Are factories the future of construction? Andrew Staniforth of Assembly OSM explores how offsite housebuilding works and how it’s evolved in the digital age.
In one sentence, what is modular construction?
Modular construction is the production of buildings (or significant building components) in an off-site facility, which are then shipped to and assembled at the final building site.
Why would someone choose to build homes or offices using modular construction?
- Cost certainty: Modular construction can eliminate change orders that typically plague traditional construction. This is accomplished by using advanced manufacturing, bringing high degrees of precision and visibility to an otherwise nebulous process.
- Time savings: By running simultaneous onsite and offsite activities, modular construction can cut up to 50% off a project’s timeline.
- Sustainability: By using new materials and systems, modular construction has the ability to reduce embodied carbon by up to 45%.
How are modular buildings made and are there different types of modular construction?
The simplest divide in modular methods is the ‘panelised’ vs. ‘volumetric’ approach. The panelised approach uses prefabricated building components, such as walls and floors, that are manufactured and shipped to the site. Assembly then happens on the final building site.
The volumetric approach uses components manufactured as building ‘chunks’ — whether whole houses, individual apartments or even single rooms. These are shipped as LEGO pieces and snapped into place on site.
That divide is increasingly obsolete. New modular entrants like us take the best of both worlds. We receive subcomponents (often panelised) in an assembly facility, clip them together there and ship volumetric modules to site for final assembly.
Because modular is relatively new, how do developers prove that the buildings have the same structural longevity as ones built with traditional methods?
Modular buildings are held to the same (if not higher) standards as conventionally built structures.
These new structures are engineered by licenced structural engineers, pass through rigorous digital and physical tests and are subject to approvals and inspections by regulators.
How much flexibility do modular designs have compared to traditional construction?
Historically most modular approaches constrain the design to allow for a product manufacturing approach. These companies develop a ‘catalogue’ of buildings that they can produce efficiently.
That said, new companies have emerged in the last few years that unlock a higher degree of flexibility. These companies recognise that you can’t take a building out of a catalogue and drop it into any environment.
Does it cost more or less to build modular houses (including the cost of setting up a factory and everything that goes alongside that)?
It depends. Given the diversity of approaches, you can have very different cost dynamics.
On one end of the spectrum, you have Katerra (the now defunct, SoftBank-backed modular unicorn), which required billions of dollars to get up and running, pushing costs higher. At the other end, you have approaches like ours which are capital light and use microfactories and distributed suppliers.
Regardless of where companies sit on that spectrum, most attempt to deliver cost savings through the value of time. Shaving 30-50% off a construction timeline results in significant savings on indirect costs such as interest, which matter just as much as the hard costs.
What proportion of new buildings can we expect to be modular in 20 years?
Modular construction has had periods of intense adoption in the past. The post-war housing boom and the financial austerity of the 60s both represent times where labour costs and availability and housing demand pushed modular adoption.
We are at the beginning of another one of those periods, but this time we’ve added another macro trend to the mix — climate change — supercharging the more straightforward supply and demand dynamics of prior modular eras.
The need, not only to produce housing, but to rapidly decarbonise our built environment is going to push modular adoption significantly beyond the current ~3% adoption in the US.
You need only look at Finland, Norway, and Sweden’s success around sustainability and their 45% modular market share as a way to predict the future of where modular can and will go in the US over the next 20 years.
Andrew Staniforth is CEO of urban high-rise offsite manufacturing business Assembly OSM