Vertical production – revolution in factory planning

What are vertical factories?

A vertical factory, also known as vertical production, is an approach to manufacturing in which different production stages and production processes are brought together under one roof on several floors. Material flows between production areas on different levels are ensured by verticalization elements.

What are the advantages of vertical production?

There are many reasons for realizing a vertical factory. In the following, we look at the available space, costs, proximity to the location, urban living and sustainability.

Available space

Additional space requirements from companies lead to challenges, particularly in urban and peri-urban regions. This is because space and available plots of land are often very limited. The large plots of land required to build a ground-floor factory are therefore only available in rural regions or abroad. If relocation is not desired and expansion of the existing area is not possible, verticalization can be a good solution. Vertical factories make optimum use of the available space by building upwards. This makes it possible to create more usable space on a limited plot of land.

Costs

Land prices are rising continuously, particularly in high-wage countries and in urban and peri-urban areas. The demand for ground-floor factories has meant that suitable land has become scarce and expensive. Vertical factory construction can offer a cost-effective solution by making optimal use of existing land and creating higher production capacity in a limited space. It can also help to reduce infrastructure costs, as less floor space is required, for example, in terms of road construction, energy supply and other infrastructure requirements. Verticalization can also bring benefits in terms of competitiveness. By saving costs associated with land acquisition and use, companies can remain competitive as they potentially have lower production costs.

Location affinity

Many companies are heavily dependent on their production location. There are various reasons for this:

• The location is part of the brand. For example, it is anchored in the company name and the company actively uses it.
• The shortage of skilled workers is a major issue, and the availability of qualified specialists is not the same everywhere. Relocating to rural areas may mean a daily commute or relocation for trained, highly qualified staff. In times of skills shortages, this can have a noticeably negative impact on the quality and wage costs of the workforce.
• In addition, social obligations at the location can also be a reason, especially for traditional companies (e.g. the only major employer in the area).

Urban life

The trend towards dense urban area planning is bringing work, leisure and life closer together. In addition to business premises, residential space, restaurants, parks, sports facilities and shopping centers are being built in the same area. This provides employees with an attractive environment in which to spend their breaks and even the end of the working day with walks in the park, a short shopping trip or sports activities. The attractiveness of an employer in urban and suburban areas is therefore high and promotes employee motivation and loyalty.

Sustainability

The concept of sustainability is also very important in the context of vertical factory construction. Vertical factories make efficient use of the available space. By building upwards, less floor space is required, which helps to limit the expansion of industrial areas and conserves valuable land. In addition, less land is sealed and the space saved can be used as green areas, for example. The issue of energy efficiency should not be underestimated either. The compact design of vertical production means that better heat and cold insulation can be achieved. This means that energy consumption can be reduced not only through energy-efficient technologies. The vertical orientation of the factory means that different production stages and work areas can be brought closer together.

Strategically placed verticalization elements (e.g. high-bay warehouses, lift systems or intelligent material flow systems) can lead to a significant reduction in the distances travelled by employees, raw materials and products. In urban environments, employees also have the option of using public transport to get to their place of work. In this way, they have a far-reaching sustainable impact on the environment and society and contribute to reducing emissions, conserving resources, reducing traffic, reducing noise and saving space.

Vertical factory vs. horizontal factory

The assessment of when and under what conditions a vertical production or horizontal factory makes sense depends on the individual framework conditions of the respective company. Companies that are strongly tied to a location due to their tradition and combine a high level of social responsibility with loyalty to the location must rule out relocating factories. Depending on the complexity of the products and manufacturing processes, the shortage of skilled workers also puts companies under pressure. High potentials have high expectations of their workplace. This also includes the urban environment of workplaces and production sites. Long commutes to work without nearby facilities for children as well as leisure, cultural and mobility options are becoming increasingly unattractive. This is also reflected when considering the shortage of skilled workers in relation to regions.

The increased costs of the vertical production concept are weighed against the resulting benefits. However, the observation period for this consideration must be 30 years or more, as this corresponds to the lifetime of a factory.

Procedure for the conceptual design of vertical production

At Rothbaum, we structure the procedure for designing a vertical factory using a 6-phase plan. This is made up of the following steps:

Step 1: Project planning and planning principles

The involvement of management and decision-makers is crucial here in order to define objectives and boundary conditions and make concrete preparations for the project. A comprehensive compilation of all relevant planning data and the actual processes in production and logistics is carried out.

Step 2: Rough planning of production system and plant structure planning

The optimal value stream and production principles are developed on the basis of the compiled planning documents. In addition, the necessary intralogistics are developed in conjunction with the degree of automation. Various plant structure concepts with the corresponding material flow optimizations are developed by means of area dimensioning. Once a rough concept has been selected by the customer, the transition to detailed conceptualization takes place.

Step 3: Detailed planning of production system, intralogistics, degree of automation and plant structure

The ideal design of production lines and workstations as well as the conception of production control for optimum transparency, throughput times and inventories is carried out. Storage facilities are also planned together with the design of internal transportation, and a concept for optimum loading is developed in the overall context of the plant structure. A catalog of economical automation technologies is part of a solution approach for plant structure planning. The layout planning of the individual implementation stages, 3D visualization and a detailed room and plant book serve as the basis for architectural planning.

Step 4: Business case and implementation planning

At this stage of the project, initial key figures such as the return on investment, which are generally important for the decision-makers in the project, can be calculated based on the business case developed. In addition, a detailed schedule is developed with all the necessary implementation activities.

Step 5: Planning the system concept, detailed layouts and organizational development

The detailed planning of plant concepts and detailed layouts can be carried out from the preliminary work on the production system and plant structure. This includes all future machines, systems, traffic routes and storage systems. 3D modeling provides the customer with a clear picture of the future factory environment. Depending on the project, tender documents are also created in this phase and plant suppliers are included.

Due to fundamentally changed processes in a factory, an adjustment of organizational structures must also be examined in this context. In particular, the vertical arrangement of production areas requires an organizational adjustment.

Step 6: Realization and implementation support

The transition to realization and implementation is subject to many influences. The support of knowledge carriers from the planning phase is indispensable. If adjustments need to be made to the planning status, delays in the overall project can be reduced or avoided by making quick and well thought-out changes.

Summary

The concept of vertical production can overcome many of today’s challenges and will be used more and more in the future. However, a detailed analysis is required to determine when and in which environment the solution can be applied. The listed advantages and disadvantages of verticalizing a factory must be examined on the basis of the customer-specific framework conditions.