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Introduction
It is important to note that modular construction (MC) or modular integrated construction (MIC) is a novel and promising method of hastening the construction process by making it more effective and efficient. The theoretical context of the research project is primarily focused on the supply chain and transportation aspects of MIC, which will be defined and described in greater detail in the following section. The main reason is that these elements are the most problematic issues of modular construction, which is why they will be used to frame the problem and formulate the research. In the case of practical context, the organization of interest is King Wai Group (KWG), which is a real estate developer in China, Shanghai, Chengdu, Shantou, and Tianjin, and it is headquartered in Hong Kong. The action project researcher and the project authors current role at KWG is Managing Director.
The currency of the project is manifested in the fact that the supply chain and transportation of MIC are core hindrances of practical implementation because modules need to be delivered to the site of construction or customer. The delays and mechanical challenges incur a high cost on the operational effectiveness of the organization, which is why the problem needs to be addressed and resolved immediately. The research project is valuable because more effective methods of supply chain and transportation will enable a profitable and positive operational outcome with multiple beneficiaries, such as KWG, homebuyers, and the government. The critical evaluation of the entrepreneurial opportunity is manifested in addressing the homebuyer communitys needs for quick and cheap housing options in the market. The main stakeholder, KWG, was directly involved in order to address its modular transportation risk factors under robust optimization with the use of external and internal data.
Real estate under the current economic conditions is becoming practically unaffordable for major segments of the population, where the costs are partially increased due to the length and complicatedness of the purely onsite construction process. Modular construction provides a cheaper and faster alternative for homebuyers by assembling modules offsite with a focus on efficiency. However, transportation still remains to be the most vulnerable and high-risk aspect of module shipping, which is why providing a more resilient framework of operations for the given transportation issue not only benefits the stakeholder but the community as well. Thus, it is a vital and critical entrepreneurial opportunity to seek and investigate the value behind it.
Modular Construction
Modular construction technology is the process of erecting a building from pre-made house parts that must be connected into a single structure, as shown in Image 1 above. As a rule, such houses do not require expensive foundations because of their lighter weights. Typically, such solutions do not require significant efforts and can additionally take into account the constraints of the site. This allows an organization to save financial resources already at the initial stage of the value chain. Modular construction technology allows KWG to take into account the problems that arise during the construction of other types of building as well. The number of actions that need to be performed by the customer is reduced to a minimum. Thus, the technology of modular construction is maximally simplified. This leads to cost savings at the main stage of building construction.
Issue
The main issue is the fact that KWG, as any other construction company is interested in a modular framework, is faced with challenges of transportation of the modules and subsequent risk management problems. The visual demonstration of the complicatedness of the transportation aspect of the modular construction is shown in Image 2 above. The value chain diagram for the modular construction is shown below in Figure 1. The modules are built offsite before there are incorporated into a building onsite. However, the modules are most vulnerable and prone to damages and other risk factors during their shipping, which creates a significant challenge for the overall risk as well as cost management efforts.
Thus, it is necessary to consider all the advantages and disadvantages, as well as the potential for using modular construction, and it can be concluded that these technologies can be used in almost all areas of construction. Considering the need to increase the residential market of Hong Kong, as well as the tight deadlines for the implementation of government plans, it is important to note that this technology will be widely used in the implementation of projects. This is plausible since the low construction time, and high factory requirements for the quality of the modules will allow the tasks to be carried out properly. However, for the full use of this technology, it is necessary to adapt the regulatory legal framework and consolidate the necessary provisions regarding modular construction.
Theoretical Context
The core theoretical context of the project is centered around robust optimization applied to KWC in regard to its integral transportation and logistical challenges. Robustness is a state in which the characteristics of a system, process, or product are insensitive to the effects of destabilizing environmental or transportation factors. Robust optimization makes it possible to develop a framework that is stable to variations in disruptive factors. The procedure is applicable to both designing a new module shipping system and enhancing the existing one on the basis of the resources available to KWG. The robust optimization method can be utilized to improve the module transportation processs parameters with minimal conduction of trials, which makes it suitable for the case study format on an already operating business.
Experiments can be performed in a multitude of methods, which can be divided into two major categories. The first one is done through theoretical modeling or optimization on the basis of collected data within the relevance range. Such modeling is applicable if there is a comprehensive model of the process that links the quality-based indicator with the core measurable parameters affecting the problem. However, alternatively, an action research project can be conducted with a physical simulation as well, which is more accurate in identifying unaccounted factors, but costlier as a result. The given project will focus on the former due to its practicality and applicability as well as constraints associated with the physical approach.
When it comes to the robust optimization process, one of the first measures includes allocating all input variables capable of explaining the result of an experiment within a categorical matrix. These can be divided into two core groups where the first category is comprised of elements that KWC manages. However, the second group consists of the parameters the company cannot impact or influence. For example, KWC might not be able to decrease the scale of each module due to its implications on the structural integrity of the final building. Thus, the input variables with the values change in a corresponding manner during the action research making them control parameters. Factors outside the companys control can be referred to as noise or disruptive factors (Yanikoglu, 2018). At the stage of selecting noise factors and control parameters, it is necessary to identify them correctly. The method is based on the use of orthogonal matrices, which are a minimal set of experiments with different combinations of parameter levels.
Thus, the variation of the set of values of the objective function simulates the output of the values of the quality index for the given control parameters. The set of observations for each set of parameters is used to calculate a criterion called the output statistic. The calculated values of the output statistics are used to estimate the optimal values of the control parameters. The signal-to-noise ratio SN is used as the output statistic (Bertsimas, Gupta, and Kallus, 2018). This ratio is expressed through the standard deviation from the middle of the tolerance field of the quality indicator. In order to interpret the experimental results of a robust experiment, an analysis of variance is used. Analysis of variance is a numerical approach used to analyze the individual influence of independent variables on an objective function. The purpose of the analysis is to determine the value of the test for each control parameter. The factor with the smallest p-value has the greatest effect on the output characteristic.
A robust experiment is associated with two matrices, and they include a control parameter matrix and a noise factor matrix. The matrix of control parameters determines their experimental values. Its columns represent control parameters, and its rows represent various combinations of parameter values. The noise factor matrix determines the experimental values of the noise factors. Its columns represent noise factors, and its rows represent various combinations of noise factor values (Yanikoglu, 2018). Each row of the control parameter matrix is combined with all rows of the noise factors matrix. The implemented robust design plan is the product of the matrix of control parameters and the matrix of noise factors.
Practical Context
The creation of more complex units, assemblies, and mechanisms with a new level of consumer properties and the desire to minimize the costs and risks of transporting modules determine the trend of constantly tightening requirements for quality indicators of modular products. In this regard, for modular construction enterprises, the issues of ensuring a specific level of module properties of new types of systems are vital. Delivery of modular products is characterized by a wide range of standard sizes, individual characteristics of each product, as well as multi-stage production (Agha et al., 2021). Under these conditions, it is effective to manage quality already at the stage of technology design. When designing technological processes for hardware production, there are always inaccurate initial data associated with the uncertainty of environmental conditions, the uneven quality of raw materials, and the imperfection of technological equipment. Under the conditions of the existing parametric uncertainty, the process control must be sustainable, and thus, the model must provide a given level of quality indicators.
The project proposes a methodology for designing modular transportation framework processes based on robust optimization. The robust approach can be effectively used in relation to the development of new and improvement of existing processes for the delivery of modular products. The practical application of this methodology will significantly reduce the time for making technological decisions to ensure a given level of quality of the finalized system (Yan1ko lu, Gorissen, and Hertog, 2019). The use of robust experiment planning makes it possible to establish the stability of quality indicators to various types of noise impacts at the design stage of the technological process.
Existing methodologies for designing modular transportation processes are not flexible enough since they require a large amount of statistical data for analysis and decision-making. The factors do not allow quality control at the stage of technology development, thereby slowing down the exit to the stage of mass production. In this regard, today, an urgent task is to develop a modular transportation design methodology that takes into account the parametric uncertainty of the initial data, which makes it possible to improve the efficiency of delivery, as well as reduce the cost of technology design.
Research Value
The potential value of the research is manifested in the fact that it will establish a better way of addressing the housing problem since it is a major challenge in the modern world. It is especially true when it comes to highly urbanized cities with limited land. The price of homes is constantly increasing, and such a rise makes apartments and houses unreachable for average consumers. Therefore, any form of optimization of risks in the supply chain and logistics of MIC can lead to a reduction in costs for such construction businesses. In return, the home prices of well-optimized enterprises can be lowered since the price reduction is among the strongest advantages of modular construction, which plays a role in the industrys competitiveness framework.
There is also a significant economic value in the research because it is practical and case-based. In other words, the applicability of the outcomes is high since real-life examples will be utilized for research purposes as data entries. The hypothesis of robust optimization is measured on data derived from MIC organizations, and any improvement is indicative of existing supply chain and logistics flaws. Therefore, the beneficiaries are both MIC companies and home buyers. The former will be able to have a potential solution to their supply chain, logistics, and transportation risks through better optimization. The latter group will be able to buy more affordable homes to improve their quality of life and financial position. In addition, one of the strengths of modular construction is the speed of construction because the modules are premade off-site prior to their assembly on-site. This, the rate of home building in an urbanized area will be able to increase and even keep pace with the increasing demand.
Research Currency
The researchs currency and timeliness are relevant due to the precise focus on a single organizations one category of business with a narrower focus on a specific issue of modular transportation. In addition, the currency is further substantiated by the fact that the data complementary to the project has been derived from publications or internal knowledge since 2017 with no utilization of any information from the previous dates. The combined use of newly published literature and up-to-date data on modular construction alongside the stakeholders endeavors ensures that the research currency is kept timely.
Project Stakeholder: King Wai Group
The core stakeholder and the organization of interest for the project are King Wai Group, a Hong Kong-based multinational company with several subsidiaries across the Asian continent. Its products and services can be divided into four major categories. These include real estate, general insurance, life insurance, and asset management (KWI, 2022). The given action project is primarily concerned with King Wai Groups real estate segment, where modular construction is already being developed and implemented as a more effective method of construction. However, in all the construction endeavors managed by the company, transportation of the modules remains the core issue, which requires an effective and superior solution.
Report Outline
The given action project report can be navigated through the Table of Contents after the title page for a readers convenience. The paper begins with an introduction section comprised of important information about the core stakeholder or organization of interest, the issue identification, theoretical framework, theoretical and practical contexts, and definitions of the modular construction. The section is followed by the narrative, and critical literature review, where applicable, a recent and relevant body of credible literature is presented, divided into subsections in accordance with the subtopics presented. The methodology and findings are provided subsequently to demonstrate the overall outcome and analysis of the projects results. The last part of the report includes a conclusion with recommendations derived from the acquired knowledge, insights, and understandings.
Research Questions, Aims & Objectives
Research Aims
The research is primarily focused on optimizing the transportation and supply chain elements of Modular Integrated Construction. The aim is to identify the most efficient and resilient method of manufacturing, storing, delivering, and transportation modules in accordance with the schedule with minimum disturbances, delays, damages, and costs. It is important to note that modular construction is a framework under which separate modules of a building are constructed off-site. These modules are later transported to the construction site to be assembled into an apartment, house, or any other building. The key benefits include standardization, lowered costs, and speed of construction. In other words, a modular construction method can build a building cheaper and quicker. However, since the standardization and economies of scale are prime reasons for these strengths of MIC, customization is minimal. Therefore, the research objective is to apply a robust optimization model for the currently existing MIC organizations to assess how the logistics and supply chain can be optimized under the existing conditions.
Research Objectives
The research objectives are as follows:
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Explore the intrinsic and inherent strengths of modular construction.
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Examine the intricate details of the supply chain and transportation aspects of MC.
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Research effective ways to address supply chain and transportation issues.
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Develop a comprehensive framework for practical application of the identified method in a project-based plan.
Research Questions
The research questions are as follows:
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What are the advantages of modular construction?
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Why supply chain and transportation aspects of MC are problematic?
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What are effective ways to address supply chain and transportation issues?
Literature Review
Introduction to the Review
One of the key aspects of any comprehensive and extensive research endeavor includes a systematic literature review on the topic. The given section is a result of the narrative literature review search since it is not pursuant of the knowledge gap identification but rather seeks to extract practical information about the subject in a critical manner (Saunders, Lewis, and Thornhill, 2016). The commonly known scholarly source search engines, such as Google Scholar, as well as specific credible journal websites, were searched with the use of keywords. The latter consisted of but was not limited to words and phrases, such as modular construction, modular integrated construction, modular construction transportation, robust optimization, module logistics, and others.
In addition, specialized books, textbooks, and online documents were consulted to obtain more technical knowledge on the specifics of the methodology in order to apply it to the King Wai Groups case. The literature review is solely interested in the recent body of knowledge, which is why all searches were constrained, with the earliest year of publication being 2017. Any material older than the provided date was deemed outdated and irrelevant in order to ensure that only fresh and recent developments, studies, and writings were built into the review.
The literature review begins with the general topic of modular construction, followed by its assessment in terms of advantages in order to provide a strong justification for why the framework is critical despite its existing challenges. The subsequent subsections address the problems and transportation-related risks in order to ensure a thorough analysis within the context of the project. The topics of MIC and modular logistics are highly intertwined and interconnected, mandating an in-depth literature review for both.
Modular Construction: Essence
Modular construction is a process in which a building is built off-site, under the controlled conditions of a factory, using the same materials, to the same codes and standards as traditional structures, but about twice as fast. Buildings are manufactured in modules that, when assembled on site, reflect the identical design intent and characteristics of the most complex site-built facility. A critical perspective reveals that one of the main advantages of using modular construction methods over traditional ones is that the work can generally be completed much faster, suffering from much fewer delays than a conventional project. It is stated that modular construction is considered a game-changing technology since it offers faster construction, safer manufacturing, better quality control, and lower environmental impacts compared with the traditional onsite construction (Thai, Ngo, and Uy, 2020, p. 1265). Studies have shown that modular projects are completed 50% faster than traditional construction methods (Innella, Arashpour, and Bai, 2019). This reliability can be very helpful in successful project planning. The weather does not interfere with the work of the construction company, so there are no delays in this process either.
Research Question One: Optimization Aspect of MC
Process optimization not only reduces the time it takes to complete a project, and it reduces cost. Minimizing the deliveries, delays, and waste materials that are typically associated with building design and construction means that choosing a modular design can cut costs by up to 20% (Wrigley et al., 2018). It is stated that it is a process in which a building is constructed off-site, under controlled plant conditions, using the same materials and designing to the same codes & but in about half the time (Modular Building Institute, 2022, para. 1). Traditional construction produces a huge amount of waste, most of which ends up in landfills, polluting the environment. Thus, shifting construction away from traditional sites and into factories could dramatically & make a sustainable impact (Bertram et al., 2019, para. 1). Therefore, the process is environmentally-friendly and has a higher degree of sustainability.
One needs to be aware that most benefits are inherent to modularity itself. MCs benefits include greater worker safety, improved productivity, increased schedule certainty, and improved cost predictability (Cao, 2020, para. 6). Since most of the construction process takes place in a controlled facility, modular design is able to minimize the amount of waste generated and can prevent contaminants from entering the soil, air, or groundwater (Ferdous et al., 2019). By doing everything away from the project site, many of the risks of injury are reduced, not only for workers but for the general public. Falling materials or noxious fumes can cause fatal injuries, and doing a lot of work away from the site is among the many positive aspects of modular construction.
Research Question Two: Key Issues in MC and Its Problematic Elements
Modular buildings are not without gripes and problems, and each construction method has its pros and cons, but it is important to know and study the cons of these buildings. It is stated that since modules are prefabricated in factory miles from the job site, they need to be transported either directly to the job site or staged at a place nearby and then set in place (Real Projectives, 2019, para. 16). There are a few downsides to being aware of, and the first downside to using modular design methods can be size limitations due to shipping issues. The presence of large dimensions for transportation can be problematic (Olawumi et al., 2022). Another problem that modular buildings currently face is a lack of confidence in the quality of the objects, which leads to a decrease in the resale value (Nabi and El-Adaway, 2020). It is reported that manufacturing and transportation restrictions can limit the size of each modular unit, which can impact room sizes (TWI, 2019, para. 7). Thus, a critical review shows that Many financial institutions may be hesitant to lend to such a home. Banks are generally unfamiliar with the modular process of building a house and the fact that most payments must be made in advance.
Research Question Three: Current Aspects of Addressing the Issues
Today one can observe the constant evolution of new technologies in a rapidly growing world. The high rate of expansion of new forms of housing is combined with our high-tech capabilities (Bayliss and Bergin, 2020). Interest in modular buildings should definitely create a bright future for construction, and most building projects are switching to this fast, cost-effective, and sustainable building process (Swiszczowski, 2020). The research is valuable due to the relative scarcity of literature in regards to the objectives. Firstly, it is stated: that as the supply chain constitutes linked segments, a higher degree of stability and coordination is required to facilitate the free flow of information, materials, services, and funds among project participants (Wuni, Shen, and Mahmud, 2019, p. 142). In other words, the supply chain for MIC is a complex system, which tends to be fragile and vulnerable to disturbances and transportation risks.
Secondly, the management process of transportation patterns can be a major challenge. A study suggests that using robust optimization, the model accounts for common causes of schedule deviations in construction sites, including inclement weather, late deliveries, labor productivity fluctuations, and crane malfunctions (Hsu, Aurisicchio, and Angeloudis, 2019, p. 1). The size of the modules require optimization as well since they restrict their delivery. It is stated that the size and properties of each element must be considered, to determine a transportation method that will not cause damage (Muresan, 2020, para. 22). Thus, the source assesses supply chain elements of modular construction as well. Thirdly, the Modular Suitability Index will be used for evaluations. A critical perspective reveals that it measures five dimensions such as connections index (CI), transportation dimension index (TDI), transportation shipping distance index (TSDI), crane cost penalty index (CCPI), and concrete volume index (CVI) (Salama et al., 2017). Thus, there are three specific examples of sources that can be used in the project. Since the search procedure was based on the use of key words on Google Scholar, these particular sources were selected due to their comprehensiveness and relevance to the research questions.
Core Advantages
A characteristic feature of the recent development of construction is the expansion of the use of not only conventional, traditional, and capital buildings and structures but also unusual, non-traditional, alternative construction projects. These include premade and mobile complexes (Liew, Chua, and Dai, 2019). Existing capital construction systems have the following main disadvantages. These are long construction periods, the significant weight of structures exerting great pressure on the ground, and the impossibility of quick disassembly of elements if it is necessary to change planning solutions (Goh and Goh, 2019). In addition, it is important to note the increased financial and labor costs for the transportation of heavy elements and the lack of planning and design solutions for the transformation of the premises.
Mobile complexes eliminate these shortcomings and are characterized by the following advantages. This includes the possibility of dismantling without significant destruction of materials and rational redeployment by serial types of road, rail, air, and water transport (Loizou et al., 2021). It should be noted that this is accompanied by a rapid change in the space-planning solution, depending on the dynamics of peoples needs. There is a problem with the presence of built-in elements and the possibility of installation without the use of heavy crane equipment manually (Xu, Zayed, and Niu, 2020). However, the result is determined by the transformation of a static and unchanging artificial habitat into a new, adaptable and dynamic space.
A critical assessment of the literature reveals that in the real estate market, such key factors as reducing construction time and reducing costs come to the fore. For these goals to be achievable, developers need new technologies through which they can keep the margins of their construction projects at an acceptable level (Nabi and El-adaway, 2021). Modular housing construction is the technology through which builders will have a strong competitive advantage in the market. King Wai Group is capable of specializing in individual monolithic housing construction and, at the moment, has already been able to build a large number of socially significant objects. Nevertheless, none of the mass-produced and experimental pre-fabricated systems does fully satisfy the entire set of modern technical requirements for them (Shahtaheri et al., 2017). This includes functional, construction and technical, economic, security, and others. The existing theoretical developments lack scientifically based principles for creating new types of modules and models for their development, and no methodological basis has been created to predict their improvement in the future.
Building a house using modular construction technology can last from 1-2 days to a week. The timeline is substantially different from similar brick and concrete-based buildings (Taghaddosa, Hermannb, and Abbasi, 2018). The degree of prefabrication of buildings manufactured using modular construction technology is very high, and it is this that reduces the time required to build a house. An almost finished house arrives from the factory. It is only necessary to connect its parts and connect engineering communications to existing networks (Kamali, Hewage, and Sadiq, 2019). It is important to note the fact that the assembly of the building at the factory allows KWG to minimize the release of harmful particles polluting the environment. This is especially true for wooden structures, where it is necessary to exclude the ingress of moisture (Enshassi et al., 2019). The assembly of the building at the factory also makes it possible to eliminate the accumulation of debris in the place where the future building will stand, and it is much easier to eliminate dirt at the production site.
The next advantage of modular construction technology is the number of financial investments that must be made for its implementation. A huge disadvantage that stops many people at the stage of an idea is the large and frightening amount of money needed to build a building (Deng et al., 2017). Another advantage of modular construction technology is the ability to expand the building during operation. If suddenly there is a need to add a few more rooms to an already built building, this is not a problem for buildings built using modular construction technology. It is these factors that take into account the technology of modular construction (Hsu, Angeloudis, and Aurisicchio, 2018). If the customer has a financial opportunit
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