Chapter 9 – Page 5 – The OM Blog by Heizer, Render, & Munson

OM in the News: Citigroup’s New Office Plan–No Offices

Citigroup CEO Michael Corbat at the bank’s HQ, under renovation. Corbat says the open floor plan will encourage communication.

In renovating its Manhattan tower, Citigroup is planning to offer all the amenities of the modern skyscraper, including a rooftop deck, state-of-the-art gym, upgraded coffee and faster elevators. But when the bank’s executives move this month into their new digs at the 39-story office building, they will find one big thing missing: actual offices. The nation’s 3rd-largest bank is making the shift to an open-plan layout—a vibe more identified with tech startups than global banking conglomerates—where no one, not even its CEO will have a door. Most employees won’t even get their own desks.

Citigroup says the setup will connect people face-to-face, raise energy levels and save money, by fitting more people into one space. The new layout is minimalist and egalitarian. Because most desks aren’t assigned, employees must lock up their family photos and personal stuff each night. Everyone gets a window view—but no one gets complete privacy.

“Researchers disagree about whether open offices foster communication or encourage distraction,” writes The Wall Street Journal (Dec. 26, 2015). The wall-less workspace is meant to flatten hierarchies, something banks have traditionally been built on. The Citicorp CEO’s new 360 sq. ft. workspace won’t have walls or a door. Instead it features tall glass dividers to provide what the bank calls “seated privacy.” Lesser executives get semiprivate spaces of 180 sq. ft.

The bank says it carefully considered its employees’ concerns. The design—from white-noise generators to walls and ceilings that absorb sound—is meant to minimize the distraction of nearby conversations. Each floor will have multiple conference rooms and small phone rooms for private conversations. But other banks that have incorporated some open spaces have kept private offices for almost all of their senior executives.

Classroom discussion questions:

1.Why is office layout an important OM decision?

2. What are the 3 physical and social aspects that workspace layout must balance (see Chapter 9)?

OM in the News: The Robots Chasing Amazon

The Fetch warehouse robot can carry as much as 150 pounds at a time

In Fetch Robotic’s mock warehouse, stocked with granola bars, breakfast cereal, sponges, and other household goods, a worker plucks items from shelves and places them in a plastic bin. The bin is set atop a small wheeled robot that follows the employee’s every step like a puppy. When the container is full, the robot darts off with it to a packing area; a second robot with an empty bin then picks up where the first left off, allowing the worker to keep gathering items without pausing or having to push around a heavy cart. Fetch Robotics, reports BusinessWeek (Oct.26-Nov. 1, 2015), is one of a handful of startups working on warehouse robots aimed specifically at e-commerce companies.

As with most things in the world of online retail, Fetch exists because of something Amazon.com did. In 2012, Amazon paid $775 million for warehouse robot maker Kiva Systems; shortly after, it stopped Kiva from selling its machines to anyone else. “When Amazon drops nearly $1 billion on something just to keep it out of the hands of competitors, it sends a really strong message to the market,” says an industry analyst. With a goal of plugging that hole, Fetch says its robots can keep up with a briskly walking person for 8 hours on a fully charged battery. It has just started selling its robots, for $25,000 apiece, and is considering renting them for $4 an hour–meaning the full purchase price should pay for itself in 6 months.

The cost of greater automation, of course, is fewer jobs. But the rise of online shopping created one of the relative bright spots in the U.S. job market: The warehousing industry employed 778,000 people in September, up 22% from 5 years earlier. For now, the Fetch robots are meant to be mechanical pack mules, supplementing humans who have the vision and dexterity to quickly recognize and retrieve the desired products. Fetch, however, is developing a robot with cameras and clawed arms that it says will eventually be able to grab items from the shelves, too.

Classroom discussion questions:

How does the Fetch robot differ from Amazon’s Kiva?
Why is robotics so important in warehouse management?

OM in the News: Reinventing Federal-Mogul’s Supply Chain

Federal-Mogul handles more than 400 million auto parts annually

For more than a century, Federal-Mogul has handled the gritty task of producing hundreds of thousands of auto parts, sticking them in boxes and shipping them to warehouses or stores across the country. Now—aggravated by how much time is lost in the process—the company is spending $100 million to upgrade its supply chain from end to end. Improvements range from an online parts catalog with 360-degree views of products to “picking robots” in its warehouses to help ensure that parts are delivered to customers on time. The $7 billion company produces everything from pistons and engine bearings to windshield wipers and exhaust gaskets.

Over the years, Federal-Mogul has become a patchwork of IT systems adopted from the companies it acquired, writes The Wall Street Journal (Oct. 14, 2015). The push under the new plan is to move the entire company onto SAP enterprise software. “We are facing a proliferation of parts,” says the supply chain chief. “Cars are staying on road longer, so you need to keep those parts, and meanwhile, auto makers are adding more models.”

So Federal-Mogul has opened additional warehouses that feature robotics systems that allow the company to consolidate storage space and offer all of the parts the company makes under one roof. (Using robotics is a page right out of Amazon’s playbook, which has used robots to speed the picking of individual pieces of merchandise for shipping). Radio-controlled, battery-operated robots run across the grid picking up requested containers when orders are received and put them onto a conveyor that will take them to the sorting area–a much more efficient system than at the older warehouses. “You have hundreds of people walking miles every day within the warehouses to get these parts, and that takes time,” says the head of logistics. “There is also the chance that parts get mixed up or broken. Now we have the parts come to the employees.”

Classroom discussion questions:

Why does the firm need the SAP system, and what will the new software do?
What is the advantage to using robots in the warehouses?

OM in the News: The Pentagon’s F-35 Push

Lockheed's F-35 assembly line in Fort Worth, Texas — Lockheed’s F-35 assembly line in Fort Worth, Texas

When I worked as a design engineer at McDonnell Douglas in the late 1960s, the F-4 Phantom fighter jet assembly line was one floor above my basement office. We rolled out one Phantom a day, a very efficient line, with volume stable and constant. This has not been the case with our nation’s latest fighter jet, the F-35. Lockheed’s mile-long assembly plant in Fort Worth currently produces only four F-35s a month.

But now “the Pentagon plans to push Congress to approve a deal for more than 400 F-35 jets, worth $34 billion, in what would be the largest-ever weapons’ contract,” writes The Wall Street Journal (May 30-31, 2015). The Pentagon said that committing to buy that many jets over 3 years starting in 2018 could yield cost savings as suppliers would be able to plan with more certainty, buy materials in bulk and triple production from existing levels to about 150 planes a year.

Boosting production is crucial to cutting the cost of the F-35 from the $108 million average paid for the jet in a 43-plane deal agreed last November. Lockheed recently submitted proposals for the next 2 batches of aircraft, and alongside other suppliers have pledged to cut the average cost to $80-$85 million by 2019. Even a rise in output to 150 jets a year would fall short of the 200-plane capacity of the Lockheed plant. Analysts believe official projections of demand for more than 3,000 jets won’t be realized. (Italy and Japan also plan to assemble some jets). Lockheed’s earlier F-16 fighter jet had more than 4,500 orders, and experts expect the F-35 to secure at most 2,000.

Classroom discussion questions:

1. This cost savings plan requires knowledge of learning curves (see Module E). What is the typical learning rate in this industry and how does it impact the analysis?

2. Why will increasing production rates decrease unit costs?

OM in the News: Hospital Patients May Feel Better Already in New Hospital Layout

Can good hospital layout help heal the sick, asks The New York Times (Aug. 22, 2014)? The University Medical Center of Princeton realized that it had outgrown its old home and needed a new one. So management decided to design a mock patient room–similar to the process we report in our video case study in Chapter 9 (called Laying Out Arnold Palmer Hospital’s New Facility). Medical staff members and patients were surveyed. Nurses and doctors spent months moving Post-it notes around a model room set up in the old hospital. It was for just one patient, with a big foldout sofa for guests, a view outdoors, a novel drug dispensary and a bathroom positioned just so.

Equipment was installed, possible situations rehearsed. Then real patients were moved in from the surgical unit — hip and knee replacements, mostly — to compare old and new rooms. After months of testing, patients in the model room rated food and nursing care higher than patients in the old rooms did, although the meals and care were the same. But the real eye-opener was this: Patients also asked for 30% less pain medication. Ratings of patient satisfaction are in the 99th percentile, up from the 61st percentile before the move. Infection rates and the number of accidents have never been lower.

There are also some fine points to the Princeton layout, like a sink positioned in plain sight, so nurses and doctors will be sure to wash their hands, and patients can watch them do so. It’s less antiseptic, cluttered and clinical than your average patient room, more like what you find in a Marriott hotel, anodyne and low-key, with a modern sofa under a big window; soft, soothing colors; and a flat-screen TV. “The room,” writes the Times, “is dignified, which matters to a patient’s mental health. And it works.”

This is a great classroom example of the role of layout in the service sector.

Classroom discussion questions:

1. Why is layout important in hospitals?

2. What are some of the OM benefits of this new layout?

OM in the News: The New Office Is Oh So Quiet

“In the prototypical modern workplace,” writes BusinessWeek (July 10, 2014), “desks are spread around open floors or clustered in pods.” The theory is that this encourages collaboration and creates the chance interactions among colleagues from which breakthroughs emerge. And of course, these layouts also allow more workers to be economically squeezed into less space. As a result, the quiet and calm necessary for deep thinking, and the solitude that nourishes the introverted mind, are obliterated. In the past century (since Steelcase–the largest office furniture company–invented the “modern efficiency desk”), the American office has only grown more open. Today, with “flat management structure” and “radical transparency,” even CEOs have put their desks in the bullpen.

This is despite a growing body of research that underlines the open plan’s drawbacks. A 2013 study in the Journal of Environmental Psychology found that the idea of open plans improving morale and productivity has no basis in the research literature. An earlier paper looked at physiological and mental effects from being subjected to 3 hours of simulated office sounds. Among other things, participants gave up faster on a set of unsolvable brainteasers—their willpower presumably sapped by simply having to endure the noise. And while workers in open-plan offices do indeed talk to each other more, those conversations are superficial, because the conversants know neighbors can listen in. Steelcase’s own surveys found that privacy has been the No.1 issue for years. It’s the biggest gap between what workers have and what they want.

Unveiled last month, Steelcase has introduced five new office layout rooms: Be Me, Flow, Studio, Green Room, and Mind Share. Studio has a low chaise, a plush rug, and a basket of rolled-up yoga mats in one corner. In Be Me, a daybed takes up one side of the space, encouraging reclining, even napping. Green Room, designed for introvert-friendly small meetings, has a sectional sofa– introverts prefer to converse obliquely, not face-to-face.

Classroom discussion questions:

1. How have office layouts changed over the years?

2. Why is layout an important OM issue?

OM in the News and Video Tip: The One Worker Assembly Line

At Japanese manufacturer Roland DG, assembling thousands of parts into wide-format printers is as easy as coloring by numbers, writes The Wall Street Journal (June 2, 2014). That’s because Roland DG makes everything from billboard printers to machines that shape dental crowns using an advanced production system known as “D-shop.” Under this method, workers in single-person stalls assemble products from start to finish, guided by a 3-D graphic and using parts delivered automatically from a rotating rack. Every worker is capable of assembling any variation of the company’s 50 or so products.

In 1998, Roland became one of the first companies in Japan to abandon the assembly line in favor of one-person work stalls modeled after Japanese noodle stands. With orders coming in smaller and smaller lots, Roland decided it needed a manufacturing system in which a single worker could build any one of its diverse products. On a recent day, one employee was assembling from scratch an industrial printer that ultimately would be more than twice her size and weigh almost 900 pounds, while another was assembling a dental-crown milling machine.

A computer monitor displays step-by-step instructions along with 3-D drawings: “Turn Screw A in these eight locations” or “Secure Part B using Bracket C.” At the same time, the rotating parts rack turns to show which of the dozens of parts to use. Meanwhile, a digital screwdriver keeps track of how many times screws are turned and how tightly. Until the correct screws are turned the correct number of times, the instructions on the computer screen don’t advance to the next step. The system is so simple, say managers, that nearly anyone can assemble products anywhere. The computer even gives workers a pat on the back at the end of the day, with the message, “You must be tired, and we thank you.”

You and your students will enjoy the 2 minute video embedded in the WSJ article.

Classroom discussion questions:

1. Why did Roland develop the D-shop?

2. What are the advantages and disadvantages of this approach over the traditional assembly line?

OM in the News: Lego High-Rise Construction in NY

Apartments are preassembled at the factory, safely away from the elements

Inside a warehouse at the Brooklyn Navy Yard, steel beams and flat metal sheeting rest atop a workbench. A diagram–which looks an awful lot like furniture assembly instructions–spells out where each beam and metal screw belongs. On it someone has carefully checked off each component, one by one.

The metal may not look like much yet, but it’s on its way to becoming part of the world’s tallest modular residential high-rise. Workers will configure these beams into walls, which will become the scaffolding of rooms, which link together to form entire apartments. Then the “mods” are loaded onto a truck and driven 2.5 miles away, lifted by crane and snapped into position like Lincoln Logs. Time to load an apartment: 30 minutes. From the first cut of metal to placing a mod on its final site, the entire process takes about 20 days. “And we’ll get faster,” says the VP of Swedish construction giant, Skanska. “This is bringing the best of manufacturing and construction together.” The first 32-story tower is slated for completion in December.

Skanska is counting on the new factory approach to urban construction to save on costs and provide greater quality control, writes Forbes (May 5, 2014). A 1,000-square-foot apartment in NY costs an estimated $330,000 to build; Skanska estimates it will knock 15% to 20% off that this go-round–and as much as 30% off with more experience.

“If they can show that here, I think it has potential to have a transformative effect,” says a Tulane architecture professor. “It’s of interest both to architecture and to developers who are interested in building affordably and fast.” The most important innovation is the construction method itself. The factory feels like the love child of Home Depot and a sterile surgical chamber. “We believe that in factory environments the productivity of the worker is greater,” says a project exec.

Classroom discussion questions:

1. Which of the seven layout types in Chapter 9 best describes this project?

2. Which of the 10 OM decisions impact this construction?

OM in the News: Laying Out the Bank of the Future

“JPMorgan’s banks of the future will fundamentally upend Americans’ relationship with banking,” writes The New York Times (April 2, 2014). They will offer more services for customers in far less space. The layout of the new banks has gained urgency across the industry as a growing number of customers use mobile technologies to conduct many traditional banking functions, like check deposits and paying bills, without ever stepping into a branch. Either the bank branches adapt or they go the way of video stores.

JPMorgan is not the only institution trying to reimagine the traditional bank branch with its long rows of tellers standing behind glass. Across Wall Street, banks are looking to slash expenses and wring more profit from retail banking. Banking giants like Bank of America and Citigroup are working to overhaul branches with the goal of more closely resembling an Apple store, where employees holding tablets and other high-tech gadgets tend to customers.

Last year, Wells Fargo opened a 1,200-square-foot “minibranch” in Washington. JPMorgan, whose legacy bank branches averaged about 4,400 square feet several years ago, has already slimmed them down to 2,500 to 3,500 square feet. That firm began by convening focus groups to determine what customers wanted. The findings: space and simplicity.

Within the new branches, the teller line is no longer the centerpiece. That has been moved to the side. The focal point is now occupied by express banking kiosks, a kind of souped-up A.T.M. Aside from their new look, the machines allow more customized transactions. Customers can, for example, opt to get cash in any amount and any denomination, not just in $20 bills or $50 bills. The new machines are safer, too. Unlike traditional A.T.M.s that must be restocked with cash, these units replenish their own supplies from deposits, cutting down on the amount of times that employees have to ferry money to the vaults.

Classroom discussion questions:

1. Why is layout a major concern to banks?

2. What other changes are taking place to make kiosks more secure>?

OM in the News and Video Tip: Rise of the Robots

“The exponential growth in the power of silicon chips, digital sensors and high-bandwidth communications improves robots just as it improves all sorts of other products,” writes The Economist’s special report (March 29-April 4, 2014). Three other factors are also at play.

One is that robotics R&D is getting easier. New shared standards make good ideas easily portable from one robot platform to another. A robot like Rethink Robotics’s Baxter, with two arms and easy, intuitive programming interface, would have been barely conceivable 10 years ago. Now you can buy one for $25,000. A second factor is investment. (The biggest robot news of 2013 was that Google bought eight promising robot startups.) The third factor is imagination. In the past few years, clever companies have seen ways to make robots work as grips on film sets and panel installers at solar-power plants. Aerial robots—drones– let farmers tend their crops in new ways, give viewers and broadcasters new perspectives on events, monitor traffic and fires, look for infrastructure in need of repair, and more.

While society may benefit greatly, robots’ growing competence may make some human labor redundant. Aetheon’s Tugs, for instance, which take hospital carts where they are needed, are ready to take over much of the work that porters do today. Kiva’s warehouse robots make it possible for Amazon to send out more parcels with fewer workers. Click here to watch a great 3 minute video on Amazon’s robots. Driverless cars could displace millions of people employed behind the wheel today.

The advent of robots that are cheap and safe enough to be used outside big factories is one reason for a resurgence of interest in robotics over the past few years. Foxconn, a Taiwanese company that manufactures and assembles electronics, is aiming to robotize much of its operation with hundreds of thousands of its own relatively cheap Foxbots. Car companies use the lion’s share of industrial robots; they account for over 50% of robot installations in the U.S.

Classroom discussion questions:
1. Why are robots proliferating?

2. Why did Amazon buy Kiva Systems?

OM in the News: A Cure for Hospital Design

Endless corridors that seem to lead nowhere. Poorly marked entrances. Multiple elevator banks and incomprehensible signs. “Hospitals,” writes The Wall Street Journal (Feb. 4, 2014), ” are realizing they have a design problem as patients and visitors struggle to navigate the maze of the modern medical complex.” Confusing layouts and signage add to patients’ anxiety at a time when many are feeling ill and are coming to the hospital to undergo tests and procedures.

Now, many hospitals are borrowing strategies from shopping malls and airports to make it easier for people to get around—a process design experts call wayfinding. Technical names for departments, such as Otolaryngology, are being replaced on signs with plain language—Ear, Nose and Throat.

Confusing layouts can result from years of hospital renovations and building additions. When hospitals expand they often fail to update their signs for multiple new entrances, wings and unconnected buildings. At Rapid City Regional Hospital in South Dakota, patients from distant ranching and farming communities frequently complained about finding their way through the 650,000-square-foot complex. So medical jargon directing patients to Antepartum and Postpartum services, for instance, was changed to Labor and Delivery. The Rapid City hospital, which spent about $300,000 on its wayfinding project, installed direction-finding digital information kiosks at each of the three entrances. Different patient areas were given a different color code. If patients or visitors look lost, employees are expected to stop what they are doing and offer to help, even to escort them to their destination.

Universal symbols to help people find departments have caught on in some hospitals, especially when patients speak various languages. The symbols, such as a teddy bear to signal the pediatrics department, have reduced patient confusion at Children’s Mercy Hospital in Kansas City.

Classroom discussion questions:

1. Why are hospital layouts often confusing?

2. What can be done, besides the ideas noted in the WSJ, to improve flows?

OM in the News: Before the Drones, Amazon Lets Loose the Robots

Amazon received a lot of news coverage for its sci-fi drone-delivery idea last week. But an immediate robotics effort under way in the Seattle retailer’s warehouses could save the company more than $900 million a year. Amazon’s rollout of robots from a company it bought last year, Kiva Systems Inc., could help pare 20% to 40% off the $3.50 to $3.75 cost of fulfilling a typical order, reports The Wall Street Journal (Dec. 9, 2013). The robots can shuttle shelves full of merchandise to warehouse workers, relieving of the workers of having to dash throughout the warehouse. “We believe this could be a significant opportunity to drive higher operating efficiency across Amazon’s massive fulfillment-center network,” says one industry expert.

Amazon has been working to reduce order costs and speed delivery, in part by constructing more warehouses closer to urban centers. While many of its latest efforts focus on deliveries themselves, Kiva robots could improve efficiency within warehouses, where humans—and human error—still rule the day. Amazon just disclosed that it has 1,400 Kiva robots in 3 of its warehouses. A broad rollout of Kiva robots could save Amazon $458 million to $916 million a year.

Perhaps more tantalizing is the potential for Amazon to sell the robots to other companies. Before Amazon bought Kiva, the robotics company was charging about $2 million for a kit of robots and as much as $20 million for large installations. Meanwhile, warehouse robots will remain a source of fascination. Indeed, Amazon’s announcement of its drone-delivery idea appeared to have prompted to disclose its effort to build robots.

Classroom discussion questions:

1. What are the advantages and disadvantages of introducing robots in the Amazon system?

2. Compare the use of drones vs. robots in improving OM efficiency.

OM in the News: The Bone Factory

Blood is everywhere in JBS’s vast slaughterhouse in Greeley, Colo., reports BusinessWeek (Sept. 23-29, 2013). It’s puddled on concrete floors, smeared on workers’ smocks, gushing from cattle knifed on the killing floor. The smell hangs on the air in a high-ceilinged room, where JBS employees toil at chopping tables along a conveyor belt. With hooks in one hand and knives in the other, they trim fat and pare as much muscle from the bone and vertebrae as they can, turning raw slabs into tenderloins and New York strips.

“Disassembly” lines like this one, relying not on robots but humans, are where JBS and other meatpackers make money. Profit margins are slim in the meat business. Rivals buy essentially the same livestock, fatten them on the same feed, and hope to whittle extra scraps of profit by being the most efficient at turning carcasses into salable cuts. “Humans have not invented a machine that can debone a cow or a chicken as efficiently as a human being,” says a JPMorgan analyst.

Each day, the Greeley plant’s 3,200 workers can slaughter and debone 5,400 head of cattle, producing 3.3 million pounds of meat. Beef expertly cut from the bone can fetch $10 a pound at retail, while leftover scraps get 1/10 of that, quickly adding up to a lot of lost profit.

JBS spends heavily on training and equipment to improve the yield. A steer or heifer can yield 72% of its gutted weight. Further, the company also installed overhead screens that flash numbers indicating whether workers are meeting yield targets. Progress is also measured in bones: the clean, white skeletal fragments are tossed into baskets behind the disassembly line, where supervisors count how many each line worker is detaching. Top producers wear black hats and get paid more.

Classroom discussion questions:

1. How does the disassembly line differ from an assembly line?

2. Why is productivity so important at JBS?

OM in the News: Wells Fargo’s Layout Goes Small in a Big Way

Customers who walk into Wells Fargo’s newest branches won’t see teller windows, safe-deposit boxes or bankers sitting in offices, writes The Wall Street Journal (April 12, 2013). Instead, bank employees will walk around with computer tablets, and the branch’s walls will fold in at night so that only the ATMs are exposed to customers. Welcome to the incredibly shrinking bank branch.

The “minibranch” is the bank’s first effort to create a floor plan that can serve most of a customer’s basic needs in less than half the space of a traditional setup. Typical branches are larger than 4,000 square feet and cost roughly $3 million to build. Older branches can be as large as 10,000 square feet. Minibranches take up 2,000 square feet or less– and their operating costs are 40% to 50% below traditional branches.

Under the new layout, bank employees approach customers when they walk into the lobby and guide them to one of three 19-inch flat ATM screens. There, they can conduct a transaction on their own or receive assistance from the employee who carries the computer tablet and wears a messenger bag that holds a keyboard and cellphone. The branch doesn’t have a vault; all cash is kept in the ATMs. One of the most unusual features is a series of movable walls, which open to reveal a desk area and banquette behind each ATM. When the branch is closed, the walls are locked into position to hide that area, giving customers access only to the ATMs.

Bank executives acknowledge that the new formats might turn off some customers who walk into a branch because they prefer old-style banking. “Customers are going to a branch for a reason; it is to deal with people, not an iPad,” says one analyst.

Discussion questions:

1. How does this layout decision (see Chapter 9) impact efficiency at Wells Fargo? Customer service?

2. Have minibranches been attempted earlier? With what results?

OM in the News: Modular Construction in New York City

Factory workers installing walls in Pennsylvania

A vacant lot in Manhattan is littered with rubble and concrete pilings. But this month, writes The New York Times (March 10, 2013), this 50-foot-wide sand pit will be transformed into a 7-story apartment building, with finished bathrooms, maple cabinetry and 10 terraces. This example of fixed position layout (see Chapter 9) is the result of modular, or prefabricated, construction. The technique means a building is manufactured piecemeal on a factory assembly line, trucked to the construction site and erected much the way Legos are. The trend toward modular does pose issues, particularly for NYC’s powerful construction unions as it means exporting some construction jobs to factories outside NY.

The modules, which have steel and concrete frames, are being trucked four to five at a time to the building site from their Pennsylvania factory. On each of the following mornings for about four weeks, an enormous crane will stack the modules. Workers will then “zip” them up, connecting one to the next, and to the building’s plumbing and electrical systems.

The project is expected to take 9 months from start to finish, compared with 16 to 18 months if construction had been done on-site. “Because it takes half the time,” says the builder, “we can rent out the units and generate income much quicker, and the carrying costs are lower.” Because modular units are built on an assembly line — which is a quarter-mile in length at the factory — there are constraints, including having to choose the paint colors, finishes, appliances and every other detail upfront. But with indoor construction, there are no delays or damages to the material from inclement weather. Modular construction provides sustainability benefits, too. “We can recycle everything, all of the packaging materials, the gypsum, every piece of steel,” says a modular builder, “because none of our products are affected by the elements.”

Discussion questions:

1. What are the advantages of fixed position layout in building construction?

2. What are the disadvantages?