The construction industry is one of the least productive industries globally, according to a McKinsey report from February 2017.
Reasons for this inefficiency range from poor organization and inadequate communication to bad performance management, contractual miscommunication, and insufficient risk management.
Construction companies are increasingly borrowing a leaf from car maker Toyota in order to improve their bottom-line.
In the early 70s, Toyota Motor Corporation developed a well-controlled and managed system of supply chain for their factories. They called it Just-In-Time or (JIT). This system created efficiency in Toyota`s supply chain management bringing in huge benefits to the company and thereby allowing Toyota to create more sub-brands.
JIT inventory systems have several advantages over traditional models. Production runs are short, which means that manufacturers can quickly move from one product to another. Furthermore, this method reduces costs by minimizing warehouse needs. JIT has therefore greatly reduced wastages since this method only produces raw materials needed at that time.
Is there a disadvantage of JIT inventory systems?
The disadvantages involve potential disruptions in the supply chain. If a raw materials supplier has a breakdown and cannot deliver the goods in a timely manner, this could conceivably stall the entire production process.
In recent years the construction industry has changed drastically with new material hitting the market.
The possibility to buy a 5-bedroom villa or 3bedroom bungalow from a department store as Knocked Down Kits (KDK) has made it possible for home builders to deploy the JIT system.
How does a consumer trace the origin of goods for quality before purchase?
Once goods find their way to departmental stores, one question comes to mind; how can you trace their origin, quality, and consistency? The only way those parameters can be verified is by a tracing tool which is where GS1 codes come to play. GS1 has developed a Building Information Modelling system (BIM). The system has adopted GS1 standards, starting with the unique (serialized) identification of building material during the build-phase and for facility management purposes, which has already begun. This globally unique digital twin (the Global Trade Item Number) is at the heart of an increased digitalization of the construction industry: automatic authentication of material, efficient electronic ordering and supply chain processes, full traceability and complete life cycle data on products, from design to disposal.
It is quite interesting to see in one continent they can erect a 30-story building in 15 days or a 60-story building in 19 days. Closer home, however, it took contractors in Nairobi four years (17,520 days) to complete the 27-story Central Bank Pension House.
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