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Thinking

Modularisation in manufacturing facility design

Manufacturing facility

Why don’t manufacturers use modularisation and prefabrication to gain competitive advantage?


Production engineers and manufacturers know that increasing volume using standard components reduces unit cost production; a philosophy improved by LEAN and six sigma. This deep seated knowledge drives a vigilant focus on delivering efficiency in manufacturing production.

It therefore seems paradoxical that despite understanding these principles, manufacturers have not used similar forms of innovation to deliver their facilities. Particularly global manufacturers with numerous facilities worldwide producing the same product.

Even for manufacturers producing multiple product lines in different facilities, it seems logical to look at standardising elements of the manufacturing facility to realise the benefits of volume in reducing the capital investment cost of the facility.

Prefabrication, is the logical extension of standardisation and volume.

So, if manufacturers are conversant with the concepts of volume to reduce cost and standardisation of modular elements of works — a technique particularly familiar to those with large sub assembly components and supplies as part of their production process — it prompts the question, “why don’t manufacturers focus more on using prefabrication?”

Prefabrication is particularly effective where there is a high degree of repetition and standardised modular elements of works, and where there is pressure on the availability of skilled trades in a local construction market.

Additionally, prefabrication reduces on-site labour — by enabling construction and assembly of elements of work off-site, and their transportation back to site in a semi-finished form for installation.

Given the philosophical parallels to manufacturing production it is somewhat puzzling that large global manufacturers have not taken a deeper look at how they construct their facilities; employing processes which are part of their DNA, to reduce capital investment waste.

However the tide is turning. Two things are stimulating this change. Firstly, the more persuasive use of BIM (building information modelling) in design. Secondly more enlightened manufacturers seeking to work more closely with creative facility designers to re think manufacturing facility design from its outset.

Modularisation in pop-up factories proves new market demand for manufacturers

Recently, manufacturers have increasingly used modularisation to seed a new market with product to prove demand and strengthen a business case; without the initial capital cost and risk associated with a full scale implementation.

Modularisation ranges from full service pop-up factory to alignment of utilities and asset management systems.

As pop-up factories have proven demand, we have seen naturally risk averse manufacturers become aligned and supportive of market expansion projects. The benefits of modularisation for manufacturers include:

  • Low/minimal business risk
  • Speed and agility
  • Seed a new market with low capital outlay
  • Proving the business case and demand for low initial commitment
  • Operational alignment, asset management alignment

With Africa’s middle class growing fast, pop-up factories are a streamlined way to provide a fit for purpose supply footprint with minimal capital risk. Large global food and beverage manufacturers are already successfully developing and deploying this thinking in emerging regions.

Other key considerations for manufacturers around pop-up factories are:

  • The ability to leverage technology, local manufacturing and innovation to support growth
  • Lower cost efficiencies — in unit production terms — due to small output
  • Potential for short life if market takes off — may be seen as wasted capital
  • More perceived risk around keeping high food standards in modular facilities 
  • Modular concept may be more efficient with services and utilities, like boilers, compressors and office shipped in pieces and then assembled onsite
  • Cube like facilities can be shipped with solar panels to reduce power consumption in high cost areas

The pop-up factory is not suited to all markets and products. It is attractive in modest markets like Ghana, Mozambique and Zambia, not established markets like Nigeria or South Africa where large food and drink facilities exist.

Pop-up factories present a low risk start up in areas where there are political risks, high costs for power and materials or onerous regulations and corruption.

Modularisation beneficial in manufacturing utilities deployment

Apart from investing in modularisation for pop-up factories, manufacturers can also realise modularisation benefits across other facilities and locations — the most obvious being the deployment of utilities, services, offices and accommodation.

We see the manufacturing industry moving from procurement of discreet parts to procurement of modular systems. Modular systems provide manufacturers with global standardisation and consistent delivery across various locations.

  • To realise the commercial benefits of modularisation, it is important to analyse the key issues and drivers around the commercial model and associated supply chain. Preconditions – what kind of payment structure will be utilised?
  • Will the supply chain respond – what is the consistency and surety around the pipeline of work?
  • Design for prefabrication – what should be modularised and how should suppliers re-tool?
  • Labour appropriateness – will global installation of the modular items be possible?

Ever changing consumer needs are challenging manufacturers to continually produce more with less, improve quality and consistency and provide products to global markets. The potential performance improvement gains from modularisation could be a profitable competitive differentiation advantage.


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