Academic and business studies continue to speak of the potential productivity gains offered by modular building processes. These never seem to go stale and remain valid even years after original publication. What’s puzzling is the industry’s slow pace of adoption over time.
Construction has one of the worst industry records for productivity gains in the period since the Second World War. In their extensive 2017 report titled Reinventing Construction: A Route to Higher Productivity, global consultancy McKinsey says since 1945, productivity in manufacturing, retail and agriculture have grown 1,500 per cent. Meanwhile, “productivity in construction has barely increased at all.”
Modular construction has every reason to grow, given the advantages it offers in current times: cost and efficiency gains, response to tight work forces, reduced carbon emissions during assembly, and collaboration with technology already available such BIM.
Yet it isn’t happening. Figures from the Modular Building Institute suggest modular building processes accounted for only 5.5 per cent of new construction across North America in 2021.
The slow adoption of modular “represents not only a lost opportunity for the industry but costs the world economy,” says McKinsey. “A shift in parts of the sector toward a system of mass production, standardization, prefabrication, and modularization —a production system— has the potential to boost productivity by five to 10 times, depending on the sector.”
Part of the problem is disparity within the industry itself.
On one hand are what McKinsey describes as, “large-scale players engaged in heavy construction such as civil and industrial work and large-scale housing.” These have productivity levels 20 to 40 per cent higher than what are described as, “firms engaged in fragmented specialized trades such as mechanical, electrical, and plumbing work that act as subcontractors or work on smaller projects like refurbishing single-family housing.”
It’s not all bad news, however. Acceptance appears to vary depending on the project type. Some construction sectors have greeted modular processes more openly, notably health care and hospitality.
Overall though, the 5.5 per cent number should be regarded as a major disappointment. The causes are worth exploring.
Investigating the construction industry’s ground-level attitudes towards modular was at the heart of a questionnaire analyzed by Tarek Salama, Osama Moselhi and Mohamed Al-Hussein in their report to the 2018 Modular and Offsite Construction Summit. Fifty-eight industry participants from 11 countries including Canada responded to a variety of modular issues.
Interestingly, more than half agreed a negative stigma surrounds modular construction. At the same time, “most respondents agreed that predictability of cost and schedule gives modular industry an advantage over conventional construction.”
However, successful adoption largely depends on other factors.
There was agreement with McKinsey’s suggestion that contract types need to better accommodate modular construction.
Eighty-five per cent of questionnaire respondents agreed that the scheduling features of Integrated Project Delivery contracts best fit the short time schedules possible with modular construction. On the other hand, only 50 per cent supported the Construction Management at Risk contract, which entails a commitment by the construction manager to deliver the project within a guaranteed maximum price.
Not surprisingly, 95 per cent agreed a modular project execution plan should be incorporated in the bidding process.
Furthermore, nearly two-thirds pointed to obstacles resulting from existing regulations including building codes. Very relevant to Canada, given the large distances often involved, were transportation issues, with nearly 85 per cent agreeing that transportation regulations affect cost, time and indeed the very design of certain volumetric components.
Many issues identified by both the McKinsey report and the international survey could be addressed through improved education.
“Most responses agreed also that there is lack of academic research which highlights advantages of modular construction,” the survey analysis said. Sharing information across borders would play a part. “Respondents suggested conducting international co-operation for all parties of the modular construction industry to show American and Canadian ideas to European industry and vice versa.”
John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments and Inside Innovation column ideas to email@example.com