10 Villas per Day

The construction industry has seen little change in recent decades. It still mainly uses the traditional approach of manual on-site labor with multiple trade representatives, with largely unpredictable risks. That could soon change. In the future, hospitality, healthcare, and residential buildings will be manufactured like cars in factories. One of the pioneers in this form of industrialization is a company from Finland.


"To industrialize the manufacture of buildings we need a new world of production," says Admares CEO Mikael Hedberg in a Porsche Consulting interview at the Innovation Lab in Berlin.Porsche Consulting/Marco Prosch

Fol­low­ing the change of gov­ern­ment at the turn of 2021, Ger­many is dis­cov­er­ing “ser­i­al con­struc­tion”: 400,000 apart­ments, espe­cial­ly in larg­er cities, are to be built each year—installed in the short­est pos­si­ble con­struc­tion time, with great plan­ning cer­tain­ty, less stress, and with­out sig­nif­i­cant con­struc­tion noise. How will this be achieved? By pre­fab­ri­cat­ing large com­po­nents that can be eas­i­ly fit­ted on site.

Can this be done? If you look at Fin­land, the answer is yes. Because that’s where you’ll find an inno­v­a­tive and very ambi­tious spe­cial­ist for con­sis­tent fac­to­ry pro­duc­tion of the most diverse res­i­den­tial build­ings. The ground­break­ing cer­e­mo­ny is sched­uled for 2022. Admares, a com­pa­ny head­quar­tered in Turku, south­west­ern Fin­land, is build­ing the world’s most mod­ern con­struc­tion fac­to­ry, locat­ed in the Mid­dle East. As of 2024, it expects to man­u­fac­ture up to 2,200 homes per year, fully equipped and ready for plug and play instal­la­tion on site. A fac­to­ry of that type does not yet exist.

Porsche Consulting / Marco Prosch
Core team in Berlin: Admares's R&D Head Riku Kemppainen and CEO Mikael Hedberg, both from Finland, work closely together with the consultants Matthias Möhrke and Dr. Manuel Schönwitz (from left).Porsche Consulting / Marco Prosch
Design of an Admares villa: the clear, minimalist Bauhaus style creates timeless elegance. Even for such extraordinary homes, clients should not have to wait long, promises CEO Hedberg.Admares

Since its early days as a start-up, the Finnish com­pa­ny has worked close­ly togeth­er with the Porsche Con­sult­ing man­age­ment con­sul­tan­cy. The basic idea is clear: the CEO and founder wants to struc­ture the com­pa­ny sim­i­lar to the suc­cess­ful sports-car maker from Stuttgart. The Porsche con­sul­tan­cy team sup­ports the com­pa­ny in all aspects of build­ing con­struc­tion, which include strat­e­gy, prod­uct indus­tri­al­iza­tion, logis­tics, and gen­er­al pro­duc­tion. The indus­try experts from Ger­many and the Admares team have been tack­ling all the main aspects of form­ing a company—in short, the devel­op­ment from a start-up to a large-scale enterprise.

The focus now is on the actu­al imple­men­ta­tion, i.e., on deliv­er­ing a fully auto­mat­ed smart fac­to­ry. The devel­op­ment process itself is excep­tion­al, at least for the tra­di­tion­al con­struc­tion indus­try. To design the fac­to­ry, Porsche Con­sult­ing is apply­ing the lat­est dig­i­tal meth­ods. One such method can be expe­ri­enced in Berlin. There, at Porsche Con­sult­ing’s Inno­va­tion Lab in the Ger­man cap­i­tal, the con­sul­tants and Admares are struc­tur­ing and mod­el­ing both prod­ucts and processes.

This lab explores the future

Porsche Consulting / Marco Prosch
Virtual but utterly realistic: At the Innovation Lab in Berlin, companies can do the rough planning for a new factory in just two days—working with specialists from Porsche Consulting.  Porsche Consulting / Marco Prosch
Right at the Spree River, at Stralauer Allee 12 in the German capital Berlin, stands the Innovation Lab of Porsche Consulting. During our visit, an interdisciplinary group of specialists is planning a smart factory for the Finnish construction company Admares. The new factory's production lines are displayed on two enormous screens. Modeling is done with the help of augmented and virtual reality. All the processes are digitalized, enabling actual practices in the future factory to be explored today. Weaknesses can be identified and rapidly eliminated under highly realistic conditions. Alternatives can be simulated and the results precisely calculated. This workshop with Admares CEO Mikael Hedberg is one of more than 70 such events of one to three days that have been held since the center of expertise opened in March of 2020. All of the laboratory work can also be done on a remote and decentralized basis if needed, enabling everyone involved to take part even when working from home. "Our Innovation Lab does not operate in isolation," says manager Benjamin Bartoli. "It is fully integrated into the project work of our clients. We see ourselves as accelerators. We use high-powered technology to identify customers' needs faster and shorten the time they need to put them into practice. The rough planning for a factory, for example, can be validated in two days." That, however, requires intensive expert and content-related preparation in the form of very individually tailored workshops. The lab's usual approach covers three fundamental elements: technical feasibility, business relevance, and customer centricity. It combines the consultants' experience and the technicians' expertise with a service-design methodology. For the workshop with Admares, the consultants brought additional specialists from other Porsche Group subsidiaries on board: IT pros from MHP and experts from Porsche Engineering. The processes and methods of these design sprints are chosen specifically for each project. Features of this sophisticated approach include rapid iterations and tangible prototypes. And clients are favorably impressed. Dr. Matthias Schubert from TÜV Rheinland recently described the results of this new form of collaboration for his company as follows: "All in all, we were twice as productive in half the time." In the words of Admares's CEO Hedberg, "I can't imagine any other way of planning a new factory."

Transformation in the construction industry

But let’s start with a look back. In early 2018, Admares’s man­age­ment began think­ing in con­crete terms about fun­da­men­tal changes in the build­ing sec­tor. Could­n’t stan­dard­ized pro­duc­tion process­es be used to man­u­fac­ture build­ings more effi­cient­ly? Would­n’t stan­dard­iza­tion yield not only bet­ter prod­ucts but also faster and more eco­nom­i­cal pro­duc­tion process­es? Might it also be pos­si­ble to indi­vid­u­al­ize these build­ings to meet spe­cif­ic cus­tomer needs and desires? Can hotels, res­i­den­tial build­ings, and hos­pi­tals be made in ways sim­i­lar to cars? “We real­ized that in order to indus­tri­al­ize com­plete build­ings, we would need a new world of pro­duc­tion,” says Admares CEO Mikael Hed­berg. “We need com­plete­ly dif­fer­ent fac­to­ries.” The Finns con­tact­ed Porsche Con­sult­ing. As Hed­berg con­tin­ues, “Who is bet­ter equipped to help us than Porsche with its long-term expe­ri­ence in mak­ing the pre­mi­um-qual­i­ty sports cars con­sid­ered the world’s lead­ing brand?” For Matthias Möhrke, Asso­ciate Part­ner at Porsche Con­sult­ing, it was imme­di­ate­ly clear that “we would help turn this bril­liant idea into reality.”

Togeth­er they began work­ing step by step to devel­op a dig­i­tal vision of the fac­to­ry of the future. No mod­els made of card­board or pro­to­types of wood. To min­i­mize devel­op­ment time, they rely entire­ly on the vir­tu­al world. Data, images, and ani­ma­tions are all dig­i­tal. “Now we’re going flat out,” says Hed­berg. “We’re sim­u­lat­ing real con­di­tions, and test­ing and eval­u­at­ing indi­vid­ual func­tions in the pro­duc­tion process.” That includes exam­in­ing how equip­ment process­es work, whether main­te­nance open­ings are freely acces­si­ble, and whether for exam­ple the win­dows are all planned for the right places.

Porsche Consulting / Marco Prosch
Admares and Porsche Consulting team members conduct design sprints at the Innovation Lab's large monitors to plan a factory building whose components are all capable of high-precision prefabrication. Porsche Consulting / Marco Prosch

What are the main ways this pro­duc­tion method dif­fers from the oper­a­tions of con­ven­tion­al con­struc­tion com­pa­nies? As Hed­berg explains, “Up to 100 per­cent of the added value is gen­er­at­ed in our fac­to­ry, which enables us to achieve the high­est lev­els of effi­cien­cy. Erect­ing the entire build­ings in a fac­to­ry means that we man­u­fac­ture prod­ucts instead of con­struct­ing projects on site.” The man­u­fac­tur­ing process­es for the indi­vid­ual build­ing units are divid­ed into small steps and all the craft­ing and trade work is planned entire­ly in advance. The units are com­plete­ly assem­bled and fur­nished with all the pipework, ducts and cables, such as water, heat­ing, cool­ing, and elec­tric­i­ty. In order for every­thing to work seam­less­ly, Admares has to inte­grate the sup­pli­ers. There may not and will not be any poten­tial­ly unsta­ble sup­ply chains out­side the fac­to­ry. At the actu­al loca­tion where the build­ing will stand, only a few final steps are need­ed, such as com­plet­ing plug and play con­nec­tions for the build­ing units and con­nect­ing the util­i­ty lines to pub­lic grids. “Admares will rev­o­lu­tion­ize the con­struc­tion indus­try like Henry Ford did in the car indus­try with assem­bly-line pro­duc­tion,” pre­dicts Möhrke.

A "shock" for the industry

This mode of pro­duc­tion offers clear advan­tages to builders and con­trac­tors. If every­thing runs smooth­ly, con­struc­tion time is reduced to a min­i­mum. A hotel, for exam­ple, should be ready to be hand­ed over to its oper­a­tors in six weeks. And thanks to high­er effi­cien­cy, the costs are by an aver­age of around 30 per­cent lower. Hed­berg expects that his com­pa­ny and its new way of pro­duc­ing homes like cars in a fac­to­ry will gen­er­ate con­sid­er­able inter­est in the con­struc­tion indus­try. “For some com­peti­tors it could even come as a shock,” he remarks.

Admares is hop­ing to set an exam­ple and meet ambi­tious goals. “We want to show strong growth over the next five years,” says Hed­berg. That includes open­ing more fac­to­ries: The first fac­to­ry in the Mid­dle East is expect­ed to serve as a blue­print for more. The North Amer­i­can mar­ket is next in line. The Finns also have their eyes on Europe. Admares and Porsche Con­sult­ing are there­fore pur­su­ing a scal­able approach in their fac­to­ry devel­op­ment work. The idea is to opti­mize the fac­to­ries’ value-cre­ation process­es to meet the needs of each region.

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