Every now and then, disruption pushes a new technology to the front of the pack, bypassing the leading competition. This effect is called “leapfrogging,” and it’s a global phenomenon. For example, in much of the developing world, absent the terrestrial infrastructure for landline telephony, the telecoms industry leapfrogged to mobile phones. Soon, mobile telephony was widespread in these areas, and more innovation followed on its shoulders. Mobile money, like M-PESA, came to market as early as 2007 in East Africa, leapfrogging another gap: inadequate access to financial institutions for everyday transactions.
What would this effect look like in the construction sector? It might look a lot like the convergence of manufacturing and construction, or “industrialized construction.” IC encompasses the manufacturing of single discipline components, such as MEP risers, timber or precast concrete wall and floor panels, but also extends into multi-trade modular systems that include architectural and structural systems and complete MEP services. These methods require less labor, enable offsite construction and onsite assembly, help deliver against accelerated project schedules, are of equivalent or higher quality, and reduce waste—all while keeping construction costs more predictable.
IC neatly sidesteps the issues bogging down growth in the sector—familiar challenges such as flagging productivity and prolific amounts of waste—speeding up delivery and making better use of resources. Is it possible that there are already signs of leapfrog technology in construction overcoming longstanding issues vexing the industry? Two experts on industrialized construction, Mike Eggers, vice president of product & innovation at Project Frog, and Michael Gustafson, industry strategy manager for structural engineering at Autodesk, explored that question.
Today, there is a burgeoning global population and rapid migration to the world’s cities. By 2050, the global urban population is expected to double, requiring construction of an additional 1,000 new buildings per day starting now. Meanwhile, global construction productivity has effectively plateaued, growing just 1 percent per year in recent decades.
According to Eggers, the industry is facing big constraints. "Speed, lack of resources and lack of skilled labor are going to be growing issues, probably globally. There’s a sustainability component in that: You just can't build conventionally in the same way and still meet the needs of society.”
Moving construction processes into a factory setting seems like an obvious solution to boost productivity and relieve some of this pressure. McKinsey Global Institute predicts that moving to a manufacturing-style system could lead to a five to 10 times productivity boost in parts of the construction industry.
“Demand is now accelerating to such a point that there's no way the current way of working will meet our needs. The gap between demand and capacity is going to get so big that it's going to change the price point for delivering buildings,” Gustafson says, noting the meteoric rise in real estate costs in many of the world’s major cities.
Materials typically account for much of the overall project cost. And construction is voracious, consuming about half of all raw extraction globally, and generating around a third or more of all solid waste. Industrialized construction promises to boost material efficiency and slash waste dramatically by getting the industry closer to using only what it needs.
According to Gustafson, “Of that material waste, industrialized construction has shown enormous savings in some cases. We also see savings in labor because work is being done in a controlled environment where you can be more efficient.”
Recent reporting from the Waste & Resources Action Program suggests that the potential savings could be very high indeed, indicating a 90 percent reduction in site waste that can be achieved by increasing the use of offsite construction, specifically volumetric modular construction. Other sources affirm the power of industrialized construction to reduce another huge source of site waste, defects and rework (which can be up to 30 percent of site operative activity), by up to 70 percent.
For wood frame structures, Eggers points out, “On a wall panel, they're able to run a 1D optimization on all of the lumber going into it, so there's very little waste.” In other words, nesting cut lengths of material on a project can virtually eliminate scrap.
Other types of construction benefit from moving offsite as well. For example, precast concrete requires significantly less steel and cement, two materials whose cumulative production accounts for more than 10 percent of humanity’s carbon footprint. Industry estimates put the savings in the neighborhood of approximately 20 percent for concrete and approximately 30 percent for steel, not to mention around 50 percent savings on labor.
Despite its clear benefits, industrialized construction isn’t taking off quite as fast as one might expect leapfrog technology to do. Projected to exceed $200 billion by 2020, the global precast/prefabricated construction market is currently growing steadily at a healthy 6.5 percent annually. But it’s also encountering obstacles, including stakeholder resistance to new ways of structuring contracts and sharing risk, especially on multi-trade projects.
“When you start bleeding shared risk around, people get very uncomfortable in a risk-adverse industry,” Eggers says. “It's sharing risk that hasn't been shared prior. So, a fundamental shift has to happen in how contracts are structured and how insurance works. Even just bidding on jobs gets problematic because contractors now have to change how many crews they need to frame the building.”
The perceived drawbacks of shared risk are likely to be less of an issue for vertically integrated firms already experimenting with IC. “Large turnkey general contractors that self-perform some prefab would be more apt to kind of merge both worlds, the multi-trade and the single trade, together,” Gustafson says.
Meanwhile, design practice has been slow to embrace design for manufacture and assembly (DfMA). An often-cited design challenge to broad adoption of industrialized construction is the perceived limit to customization. As Gustafson puts it, “We haven't created enough business models where you can get mass-customized building solutions. You can get very highly customized ones and then you can get highly mass-produced ones. But to get that in-between, the mass-customization at scale, which the automobile industry does so well, hasn't been achieved yet.”
But the difficulty of this challenge is, arguably, a matter of perspective. Indeed, Project Frog is already tackling the challenge of mass customization head on, providing a way for architects, builders and owners to create customized buildings through a standardized set of building components (i.e., kit of parts). Gustafson is quick to acknowledge this achievement: “Project Frog and others say we're at a tipping point on design flexibility. Older perceptions that you can't get the customization owners want without paying for it no longer apply.”
Lastly, regulatory frameworks have been slow to adapt to new construction technologies. "I think as much as we can leapfrog or integrate data flows and ways of working with the different stakeholders across the project, when it comes to regulatory bodies, there's no incentive for them to change," Eggers says. "It becomes a big impediment.”
Project Frog can design a school in a week and build it in two months, but it might still sit in regulatory review for four to six months. Bureaucracy isn’t moving at anywhere near the speed of DfMA.
These challenges are real, but surmountable, and the future won’t wait. Contract structures, ways of designing and bureaucratic frameworks all evolve under enough pressure, and it is mounting. As demand for new buildings explodes, and contractors are expected to deliver high-quality results faster cost-effectively and under safe working conditions, the needle will have to move.
In the meantime, just as mobile money came on the heels of mobile telephony, there are signs of innovation on top of IC’s success thus far. Eggers identifies three key innovations taking it to the next level and further catalyzing adoption:
1. automation; 2. data standards; and 3. cloud-connected tools.
1. Automation
“You need some amount of automation. And a lot of people are working on automating design processes, engineering, production processes and robotics,” says Eggers. Project Frog makes it easier to do what architects are used to doing. “Our approach is trying to work with their existing toolsets, integrate into their existing workflows and augment it with more efficient ways of working. We automate building out Revit models so we can hand back something they know very quickly and bring that back into their regular design environment and start working.”
At the same time, robotics are increasingly automating production processes, leading IC toward bigger efficiencies of scale. Gustafson anticipates the use of robotics in IC growing from single to complex multi-trade applications.
“Multi-trade [prefabrication] right now is a very manual process because it's complex," he says. "Whereas we're seeing robotics being used in component-based fabrication today with wood frame and precast concrete. However, once we can get assembly-based robotics to the point where it can assemble many different systems together—now that, I think, creates a new opportunity. The cost will be able to go down.”
2. Data Standards
The second innovation Eggers highlights promises to speed adoption and growth of IC by connecting disparate pieces of the design and build value chain.
“You need data standards, so there's a common way to integrate data across lots of different companies, constituents and stakeholders,” he says.
When it comes to bringing different parts of the value chain together in an integrated process, BIM sets IC up for success now and in the future. As Gustafson points out, “BIM is helping teams speak the same language, digitally. So, if we're going to talk about multi-trade adoption [of IC], that means multi-discipline design. And multi-discipline design needs to be thinking about constructability downstream: that's exactly what DfMA is. BIM enables design to think about constructability, not just for one component at a time, but for all the disciplines together. And this is where Revit, as a multi-discipline BIM platform, which now extends design to fabrication, is unique to facilitate this.”
3. Cloud-connected Tools
“Lastly,” says Eggers, “you need accessible, cloud-connected tools and applications. And to make those things widespread, you need a platform that enables them. Up to now, there’s been no iOS or Android for the AEC software industry.”
But the game is changing with open platforms like Autodesk Forge, and Eggers sees this as fertile ground for an explosion of IC-enabling software applications.
“To address the multitude of needs across this industry, you need thousands of applications to address lots of different workflows, some of which are extremely specific. It requires new, innovative ways of working. And then if you have a common platform to develop against, you'll start thinking about new applications. I think people will naturally migrate to a cloud-enabled environment to develop those applications. That's really what we're excited to be developing on with Forge, having that common platform out there in the world.”
Going back to the original question: Is industrialized construction leapfrog technology? Yes and no. It undoubtedly provides proven ways to circumvent some key challenges facing the industry and is growing quickly. But industrialized construction doesn’t benefit from the wide open “greenfield” conditions that cell phones did in the developing world.
The way things are built is changing for the better, but established practices and players aren’t ready for a wholesale revolution in business processes. The potential for disruption is huge, but adoption of DfMA, prefabrication and modular construction will happen through gradual evolution, not overnight. Nonetheless, the path forward is clear, and technology, as a catalyst, is paving the way.
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