Off – Site Manufacturing At Phoenix PM


Project management is a concept that has been developed over the past decade. The conceptualisation is still under the process. However, it is heavily being employed by the companies in which projects are conducted such as construction companies. Recently, a new dimension has been added in the concepts of project management, which is off - site manufacturing. Off - site manufacturing basically deals with production of the material on a different location or it can be said that it occurs in a manufacturing plant (Smith, Merna and Jobbling, 2006). Project management and management of risks goes hand in hand because there are projects that face risks (Sears, Sears and Clough, 2008). In this report, different concepts of off  site manufacturing have been analysed with respect to the case of the report which is Phoenix PM which is a small company. The case which is analysed in this report also is confronted from complex environment which has made it to look for certain options which in turn can increase business efficiency.

Introduction and Context

The report is designed to cater various aspects of project management and off - site manufacturing. There are different sections of the report each of which have been designed to incorporate theory and practice of project management on a case given which is Phoenix PM. The report starts with an introduction in which the introduction to the context is given. Thereport starts with core literature on off - site manufacturing. In another section the business strategy is discussed in which strategies to Phoenix PM are given. A new business model and implementation strategy is proposed to help Phoneix PM to deal with the current scenario. Some of the risks are discussed and their mitigation is also given. At the end of the report, conclusion is given in which the recommendations are postulated out and limitations are also discussed.Throughout the analysis, it is made sure that the theoretical perspective is critically analyzed and it is connected with the Phoenix PM case study.


There are various aims of this report; each of which have been accomplished in different sections. Aims are developed to give direction to the report. The aims are collectively derived from learning outcomes as well as the requirements of the report. The aims are:

  • To critically evaluate the core literature regarding off – site manufacturing and to discuss the core business models in strategic project management.
  • To discuss and improvise business strategy by analyzing project environments.
  • To develop a business model and to identify how to implement the newly developed model.
  • To identify different risks faced with the project during different cycles of a project.
  • To present recommendations and highlight limitation of the new business strategy.

Introduction and Context

The company analayzed in this report is Phoenix PM. This is a small contracting company. The total workforce of the company is 212. The issue with this company is about the workforce, which is for the contract base. Once the project ends, the company starts on new projects and hires new employees. For these new employees, it provides training. This is an extra cost and this is also impacting the core business negatively. This was the case after the recession. Considering this situation, the management team has decided to adopt a new approach in which it should incorporate off – site manufacturing, which will help Phoenix PM to enter niche market, reducing turnover and leveraging the financial position. This report is designed to present an overview to the Phoenix PM to maximize benefits from off – site manufacturing and in advance come to know about how well it will integrate in the business process of the Company.

Section 1: Offsite Manufacturing (synthesis of core literature)

1.1.Definition of Off – Site Manufacturing

There are many terms, definitions and classifications that are used to explain off –site technologies and innovation in construction. Off –site is a generic term which is employed to describe the variety of construction techniques which are traditionally different from on - site construction as according to Ross (2002). There are two types of production sites which are non – traditional. One is called as off - site factory and the other is called as on - site construction (Mostafa et al., 2014a).

A very simple definition of off – site manufacturing is that the construction of building material which is conducted out of rain and under the cover (Anthony, 1945, p. 42; Aloini, Dulmin&Mininno, 2012). The benefits of off –site manufacturing as visible from this definition is efficient, best suited to safe and productive construction. Different terms are used to explain and refer off – site manufacturing such as Modern Methods for Construction (MMC), Off - Site Production (OSP), Industrialised Building System (IBS), Industrialised Building (IB), Off-Site Construction (OSC), Off-Site Manufacture (OSM),  Off-Site Prefabricated housing, Modular Building (MB). These are used by researchers, practitioners, industry situations and government (Kamar et al., 2011; Barki, Rivard& Talbot, 2001; Cleden, 2009).

1.2.Historical Background

It is pointed out by Taylor (2010) that the phenomenon of manufactured buildings is not new. John Manning developed a portable colonial cottage in 1830s and in the 19th century as well there are many examples of off –site production (Darnall& Preston, 2010). In the colonial expansion of the European nations, prefabricated houses were used mentioning that they refer to the ‘European-style housing’ and in the construction of these houses local material and labour was not used (Gibb, 1999). The prefabricated hospitals were manufactured in the Crimean War, whereas industrialised building method was developed as a result of industrial revolution (Gibb, 1999). After World War II, off – site manufacturing was used on a large scale as it was the demand of population for new housing (Finnmore, 1989). In this era, prefabrication was famous because of economies of scale as through this mass production was possible (Venables, Barlow and Gann, 2004).

Prefabrication was also popular due to the economies of scale which could be generated from standardised mass production (Venables, Barlow and Gann, 2004). Off – site construction was utilized on different scales to the end of the 20th century, such as hospitals, hotels, prison and schools (Edwards, 1995). Public projects declined because societies became wealthier and during this time pre – fabrication utilization got spurred up (Gibb, 2001). Waxes and wanes is the history of off – site manufacturing. Therefore, off – site manufacturing is not an emerging trend rather more technology is upgraded in this process. It is a cyclical process. The perception related to Off – site manufacturing is more influenced by cultural, social and economic context.

1.3.Off – Site Manufacturing Benefits

There are many benefits which are brought to the construction industry through off – site manufacturing as mentioned in the semi Egan Report (Egan, 1998). In the same report, it is identified that it is playing an important role towards the performance of the construction industry. The literature on the benefits of traditional on – site and off – site construction is scarce (Blismas and Wakefield, 2009). This heading has analysed some of the major benefits of off – site manufacturing very briefly.

Figure 1: Benefits of Off – Site Manufacturing (Self-made)

1.3.1. Time Saving

Time saving is the most highlighted benefit of off – site manufacturing. The time in on – the – site decreases when the work is transferred to the off – site facility. The conditions in the factory are predictable and economies of scale are generated through this method and it helps in meeting the deadlines. According to the research findings of Gibbs and Isak (2003), the senior personnel of the large construction companies revealed that in the UK, pre - assembly is one of the common procedures and there are over 40 percent of construction companies using it. 38 percent of the designers and clients have marked pre – assembly to save time as the most common benefit of off – site manufacturing (Goodier and Gibb, 2007).

1.3.2. Quality Improvement

The stakeholders in the construction industry have pointed out quality improvement as a significant benefit of off – site construction. It has been identified that through off – site manufacturing, tight quality control can be done, which is not possible in on – site manufacturing (Venables et al, 2003). A comparison was made between on –site and off – site construction quality and it was found out that quality is found more in off – site construction. In another study by Goodier and Gibb (2007), it was found out that after time saving, quality was the next benefit of off –site manufacturing.

1.3.3. Addresses Skills Shortages

Off – site construction brings other benefits as it helps in relieving from the shortage of skills. This enables the company to outsource the process in another place in which less labour is needed as compared to the on – site manufacturing (Pan, Gibb and Dainty, 2007). In a research by Lu and Liska (2008), it was revealed that the shortage of skills ranks among top six benefits of off – site manufacturing.

1.3.4. Cost Reduction

Cost saving is another perceived benefit of off – site manufacturing.  Initially, it is high in cost, but then it keeps lowering. House building companies are using off – site manufacturing because of the cost efficiency (Pan et al., 2007). Off – Site manufacturing is more predictable and there are less cost blowouts which arise because of the risks associated in on – site manufacturing. Engineers and architects have revealed that 36 percent of these people consider cost reduction attached to off – site manufacturing (Gibbs and Isak, 2003).

1.3.5. Productivity Environment

There is another method through which the benefits of off – site production can be conceptualised. A research by Gibbs and Isak (2003) has mentioned that it is the fourth benefit of off – site manufacturing and it helps in gaining productivity. In a broader perspective, productivity overrides high quality, reduced time and lower cost (Goodier and Gibb, 2007).

1.4.Barriers to Off – Site Manufacturing In the UK

The barriers to the off – site manufacturing to the UK construction companies are mentioned in the following points.

  • Historical Context: As it is mentioned before that prefabrication was in high demand in the UK during 1960s. The problems which arose as a result of prefabrication included poor workmanship and quality of material. This led in developing  a negative image of prefabrication in the perception of public (POST, 2003).
  • Reluctance to Innovate: According to the research work of Barker (2003), it was identified that there was seen reluctance towards adoption and innovation of the modern methods of the construction.  It has been found out in one of the surveys that the UK construction industry is more labour – intensive as compared to the other countries. The cause of adoption of off – site manufacturing reluctance was not adopting innovation. There were two main issues highlighted by the suppliers in the adoption which included market demand and production capacity as according to the Housing Forum (2004). POST (2003) identified other issues arising because of reluctance such as cost of modern methods of construction, its environmental benefits, public acceptance, the industry capacity, the quality of such housing and planning and building regulations.
  • Perceptions of Stakeholders: According to Barker (2003), it is identified that it is the duty of the warranty providers and lenders to give knowledge to the customers about benefits of off – site manufacturing. The main benefit which is provided to the customers is about the durability and the safer buildings (Housing Forum, 2002). However, the barrier is from the lenders.
  • Culture of risk aversion: The nature of the construction industry is risk averse, which has influenced this industry as investment is less towards the adoption of capital – intensive approaches. The risks which are associated with this industry makes the investors reluctant in investing in the plant and other alternative construction techniques. In addition to this, there are other limiting factors such as the importance of land acquisition, the unique market constraints, the nature of the UK planning system, and location in determining price (Barker, 2003). All of these tend to limit innovation in the construction industry.

Section 2: Business Strategy Considerations

2.1. Adoption of Off – Site Manufacturing as a Business Strategy by Phoenix PM

As it has been mentioned in the case study that Phoenix PM is a small company and it is planning to adopt off – site manufacturing as a new business strategy. The possible benefits which will be obtained from this business strategy include identification and targeting a niche market, lowering project costs and stabilizing the workforce (Gould & Joyce, 2002; Keil, Rai& Liu, 2013; Mcfarlan, 1981; Perry, 1986; PMI, 2004). These are the benefits and currently company is lacking a system through which these benefits could be obtained because operations of the company are very compact and the size is also small. The company cannot think of getting into managerial decision which is more than its operating cost. In the literature review, it has been discussed that there are many benefits of off – site manufacturing such as quality improvement, time saving, cost reduction, productive environment and addressing the shortage of skills. All of these benefits pose that there are long term benefits of off –site manufacturing and Phoenix PM should adopt it so as to gain returns in future as well.

2.2. Potential Impacts of Off – site manufacturing as a Business Strategy

The business strategy which Phoenix PM should adopt is off – site manufacturing and it will impact on various aspects of current business.

Figure 2: Potential Impacts of Off – site manufacturing on Phoenix PM (Self-made)

These are discussed one by one in the following points.

  • Project Management: The project management is a complete process (Gould and Joyce, 2002) which starts from project planning and ends at project implementation. Phoenix PM is a contracting company and previously it was providing services in on-site manufacturing. But due to various factors, such as turnover of employees and low profitability, the company has decided to adopt off – site manufacturing. With respect to this, the project management process will be affected.
  • Initial Cost: Since the company has been relying on on – site manufacturing, adoption of off – site manufacturing will require more space for the production of prefabricated material and new plant will be required. This will incur cost.
  • Human Resource management: The HR of the Phoenix PM will also be impacted. The company which was previously hiring employees on contractual basis will need to hire a group of people having expertise in off – site manufacturing and on permanent basis.
  • Training: The existing employees need training with the new business strategy. The employees are required to have knowledge, skills and abilities through which they can deal with the current situation in the company.
  • Change management: Since company is in business from past many years, it has a strong culture. The managerial staff of company is permanent and it will need permanent staff for off – site manufacturing. This will change culture of the company. Employees will show resistance and reluctance towards the newly developed system as well as new hiring. For this purpose, the company is required to provide orientation to the employees, small teams should be developed through which communication can be made within the new and the existing staff.
  • Management Information System (MIS): There is a need to develop databases by the company in which the record of projects is mentioned. Through this system, the company will be able to update its information regarding off – site and on – site manufacturing, employees and finances. This will also require additional cost, but the benefits are long term.

Section 3: New Business Model Solution and Implementation Strategy

3.1. New Business Model

The basic business model is selected for Phoenix PM which was proposed by Harvard Business Review. The figure of this model is shown as follows.








Figure 3: Business Model

This business model is a triangle in which there is profit formula, cost structure and revenue streams and all of these are generated to utilize strategic resources, dynamic capabilities and processes to gain value proposition. For Phoenix PM, this model has been applied to the new strategy which is developed by the company which is off – site manufacturing.

The first thing to consider is cost structure and this is guided by competencies and company value chain (Bryson, 2011). The competency of Phoenix PM is that it was successfully utilising on–site manufacturing. The value chain of company in which primary and secondary activities were involved were also going well before the recession but afterwards its profit margin was affected. For the off – site manufacturing, Phoenix PM has to increase its operations for instance, in the past, there were no marketing activities, but now it will need marketing to support its new system. Next is the profit formula. To maximise profits from off – site manufacturing, the company has to build relations with the customers and sell their off – site manufacturing. Attention of customers can be gained by adopting strategies such as sustainable business practices and innovation. Such type of strategies will initiate revenue generation.

The strategic resources of Phoenix PM are in on – site manufacturing. The company is in this business from the past many years and it is mentioned in the case study that it has been earning well from its operations. The internal management system and on – site manufacturing experience are strategic resources of the company which will help in developing off – site manufacturing. The company strategic resource towards off – site manufacturing will be its employees, which it will hire on a permanent basis.

The value proposition deals with developing an idea filling up the gap of customers' needs (Porter, 1996). The off – site manufacturing is a value proposition for the company because it is not only going to save time of company, but it will also bring more business to the company. In the current era, people believe in prefabrication and working on off – the – site. There are many reasons for this behavior such as environmental sustainability, noise pollution and other types of pollution that arise because of on – site manufacturing. Therefore, off – site manufacturing is the value proposition of Phoenix PM.

Dynamic capabilities and competencies are developed from strategic resource building (Eisenhardt and Martin, 2000). The main strategic resource which needs to be developed by Phoenix PM is development of existing and new staff. For this purpose, training and development should be conducted to build knowledge, skills and abilities of employees towards off – site manufacturing as well as company operations. This resource altogether is going to develop a company competitive advantage which will be sustainable.

3.2. Implementation of Strategy

The implementation of strategy takes place at three levels namely corporate level, competitive level and operational level (Cheung, Kutcher and Wagle, 2009). The implementation of strategy with respect to the three levels is discussed in the following points.

  • Corporate level: At the corporate level the major decisions should be made regarding
    • Recruitment and selection of team which can handle and have expertise in off – site manufacturing.
      • Implementation will be done through HR executive.
    • Training and development of existing and new employees regarding change management and off – site manufacturing.
      • Implementation will be done through HR executive.
    • Development of management information system which will aim at developing database and digital record keeping. In this the risk register will also be made.
      • Implementation will be done through IT personnel.
  • Competitive Level: This will utilize the resources and capabilities so as to develop sustainable competitive advantage. Existing resources will be utilized by the company such as already developed market, market knowledge, strategic alliance with competitors, finance and cost structure and knowledge on – the – site manufacturing will be utilised. All of these decisions will be implemented through the top management of Phoenix PM and will only be done through consensus by stakeholders and shareholders of Phoenix PM.
  • Operational Level: The operational level strategy for Phoenix PM is that teams should be developed and each of the team should be responsible of performing tasks. Leadership should be appreciated.

Section 4 - Risk Management and Mitigation Approaches (prior, during and post-implementation)

4.1. Different Types are Risks Associated with the Projects and Risks Encountered to Phoenix PM

There are different risks associated with a project specifically in the construction projects. A risk can be accepted or rejected as there is a possibility (Chia 2006). There are different tools, skills and techniques applicable with the help of which the risks can be averse as according to Zolfagharian et al.,(2014). The risks can be short or long term. When it is short term, then it takes place when the project is delivered (Tam, Zeng and Deng, 2004) and in case of long term, the impacts are afterwards when the project is implemented. Different types of risks associated with a project are explained one by one in the forthcoming paragraphs.

  • Technical risks: Technical risks are the ones which happen because of not getting inaccurate knowledge about site or other factors (Ankrah, Proverbs and Suresh, 2012). When there is unfinished devised, unqualified suitability, ambiguity, inaccessible equipment, incomplete design, uncertainty, specification inappropriateness and material unavailability, then these are technical risks as according to Chia (2006). Phoenix PM has encountered this type of risk because it has been mentioned in the problem that the company get rid of the contractual employees who have knowledge and skills and when it starts on with the new projects, it hires new employees and train them(Smith, Merna&Jobbling, 2006; Wallace, KeilRai, 2004b).
  • Logistical Risks: When there is lack of facilities, lack of equipment, unavailable resources, inadequate shipping services and inaccessible sources, then this risk is called as logistical risks (Esmaeili and Hallowell, 2012). This type of risk is not encountered by Phoenix PM.
  • Management related risks: Then there are some management related risks which are related to weak management. This can greatly harm a project as according to Peter, Straubb and Rai (2007). The management related risk is with the human resource of the company. The turnover rate of the company has increased after the recession.
  • Environmental risks: Environmental risks cannot be neglected as these are associated with the environment, including weather, natural calamities and climate allusion as mentioned by Mitropoulos, and Namboodiri (2011). These can stop a project and can cause delay in delivering the project. These are not affecting Phoenix PM.
  • Financial risks: Financial risks have been mentioned before and it is because of delays in payments, in foreign exchange, inflation, postponement in reimbursement, local taxes and repatriation of funds(Taylor, Artman&Woelfer, 2012; Thomas, 2009; Webb, 2003; Rao & Burchett, 1999). This risk is a threat as it can stop a project as according to Bansal (2011).  It has been mentioned in the problem that with the adoption of off – site manufacturing, the financial issues will be resolved. In addition to this, it needs to use off – site manufacturing.
  • Socio – political risks: Hindrances on the availability and employment of emigrant staff along with restriction and processes of customs and imports are examples of the types of socio - political risks (Edwards, 1995).Mitropoulos and Namboodiri (2011) has stated that persistence with the usage of local firms and representatives and urging on the use of local organizations and agents can also be risks for construction projects. These are the most common risks which are confronted by most of the construction projects. These are not confronted to Phoenix PM because the operations of company are very limited.

4.2. Mitigation Approaches (prior, during and post-implementation)

There are basically three phases in project planning, namely initiation and planning phase, implementation phase and closing phase. Initiation and planning phase are pre – implementation phases, the implementation phase is during phase and closing phase is post – implementation phase. For the off – site manufacturing implementation by the Phoenix PM, the process of implementation is discussed in the following sub-headings.

4.2.1. Pre – Implementation (Initiation and planning phase)

In the pre – implementation stage, Phoenix needs to develop risk register through which it can come to register the risks which will arise because of off – site manufacturing. In this stage, Phoenix PM needs to identify the workforce that it requires for off – site manufacturing. Cost and budget will also be decided in the same phase.

4.2.2. During Phase (Implementation phase)

After the initiation and planning phase, during phase occurs. In this phase, all the planned activities are implemented. In this case, Phoenix PM is going to start its off – site manufacturing which was not previously used. According to the analysis of literature, it was identified that there is not much need of the workforce. Quality will be improved as well. During the implementation of the off - site manufacturing, management needs to focus on the operations of Phoenix PM.

4.2.3. Post – Implementation (Closing phase)

After the implementation of off - site manufacturing, the management needs to develop cost and benefit analysis of the first project in which off - site manufacturing was applied. During the same project, management will be able to know about the risks which it has encountered. In this manner, all of the necessary information for future will be identified.

4.2.4. Mitigation of Risks During different phases of project

The risks can be mitigated by keeping their risk register. This will help the company in keeping record of risk, their type and what strategies were helpful when that specific risk arose in the past. In this case, the most common risk which company can face are technical risks, management related risks and financial risks. In this case the strategies which can be used are

  • Company needs to keep risk register
  • The failure points should be highlighted for every mitigation solution.
  • The event should be documented and a flag should be raised when it reaches to a critical position
  • Phoenix PM should be proactive rather reactive
  • Risk management department should be developed by Phoenix PM so as to deal with all types of risk and providing a special task force which can reduce the chances of damage by these risks.
  • Alternatives should also be present so as to correct the failure.

Conclusion, Recommendations and Limitations


Phoenix PM is a small company and in the anlaysis of the report, it has been proposed that the company should adopt off – site manufacturing which is not a new area in project management. From the analysis of the literature, it has been revealed that there are myriad of benefits of off – site manufacturing all of which answers the future prospects of the company. There are different sections of the report each of which has identified the successful implementation of project management tools and the business solution.

The loopholes of the company have been identified and accordingly strategies have been devised. It has also reviewed that there are risks associated with off – site manufacturing which can be encountered. The mitigation of the risks is also mentioned in the report. From the analysis of the report, it is concluded that company is facing strategic issues which are the hindrance in the implementation of a new strategy. The report has been designed in a manner that theory is presented and then the application to Phoenix PM is also given. Theory and practice has together being utilised in the report so as to present the main idea of off – site manufacturing.


The recommendations which are postulated out of this report are

  • Key Performance Indicators: For successful implementation of off – site manufacturing strategy, it is important to develop key performance indicators (KPI). Through this, the company will be able to highlight key areas in which performance improvement is required, against it the performance indicators should be set.
  • Balanced Scorecard: The balanced scorecard is a method through which four aspects of the company are taken into account, namely financial, customers, internal business process and learning and growth of Phoenix PM. This is a complete system in which the performance of the company will be reviewed on different ground and it can then be evaluated.
  • Training: Training of employees is required towards off – site manufacturing and change management.
  • Clear Communication: Communication should be clear at all management levels that is from operational to to management. The communication between project leaders and site teams is needed so as to implement off – site manufacturing successfully.


There are certain limitations which can be faced from different drivers and actors in Phoneix PM. The limitations of off – site manufacturing are:

  • One of the limitation of off – site manufacturing is that once a design is developed and made in the factory outlet, it is difficult to change it rather than on – site manufacturing.
  • Another limitation is the the company small group of employees, which are permanent. They have a strong culture and their values are different. The company performance in the recession period is  showing that the employees were not giving their input. So the senior employees are also a limiting factor in off – site manufacturing. The employees will show reluctance towards adoption of innovation, which is another aspect related to probable limitation faced from the employees.
  • Company structure and management is also a limitation to the successful implementation of off – site manufacturing.





















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