Preamble
Zenith PM is a traditional contracting company, which has been affected by the economic crisis. It has also faced a problem of maintaining a health order book for long-term contracts. This has made the company to employ workers on a contractual basis.
This has led to a high rate of turnover of employees. There is a need to change the core business model in order to solve these problems. This report involves the process of changing from the traditional manufacturing to the offsite manufacturing.
Introduction
Most companies have several projects running at the same time. However, the current economic downturn has made various manufacturing companies to re-evaluate their current situation. This has enabled them to shift from the traditional manufacturing to offsite manufacturing technique. Offsite manufacturing may also be described as the modern method of construction.
It involves the establishment of structures in different places from the location of use. It involves constructing modules at the factory and then transporting these modules to the site using specifically designed trailers. It is a modern method of construction, which depends on offsite construction elements (Jones, 2000).
This method is commonly applied in various sectors of the economy to improve efficiency in the construction process. This includes housing for health sector and education sector providing economical and social advantages.
Offsite Manufacturing
Off site, manufacturing entails designing of building modules whereby operations are carried in a factory. (Petridis, 2009). Modular units are then taken to the site and used in constrution. The method helps in providing effective and cost effective solutions to the company. It applies modern manufacturing processes and technology to improve construction.
The management of Zenith PM should change from its current traditional site built construction, to the offsite construction method (Womack, 2001). This method of construction reduces the project construction time; this is because the buildings are structured at the same time with site preparation. It may even take less half the time taken by the traditional construction method.
A lot of work is not done in the project site, and this reduces the amount of disruption in the site. The management should adopt this method of construction as it fits well in places where labor is expensive. Materials can also be bought in large quantities because a lot of work is done in the factory.
This construction method will also enable Zenith PM to achieve manufacturing efficiencies. Zenith PM is a traditional construction company, so it can be served better by offsite manufacturing due to its limited space (Gibb, 2001).
The offsite construction will enable the company to provide quality facilities at a less cost. The method involves program simplification, which increases productivity levels on the site. Using the product and process innovation off site construction enables a construction company to provide quality facilities. This method will help Zenith PM to provide complex building facilities, which will make it competitive.
It will also help in reducing the operational cost as well as defects units (Gil, 2000). The improved manufacturing design and the process will help zenith in maintaining its workers and reduce the rate of turnover. Off site, manufacturing will also help the company to gain sustainability from enhanced performance and efficiency. Zenith will also benefit from significant waste reduction and a further reduction in site traffic. It creates safety-working conditions to employees due to its well-controlled environment.
The company will maximize its return on investment by using off site manufacturing (Roger, 2008). It leads to high standards of workmanship, which is beneficial to the company. It involves great architecture, which will correspond with savings. Today, most companies especially contracting companies have recognized the benefits of the offsite manufacturing method and zenith pm should follow suit in adopting this method.
Business Strategy Considerations
Off site manufacturing provides a crucial advantage in a major contractor’s portfolio, as it provides innovation into the market. Most companies are working hard to change from the traditional manufacturing to the offsite manufacturing method. However, there are some problems encountered in adopting this manufacturing method. These problems may include public sector spending reviews as well as economic crisis.
For instance, a company like Tata Steel had to close down its off site manufacturing operations in North Wales. Britspace Modular Buildings Limited was forced to go into liquidation. The company should develop efficient business strategy considerations to change into off site manufacturing method. First, it should consider the current security and logistic issues to be affected by this change.
Waste management strategy is another consideration. It has been proved that waste constitute of around 25% of the project costs in the traditional construction process (School, 2007). Current quality control and work schedule strategies of Zenith PM should also be considered during the change management process.
The company should also consider the appointment of suppliers and manufacturers. Pre-contract services agreement is the appropriate logistic method used in offsite manufacturing sites. The company should also consider the skills availability and the recruitment strategy. Project cost management should also be considered as off site manufacturing will lead to a cost reduction.
These costs include the costs of fully finished modules as well as site installation costs. The current marketing strategies of Zenith PM should also be considered. Market segmentation issues such as niche marketing will influence the offsite manufacturing processes. Product quality will also be affected by using the offsite manufacturing technology.
It will lead to production of high quality products at a lower cost and at a reduced time. The current organizational structure of the company should also be taken into consideration. This should also include the entire workforce of the company. Changing to offsite manufacturing process will affect the entire workforce of Zenith PM hence the need for all workers to be ready for a change.
New Business Model Solution and Implementation Strategy
Zenith Company should implement the offsite manufacturing which is regarded as the modern method of manufacturing. The new project should fit into the company’s strategic framework (David, 2006). The project design should be able to fit the manufacturing process. The project management, as well as the project team, should be committed to the installation of manufactured modules.
All the people participating in the implementation process should understand the changed process (David & Lewis, 2002). The company needs to reduce the number of workers in order to allow for innovation and cost reduction. The number of management layers will also be reduced in order to increase employee satisfaction.
This will lead to a more efficient company, which will be able to adopt the offsite manufacturing technology. The new business model will create a growth in the rate of turnover and employees satisfaction.
The management will design the new business model as well as the organizational chart. The entire workforce will be involved in the implementation process (Gerard, 2009). The company should also contact models consultants during the implementation process. The project managers will lead the project team in the implementation process.
Change agents and a steering committee should also be appointed in order to monitor and evaluate the implementation process. Workers should be committed towards the change management process. They need to be trained in order to prepare for the coming change.
Communication plan should be designed in order to enhance communication by the members of the project team in all stages of the implementation process. The actual implementation of the offsite manufacturing model should take a period of 12 months.
Risk Management
Risk involves something that may occur during the implementation process, and if it happens, it will have a negative effect on the project. During the risk management process, the company should design a risk management plan (Harold, 2009). The plan will have four stages of risk management. In the first stage, the company should identify the potential risks.
People from the manufacturing and IT department should brainstorm and identify the potential risks associated with offsite manufacturing. There are various risks, which may affect the project process such as business risks, which will be handled by the business (Crouhy & Mark, 2006).
There can also be generic risks that may affect the project. Risk quantification is another factor to be considered by the company in the risk management process. This involves assessing the impact of the potential risk to the project. The company should use the probability matrix to evaluate the impact of a potential risk. Another component of risk management to be considered by the company is the risk response.
This involves how the company will respond to a potential risk (Galai, 2002). The final step in risk management will be the risk control. This involves monitoring and evaluation of risks to identify changes that may occur. It will also help in identifying the probability and the impact of risks in the project implementation process. Risk control may also enable the company to identify new risks. The company should follow the four steps in order to effectively manage potential risks.
Conclusion
Offsite manufacturing is a modern innovation method of construction. It involves the design of individual modules in the factory and then transporting the units to the construction site. Most manufacturing companies today are changing from the traditional manufacturing to offsite manufacturing. It provides a cost effective solutions to the manufacturing industry. It is based on modern manufacturing processes and technological improvements (Luecke, 2007).
It has enabled the manufacturing companies to become competitive through producing quality products. Zenith PM Company is in the process of adopting the offsite manufacturing in order to solve its current problems. The company should adopt this modern and innovative technology in order to remain competitive in the manufacturing industry (Thompson, 2007).
The problem of economic downturn affecting the company may be reduced using off site manufacturing technology. Many designers, manufacturers as well as contractors, have been exploiting the benefit of offsite manufacturing. However, one of the major limitations of implementing this method is its complexity.
This has made some companies using this method to close down leading to job losses for many people. Lack of skilled personnel is another limitation in the adoption of offsite manufacturing. However, Zenith Company should change its manufacturing operations from the traditional manufacturing to the offsite manufacturing.
This is because off site manufacturing has several benefits as compared to the traditional manufacturing. These manufacturing benefits include improved productivity, improved control, improved cost, improved quality as well as improved processes.
Reference List
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