Productivity growth within the construction industry requires more than the adoption of technological management aids. An increasing number of studies point to modular componentry as the way forward.
Among the most respected sources of research concerning construction productivity are the studies published over the past few years by the McKinsey Global organisation.
Their conclusion is fairly straightforward when it comes to construction’s bottom line: “Modular construction can be as much as 50 per cent faster, which can translate into cost reductions of 20 per cent.”
Where do these potential cost reductions come from?
The Modular Building Institute (MBI), is an international non-profit organisation whose representation includes 60 modular builders in Canada. They identify three key advantages, all of which lead to reduced costs: Quicker occupancy due a more streamlined construction process; more efficient use of labour, particularly in areas where key skills are in short supply; and improved predictability in terms of material procurement.
The term “modular construction” is very broad. It includes both volumetric units supplied virtually complete and ready for assembly on site, and prefabricated components manufactured remotely and then connected with other components on site to build complete systems.
Prefabricated housing has been around in one form or another for decades. Remember the Pan-Abode and Viceroy homes of the 1970s?
Despite its potential, though, McKinsey says that prefabricated housing has been in and out of favour in North America over the years. Only in Scandinavia and Japan has the concept maintained a steady foothold.
That’s been changing, however. The United Kingdom, Europe and the Middle and Far East are experiencing a growing love affair with the concept of modular construction, and it’s not restricted to housing.
In fact, size is not even an issue. It’s now possible to order buildings as tall as 30 storeys or more from Chinese factories, that arrive by ship with art already mounted on the wall.
North American interest is increasing. According to another McKinsey Global report, “the permanent modular construction market share of new North American real estate construction projects has grown by 50 per cent from 2015 to 2018.”
Canada Playing Catch-up
However, modular growth has been muted in Canada.
Figures from MBI indicate that Canadian modular spending declined in 2018 versus 2017 across all sectors — non-residential, education, administrative and industrial workforce —rebounding slightly to $27 billion in 2019. The 2021 MBI report indicates Canadian modular spending remained flat in 2020 and is forecast to come in at $26 billion in 2021.
“I definitely think we have a ways to go to catch up to other places like Europe.” says Kevin Read, President of Nomodic Solutions in Calgary, Alta.
“They’ve been adopting modular for some time, particularly in the United Kingdom. And of course, there’s a lot happening in Asia”
Read sees a Canadian instinct towards caution as one reason for the slower pace of modular adoption. Every project is a three-cornered discussion that involves the owner, the architect and the building fabricators, he says. And when it comes to a modular approach, education lies at the heart of the issue.
“Nine years ago, we were educating everybody. There weren’t a lot of owners or architects adopting modular processes. But now, there’s enough modular installed in the field, buildings that people can go touch and feel in hospitality and housing. While it’s still driven by the owners, there are enough people on the design and architecture side to also promote the idea.”
Going Modular, What Does It Take?
Committing to modular processes requires the close collaboration of all project parties at the earliest possible point, says Read, whether it’s volumetric units or prefabricated componentry.
“Another thing is continuity. It’s huge. If you invite somebody in at the beginning, they can actually help solve problems. But if you invite them in at the end, it becomes their job to find problems.”
As an example, Read cites cases in the past when plans have been brought to his company almost at the building permit stage.
“They were saying, ‘Hey, this project looks like it might be going over budget. What can you do?’ ” he says.
Some owners and designers may also hold a preconception of cookie-cutter, box-like designs resulting from modular processes.
While Read appreciates the concern, he says the reality is far from that.
Companies like Nomodic look closely at the objectives of the owner, the vision of the designer, and the specifics of the site and its community. As a design-build organisation, they can then work closely with various material and component suppliers to make their modular processes fit the design, rather than the other way around.
Logistics are another aspect requiring planning. In a country as large as Canada, distances between manufacturing facilities and the building site must be considered.
“When we get to certain stages of the design, it’s important that we do a formal transport study. We need to understand what options we have to get the assembly, modules or components of various sizes to the site. It’s really an exercise in analytics.”
Despite an increased understanding of its overall productivity potential, Canada continues to be slow in moving to the next level of adoption, specifically the large modular projects seen elsewhere around the world.
In Read’s opinion, one reason is that most current building codes in Canada themselves have been slow to adapt. That’s followed by supply chain issues. The availability of innovative materials and components that support volumetric modular processes needs to improve in Canada, he says.
Canada’s financial industry also has a role to play. Owners can face challenges obtaining project financing when the building is manufactured in a remote factory while site work is being undertaken concurrently. Some financial institutions are restricted by underwriting ratios regarding the storage of offsite materials that do not account for the enormity of the modular process.