Business model innovation, from constructing to logistics

If you ever travelled to the Netherlands you might noticed that the way in which residential areas are formed is very structured and strictly formed in blocks/squares. A lot of tourists always state that every neighbourhood have a similar outlook. Nothing is less true, due the lack of space in the Netherlands the country is forced to create very efficient constructed neighbourhoods. This development also impacted the fundamental way of building the residences. The Netherlands became masters in creating standardized residences. All buildings and houses next to each other look kind of the same to optimize the manufacturing process and the use of space.

Due to this standardization the trend of prefab houses took an enormous flight. Prefab houses are residences that can be built quickly from pieces that have been made in a factory. Especially in the Netherlands the core business process of a building company does not rely especially on constructing anymore. Because on the construction sites they only “screw” the parts together. The divergent parts are made on one fabric plant by for example 3D printing and need to be stored efficiently on divergent warehouses. On the eventual construction sites they only have to screw the parts together, and the job is done. There are even blueprints of houses which construction companies can set up in only 1 day.

This prefab development created from a building company a logistics company. As result building companies have some new challenges to optimize the building process to reach the service level agreement delivery goals. Due the fact that parts of residences are not always small and planning of projects are very hard to forecast (due permits and the dependency on other infrastructure suppliers) its very hard to create a just in time strategy to reduce inventory costs. In addition, the transport costs increased tremendously because the expansion of the amount and size of the parts. One of the main challenges for building companies is to create bundled deliveries, What to bring when on which type of transportation in the most efficient way. The Netherlands is a high densely populated country and traffic jams are daily business resulting in another big challenge to take into account by changing to a logistics process company. (in this video you can see an example of transporting a prefab part of a big residential building).

This prefab era is a business model innovation which change the whole way of working and focus of the building companies and nowadays they are still struggling with the challenges just mentioned. However when this process works optimally we are able to create houses on construction sites in only 1 day!

(But still, lets hope the world will not become full of inartistic standardized neighbourhoods like in the Netherlands;))

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