In such a buoyant market and with developers and clients wanting the best possible products in a timely fashion, builders in the hard dollar and D&C world are always looking for innovative and effective ways to deliver on their promises and gain whatever advantage they can both at tender time and throughout the construction process.
One method which isn't new to the industry but is again coming to the fore, primarily on the back of strong market conditions is modular construction.
The use of modular construction solutions aren't every builder's cup of tea and it is really only viable for projects that are producing a large volume of rooms all with similar scopes, such as apartments, prisons, aged and health care, but I can guarantee you that every builder at some stage in their professional career has explored and researched adopting the use of this method of construction.
As for why using modular construction techniques are popular with some builders and not others can be for a variety of different reasons but on exploring this topic further it is very much a personal opinion and always relevant to the specific project/s at hand. One example of this is the bathroom sector. According to Matt Carolan, CIO of Urbanest, “modular has become much more prevalent in today’s construction industry, especially on high rise (tower) construction”.
The key benefits for a builder adopting a modular solution where a product is manufactured offsite then delivered to a project and installed, would be its cost-effectiveness, efficiency from a time perspective as well as an improved consistency in the quality of rooms delivered.
This is achieved in a number of ways which include but are not limited to:
- Reducing the number of trades and labour needed onsite which in turn reduces costs as well as the risk of LTI’s and workers compensation scenarios.
- The installation process of a modular room is exponentially quicker than fitting out multiple rooms.
- Elimination of complexities around programming multiple traded to complete multiple rooms.
- By replacing the need for multiple skilled trades to complete a room by the installation of a pod, it also alleviates any skill shortages as the installation process is much less technical.
- Reducing the need for the delivery of and handling of materials on site and in turn reducing waste produced on site.
- Defects are massively reduced through this process as the modular builders, working to strict quality guidelines are able to produce near perfect rooms.
Like with any form of construction there are also certain cons to the use of a modular solution and they can include:
- It isn’t an option you can call upon down the track during construction as it needs to be designed during pre-construction with potentially more lead-time needed than conventional construction
- The potential result of damaged pods during the transportation process.
One other perceived con is that modular is only viable with volume repetition projects and not suitable for bespoke designs. However, Matt Carolan believes this is changing. “There are companies that are taking advantage of the bespoke space by selling on quality, unique design and savings in time on difficult or remote sites.”
I recently sat down with David Michel, Managing Director and Founder of Bedrock Offsite, his company of 2 years and 70 staff that closed down in March this year due to delayed orders by a number of builders for upwards of 3-9 months. This meant he would have to cash-flow the jobs himself and store the product at his own cost (many millions of dollars) or pay his staff and fixed costs with no output for 3 months (again, many millions of dollars). This shows that supplier depth in Australia is still an issue and in order to fix this, a fundamental change in the way that risk is transferred and terms of trade must be made. David believes we will see more products coming from China until the Australian supply base matures to a point where it can sufficiently support production.
Originating out of a main contractor background and with a wealth of experience in the industry, David had some great insights which I have summarised below:
1. Stop doubting the validity of offsite construction, today. For buildings with relatively simple and standardised design and layout, the benefits are broad and compelling, across all construction KPIs.
2. It starts with developers and architects, not builders.
Unfortunately, by the time the project (design) gets to the builder, it is often too far developed to consider offsite methodologies as a viable alternative.
3. There is no such thing as a perfect offsite solution to suit every project. A range of offsite options are available to suit the specific needs of projects – volumetric (modules or pods), panels, components, mass timer (e.g. CLT), or a combination. Clever consideration of the options and D&C strategy up-front is the answer (refer item 2 above).
4. Senior management, it's up to you. Project directors and managers are notoriously change-averse. And that’s why offsite was embraced as an option for the first time in a company, it was driven by senior management.
5. Collaboration is important - in fact, it's essential. In the US right now, we are seeing billions invested into companies offering turn-key solutions which include design, manufacture and construction.
6. Manufacture on-shore or off-shore, the million-dollar question. The exciting thing is that offsite construction provides a great opportunity to create a major new manufacturing industry in Australia, one that could employ tens of thousands of workers, and further diversify our economy and manufacturing base. The biggest challenge here is supplier depth which makes offshore options still a viable one.
So to date there may have been a real mixed perspective amongst the building fraternity when it comes to the use of certain modular construction products, but in an industry that is as busy and competitive as we have ever seen it, there seems to be a growing appetite for more innovative methods of construction and the pros of modular construction are making it a much more viable option now than it has ever been in the past.
Greg Ford - Divisional Manager, Professional Recruitment
Greg has over fifteen years’ industry experience providing recruitment and consulting services to the construction, property and engineering markets both in Australia and overseas.
Working with major local and multinational companies including main contractors, consultancies, engineers, developers, property owners and government agencies, Greg has successfully completed assignments including General Managers, Construction Managers, Project Directors, Senior Project Managers, Commercial Managers and senior technical specialists across the region.