Modular Construction

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Three construction workers looking at blueprints

When you hear the term modular construction, you might think of prefabricated (prefab) housing. While the concept of building a prefab house may have seemed foreign and gimmicky 30 years ago, today prefab or modular construction is gaining traction for various reasons.

There’s a huge need for new construction worldwide, especially in housing. McKinsey & Company estimates the struggle to obtain secure and affordable housing could affect approximately 1.6 billion people globally within a decade. America isn’t immune to this phenomenon. There’s a shortage of affordable housing in the United States—an issue that has become a major topic in the national elections. Survey after survey indicates the shortage of skilled labor in the construction trades is one of the top issues contractors face, which becomes a barrier to building more affordable housing. Construction companies need to build at a faster rate with fewer resources. One way construction companies are accomplishing this is through using modular construction techniques. Projects that have a repetitive nature, such as hotels, apartments and hospitals, are well suited for modular construction and can be completed more efficiently. 

Modular construction is similar to manufacturing. Builders construct sections of the structure and then assemble it later on. Typically construction happens in a factory-type setting and away from the site where the structure will end up, allowing for better overall quality control due to increased speed and consistency. Materials can be stored inside to protect them from the elements, reducing potential spoilage. Working inside largely eliminates environmental factors from creating problems, which helps keep workers safer. In addition, a factory floor is better controlled with designated work areas, walkways and safety equipment. This makes the work safer and more predictable. The improved workflow and safety of a factory setting reduces injuries and downtime and increases productivity, allowing workers to get more done in a shorter amount of time. 

Using modular construction also helps reduce material waste by enabling companies to cut parts out of raw material in the most efficient manner (nesting), and using a computer numerical control (CNC) machine may reduce waste even further. A CNC machine allows similar parts to be cut faster and in less time than it takes workers to do the same work, thus gaining efficiencies, reducing labor and decreasing overall construction time. It’s even possible that modules can be constructed or fabricated using 3D printers. 

Modular construction also can improve scheduling. The traditional build-in-place construction schedule is a series of steps. The next step often can’t be started until the prior step is completed. With modular construction, a builder can continuously build modules, cutting out potential downtime.

One of the most basic examples of modular construction is shipping container construction. One company builds prefab buildings out of shipping containers used primarily in an industrial or military setting. They simply arrange or stack shipping containers together, cutting out connections for stairs, hallways and even larger spaces. Once inside, you would never imagine you’re in a shipping container. Other companies are doing something similar but with retail districts and multifamily houses. Such projects are popping up across the country, including in Nashville, Las Vegas and Wichita. Hotels are a great opportunity to use modular construction, as the rooms are almost identical. In May 2017, a large hotel chain made a commitment to building 50 hotels using modular techniques. Even complex skyscrapers are candidates for modular construction. Seattle’s Rainier Square Tower, which will end up being 850 feet tall, is using a modular core that will cut an estimated 40 percent off the build time.

Modular construction isn’t without problems, and that’s partially why it has been slow to take off. Issues can come into play when trying to connect multiple sections. In the past there have been issues with water leaks, which can lead to rot and mold. These types of issues can require significant rework that may take away the efficiencies gained through modular construction. However, these potential issues are mitigated through new technologies such as building information modeling and virtual reality, which help detect flaws during design instead of in the field.  

Overall increased building needs, lack of workers and improvements in technology could make modular construction more mainstream with construction companies changing building techniques. In addition, some manufacturers may get into the modular construction business, as they have the skills and knowledge to take on these types of projects. Some companies are fully embracing the concepts of modular construction. One such company, founded in 2015 under the auspices it would be a modular construction company from day one, has grown quickly, with revenue at the end of 2018 of $850 million and a backlog of construction jobs of $4 billion. The company considers itself more as a manufacturer and has multiple factories in the U.S. and India. Some of these factories may make various building components such as floors, windows, roof trusses, cabinets, etc. They also use on-site factories that can be moved from one site to another. They believe the efficiencies they can gain in a more automated manufacturing environment will make them more efficient. This will help the company get jobs done quicker and at a lower cost, helping with the shortage as well as the cost to the resident. 

It’s a time of change in the construction industry, and modular construction may well become the mainstream in the near future. For more information, reach out to your BKD trusted advisor or use the Contact Us form below.


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