Production Strategy in Project Based Production within a House-Building Context

Sammanfattning: A production strategy enables companies to effectively manage the different challenges that the production function face in a competitive environment. A production strategy helps a company to make operational and strategic decisions that follow a logical pattern and supports the corporate strategy and the competitive priorities of the company. When no strategy exists the decisions may be arbitrary and unpredictable leading to an under-achieving production system. Production strategy involves decisions that shape the long term capabilities of a producing company. For the traditional production industry there are a number of production strategy frameworks that facilitates the process of designing production systems. However, these frameworks typically leave project based production out of the scope or treat project based production as one type of production system, when in fact project based production systems can be multifaceted depending on product design and market requirements.This thesis focus on project based manufacturing in a house-building context. Houses can be produced by different types of production systems, and depending on how the production systems are designed they have strengths and weaknesses in different areas of competition. To be able to meet the increasing demand for residential houses, and improve performance in the house-building industry, the way houses are produced have to match different market requirements in a more effective and efficient way. To do this a production strategy has to exist. Typically there is a trade-off between productivity and flexibility, hence a production system designed to meet customer requirements concerning product design is probably not the best process choice if the customer thinks price and delivery time are the most important. A production strategy helps a company to make decisions so that the output of the production system meets customer requirements in the best possible way. Due to the fact that project based production is typically left out of the scope in traditional production strategy literature and that there is a lack of research concerning production strategy in a house-building context, the purpose of this research is:… to extend the production strategy body of knowledge concerning project based production in a house-building context.To fulfil the purpose the following four research questions are studied and answered:RQ1: What aspects can be useful in a classification matrix contrasting different production systems for house-building?RQ2: Which competitive priorities are important to measure when evaluating different production systems on a production strategy level in a house-building context, and how can they quantitatively be measured?RQ3: How does the characteristics of the production system, i.e. the process choice, affect information exchange in a house-building context?RQ4: How can a new production strategy be formulated and implemented in an industrialised house-building context and what challenges are important to consider in that process?To answer RQ1 a classification matrix was developed that classify production systems along two dimensions: a product dimension (degree of product standardisation) and a process dimension (degree of off-site assembly). The two dimensions are related, for example a high degree of standardisation should be matched with a high degree of off-site assembly and consequently a low degree of product standardisation should be matched with a low degree of off-suite assembly. A mismatch, e.g. high degree of off-site assembly and low degree of standardisation, typically leads to poor performance and should hence be avoided.To be able to see how different types of production systems perform in different areas of competition key performance indicators (KPIs) were developed. The KPIs presented in this research can be used to measure quality, delivery (speed and dependability), cost (level and dependability), and flexibility (volume and mix) at a production strategic level (RQ2).Furthermore, to answer RQ3, a production strategy perspective was taken on information exchange by relating information exchange to the design of the production system. The results indicate that employing different types of production systems leads to different approaches to information exchange. Employing a production systems using traditional production methods on-site and a low degree of product standardisation lead to a traditional approach to information exchange, e.g. project meetings, telephone and mail. Production systems employing some degree of off-site assembly have less complex and more stable supply chains and use ICT-solutions to a higher extent, which facilitates information exchange. The findings also indicate that a high degree of product standardisation facilitates the use of ICT-solutions such as ERP and BIM.RQ4 concerns the production strategy process, i.e. formulation and implementation. Failure in this processes can jeopardise the whole business. Based on a longitudinal case study of an industrialised house-builder a suggested production strategy process was developed, including both production strategy formulation and implementation. The study also identified context specific challenges that have to be considered in an industrialised house-building context, e.g. the complexity that comes with using two different production processes (off-site and on-site) in the same production system.The research is case based and a total number of eight different production systems have been studied. Data has been collected through interviews, observations, and review of company documents.