highly satisfied with well-executed offsite construction projects compared to 35% for traditional construction.
Unlocking the Code
To get the most from the customer satisfaction advantage, factories must prioritize quality and customer feedback. Implementing a customer feedback loop and tracking customer satisfaction metrics can help identify areas for improvement. Lean principles, such as Kaizen, a continuous improvement methodology I outlined in the December 2023 issue of Offsite Builder, ensure that customer needs are met and even exceeded.
Winning the Construction Game
The point here is that offsite manufacturers who want to win the game of construction have access to a variety of cheat codes — which can be unlocked through Lean manufacturing principles and continuous improvement methodologies.
Perhaps you feel like fate has been throwing as stream of profit-killing barrels at your company. But once armed with the above cheat codes, you can level up and win the game by reducing waste, enhancing quality, safety, and speed, and maximizing customer satisfaction.
Daniel Small is a Denver, Colo.-based management consultant to the offsite construction industry. He specializes in Lean Construction and Manufacturing and Six Sigma methodologies. For assistance with improving your offsite manufacturing process, contact him at 719-321-1953 or [email protected] or visit www.LeanOffsite.com.
