OM in the News: Why Can’t Houses Be Built Like iPhones?

Katerra manufactures whole walls—including windows, insulation, wiring and plumbing—in its factory

The world’s housing crisis has many causes, but there is a stubbornly persistent one that we should have been able to solve by now: Productivity. As prices of components and materials for pretty much every other physical object—cars, cellphones, clothing—have dropped precipitously, it still costs too much to build a building. “Over the past 60 years, productivity in manufacturing has increased 8-fold while remaining basically flat in construction,” writes The Wall Street Journal (July 3, 2017).

Some companies think they have a solution. They are reviving old ideas in construction, including prefabrication and modular building. And they’re applying all the logistics and IT knowledge gained from building the global supply chains that deliver mobile devices, and all the automation pioneered by the automobile and other manufacturing industries.

Take Katerra. It has a 200,000-sq-ft factory in Phoenix where it manufactures whole walls, including all the windows, insulation, electrical wiring and plumbing. Katerra uses an integrated CAD/CAM system that tells all the factory’s automated saws and routers how to produce all the buildings’ components. The same system connects to job-site cranes that lift and place the finished panels. Katerra ships the walls to construction sites, where they’re snapped together like Lego bricks. The company’s goal is to build 7 more factories in 2 years, each intended to serve a different geographic area.

Katerra is responsible for its buildings from design to final construction, which allows it to further cut costs. In consumer electronics, “design for manufacturability”—the reconfiguring of a device’s shape and function to make it cheaper to build—is standard. Another thing Katerra borrows from that industry: buying goods in bulk, direct from suppliers.

Classroom discussion questions:
1. What is design for manufacturability? Give an example.

2. Of what type of layout is this an example (see Ch. 9)?

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

Apartments are preassembled at the factory, safely away from the elements
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: Modular Construction in New York City

Factory workers installing walls in Pennsylvania
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.

Completed 7-story apartment house
Completed 7-story apartment house

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?