Offsite Construction Gaining Momentum

April 4, 2019 Conley Smith

When it comes to laying blame for the productivity problems plaguing most construction jobsites, there is no lack of fingers to point. Is it the critical labor shortage? Incomplete project designs? Or just an industry slow to adopt new technology?

Take your pick, but you won’t find many people blaming offsite construction methods. Not only is the modular construction model gaining ground with nearly 90% of contractors using it for at least part of their work, but the market is also predicted to grow to $157 billion by 2023.

Offsite—which includes prefabricated and modular—has an impressive potential to lower costs and compress project schedules by 30% to 50%. Driving much of the growth is the need for complex structures at affordable rates due to urbanization and the desire for sustainable construction methods, according to the 2018 National Institute of Building Sciences (NIBS) study.

Closer Look at Prefab and Modular

For starters, offsite construction has been around for decades. Its ability to deliver projects faster and cheaper is proving attractive for a construction industry struggling with productivity issues. Owners and contractors, who are hard-pressed to find enough craft workers, have started to embrace this project delivery approach in a big way.

But before we dive in further, let’s get a little clarity on the terms:

  • Offsite construction is an umbrella term for prefab and modular. According to the NIBS, offsite construction involves planning, designing, fabrication, and assembly of a building at a location other than the actual area for rapid assembly at the site.
  • Prefab construction is any structure that has its section designed in a factory. As a result, both modular and pre-manufactured structures are considered prefab construction. Also, prefab must meet state and federal building codes and undergo regular inspection.
  • Modular construction falls under the broad idea of prefab construction. This is where whole structures are built in three-dimensional boxes or in the form of modules and transported to the jobsite. These can be temporary structures like construction site offices or permanent ones like banks, schools, and hospitals.

For example, with modular construction, the structure can be fabricated in a modular construction facility while the project jobsite is being prepped for the structure installation. Instead of a traditional jobsite where these projects happen one after the other, work can be done simultaneously—reducing project lead time up to 50%.

Tom Hardiman, executive director of the Modular Building Institute (MBI), explains: “The difference is that 60% to 90% of modular buildings are completed offsite in a controlled production environment, including all MEP, fixtures, and interior finishes.”

Can 87% of Contractors Be Wrong?

Clearly, offsite construction is becoming more mainstream. The NIBS study completed by its Off-Site Construction Council (OSCC) showed that 87% of participants had used some form of offsite construction in the previous 12 months and more than 81% planned to do so in the future.

The 205 survey participants—construction managers, general contractors, engineers, trade contractors, architects, owners, and developers—noted that offsite is being used for everything from commercial construction, industrial, healthcare, education, multi-family, hospitality, single-family, and data center construction.

Despite the level of engagement required, the survey noted that offsite projects resulted in high-quality outcomes, fewer changes, streamlined schedules, and lower costs. When asked who is making the decisions regarding off-site use, the results were interesting:

  • 48% said the construction manager or general contractor
  • 63% said designers, architects, and engineers
  • 41% said clients
  • 21% said subcontractors

With GCs and construction managers most often making the decision to pursue offsite, the study concluded that current decision makers and owners may need to be educated on the value of off-site construction.

Overcoming Barriers for Offsite Benefits

While the NIBS study shows growing use of offsite construction techniques, they also found that some long-term projects may not be as well suited for prefab elements. They cited barriers to offsite construction like the distance of the factory to the construction site, last-minute design changes, and the construction industry’s reliance on traditional methods.

In stark contrast to traditional construction, offsite is regarded as less time-consuming, sustainable, safe, cost-efficient, and flexible. One of the most significant barriers to offsite construction involves the current culture of design and construction. Comments in the study indicated that late design changes, lack of collaboration, and an adversarial climate for project delivery leads to difficulties in realizing the benefits of offsite construction.

Another benefit of offsite occurs when prefab structures are manufactured in a controlled environment and transported to the site. As such, contractors can monitor the quality of every section of the structure, which is not possible in the case of on-site or traditional construction.

Hello Predictability, Goodbye Chaos

For many contractors, it is appealing to think of how offsite construction methods can improve project time, cost, and quality. It appears offsite construction can potentially deliver what is sorely missing in the construction industry: predictability.

It is also interesting to note how contractors view the potential for prefabrication to improve productivity and profitability. When asked which technology they would choose to make their business more competitive, nearly 38% picked prefabrication as their tech choice in the 2018 JBKnowledge Construction Technology Report. Prefab beat out AR/VR (28.4%); jobsite sensors (21.6%); robotics (20.9%), and machine learning (17.8%).

Does your construction business bid on projects with prefab and modular components? We’d love to hear from you! Email us to share the biggest impact offsite construction has had on your estimating process and construction business.

On Center Software by ConstructConnect is an industry-leading software provider. Request a free demo now to explore our takeoff and estimating tools.

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