Prefabrication experiments - 517 - Three «Platform Oriented» Business Models

Ways of doing business in offsite construction are being reformed by digital practices and platform thinking percolating into the construction sector, both fostered by advances in parallel industries. The highly repetitive, standardized production methodologies that accompanied the Second Industrial Revolution (mass production) introduced product families and design catalogues with little to no variability. Mobile home or kit-of-parts house manufacturers proposed products within a set of constraints and components.

 

Today, the Fourth Industrial Revolution (mass customization) is providing the prevalent configured-to-order ideology of variable architecture from a library of digitally organized parts. Current literature points to three business models in the industrialized construction field: the first is vertically integrated, the second is a digitally driven delocalized production model, and the third is related to spinoff factories set up to facilitate an integrated process for the conventional general contractor. 

 

A design platform is the overarching umbrella theory infiltrating all three where chunks or sub-assemblies share similar components, criteria and parameters. The modular volumetric producer, spawned from the evolution of the manufactured housing company is a suitable representation of the vertical integration model. Planning and production are articulated to a dimensionally coordinated prism - the basic chassis (the platform) of any modular project. Supply chains, design possibilities and project management are tuned through a central company which coordinates production from bulk material orders to delivery along with building assembly. 

 

Both the second and third business models are defined by a delocalized process and precise virtual design models that can be modularized and spilt into parts made in non-proprietary factories which are then delivered to site. Supply chains can also be comprehensively managed by a core company, however there is not necessarily one centralized location for production – projects are engineered to specific requirements including place, regulatory frameworks and architectural variability. This type of kit-of-parts approach configured or engineered-to-order relies on standardized details, harmonized supplier and core company relationships, flexible integrated project delivery methods, and upfront planning. These are all geared toward the assembly of interrelated parts common from project to project - simplifying coordination, supported by efficient rationalization and creating economies of scale based on sharing elements and methodologies.   

Three business models: Left: Modular volumetric centralized production (Champion Homes); Center: Digital platform delocalized production (Project Frog); Right: Flying factory for bespoke building (Skanska)

Prefabrication experiments - 516 - Predictable demand - scaling capacity

 

As the housing crisis deepens, shortages are accumulating, construction costs are rising and offsite approaches are being encouraged at policy levels to increase productivity in construction. For prefabrication and industrialized building systems more specifically to be adopted and work on all cylinders, demand must be systematized as a streamlined pipeline of similar types to enable manufacturers’ existing methodologies to be deployed successfully. 

Innovative application of technologies within the industrialized construction space, panelized or modular is difficult as current project demand, which is required to plan a company's viability are simply not at predictability levels conducive to adopting or investing in production strategies that bolster capacity. Government programs in certain countries are directing initiatives to frame both current and future demand guaranteeing long-term commitments giving manufacturers confirmation that any investments will not be in vain; stability encourages both growth and technological reform.

For the manufactured housing sector this type of secure demand is critical as profitable fabrication of homes in a factory is based on continuous supply chains and normalized requirements. Promoting specific building systems like modular volumetric building with stacked standardized units has proven challenging as in the single-family dwelling market - the sector's bread and butter at least in America - pipelines are articulated to simpler conditions when compared to the collective housing blocks.

Collaboration with professionals, code requirements, energy metrics along with performance criteria, logistics and project management in dense urban areas are just a few conditions that showcase collective blocks’ complexities in relation to business models derived from single-family dwellings. Without predictable orders that provide the capacity to study, implement and deploy integrated manufacturing processes, most companies lack the financial robustness and resilience to support fragmented project orders. Automation, in particular, has been difficult to implement, at scale, in housing manufacturing where demand doesn’t justify substantial upfront investments. 

Pipelines for conventional construction are developed on a project-by-project basis and are not conceived for scale. They are geared toward an imagined / perceived bespoke quality. Successful application of industrialized construction points to a reformed model of mass production where stability in demand supports a customizable uniqueness through scalable systems.

Toyota Homes factory production - capacity of 5000 units per year

Prefabrication experiments - 515 - What is Modular?

 

The diverse vocabulary associated with offsite construction can sometimes fog what is meant by «modular». Today, Offsite construction has been popularized, but the term is often used interchangeably with modern methods of construction, manufactured housing, prefabrication, industrialized building or modular, all refer to similar yet distinct concepts. Modular as a generic term should always be specified in relation to what is produced, a 2D panel, a 3D volume or a linear element can all be modular in the sense that their dimensions inform how they are either transported or how they contribute to shaping a larger whole.

 

In this sense modular volumetric construction would be the correct term for building with large boxes produced in a factory determined by transport criteria, then lifted and stacked into place. Modular volumetric can be deployed for a whole building composed of many megablocks, or to prefabricate complex parts; service cores or pods can be manufactured and inserted into an open framework.

 

With much of the work completed in the factory - up to 90% in certain cases - this formidable building strategy can go up quickly to reduce project timelines and when part of a scalable mass-production strategy could contribute to reducing construction costs. 

 

While the advantages are clear, building large chunks of a building in a factory requires a shift in planning as all project parameters must be determined and harmonized for the factory long before it’s required for a conventional onsite build. The traditional onsite process is linear with all building systems added onsite as required. Modular volumetric building begins either before or concurrently to site work and once elements are produced and brought to site, there is little room (no room) for change - or in the worst case, adapting to new site conditions interrupts factory production. Upfront planning can be seen as an advantage but is often identified as a barrier. Modular volumetric units are planned down to their most seemingly insignificant details with harmonized supply chains epitomizing manufacturing methodologies applied to building, thereby upsetting traditional paradigms. 

Modular components and subassemblies