1 Department of Mechanical Engineering, Technical University of Denmark2 Engineering Design and Product Development, Department of Mechanical Engineering, Technical University of Denmark3 Department of Management Engineering, Technical University of Denmark4 Production and Service Management, Department of Management Engineering, Technical University of Denmark5 Operations Management, Department of Management Engineering, Technical University of Denmark6 Centre for oil and gas – DTU, Center, Technical University of Denmark
Construction companies in Denmark are often working with profit margins as little as 1-3% in situations where they deliver high-end buildings to the local market. Even though customers are willing to pay a premium price for high quality, construction companies earn very little on their products. Consequently one Danish company took the decision to produce sustainable low-cost houses and to sell them to development countries that have township housing programs. Why does this company believe in still making profit in the low-cost housing segment abroad, when there is almost no profit in the high-end segment at home? As the research described in this article shows there are three main reasons for their optimism: 1) The successful introduction of a product platform for low-cost houses, 2) a modular approach to the design of low-cost houses, and 3) the application of requirements management as described by INCOSE. 1) to 3) have been studied using action research on a case project. The case company´s success in their endeavor contributes to people currently living without decent housing getting insulated low-cost houses based on the latest technology. The fact that those low-cost houses are solid gives their new owners the possibility to take a loan in their building which is expected to contribute to more businesses being started up and thereby strengthening the domestic economy. As a consequence of this, additional research is needed in how to further optimize the economy of sustainable low-cost housing based on life cycle considerations. Moreover it has to be examined how the gained experience can support in maximizing the high-end segment in countries like Denmark?
Low-cost housing; Product platform; Construction industry; Practical implementation; Action research