Welcome to the final in a series of three articles focused on how integration – combining products, processes and vocational expertise – is helping designers and builders create higher quality structures more efficiently. In our third article, we’ll focus on how pioneering companies are bringing multiple aspects of the construction process together with factory innovation to help offsite construction continue its tremendous growth.
Get ready for the new normal. High tech has met construction, and the marriage has investors salivating, venture capital firms swooning, and offsite construction taking center stage in the industry. 2018 saw $1.24 billion invested in prefabrication start-ups in just the first three quarters of the year.1 The trend shows no sign of slowing, as end-to-end building services provider Katerra – who benefited significantly from 2018’s investment blitz – is reportedly poised to receive another $700 million investment from partner SoftBank early this year.2
Michael Mark, Katerra recently told CNBC, “Look, we’re doing what Silicon Valley does best, which is bringing technology into a very large market, and in a lot of ways it’s similar to Tesla. You know Elon has done a fabulous job by taking on a really big industry and doing it differently. And one of the things that they’re also doing at Tesla, which we’re also doing at Katerra, is taking the responsibility to do lots of things ourselves. We are fully integrated and bringing technology tools that are not common in the industry. We’ve taken on the entire chain much like they’re doing at Tesla. We’re the architects, we’re the engineers, we’re the general contractors, the subcontractors and the materials providers…we take on the whole project. We’re using very sophisticated electronics-style manufacturing techniques and applying that to construction.”3
While companies like Katerra are serving as one-stop shops, firmly established tech giants like Amazon are also getting into the now lucrative offsite construction game. The company’s Alexa Fund made its first foray into prefabrication investing in the housing sector. And now, Amazon customers can even order a complete modular hospital room.4
Catalysts Driving Off-Site Adoption
So, what’s causing offsite construction to move from limited use into the mainstream? Pressure. Let’s start with labor. In 2018, 280,000 construction jobs were added to the workforce; this is over the 250,000 new jobs added in 2017.5 And 2019 isn’t bringing any relief. With offsite construction, fewer skilled laborers are needed.
Sheltering both the project components and the workers constructing them in a factory also eliminates weather-induced scheduling delays, helping ensure production deadlines are consistently met. It pulls laborers off scaffolding into a controlled environment, at a bench working with good lighting and ample room. No bad weather, no dangerous overhead work on a ladder, and no risk of falling from lofty heights.
But while carrying legacy processes into the factory will certainly provide efficiency, how much more can be achieved by incorporating products that already consolidate processes? Some building products manufacturers, such as Georgia-Pacific, are responding to the efficiency challenge that prefabrication has thrown down.
“We understand that combining an efficient product with the efficiency of prefabrication multiplies its benefits,” says Senior Product Manager John Chamberlin. “DensElement® Barrier System, our integrated sheathing system, is perfectly suited for prefabrication projects. It saves a complete step in the installation process, allowing for higher factory output and optimization of labor.”
By filling microscopic voids in the glass mat and gypsum core via AquaKor™ Technology, a hydrophobic, monolithic surface is created that blocks bulk water while retaining vapor permeability. No separate Water-Resistive and Air Barrier (WRB-AB) is needed, which saves valuable installation time. Contractors can finish joints, seams and transitions in a climate-controlled factory, decreasing curing time and eliminating the need for an additional trade, which helps save money. And since the WRB-AB is integrated within the sheathing, it’s protected during transportation to the job site.
Everyone in the Process Chain Benefits
With the ability to accelerate the construction schedule, offsite construction projects can be delivered sooner, which lowers operating costs and allows the building owner to generate revenue more quickly than traditional construction methods. Trail blazers like Katerra and Prescient, a technology company that is bringing lean manufacturing systems and software to the building industry, are showcasing their new business models and attracting serious investment – confirmation that the models work and are perceived to have a strong future.
The adoption of offsite construction is extending to general contractors as well. For example, in July 2018, Skender announced the creation of their new advanced manufacturing facility in Chicago.6
“By designing, manufacturing and constructing modular buildings and building components,” says CEO Mark Skender, “we can centralize and stabilize labor, standardize the assembly process and eliminate weather-related delays. This process will increase efficiency, shorten schedules, ensure consistent high quality and reduce costs – ultimately making new buildings affordable, even in our current environment of rising costs for labor and materials.”7
In the controlled factory environment, construction is completed with more precision, for example in joint construction and air flow management. It offers uniformity in process and consistency in crew skill levels versus onsite construction. This means architects’ designs can be accurately followed and their planned energy efficiency objectives achieved. The ability to recycle at the factory also reduces waste, helping architects meet sustainability goals. Ease of access and comfort means their “site visits” can happen more often. And when new products, components or assembly configurations are utilized, testing is easier outside of weather’s reach, so the frequency of their visits throughout construction can increase, helping ensure that performance matches expectations.
One Wonderful Disruptive Jolt
The confluence of the labor shortage, control of the weather, increased worker safety and the advent of building materials like DensElement® Barrier System is driving prefabrication into the mainstream. Meanwhile, cutting-edge firms are seeing their business models yield substantial financial gain, virtually guaranteeing its adoption as a vertical integration play across the industry.
The big boom is on. Can you hear it?
