Opportunity and Value: Supply Chains and SMEs in Modular Construction

On Wednesday 4 November 2020 we held a free webinar discussing how to find opportunity and value in these challenging times. The webinar was specifically aimed at small and medium sized firms working in or supplying construction in the Derby, Nottingham and Sheffield areas. We worked with the Advanced Manufacturing Research Centre (AMRC), D2N2 Local Enterprise Partnerships, and the East Midlands Chamber of Commerce to start a conversation on reframing and reorganizing construction in the region in these particularly challenging times.

We had an excellent group of speakers from academia, industry and policy bodies that contributed to the event. The discussion was chaired and moderated by Prof. Jennifer Whyte who is co-Director of the Centre for Systems Engineering and Innovation and Innovation at Imperial College. Prof. Whyte opened the webinar by setting out the scene for the conversation. She remarked that in its Roadmap to Recovery: An Industry Recovery Plan for the UK Construction Sector, the Construction Leadership Council, of which she is a Board member, has laid out proposals on how the industry can Restart, Reset, Reinvent in response to the crisis engendered by the COVID 19 pandemic. Prof. Whyte suggested that looking at systems integration as a process that involves the supply chain, at the responsibilities throughout that chain, and at how SMEs can link into it would be a useful perspective to adopt. This is especially important when needing to build supply chain resilience, something that is extremely important in times of crisis such as these.

The event was set out to be highly interactive, so participants were invited to answer, in real time, the following questions, with the answers then feeding back into the conversation:

What is a particular challenge for SMEs in supply chains?
What is a particular opportunity for SMEs in supply chains?
How can SMEs work with large corporates?
What does supply chain management mean to you?

Prof. Whyte introduced the first session, which focused on how to connect regional policy and practice. The speakers in this session were Dr. Chris Millard, who is the Head of Engineering Excellence at Laing O’ Rourke, and Sajeeda Rose, who is the CEO of D2N2 LEP. Chris talked about manufacturing approaches to construction with a view to engaging SMEs in the supply chain, something that Laing O’Rourke values very much. He took a slightly different angle when exploring how SMEs can contribute to modular and offsite construction, namely by tackling the subject of productivity in construction. He focused on how offsite and DfMA manufacturing can help with re-engineering and re-designing things and drive productivity in the context of the manufacturing process. This is something to which specialist SME capabilities in the region can truly make a contribution. Sajeeda Rose gave a macro overview of what is happening in the Derby/Derbyshire and Nottingham/Nottinghamshire regions, of the challenges SMEs are presented with and of the skills needed to overcome them. Brexit and COVID 19 are obviously major challenges at the moment, with women and young workers being at higher risk in the sector. Sajeeda mentioned how upskilling and reskilling are especially important now that lack of opportunity might lead to long-term unemployment and a permanent loss of skills. Sajeeda closed by talking about opportunities for growth such as investment in major infrastructure in the region, connecting up innovation and investment in order to grow and diversify, and the creation of support clusters and agglomeration for local supply chains.

The second session centred on examples of best practice from real-life projects. In particular, Prof. Jens Roehrich, who is HPC Chair in Supply Chain Innovation and the Director of the HPC Supply Chain Innovation Lab at the University of Bath, talked about what we can learn from the Hinkley Point C project. Jens discussed how a major project engages with a regional supply chain, and what lessons there might be learnt from HS2 and other projects. Jens remarked on the importance of having clear from the outset what the strategic legacy of a major project on a specific region is. Moreover, in order to identify, integrate and develop local SMEs, it is vital to have a clear and coherent strategy for the entire lifecycle of the project. Prof. Janet Godsell, who is Professor of Operations and Supply Chain Strategy at WMG, University of Warwick, talked about how to best approach supply chain management. In this respect, she suggested an end-to-end value chain perspective when looking at SME engagement in supply chains and remarked on the importance of moving away from economies of scale to economies of scope. James Illingworth, who is Head of Construction Research at the University of Sheffield Advanced Manufacturing Research Centre (AMRC), discussed major opportunities afforded by advanced manufacturing techniques in modular construction to increase productivity, quality and value. He focused on how SMEs can fit into the DfMA manufacturing process and concluded by noting that in order for the whole sector to evolve, we need to make SME supply chains part of the whole DfMA journey.

The two session were followed by a panel discussion and an interactive Q&A with the audience. Some of the main themes that emerged from the conversation were:

What the opportunities are for SMEs in the Modular Construction?
What we need to do to increase pre-manufactured value in the supply chain?
What regional policy can do in order to support the transition?

The importance of skills was highlighted, and specifically the transferability between skills and different elements in the supply chain and how to embed skills so that they are at the basis of such transferability. The discussed also centred around ways to make specialist SME skills more visible to larger modular manufacturers in the area. The need for more connectivity was highlighted, with suggestions ranging from the creation of more intermediaries to a ‘brokerage and matching’ model.

Prof. Whyte provided the concluding remarks by noting that all contributions had suggested that the sector needs some degree of rethinking and reimagining when it comes to SME integration in the supply chain. She added that we might have to rethink where we want to take the sector in the short, medium and long term in light of the disruption caused by COVID 19 – going forward, the sector will not be the same as it was pre-pandemic. This will involve a reconfiguration and reorganisation in supply chains as well. She then concluded by thanking speakers, participants and sponsors for making the event possible.

Through a mix of academic reflection, industry and policy insights, the webinar addressed how we think about supply chains, particularly in response to immediate challenges facing regional SMEs. It provided insights on supply-chains, SME opportunities and skills, and how large companies work with and integrate SMEs in their supply network, with a view to improving regional SME capabilities for modular building. This is especially timely now that we are entering the recovery phase in the sector, and the government are promoting plans to restart the construction industry.

The webinar was part of a project funded by the Royal Academy of Engineering Regional Engagement Award, which is aligned with Professor Jennifer Whyte’s Royal Academy of Engineering and Laing O’Rourke Chair in Systems Integration