Success factors for Swedish industrialized housing construction Prof. Lars Stehn Structural and Construction Engineering Luleå University of technology.

Success factors for Swedish industrialized housing construction

Prof. Lars Stehn

Structural and Construction Engineering

Luleå University of technology

Lessing, J., Stehn, L., and Ekholm, A. (2015) Industrialised house-building – development and conceptual orientation of the field, Construction Innovation, Vol. 15, Iss. 3, 378 – 399.

Industrialized building construction

Sweden beats the world hands down on prefab housing

• Industrialized house-building worldwide still mostly mass production based on a historical approach (Goodier and Gibb, 2007)

• About 84% of detached houses in Sweden, 15% in Japan and about 5% in the US; Australia and the UK use prefabricated timber elements

Temporary housing, UK post war build-up

Sweden todayposted on

So, this modern customer oriented Swedish version of Industrialized housing construction

What is it?

Prefabrication important but not enough

“offsite construction”, “pre-assembly”, “automation” etc. are technology based definitions that take a stand-point in production methods and prefabrication

Integration to “control the means of production”

Industrialized housing construction involves defined production methods but:

•is based on who owns“the means of production” and

•how to integrate “the means of production” into a controlled concept.

Integration of the means for production - a product platform

Lessing et al. (2015)

Three key ingredients needs to be integrated

1. Industrialized housing construction must be a strategy that effects how the whole company operate

2. Market specialization and selection of niche markets sets the requirements for the production system

3. High degree of product predefinition through utilization of product platforms

Characteristics - key points

Integration of the nine constructs of the product platform to own or to control the means of production to be competitive

Selection of products or market niches to a business strategy necessitates

•Fit of production system to market (example 1)

•Loyalty to the business model (example 2)

Example 1

Fit of production system to market

Robertson and Ulrich (1998) Winch (2003)Hvam et al. (2008)Johnsson et al. (2013)Jansson et al.(2014

Norms and standard

General platforms

Self-owned platforms

Standard products

Detailed drafting

Combining building elements

Configuration

Choose variant

Client order decoupling point

Production based on forecast

Production based on client order

The product platformthe essential choice for a

company

Market demands vs. production capability

Construction capabilities

Tendering

Procurement

Engineering/design

Supply chain coordination

Site/factory coordination

Market demands

Product type (customized to standard)

Product range (wide-narrow)

Demand volume

Price

Conformance to Quality

On-time delivery

Market offerProduction design

Fixed assets and equipment organization

Product planning and control

Automation technology

Market strategy

Resource strategyHallgren et al. 2004

Choices made by some Swedish companies

Market strategy

Self-owned platforms

General platforms

Norms and standards

Standard products

Resource strategy

Broad market (process

standardization)

Niche market (product standardization)

Veidekke

PGS

Moelven

BoKlok

Kärnhem

Lindbäcks

Example 2

Loyalty to the business model

Defining what business models are

• Business models are constructs illustrating how companies are built up and the way they operate(Baden-Fuller and Morgan, 2010)

• Clarifying a business model can help a company to support the chosen product platform Brege et al., (2014)

The offering presents the value proposition of the company. The offering is a combination of physical products and services offered to the customers. The market position describes the company’s role in the marketplace and in the supply chain, with close connections to strategic effectiveness (are we doing the right things?). Market segmentation and marketing strategies for the segments based on the four P’s (product, price, place and promotion) are vital components for the market position. The operational platform consists of the company’s resources and competences together with external resources from suppliers and partners and has close linkages to internal effectivess (are we doing things right?). A product platform and designated production system are important components for enabling the company’s product offer.

The case of multiple business models

• Explorative longitudinal case study from one manufacturing company

• Data from a period of 15 years (1997-2012)

Business model loyalty lesson

• Really difficult to combine standardisation of manufacturing with customisation in same plant if not deliberately managing a portfolio of different business models (Höök et al., 2015)

Standardization of processes integrated with predefinition of

products

Industrialized housing construction is to standardize how

construction is performed not the result

19

Thank you for your attention

[email protected]