Offsite construction is gaining traction in the industry, and it requires a shift in fundamental business strategies. There is a higher demand than ever for single-family housing that people can afford, and industrialized construction (IC) can help fill that need.
An effort led by ProBuilder Media and Pittsburgh-based Housing Innovation Alliance (HIA) is developing a comprehensive “IC Road Map” outlining a successful transition of a builder’s business model to fully integrate IC. The following key steps have been identified by the working group for making IC productive, sustainable and profitable:
Rethink and retool
IC requires a higher level of preplanning than traditional construction methods. Beginning with design, companies need to consider ahead of time what they do well and what needs finetuning, from employees and systems to transportation. Every detail of a project must be worked out in advance. Documentation needs to be factory-ready, and decisions can’t be left for the jobsite like they were in the old days.
IC scheduling is also different. Design, engineering and preconstruction for a housing development might take months, with the actual manufacture each house’s components taking mere hours. Onsite assembly for a house might require another day, reaching weathertight in just a few days. The labor savings can really add up.
HIA reports that many builders have a hard time calculating their true cost of constructing an onsite house. So, it can be difficult to calculate the savings from offsite construction.Thecosts that are similar for both processes – labor, materials, overhead – can be used to calculate a comparison.
IC requires “patient” capital investment. Because of the large up-front investment required to acquire a facility, significant returns are long-term. Speed is the greatest attraction for modular processes – less labor cost means more profit.
The transition to IC can involve experimentation. Some companies decide to manufacture components like walls, roof trusses, stairs, and doors in their factories. For others, panelization is cost competitive in light of all the costs.
Reassess the role of subs, especially framers
A big change for builders shifting to IC is their relationship with subcontractors, particularly framers. Discipline and organization are imperative. Things happen quickly in a factory, so every hour counts. Training for subcontractors is essential.
HIA explains that, if framers are brought into the workflow early and the process is efficient, they can build more homes and make more money. The goal is to spend less time on each house, for greater profitability.
Regard the limits of technology
Many sources say the construction sector is ripe for manufacturing processes. Technology for offsite manufacturing of components and modules has come a long way. Still, some builders may be cautious about innovation because of negative experiences in the past.
In the realm of large builders, there are fully automated modular manufacturing factories. Robots are being used for precision tasks like wall-framing, roof trusses and installing drywall.
Although these options may not be an option for most companies, standardization could be the best interim step. After all, modularity begins with standardization. Establishing standards can reduce the variety of components and enable repeatable processes, saving labor.
Understand production capacity and your capabilities
In some markets there is a sustained high demand for homes, and IC is being used more often for non-residential and multifamily projects. After components are manufactured, an entire house can be set up on the jobsite within a couple weeks. As tantalizing as that sounds, the advice to builders is to consider modular methods carefully.
According to the Housing Innovation Alliance (HIA), there are still some issues with modular:
- not enough factories to fill demand,
- the distances factories are from the demand (adds transportation costs),
- local zoning regulations that are not modular friendly.
The suggestion by the HIA working group is to start out by manufacturing components first before jumping into full modular construction.
Celebrate offsite construction successes
To boost the popularity and demand for IC, more publicity is needed about completed projects that showcase panelized and modular practices. Much of the success of IC depends on people knowing what is being accomplished, liking what they see, favoring the cost to buy it, and the builder making a profit from that decision.
Download the free Applied Software eBook “Software Collaboration for Modern Projects” to explore IC trends.