February 1, 2019
by Keith Tilley and David Kennedy, P.L.(Eng.), LEED AP
Offsite construction is becoming more prevalent in Canada due to its increased efficiency on jobsites, labour shortage, and tight project timelines. The market for prefabrication modular building systems is expected to rise as more sustainable building standards are implemented because offsite applications create less waste and use less energy. Further, the shift toward factory-based building construction techniques is increasing demand for panelized or volumetric systems due to inherent cost savings.
Collaboration with designers and contractors to facilitate procurement and integration of modular systems is important to offsite construction projects. Price normalization and stakeholder integration is also essential to understanding the full benefits of offsite construction during the estimating and design phases of a project.
Prefabrication in its simplest form is assembling components offsite in a controlled environment, prior to installing onsite. On some level, it can apply to almost all types of buildings, whether it is mechanical systems, panelized walls, bathrooms, or fully finished volumetric boxes. Due to the more frequent use of prefabricated components, new technology and ideas have made offsite manufacturing easier to implement onsite.
The stages at which prefabrication systems are considered in a project determine how much of a building can be efficiently produced offsite. The flexibility of premanufactured solutions is a strong driver for designers, as it does not have to be an all or nothing approach. Many firms are dipping a toe into new building methods by implementing some portion or facet of premanufactured solutions to their building designs. Critical path items, such as building envelope and roofing systems, are commonly selected for offsite construction. It is the creativity of the offsite solutions provider to design a system that does not alter the original design of a building with traditional methods in mind. An example of this hybrid approach is the exterior envelope. In this case, the building structure, design, and esthetic can be achieved as designed, while reducing the timeline, waste, congestion, and risk of a project.
Prefabrication is not a one-size fits all solution. It tends to work best on projects with the scale to take advantage of mass production and repeatability. This does not mean the building has to be boxy or boring. However, if there is a repeatable pattern, factory-built solutions become much more efficient and thereby reduce costs.
The cost of prefabrication
Most stakeholders can grasp and accept the idea of prefabrication. After all, cars and most of the goods used daily are built in a factory. Why then, does it not make financial sense to engage modular construction techniques? A few factors in the construction market contribute to the cost of prefabricated solutions being equal to, or sometimes, slightly higher than in-situ building methods.
Prefabrication requires a large factory to build and store the products. This space is typically a leased or owned space adding overheads to the manufacturer that is included in the product cost. This is in contrast to sub-trades who may have little or no overheads. As prefabrication becomes mainstream, this overhead burden will decrease.
Anything fabricated in a factory must eventually get installed onsite. This requires large transport trucks and trailers. Transportation is expensive, a cost traditional construction methods do not have to include in their price, as suppliers will often ship directly to site or raw materials can be delivered by contractors using pickup trucks or cargo vans depending on the size of the project.
Creating an accurate budget when comparing traditional construction methods to prefabrication is difficult. Getting a true apple-to-apple comparison requires a deep understanding of what is included and excluded when procuring offsite solutions. In most cases, sub-trades will provide an approximate estimate for the entire scope. This estimate will have to be broken down into individual scopes to evaluate the prefabrication option. This technique works in theory, however not engaging all parties to collaborate and provide clarity of precisely what is included in their scope of work, generally leads to skewed numbers. During the estimating and procurement process, documents must be clear and concise to facilitate a true comparison of offsite versus onsite work.
Prefabricated building systems must be designed to a higher standard because there is less ability to adjust onsite and is often inspected more than once during the cycle. This results in a slight increase in cost due to extra strapping or a more rigid frame to undergo dynamic loads during transportation to and from the manufacturing site. In the case of modular bathroom systems, the unit will undergo quality assurance/control (QA/C) testing in the factory and again onsite when the product is connected to the overall building systems. In-situ built bathroom systems usually require an inspection only during rough-in and as the final fixture installation stage.
The implementation of prefabrication for a project requires higher level of understanding from all stakeholders. From the owner’s vision to the building site team, the process and factors that must be considered are new and require looking at a project through a different set of lenses. Prefabrication transforms a construction site from a place where structures are built to one where large pieces or components are erected. There is a fundamental difference in those activities. Taking the building process offsite and simply placing the finished product on a site has many positive advantages to the net cost of a project that are less obvious to calculate when filling out an estimate or pro-forma.
By using prefabrication methods, the overall cost of risk for a project is minimized due to the drastic reduction of exposure. Conventionally, a project’s biggest risk is safety. In certain conditions, traditional construction methods are inherently dangerous, and despite great strides made in the past few decades, injury, lost-time accidents, and death are still prevalent in construction. According to the 2018 Report on Work Fatality and Injury Rates, there were 204,682 loss-time injuries in Canada in 2016. Prefabrication takes many of the higher risk trades, such as drywall and cladding installation, away from the active site and places them in a factory environment where the conditions and risks are more predictable and easier to monitor. This reduction in risk is a long-term benefit for all stakeholders. However, it is hard to quantify the cost of this risk when evaluating the procurement of prefabricated products.
The greatest benefit to a construction site is the project schedule is dramatically reduced using prefabricated methods. Developing a property requires a large sum of money to either be tied up or financed. Reducing the build time not only reduces the overall cost of capital required for a project, but also ensures the building is ready for occupancy sooner, turning typical cost into revenue sooner than traditional construction may be able to deliver.
Since in-situ construction requires the assembly and erection to be completed onsite, the general contractor (GC) must deal with a very congested and inefficient space where trades are trying to share resources, workspace, access, parking, and supervision. This burden takes energy away from the GC and causes distraction and inefficiency. The drastic reduction in people and overlapping trades instantly reduces the cost of supervision, while simultaneously increasing the quality of time a supervisor or foreman spends onsite.
The ability to observe the construction of a wall panel or bathroom modular system in a factory weeks before it is needed onsite provides GCs and building owners schedule certainty. While traditional methods require labour to be present and productive onsite every day, the productivity cannot be measured until the end of the day. This creates a reactionary wave if production is not as fast as planned. With offsite construction, production can be properly forecasted days or weeks in advance, giving project managers time to manage their schedule.
In Canada, the construction, renovation, and demolition sectors account for 27 per cent of the solid waste produced. As the world becomes more educated and concerned with sustainable building practices, efficient buildings, and waste reduction, prefabrication offers a solution to address these trends. In the design phase, prefabricated methods can assist architects and designers to plan waste out of the project. A report published by the Waste Reduction Action Programme (WRAP) suggests offsite manufacturing processes can help the construction industry reduce waste by up to 90 per cent.
There is no question the construction industry is trending toward offsite methods. The key for Canada is to catch up to the rest of the world, particularly China and the United Kingdom, and educate themselves on the risks, downsides, benefits, and limitations of available premanufactured solutions.
Factors affecting cost, risk, and schedule when it comes to prefabricated building methods that must be considered and weighed by all stakeholders include:
For a building to realize all the above considerations, stakeholders must collaborate early enough in the conceptual and design development stages to allow prefabrication to provide its many benefits. Careful planning before a project commences is critical to ensuring the benefits of offsite construction are realized. This requires engaging the owner, contractor(s), design team, and sub-trades earlier than required to collaborate on the front-end of a project to reduce change orders, snags, scope gap, or overlaps in the end.
In most circumstances, the construction procurement methods allowing for prefabricated solutions to be implemented easier are design-builds (DB), integrated project delivery (IPD), private-public partnerships (P3), and construction management (CM). This does not mean other methods are not to be considered, but it becomes much more difficult to implement offsite solutions if the provider is not included at the start of the design phase.
Overall, as previously mentioned, offsite manufacturing products and solutions are becoming more prevalent in the construction industry, and collectively as an industry, it takes an open mind to accept change.
Keith Tilley is the director of business development at Mod Panel Manufacturing. He has been working in the subcontractor field for 10 years. Tilley is an active member of the Edmonton Construction Association (ECA) and YBG in Edmonton. He has an MBA from the University of Alberta. Tilley can be reached at email@example.com.
David Kennedy, MBA, P.L.(Eng.) LEED AP LEED AP, is director of engineering at Mod Panel Manufacturing. He is responsible for overseeing the engineering department for new and conceptual designs including building envelope solutions, modular pods, and volumetric steel/wood boxes. Kennedy has more than eighteen years of experience in the design of building mechanical and control systems. He can be reached at firstname.lastname@example.org.
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