VMI in offsite construction

2 min read

Building prefabricated modules off-site can speed up the construction process by as much as 50% and cut costs by up to 20%, according to a 2019 report by McKinsey & Company. Mark Degnan, territory manager at supplier of fasteners and supply chain solutions TFC explores how it can bring the efficiency of a production line to the construction site.

Producing buildings as modules on the factory floor can allow construction managers to run projects as highly efficient production lines. Offsite construction means you can maintain quality standards, operate within budget and hit deadlines. Ultimately, it may also address the UK’s housing shortage, cope with the construction skills gap and meet sustainability goals. Because of this, modular construction is growing in popularity across the UK. For example, in 2019, care provider Housing 21 worked with a construction firm to build modular homes at two retirement living courts in Shrewsbury and Brighouse. The project was delivered on time and on-budget in just 26 weeks.

Though achieving production line efficiency is possible with offsite construction, it is by no means guaranteed. When establishing a facility for offsite construction, managers can implement systems that help streamline the process and prevent the possibility of delays. One potential method is vendor managed inventory (VMI). This is where a partner company takes responsibility for supplying the necessary components and materials directly to the point of use.

Take fasteners for example; modular buildings can contain hundreds or even thousands of fasteners and fixings, and every nut, washer and bolt is essential to bring buildings together. Using VMI to manage fasteners and fixings is a beneficial way to ensure a consistent supply of these critical parts.

When implementing a VMI system, the partner and construction business can work together and use historic data to come up with a delivery schedule. As a result, the customer benefits from a streamlined supply of parts. This streamlined supply also reduces the stock “footprint”, releasing valuable workspace for profiting-generating activities. A flexible VMI solution adapts to the client’s changing demands, scaling up or reducing volumes when necessary, which can reduce obsolesce and overstocking.

Building modules, brackets, subframe systems and other components must be joined together with fasteners of sufficient quality, so that they can last the test of time. Naturally, quality is a top priority in construction projects, and rigorous quality processes are an important, but time-consuming, operation. When choosing a VMI supplier, it can help to check the company’s quality credentials, as well as enquire about what skills and equipment it has in house, how it reports on quality and what standards and certifications it can work to.

As well as the direct cash flow and efficiency benefits, VMI can reduce the indirect costs associated with a modular construction project. One attractive benefit is vendor consolidation; instead of dealing with ten invoices, ten purchase orders and ten suppliers, VMI means dealing with just one.