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TiiN DP6: Flow-efficient value chains, industrial building

Published: 9 November 2016

A three-year innovation project starting in January 2016, where LTU cooperates with industrial partners within Wood Centre North (TCN).


To study how industrial builders in wood and their sub-contractors can adopt a flow-oriented production control system.


To find ways of measuring flow-efficiency and identifying obstacles and difficulties which need to be overcome in industrial building processes and their value chains.   


In recent years, developments within the building industry have gone from the classical approach where all the building work takes place on-site towards the industrial construction of ready-built components and whole houses. The advantage of the latter approach is that each task can be carried out more efficiently since the degree of repetition increases and with it the potential for optimising work routines.  In recent times, the focus has increasingly been on optimising the whole value chain, from the manufacturer of components to the delivery and assembly of the buildings.  Efficient value chains require however an efficient flow, and this in turn often requires a change in the control and planning of the production process. With an increasing degree of repetition, the possibility of finding ways to eliminate sources of disturbance and variation in the production flow increases

Industrial house building has a good potential for following, for example, the vehicle industry with regard to the principle of flow-efficient production. Problems arise, however, when the industrial building companies seek to focus on flow efficiency instead of on the traditional pattern of project-directed objects with a clear focus on resource efficiency. The building industry lacks the contractual structure and references against which flow efficiency can be measured. Nor are there tools for the planning of building activities in a flow-efficient manner when it comes to coordination to create an efficient flow between companies in the value chain. The planning tools and references which are used have instead been developed for a planning based on resource efficiency and one activity at a time.   

The difference between industrial building and regular building lies in the approach in the former case to standardize repetition in the work and to introduce quality control of the process.  A number of attempts have been made within individual companies: prefabrication indoors in factories, robots and lifting equipment on site, standardization of the number of varieties and the size of the product, but an efficient industrial building cannot be realised without a value chain which functions in step with the other companies in the chain.

Within the automobile industry with which the industrial building is popularly compared, the value chain is organised by associating it with an assembly company such as Scania via long-term supplier contracts which not only deliver goods but also include product development. The production takes place in a production system that handles a given number of variants, the combination of which is decided upon when the order is placed, so-called modularization.  The building industry does not have the same custom of working in a stable value chain.  The industry is characterized by a project-oriented manner of working consisting of a large number of easily exchangeable sub-contractors who are procured individually for each building project.  One argument in favour of this arrangement is that it keeps the costs down and increases competition – a strategy which focuses on result efficiency.

The infra-structure in the traditional building industry has regulations and agreements designed to handle exchangeability, while a traditional industrial process strives to achieve stability in flow and standardization.


Project manager: Micael Öhman, Luleå Technical University

Working group: LTU with resources from the divisions of Timber Structures and Wood Science and Engineering, together with representatives for the member companies within Wood Centre North (TCN).


Micael Öhman

Öhman, Micael - Senior Lecturer

Organisation: Wood Science and Engineering, Wood Science and Engineering, Department of Engineering Sciences and Mathematics
Phone: +46 (0)910 585374