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Production Strategy in Project Based Production within a House-Building Context
Linköping University, Department of Science and Technology, Communications and Transport Systems. Linköping University, Faculty of Science & Engineering. (Bygglogistik)
2017 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

A production strategy enables companies to effectively manage the different challenges that the production function face in a competitive environment. A production strategy helps a company to make operational and strategic decisions that follow a logical pattern and supports the corporate strategy and the competitive priorities of the company. When no strategy exists the decisions may be arbitrary and unpredictable leading to an under-achieving production system. Production strategy involves decisions that shape the long term capabilities of a producing company. For the traditional production industry there are a number of production strategy frameworks that facilitates the process of designing production systems. However, these frameworks typically leave project based production out of the scope or treat project based production as one type of production system, when in fact project based production systems can be multifaceted depending on product design and market requirements.

This thesis focus on project based manufacturing in a house-building context. Houses can be produced by different types of production systems, and depending on how the production systems are designed they have strengths and weaknesses in different areas of competition. To be able to meet the increasing demand for residential houses, and improve performance in the house-building industry, the way houses are produced have to match different market requirements in a more effective and efficient way. To do this a production strategy has to exist. Typically there is a trade-off between productivity and flexibility, hence a production system designed to meet customer requirements concerning product design is probably not the best process choice if the customer thinks price and delivery time are the most important. A production strategy helps a company to make decisions so that the output of the production system meets customer requirements in the best possible way. Due to the fact that project based production is typically left out of the scope in traditional production strategy literature and that there is a lack of research concerning production strategy in a house-building context, the purpose of this research is:

… to extend the production strategy body of knowledge concerning project based production in a house-building context.

To fulfil the purpose the following four research questions are studied and answered:

RQ1: What aspects can be useful in a classification matrix contrasting different production systems for house-building?

RQ2: Which competitive priorities are important to measure when evaluating different production systems on a production strategy level in a house-building context, and how can they quantitatively be measured?

RQ3: How does the characteristics of the production system, i.e. the process choice, affect information exchange in a house-building context?

RQ4: How can a new production strategy be formulated and implemented in an industrialised house-building context and what challenges are important to consider in that process?

To answer RQ1 a classification matrix was developed that classify production systems along two dimensions: a product dimension (degree of product standardisation) and a process dimension (degree of off-site assembly). The two dimensions are related, for example a high degree of standardisation should be matched with a high degree of off-site assembly and consequently a low degree of product standardisation should be matched with a low degree of off-suite assembly. A mismatch, e.g. high degree of off-site assembly and low degree of standardisation, typically leads to poor performance and should hence be avoided.

To be able to see how different types of production systems perform in different areas of competition key performance indicators (KPIs) were developed. The KPIs presented in this research can be used to measure quality, delivery (speed and dependability), cost (level and dependability), and flexibility (volume and mix) at a production strategic level (RQ2).

Furthermore, to answer RQ3, a production strategy perspective was taken on information exchange by relating information exchange to the design of the production system. The results indicate that employing different types of production systems leads to different approaches to information exchange. Employing a production systems using traditional production methods on-site and a low degree of product standardisation lead to a traditional approach to information exchange, e.g. project meetings, telephone and mail. Production systems employing some degree of off-site assembly have less complex and more stable supply chains and use ICT-solutions to a higher extent, which facilitates information exchange. The findings also indicate that a high degree of product standardisation facilitates the use of ICT-solutions such as ERP and BIM.

RQ4 concerns the production strategy process, i.e. formulation and implementation. Failure in this processes can jeopardise the whole business. Based on a longitudinal case study of an industrialised house-builder a suggested production strategy process was developed, including both production strategy formulation and implementation. The study also identified context specific challenges that have to be considered in an industrialised house-building context, e.g. the complexity that comes with using two different production processes (off-site and on-site) in the same production system.

The research is case based and a total number of eight different production systems have been studied. Data has been collected through interviews, observations, and review of company documents.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2017. , 94 p.
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1892
Keyword [en]
Production strategy, Industrialised House-Building, House-Building, Off-site production, Performance measurement, Information exchange, Production strategy process
National Category
Building Technologies Construction Management
Identifiers
URN: urn:nbn:se:liu:diva-143262DOI: 10.3384/diss.diva-143262ISBN: 9789176854013 (print)OAI: oai:DiVA.org:liu-143262DiVA: diva2:1160713
Public defence
2018-01-19, K3, Kåkenhus, Campus Norrköping, Norrköping, 13:15 (Swedish)
Opponent
Supervisors
Available from: 2017-11-28 Created: 2017-11-28 Last updated: 2017-12-13Bibliographically approved
List of papers
1. Classification of production systems for industrialized building: a production strategy perspective
Open this publication in new window or tab >>Classification of production systems for industrialized building: a production strategy perspective
2013 (English)In: Construction Management and Economics, ISSN 0144-6193, E-ISSN 1466-433X, Vol. 32, no 1-2, 53-69 p.Article in journal (Refereed) Published
Abstract [en]

The purpose is to develop a matrix for classifying production systems for construction with various degrees of industrialization. Previous attempts to classify industrialized production systems for construction focus on dimensions such as the design process, the product technology, or the supply chain structure, but none of them acknowledge the importance of how orders are actually won in the market and that different market segments have different requirements. Using production strategy theory as a base, a matrix is developed linking market requirements, via the product offering, to the design of the production system. The matrix positions typical production systems based on their respective degrees of product standardization and volumes relative to the degree of offsite production. Similar to production systems in manufacturing, production systems for construction also deliver manufacturing outputs at different levels, indicating that the choice of production system will affect the competitiveness of the company. The applicability of the matrix is exemplified through three case illustrations of concepts for industrialized building, and these show that the matrix can be used to analyse the production systems’ relative strengths and weaknesses. The matrix can also be used as a guide when developing new, or adjusting existing, production systems for industrialized building so that they will match market requirements and offer competitiveness.

Place, publisher, year, edition, pages
Routledge, 2013
Keyword
Construction industry, Industrialized housing, Off-site production, Operational research, Production process
National Category
Business Administration Construction Management Building Technologies Production Engineering, Human Work Science and Ergonomics
Identifiers
urn:nbn:se:liu:diva-96756 (URN)10.1080/01446193.2013.812226 (DOI)
Available from: 2013-08-26 Created: 2013-08-26 Last updated: 2017-12-13
2. A Production System Classification Matrix: Matching Product Standardization and Production System Design
Open this publication in new window or tab >>A Production System Classification Matrix: Matching Product Standardization and Production System Design
2015 (English)In: Journal of construction engineering and management, ISSN 0733-9364, E-ISSN 1943-7862, Vol. 141, no 6, 05015004Article in journal (Refereed) Published
Abstract [en]

The potential benefits of using off-site production in residential construction have been highlighted in many studies, but the full potential of off-site production approaches is not always realized. This shortfall can be explained by the mismatch between market requirements and the output offered by the production system, in other words, a mismatch between the degree of product standardization and the design of the production system. This mismatch could be resolved through a classification matrix that aids decision makers in matching market requirements and the degree of product standardization with the degree of off-site production and production system design. This paper describes the development of a classification matrix that guides the decision-making process during the designing of new or re-designing of existing production systems in residential construction. An important aspect of the development was balancing the trade-off between productivity and flexibility so that products can be produced competitively. The merits of the classification matrix are exemplified by five case companies with different approaches to industrialization and off-site production.

Place, publisher, year, edition, pages
American Society of Civil Engineers (ASCE), 2015
Keyword
Production strategy, Construction industry, Off-site production, Residential building, Process choice, Case study
National Category
Business Administration Construction Management Building Technologies Production Engineering, Human Work Science and Ergonomics
Identifiers
urn:nbn:se:liu:diva-105990 (URN)10.1061/(ASCE)CO.1943-7862.0000965 (DOI)000354550100004 ()
Available from: 2014-04-16 Created: 2014-04-16 Last updated: 2017-12-13Bibliographically approved
3. KPIs for measuring performance of production systems for residential building: A production strategy perspective
Open this publication in new window or tab >>KPIs for measuring performance of production systems for residential building: A production strategy perspective
2017 (English)In: Construction Innovation, ISSN 1471-4175, E-ISSN 1477-0857, Vol. 17, no 3, 381-403 p.Article in journal (Refereed) Published
Abstract [en]

Purpose

This paper aims to define key performance indicators (KPIs) for measuring performance of production systems for residential building from a production strategy perspective.

Design/methodology/approach

A literature review is done to identify suitable competitive priorities and to provide grounds for developing KPIs to measure them. The KPIs are evaluated and validated through interviews with industry experts from five case companies producing multifamily residences. Furthermore, two of the case companies are used to illustrate how the KPIs can be employed for analysing different production systems from a manufacturing strategy perspective.

Findings

Defined, and empirically validated, KPIs for measuring the competitive priorities quality, cost (level and dependability), delivery (speed and dependability) and flexibility (volume and mix) of different production systems.

Research limitations/implications

To further validate the KPIs, more empirical tests need to be done and further research also needs to address mix flexibility, which better needs to account for product range to provide a trustworthy KPI.

Practical implications

The defined KPIs can be used to evaluate and monitor the performance of different production systems’ ability to meet market demands, hence focusing on the link between the market and the firm’s production function. The KPIs can also be used to track a production systems’ ability to perform over time.

Originality/value

Most research that evaluate and compare production systems for residential building is based on qualitative estimations of manufacturing outputs. There is a lack of quantitative KPIs to measure performance at a strategic level. This research does this, identifying what to measure, but also how to measure four competitive priorities through 14 defined KPIs.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2017
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
urn:nbn:se:liu:diva-143673 (URN)10.1108/CI-06-2016-0034 (DOI)
Available from: 2017-12-13 Created: 2017-12-13 Last updated: 2017-12-13

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