The manufacturing industry has always been on the forefront of digital transformation and process optimization. Construction companies can learn a lot from manufacturing companies, including lean project delivery, use of digital twins, and effective cost control.
In the world of operations, manufacturing and construction are typically seen as distinct industries. There are many stark differences between the two, including variability in products, variability in labor required for desired outcomes, and that every day on a construction site is different due to ever changing site conditions.
However, when we dig deeper into these industries, it’s easy to see many similarities, too, including:
- The need for detailed work breakdown structures (planning),
- Understanding material management to ensure there is enough raw materials when you need it, and
- The need for strict quality control to ensure a satisfactory product is created the first time.
When it comes to improving productivity and reducing costs, there are valuable lessons that construction contractors can learn from the manufacturing industry. In this blog, we will explore some similarities and differences between manufacturing and construction and how contractors can leverage manufacturing concepts to improve their operations.
The Science of Production: Benefits of Lean Manufacturing
Manufacturing and construction have different approaches to production. Manufacturing involves a highly repetitive process that requires a high degree of standardization. On the other hand, construction is a unique, project-based process that requires flexibility and adaptability, especially as the project progresses and the site itself changes (this would be like a factory changing shape every few days).
Despite these differences, there are enough similarities between the two industries to be able to apply some key manufacturing principles to construction. Both manufacturing and construction require careful planning and coordination to ensure that materials and resources are used effectively and efficiently. In manufacturing, this is achieved through a process known as production planning and control, which involves forecasting demand, creating production schedules, and optimizing inventory levels.
In construction, project planning and control involves scheduling labor and materials, managing budgets, and monitoring progress to ensure that the project is completed on time and within budget.
One concept that manufacturers have used to improve production planning and control is Lean Manufacturing. Lean manufacturing originated from Toyota Production Systems in Japan during the 1940s and 50s. It's a production methodology that aims to minimize waste, reduce costs, and improve efficiency. Lean Manufacturing is a systematic approach that involves the continuous identification and elimination of non-value-added activities in the production process and the identification of bottlenecks that could reduce overall efficiency. The ultimate goal of lean manufacturing is to provide customers with high-quality products while reducing costs and lead times, which is also the main goal of the construction process.
Construction contractors can apply the principles of Lean Manufacturing to their operations by identifying and eliminating waste in their processes. The Lean Construction Institute (LCI) has developed the Lean Project Delivery System™ (LPDS) that applies lean principles pioneered in manufacturing to construction. LPDS can include reducing wait times for materials and equipment, keeping crews working on critical tasks, optimizing inventory levels, and reducing the need for rework by improving quality control.
Construction specific project management software such as Smart Construction Office can help owners, general contractors, and subcontractors simplify this process by breaking down work items into bite-sized tasks, planning the work, and analyzing the performance of each task on a daily basis, allowing managers to make faster changes and optimize operational performance.
Digital Twins: Advancing Digital Transformation in Construction
Another area where construction can learn from manufacturing is in the use of digital twins. Digital twins are virtual models of physical assets that can be used to simulate and optimize the performance of those assets. In manufacturing, digital twins are used to optimize production processes, improve quality control, and reduce downtime.
In construction, digital twins such as Smart Construction Dashboard combined with Smart Construction Office can be used to plan, simulate, analyze and optimize the construction process, from planning and design to construction and close-out. This can include modeling your entire equipment spread and simulating different construction scenarios to identify the most efficient approach, optimizing schedules to reduce delays and cost overruns, and predicting the performance of projects over time to improve production and reduce costs. Previously, Smart Construction described how digital twins can be used in construction in this blog post.
Innovative tools such as Smart Construction Field, Smart Construction Fleet, and Smart Construction Dashboard help by automating data collection on the jobsite which not only increases the amount and accuracy of data collected, it also removes the burden of your crews having to record jobsite activities manually. Simply put, because technology is automating much of this data collection, much like you would see in a manufacturing operation, contractors have access to more information than ever before. Automation not only speeds up the time to collect field data, in many cases this data also tends to be more accurate; allowing managers to make faster and more confident decisions while reducing the burden on field crews and office personnel.
By using digital twins, construction contractors can improve productivity, reduce costs, and improve the quality of their work. This technology can also help contractors to collaborate more effectively with stakeholders, including subcontractors, architects, engineers, and owners.
Comprehensive Cost Controls
Finally, one of the most important concepts that construction can learn from manufacturing is cost control. Manufacturing companies use a variety of techniques to control costs, including detailed cost tracking, value engineering, standardization, and continuous improvement.
In construction, having the appropriate cost controls in place is essential for managing successful projects by ensuring that project tasks are completed on time and within budget. This can include implementing value engineering to reduce costs without compromising quality, standardizing construction processes to improve efficiency, and continuously tracking and improving processes to reduce waste and improve productivity.
By implementing the appropriate cost control techniques, construction contractors can reduce costs, improve efficiency, and increase profitability using the PDCA (Plan Do Check Act) cycle. This can also help to improve a contractor's reputation and lead to more business opportunities in the future.
Implementation, however, can pose a challenge for many organizations. With slim profit margins, labor shortages, and rising material costs, many managers are afraid to make changes because they worry it may get worse before it gets better. “Employees don’t want another app,” “we already have too many processes and don’t need another,” and “don’t fix what isn’t broke” are all common points of resistance. However, embracing new technologies and methods is crucial for construction contractors to remain competitive, meet the needs of their clients, and achieve long-term success.
While manufacturing and construction are different industries, there are valuable lessons that construction contractors can learn from the manufacturing industry. By applying the concepts of Lean Manufacturing, using digital twins, and implementing cost control techniques, construction contractors can improve their operations, reduce costs, and increase profitability. As the construction industry continues to evolve, it will be important for contractors to embrace new technologies and methods to remain competitive and meet the needs of their clients.
Reach out to the Smart Construction team today to learn more about how we can help you incorporate these principles into your business with the help of Smart Construction technology.
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