Digital logistics management is standard practice in manufacturing and is best know for enabling just in time delivery (JIT). Now a company in Scandinavia has applied digital logistics management to construction. Experience in applying this approach to several hundred projects of different types has shown that digital logistics management can significantly reduce labour costs increasing productivity.
Material wastage and lost labour productivity are major causes of delays and budget overruns on large construction projects. Innovators in the construction industry often look at manufacturing for business processes that could transform construction to a more productive, predictable process. Prefabrication has been touted as a way of transforming construction but has not been found to be generally applicable to many construction projects. Now another alternative has been developed that successfully applies digital logistics management as used in manufacturing to construction workflows.
Background
Construction productivity in many of the world's advanced economies has been in the doldrums for over 40 years compared to industrial productivity. To improve productivity people have looked to the manufacturing sector for techniques that potentially could be generally applied to the construction industry including digitalization.
Digital logistics management
One of the major problems in construction is managing the delivery and storage of material to the construction site. A common rule of thumb is that as much as 30% of the building materials delivered to a construction site is wasted. Digital logistics management has been used in manufacturing for many years and is best known for enabling for just in time (JIT) delivery of materials, avoiding the costs or storage and materials management on the factory floor. Beginning in 2013 Myloc Construction has been applying these same digital logistics management techniques to construction workflows on over 350 projects in Norway and Sweden. These projects cover a broad range to project type including hospitals, infrastructure, tunneling, residential, commercial, and industrial projects. These projects have been normal construction projects with all or the majority of the work occurring on-site. I had the opportunity to speak with Anders Eklund, Business Area manager at Myloc Construction, about how digital logistics management can be applied to improving construction productivity.
For the greatest benefit the digital logistics management approach is adopted by the owner and the implementation of the process begins when the project is initiated, but this is not always possible and on many projects using digital logistics management has been initiated by the project general contractor. The first step is the identification of roles and responsibilities including developer (owner) and construction management, contractors, material suppliers, and logistic services partners. The objective is to prevent problems in the first place and collaboration between all stakeholders in a construction project is key to success.
The objective is the digitalization of all construction supply chains (concrete, HVAC, etc) is to ensure that the required data is being captured from each stakeholder and is accessible to all. Digital logistics management is a data driven process aimed at ensuring that all data is available and accessible digitally and not locked up in documents such as spreadsheets or pdfs. The result is simplified decision making which enables effective collaboration and minimizes administration overhead at all levels. The technical implementation of this process relies on distributed processing, but the result is centralized oversight for monitoring, reporting and management..
The overall goal of digital logistics management is a simplified process that ensure that the right material is delivered at the right time with the right labeling with minimal administration overhead. The process also aims at ensuring that the necessary labour skills are available at the right time and at the right place. Saving 5-10 hours of an expert HVAC installer's time contributes directly to improving the bottom line and is fundamental to keeping a project on schedule and on budget.
To avoid material clogging the construction site and to ensure that material is available just in time (JIT), the digital logistics management process relies on an off-site consolidation centre which allows materials to be delivered by the supplier up to 10 days earlier than it is projected it will be required at the construction site. The material is then delivered from the consolidation centre to the construction site just in time, typically the night before it is required.
Conclusion
To date this technology has been used commercially in Sweden and Norway for hundreds of construction projects with positive results. Quantitative data supporting this approach was recently provided by an Umea University study of a hospital construction project that found that digital logistics management results in a 19 % reduction in labour time. Furthermore the study found that materials deliveries to the construction site were reduced by an astonishing 45%. This shows that simply optimizing deliveries of materials, a general technology that can be applied to any kind of construction project, can significantly reduce labour costs, increasing productivity. An important side benefit is fewer deliveries which reduces the carbon footprint of the project.
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Great sharing experiences and observations with this seniority!
Logistics in itself is not the question but the improvement of productivity it enables.
Posted by: Anders Eklund | April 06, 2021 at 07:45 AM