Modular construction is nothing new. In fact, the first documented preconstruction project dates back nearly two centuries. However, until recently, many general contractors (GCs) overlooked off-site planning methods. But new technology, economic demands, and supply chain challenges have encouraged construction professionals to give it a closer look, and the results speak for themselves. In fact, preconstruction planning has helped stakeholders realize a host of benefits, including improved productivity, better project quality, and more reliable schedule certainty.
If you’re interested in learning why industry-leading general contractors are investing in their prefabrication and modular construction abilities, this piece is for you. In it, Join, an emerging leader in construction collaboration software, discusses the benefits and risks of prefabrication and what the future holds for off-site construction.
From Construction Sites to Cutting-Edge Factories
From cars and computers to solar panels and smartphones, manufacturers have used modular design to develop numerous products. This scalable, standardized, and well-defined process has caught the eye of leading GCs as a means of reducing costs, shortening timelines, and improving schedule certainty.
Whether your team calls it prefabrication, modular construction, or off-site construction, the idea is largely the same. It’s a standardized production strategy that involves building structural components off-site in a factory and then assembling them on-site.
While there are many different approaches to prefabrication, it’s clear this production strategy has the potential to make a profound and enduring impact on the construction industry. To understand why prefabrication could be the future of construction, it’s helpful to look at its benefits for GCs and other industry professionals.
1. Project Acceleration
As Benjamin Franklin once said, “Time is money.” With prefabrication, GCs are minimizing project durations and, therefore, making them more profitable builds. In a recent McKinsey report, researchers noted that modular projects have established a solid track record of accelerating project timelines by 20 to 50 percent.
With more lead time, less downtime, and a new level of scheduling flexibility, GCs are discovering new project efficiencies and compressing job schedules. This benefit also allows industry professionals to submit more aggressive project bids, helping them to win in an increasingly competitive market.
2. Cost Predictability
Understanding your expenses is essential to growth. The more GCs can firm up pricing, the more accurate their bids will be. Between saving money on materials, on-site labor, and rework, there is an opportunity for 20 percent savings with prefabrication.
It’s important to note that there is a risk of increased logistical costs by building off-site. However, these additional expenses are outweighed by the savings on on-site labor.
3. Labor Predictability
The Covid-19 pandemic caused a major shakeup in America’s labor force. Workers in nearly every sector, from hospitality to healthcare, resigned en masse, leading to what many economists refer to as The Great Resignation or Great Reshuffle. During this time, more than 47 million Americans quit their jobs.
Thankfully, there is good news for the construction industry, as there is currently a labor surplus. However, with many U.S. workers hoping for more remote work opportunities, the tables can turn quickly. With prefabrication, GCs can guard against the lack of skilled workers by streamlining and simplifying installation and assembly tasks in a prefabrication shop. Furthermore, a supervisor can oversee quality control from one central area as opposed to monitoring an entire construction site.
By minimizing the risk of labor shortages, GCs can maximize schedule certainty.
4. Decision Certainty
GCs burn up a lot of valuable time updating projects with last-minute changes. Through automation and the minimization of on-site variables, prefabrication offers the ability for GCs to optimize decision-making during projects.
By merging modular construction with decision-making preconstruction software that collects and analyzes historical data, GCs can reduce unnecessary costs, remove bottlenecks, and empower all stakeholders to make better decisions. And they can do it all with unprecedented certainty.
GCs with a strong standardized “product core” will also be able to pivot faster than their on-site counterparts, increasing project speed and client satisfaction from design to construction.
5. Payment Certainty
Modular construction doesn’t use traditional project milestones, so there’s some understandable concerns about pyament. With prefabrication being a new concept in the eyes of many lenders, financing may come with some challenges. However, these challenges are set to diminish as lenders see a track record of successfully completed modular projects.
For GCs that position the value of prefabricated construction elements through a streamlined preconstruction collaboration software, the milestones and payment mechanisms become more transparent for stakeholders. With compressed project times and much of the project value developed early in the design phase, GCs will likely see a significantly higher payment upfront than they would through traditional on-site construction.
6. Off-site Certainty
With prefabrication, the role of a GC may change from managing complex on-site projects to ensuring the module construction elements are delivered on time and include all client changes. To do so, they need clear visibility into this new supply chain.
Using a preconstruction software that streamlines the view of project progress, they can ensure delivery and frictionless coordination between stakeholders. This ability to collaborate in real-time is critical when small mistakes during prefabrication can be catastrophic to a project’s schedule and budget.
Where the Industry is Heading
Prefabrication promises massive cost savings, new levels of growth, and unprecedented schedule certainty for GCs and other project stakeholders. It’s for these reasons that the market value for modular construction in new real-estate construction could reach $130 billion in Europe and the U.S. by 2030.
However, with so much of the project being completed off-site, even minor mistakes during the prefabrication process can be devastating. Therefore, it’s essential that GCs leverage the power of preconstruction software that minimizes project risk.
To do just that, a growing number of top GCs are using Join to streamline their prefabrication projects. If you’re interested in learning more about how Join’s decision-making software can help, reach out today.