Business Tips

Modular construction

Studies show modular construction can cut project times in half. Is it right for you?

With all the advances in technology now available to contractors everywhere, it’s a very exciting time to be in the construction or the field service industries. Virtual reality goggles are quickly becoming a tool to make job sites safer and more productive, while GPS-powered workforce management software can help monitor job site activity.

Another innovation gaining momentum throughout the industry is modular, or prefabricated, construction—a process where pieces and structures are built off-site in manufacturing plants before being transported to the job site. This is, of course, different than traditional construction models, where everything is built on-site.

McKinsey found that modular construction can deliver projects anywhere from 20% to 50% faster than standard methods, while cutting costs by as much as 20%.

While modular building is still in its early stages, a recent report by McKinsey may serve to amp up adoption of the model. In it, the research firm found that modular construction can deliver projects anywhere from 20% to 50% faster than standard methods, while cutting costs by as much as 20%. Some noteworthy companies, like Marriott, are already using prefabricated construction to build their hotels.

With the industry’s surge in contracts coupled with a shortage of labor across the board for construction and field service jobs, modular construction could be the type of lean, agile step forward the landscape needs. Here are some of the benefits of the process, along with how to tell if the option is right for you.

Benefits of modular construction

There are a handful of key benefits of modular construction, one of the most important being increased safety. Traditional construction is obviously full of hazards—and the risk for falls, slips, and other hiccups only grows as projects get larger and buildings get taller. In fact, in 2017 alone, there were over 79,000 injuries in the construction industry, along with 5,100 work-related deaths.

With modular construction, because significant parts of the project are pre-built in a controlled environment, the risk of injuries for crews naturally goes down. With not as much high-rise work needed, your team will be that much less prone to injury—keeping your employees a little safer and even avoiding a potential lawsuit.

Before jumping in, you’ll need to check and see if both your state and local governments allow for prefabricated construction to be used for your specific contract.

The rising costs of many areas in construction have also made today a particularly good time for the industry to venture into prefabricated construction. For one, increased housing costs have created a huge demand for more units to be built, as a shortage of housing has priced tenants out in metropolitan areas.

On top of that, the cost of many crucial building materials has gone through the roof—with a 22% increase in steel piping and an 11% increase in asphalt mixture from 2017 to 2018 alone.

Combine all of this with the construction industry experiencing an unprecedented labor shortage (91% of construction professionals have said they’re having a hard time filling positions), and a big problem arises: a high demand for construction with less labor to get the job done than ever before.

So, what’s the solution? For many, the answer is prefabricated construction. Yet, despite its benefits, there are cons associated with the practice as well as kinks which haven’t quite been ironed out yet.

Here are 3 important things to consider before choosing to invest in modular construction.

#1. Do you have the resources to do so?

Within prefabricated construction, most manufacturers require the cost to build the parts upfront as opposed to allowing contractors to pay using credit—which differs from a large number of traditional projects. This means you’ll need a large amount of cash before kickstarting construction, so if you’re not in a position to drum up that kind of investment, modular construction may not be in the cards at this time.

#2. Do your state and local laws allow it?

Before jumping in, you’ll need to check and see if both your state and local governments allow for prefabricated construction to be used for your specific contract. For example, in recent years there has been a noticeable push for the Bay Area to integrate more prefabricated units in San Francisco and beyond, but because that wouldn’t abide by state laws, the projects have hit a wall. Like everything, laws vary state by state, and city by city—so be sure to stay compliant by verifying it’s legal to use modular construction in the first place in your area.

#3. Is your project relatively basic?

The modular design model is still new, so it’s only natural for there to be a few hiccups which haven’t been fixed yet. That’s why it’s best to “start small” when it comes to moving over to modular, then work your way up to more complicated projects once you know it works for you. There’s safety in numbers, so as more companies—big and small—begin using prefabricated construction or rejecting it, you’ll have a better understanding of what to expect.

Modular construction is a fresh, new way to tackle construction. By the numbers, it’s been found to be more cost effective and deliver projects faster than on-site methods. Before diving into it though, take the time to do your research to see if it would be a solid fit for your company.