Today we welcome Fouad Khalil to the show. Fouad calls himself a reformed architect. About three years ago he eased into offsite construction and founded Modly, a modular construction consultancy that provides the building and real estate sector with market research, feasibility analysis and advisory services. His focus is on helping owners and construction companies integrate manufacturing processes in the construction process.

Tyler asks Fouad to unpack the category of industrialized construction programs (IC). He explains that it has to do with looking at the increased rates of productivity in manufacturing and bringing some lessons from that world into the world of construction.

Efficiency and productivity within construction has remained largely stagnant during the last several decades, while those things have improved dramatically within manufacturing. This means that Fouad pursues improvements in quality, speed, and budget. Manufacturing programs are one way to handle that. He looks for areas where implementation of standards and repetition can gain the most traction.

Tyler asks Fouad to talk us through the series of questions that he asks in order to determine which projects are good candidates for industrialized construction. Here’s what he shares:

Volume: Is the juice worth the squeeze? Does it represent enough potential return to justify the effort? Fouad says that IC works best for serial builders–those who are aiming for consistency across a large number of projects. He gives examples including hospitals, data centers, and fast-food restaurants.

Pipeline: Do I have enough of it spread over time? Will the pace of work be steady enough? If I’m going to do it only once and then not do it again for another six months, that pipeline isn’t robust enough to consider. Some owners want to have several dozen units produced as modules, but they want them all done at the very same time. This is unrealistic.

Repeatability: Is every part of this project unique, or are there enough repeatable elements that my workers’ hands will be able to master routines? The construction world is used to sprints–going all out from start to finish. Fouad explains that factories take more of a long-distance running mindset, often aiming to run steadily at 80% efficiency. With a manufacturing mindset, the profitability horizon might be quite distant. You might need to make 150 modular bathrooms before you’ll turn a profit.

Design: How can we ensure that design and production maintain an active feedback loop so that iterative cycles can be continuously active? Fouad describes the routine of morning and afternoon meetings that his team did with Walmart on their health centers. Sometimes you change the design to make it more buildable. Sometimes you need to redesign the production floor to fit the design.

Optimization: At the production level, how can I improve margins on man-hours and other elements of cost. The goal is for unit costs to drop through a continuous flow of improvements in engineering and production. Projects that appear impossible in the early stages become lean and profitable because of a consistent focus on optimization.

Eddie presents the idea of “demonstrable economy” and discusses an example of how optimizing and productizing applies in his world, and we explore the importance of defining the use of the term “optimized” within a team. If you have various silos optimizing in isolation, the overall outcome may be far from optimum.

Fouad describes the IC process as the space program we need in construction. Through the application of these techniques, we’ll be able to see improvements across the industry. Surprise, surprise, Tyler brings us back to Formula 1 racing. We discuss the iterative process and the feedback loop between the race teams and the consumer world as it plays out in that world.

Fouad’s Megaphone Message: Owners, explore the benefits of setting up a recurring IC program. Talk to your VP of construction and see if the commitment might exist to move forward with this approach. It requires everyone to pull together and work really hard, but the rewards are worth it when the situation is right.

Find Fouad Online: LinkedIN

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