On 25 January the Constructing Excellence were hosted by Tata Steel at their distribution and processing centre at Wednesfield, West Midlands, the largest in the UK. Tata Steel have invested heavily in the facility including over £12 million in a dedicated Automotive Service Centre to produce sophisticated differentiated steel products.
The visit inspired some very pertinent questions around how the business case was made for the automotive investment.
- Long term relationships: Suppliers invest in production facilities on the basis of long-term and certain demand based on standardisation and systemisation, making it easier to make long term investments in manufacturing facilities. Long-term relationships with clients, it can take 2 years of discussions with end clients before a part gets put on the production line. The steel industry is not without risks but those risks are clearly identified and understood so therefore investments can be justified.
- Is lack of people a good thing? The group were struck by the limited number of people on the shop floor, prompting the debate around whether reduced labour requirements associated with the manufacturing revolution was a good thing. Levels of automation mean a higher level of training and therefore opportunities to improve the workforce skillset and flexibility. High quality production and just in time service also require resources and training in QA, planning and H&S to support the supply chain.
- Manufacturer led construction? The aim for manufacturers like Tata Steel is to change the perception of steel as not just a commodity product and to add more value they need to get closer to their clients to really understand their requirements and how they define value, in much the same way as the automotive sector has done. This would require a movement away from traditional supply chains towards more integrated supply chains.
- Can existing procurement practices support this? Procurement processes are in place to manage risk, and particularly in the public sector to ensure fairness and transparency. There was a heated discussion over whether the existing complex supply chains can be open and whether they do deliver transparency and that current processes were skewed towards traditional delivery. It was considered that existing procurement procedures can get in the way of early manufacturer engagement and therefore limit some of the advantages of offsite. Moreover, passing risk down the supply chain has the effect of multiplying risk.
- Generative design tools and a platform based approach with a pallet of products will help allow construction to start full advantage of manufacturing and its added value. This relates to the work that Constructing Excellence Members Blacc have been doing in the education space to identify a kit of parts for the education sector that can be configured to suit the specific site and client requirements, whilst still meeting Education Funding Agency requirements at higher spec and lower costs.
Alex Lubbock, Head of Digital Construction at the Infrastructure Projects Authority led a discussion on how the IPA’s Transforming Infrastructure Performance programme is designed to support Government engagement with industry to shift to a presumption in favour of offsite outlined in the Autumn budget 2017. Some of the key areas include:
- Finding ways to enable early manufacturer engagement whilst remaining compliant with European procurement regulations. This will enable tenders and procurement to be delivered in a way that supports innovation and SME involvement.
- Generating a pipeline of repeatable projects and elements that can unlock long-term investment and enable the industry to build on knowledge and transfer learning more effectively between projects.
Throughout the day the message was reinforced that early decisions on offsite were required in order to deliver real value for clients.
The group will be visiting Explore Offsite at Ecobuild on 6 March. Please email email@example.com to find out more.
*images courtesy Tata Steel