I’ve recently had the opportunity to work with Daniel (Danny) Small, MBA, LSSBB, through Offsite Builder magazine and as a member of his Offsite Construction Roundtables.
When he told me about what he is doing for offsite factories, I knew I had to find out, in more detail, exactly how his new program, Lean Offsite™, helps factories become more efficient without investments in hiring more labor or automation.
Here is the discussion Daniel and I had on how his new program works.
Gary Fleisher, the Modcoach: Danny, what is Lean Offsite™?
Daniel Small: Lean Offsite™ is a process optimization and productivity improvement program for offsite construction facilities. By implementing Lean Manufacturing tools and principles in a data-prioritized “blitz” format, Lean Offsite™ dramatically and quickly increases the labor productivity of the factory/shop by at least 10% within 90 working days. This performance is backed by a money-back guarantee.
Modcoach: Where did the idea for the Lean Offsite™ program come from?
Daniel: Offsite construction has the significant potential to reduce costs, schedules, and defects by making use of a controlled manufacturing environment. And to an extent, it is doing that. However, as I’ve worked with many offsite construction companies over the years, I’ve observed that offsite construction and prefabrication still struggle to realize their full potential to disrupt construction.
There are many causes for this unrealized potential, but one of the biggest and most addressable is lingering inefficiency in most offsite factories & shops due to suboptimal process design. Factory-based work is certainly better than fieldwork, but most shops are still woefully inefficient. In fact, from my analysis of over 500 hours of offsite factory work, an average of 74% of labor time in offsite factories is Non-Value-Add time or Waste. As a result, the factory struggles to keep up with demand, and costs are high.
Companies usually take one of two main approaches to try to address this issue, and they’re both ineffective:
- Hire more employees – With the current severe labor shortage, this strategy is not viable for most companies. And in the rare case when it IS possible to find people, this approach increases direct costs and requires significant resources to find, recruit, hire, train, and retain the employees.
- Add technology (software or automation) to a sub-optimized process – Having worked in offsite software, I can confidently say that adding technology to an inefficient process usually complicates things, dilutes workers’ focus, obscures the real process issues, and speeds up waste, or is Band-Aid at best.
What I believe is needed is a way to fix the root issues in the offsite process itself, so the need to hire more people is lessened, and inefficiencies are not compounded by premature technology adoption.
Lean Offsite™ was developed to meet that need.
Modcoach: How does Lean Offsite™ work?
Daniel: Lean offsite™ utilizes the 5-step Lean Six Sigma process optimization framework known as DMAIC to identify and eliminate waste from the process:
- Define – The process is defined, mapped, and studied to thoroughly understand its objectives, steps, inputs, outputs, and value creation.
- Measure – Each step in the process is measured quantitatively to determine the current state of efficiency and effectiveness.
- Analyze – The data collected is then analyzed to identify sources and levels of waste at each step in the process and determine the priority of solutions.
- Improve – Based on the analysis, solutions are developed to eliminate the largest sources of waste, and the solutions are implemented and results measured against the baseline to confirm effectiveness.
- Control – Once the performance is confirmed, the improved procedures are standardized and systematized for long-term retention of efficiency gains.
Through this methodical approach, productivity, throughput, profit, safety, quality, and employee satisfaction are all increased.
Modcoach: Who is a candidate for the Lean Offsite™ program?
Daniel: The Lean Offsite™ program has been specially designed for all forms of offsite construction. As such, any company that manufactures, fabricates, or assembles components or assemblies in a factory environment for later installation in a building on-site, can benefit from Lean Offsite™. Specifically, this includes manufacturers of volumetric modules; pods; wall, floor, & ceiling panels; precast concrete components; and trusses & joists; as well as single-trade (MEP) prefabbing contractors.
Modcoach: How does Lean Offsite™ benefit offsite manufacturing & prefabrication companies?
Daniel: Lean Offsite™ is designed to be very hands-on and no-nonsense. We work very closely with the client’s front-line staff and management, in their factory or shop as well as remotely. We quickly identify the issues causing inefficiency and develop grass-roots solutions for those issues. We then implement & standardize those processes and environmental improvements to eliminate waste and boost labor productivity, sometimes by more than 80% (although that’s not typical). The result is quick wins, staff buy-in, and a huge push toward the long-term establishment of a Lean culture and a virtuous cycle of continuous improvement.
Modcoach: Why should an offsite factory or prefab shop consider participating in Lean Offsite™?
Daniel: Every process has a large amount of waste, and offsite construction & prefabrication processes are no exception. Reducing process waste is one of the highest-ROI business management practices. In a construction or manufacturing company, materials and labor are by far the two largest cost centers. With great effort, over a very long time, under ideal circumstances, material costs can be reduced by perhaps a few percent, with the risk of reduced quality. By contrast, labor costs can be reduced by 10, 20, or 30 percent or even more within months by the wise application of Lean Manufacturing principles, usually with an INCREASE in quality. Lean Offsite™ offers this level of potential benefit.
As an example, for a factory with 50 full-time employees at an average fully-loaded wage rate of $35 per hour, just a 10% increase in labor productivity would result in approximately $350,000 per year in financial benefit. This does not include the monetary and non-monetary benefits of the accompanying increases in throughput, inventory turns, quality, customer satisfaction, employee retention, etc.
Modcoach: How can interested parties learn more about the program?
Daniel: To learn more about the Lean Offsite™ program and to schedule a 20-minute Launch call to see if you qualify, go to www.LeanOffsite.com.
Modcoach: Thank you for sharing what Lean Offsite™ is and how you can help offsite factories achieve more efficiency.
Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder magazine. Email at [email protected]
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