Modular Construction Report from the folks at McGraw-Hill. Report reflects data on the advantages of systems built modular construction techniques and solutions.
3. SmartMarket Report
Introduction
P
refabrication and modulariza- Last year, in the Green BIM SmartMarket
Prefabrication and Modularization: Increasing Productivity in the Construction Industry
tion are construction processes Report (2010), we looked at the conver-
that the industry has used for gence of the BIM and green trends and
centuries. So why in 2011 is found that construction professionals who
McGraw-Hill Construction conducting for- use BIM on green projects are more likely
ward-thinking market research on what to do model-driven prefabrication than
many consider to be old, well-established non-green BIM practitioners. These green
methods used on construction projects? BIM practitioners saw model-driven prefab Harvey M. Bernstein
Well, to paraphrase the song, everything as a way to design and construct greener F.ASCE, LEED AP
old about prefab and modular is new again. buildings and have a greener site. Vice President
Industry Insights & Alliances
This reemergence of prefab and modular Now, in this SmartMarket Report, we McGraw-Hill Construction
as a “new” trend is tied to the rise of BIM take a new look at prefabrication and
and green building, critical new trends modularization and their impact on a major
identified by McGraw-Hill Construction and initiative within our industry—improving
other industry leaders. productivity. Through an Internet survey
The emergence of building information of hundreds of AEC professionals, we
modeling (BIM) is influencing design and gathered data on the impact of prefabri-
construction processes and how project cation and modularization on key industry
teams collaborate. In the Business Value productivity metrics including project
of BIM SmartMarket Report (2009), we schedules, costs, safety, quality, eliminat-
found that a key benefit of BIM is enabling ing waste and creating green buildings.
the increased use of prefabrication and Some of the most significant productivity John E. Gudgel
Director,
modularization, which in turn improves findings from prefabrication and modular- Partnerships & Alliances
worksite productivity and overall project ization users include the following: McGraw-Hill Construction
ROI. Contractors were especially excited,
■■66% report that project schedules are
with 77% believing that BIM would allow
decreased—35% by four weeks or more.
them to use prefabrication on larger, more
complex projects in the future. ■■65% report that project budgets are
The phenomenal growth in green build- decreased—41% by 6% or more
ing has also had an undeniable impact on
■■77% report that construction site waste
the construction industry. Just last year, in
is decreased—44% by 5% or more.
Green Outlook 2011 we estimated that up
to 35% of new nonresidential construction We would like to thank our premier part-
is green, representing a $54 billion market ners including NIST, the Modular Building Donna Laquidara-Carr,
opportunity that will grow to $120 billion or Institute, Island Companies, and Syntheon; Ph.D., LEED AP
Manager, Green Research
more by 2015. and our other corporate & association part- and Communications
ners for supporting this study. McGraw Hill Construction
Harvey M. Bernstein, F.ASCE, Professor with the University of ability. He has over 17 years of direction, analysis and content
LEED AP, has been a leader in Reading’s School of Construction experience in technology project to the SmartMarket Reports,
the engineering and construc- Management and Engineering in management in the computer and examining critical construction
tion industry for over 30 years. England. Bernstein has an M.B.A. telecommunications industries. trends including BIM and green
Currently, he has lead responsibil- from Loyola College, an M.S. in John has an M.S. in eCommerce building. Previously, with MHC’s
ity for MHC’s market research engineering from Princeton Uni- from George Mason University, Dodge division, she has nearly
group as well as MHC’s thought versity and a B.S. in civil engineer- an M.S. in Telecommunications twenty years of experience in the
leadership initiatives in areas such ing from the New Jersey Institute from the University of Colorado construction news industry. Since
as green building, BIM, interop- of Technology. and a B.S. in Geological Engineer- 2005, as Editorial Training and
erability, innovation and global ing from the Colorado School of Policy Manager, she educated a
construction markets. Previously, John E. Gudgel is responsible for Mines. team of over 250 reporters on key
Bernstein served as the President managing MHC’s relationships trends in the industry, including
and CEO of the Civil Engineer- with both national and regional Donna Laquidara-Carr, Ph.D., public-private partnerships and
ing Research Foundation. He industry associations. He also pro- LEED AP, has been Manager of the evolution of project delivery
currently serves as a member duces and offers thought leader- Green Research and Communica- methods. Donna has a Ph.D. from
of the Princeton University Civil ship on construction technology, tions at McGraw Hill Construc- Tulane University, an M.A. from
and Environmental Engineering managing MHC’s SmartMarket tion since December 2008. In that Boston University and a B.A. from
Advisory Council and as a visiting Reports on BIM and Interoper- capacity, she provides editorial Middlebury College.
McGraw-Hill Construction 1 www.construction.com SmartMarket Reports
SMR0411_Letter-bio.indd 1 5/2/11 3:11:15 PM
4. SmartMarket Report
PREFABRICATION AND MODULARIZATION: INCREASING PRODUCTIVITY IN THE CONSTRUCTION INDUSTRY
TABLE OF
CONTENTS
4 Executive Summary
4 Executive Summary
6 Recommendations
7 Data
8 Market Activity and Opportunity
8 Sectors with Opportunity for Prefabrication/Modularization
10 Building Sectors with the Most Significant Future Opportunity for Prefabrication/Modularization
12 Users of Prefabrication/Modularization
13 Levels of Use of Prefabrication/Modularization: Today and in the Future for Current Users
14 Future Activity by Current Non-Users of Prefabrication/Modularization
14 Firm Size of Prefabrication/Modularization Users
18 Productivity
18 Impact on Project Schedule
19 Impact on Project Budget
20 Impact on Site Safety
Photo courtesy of Liam Frederick (cover); Photo courtesy of Perkins Wil (opposite page left); Photo courtesy of the Warrior Group (opposite page right)
21 Impact on Purchase and Installation Costs for Materials
22 Expected Impact on Project Schedule According to Prefabrication/Modularization Non-Users
22 Impact on Project Budget According to Non-Users
23 Impact on Reducing Onsite Resources According to Non-Users
23 Impact on Improving Project Quality According to Non-Users
29 Influence Factors
29 Drivers for Use of Prefabrication and Modularization
30 Factors Driving Future Use of Prefabrication/Modularization for Non-Users
31 Non-Users’ Current Reasons for Not Using Prefabrication/Modularization on Projects
32 Users’ Current Reasons for Not Using Prefabrication/Modularization on Some Projects
33 Prefabricated and Modular Building Elements
33 Influence of Job Site Conditions
34 Most Commonly Used Prefabricated and Modular Building Elements
39 Green Building
39 Using Prefabrication/Modularization on Green Building Projects
39 Construction Waste
40 Materials
41 Model-Driven (BIM) Prefabrication
41 Usage
42 Drivers
SmartMarket Reports McGraw-Hill Construction 2 www.construction.com
SMR0411_ToC.indd 2 4/29/11 3:33:48 PM
5. Front cover:
The Summit at Queens College
Student Residence Hall, Queens, NY
From left to right:
Texas Health Harris Methodist
Alliance Hospital, Fort Worth, Texas;
Fort Sam Houston Medical Education
and Training Complex Barracks,
San Antonio, Texas
CONTENTS
46 Contractors
46 Usage
47 Productivity
48 Drivers
49 Architects and Engineers
49 Usage
50 Drivers and Productivity
43 Data Sidebar: Drivers Behind Owner Adoption of
Prefabrication and Modularization
Sidebars
9 Brief History of Prefabrication/Modularization
25 Lean Construction
Thought Leader Interviews
15 J. Doug Pruitt, Chairman and CEO, Sundt Construction
24 Gregory Howell, Cofounder and Managing Director, Lean Construction Institute
Case Studies
16 Speeding Delivery to Meet a Military Mission:
Fort Sam Houston Medical Education and Training Complex Barracks, San Antonio, Texas
26 Pushing the Envelope in Prefabrication: Texas Health Harris Methodist Alliance Hospital, Fort Worth, Texas
36 Innovation in Prefabrication to Achieve a Tight Schedule and Green Results:
The Summit at Queens College Student Residence Hall, Queens, New York
51 Glossary
52 Methodology
53 Resources
McGraw-Hill Construction 3
www.construction.com SmartMarket Reports
SMR0411_ToC.indd 3 4/29/11 3:33:56 PM
6. Executive Summary
Everything Old Has Become New Again!
Building information modeling (BIM), modern manufacturing
PREFABRICATION AND MODULARIZATION: INCREASING PRODUCTIVITY IN THE CONSTRUCTION INDUSTRY
methods, sustainability goals and recognized productivity
gains rejuvenate centuries old-construction processes.
Prefabrication and modular construction are processes that have been used by generations of
construction professionals. Over the past century, these processes have developed a stigma of
“cheapness” and “poor quality.” However, through modern technology, that image has changed.
Now it’s a key component of the drive to improve construction industry productivity.
Adoption and Usage Percentage of Prefabrication/
Prefabrication and modular building processes are Modularization Users Today (2011)
not new activities—63% of those that are using these Source: McGraw-Hill Construction, 2011
processes have been doing so for five years or more. User Non-User
Given that prefabrication/modular construction has
been around for many years, it is not unexpected that Contractor
85% of industry players today are using these processes 84%
on some projects—including 90% of engineers, 84% of 16%
contractors and 76% of architects.
Engineer
By 2013, nearly all players (98%) expect to be doing
90%
some prefabrication/modularization on some projects.
10%
Among users, usage today is fairly low. Only about a
third of users (37%) have been using it at a high or very Architect
high level (more than 50% of projects). Over the next 76%
two years, usage on projects is expected to moderately 24%
grow, with high or very high usage reaching 45% by 2013.
Among all players surveyed, the highest level of current Current Drivers to Use of
and future usage is among fabricators, mechanical Prefabrication/Modularization
contractors and design-builders. (By Player)
Among all players, the primary reason they are Source: McGraw-Hill Construction, 2011
not using prefabrication and modularization on some
Contractor Engineer Architect
or all of their projects is that the architect did not design
it into their projects. Owner resistance was the primary Improve Productivity
reason given by architect users (39%) and non-users 92%
(54%) for not including prefabrication and modularization 70%
into their designs. 68%
BUILDING SECTORS AND AREAS OF USAGE Competitive Advantage
Adopters are using prefabrication/modular building 85%
processes on a wide variety of commercial building proj- 60%
ects. In particular, respondents today are using it on 52%
healthcare facilities (49%), college buildings and dormi-
Generates Greater ROI
tories (42%) and manufacturing buildings (42%). These
70%
respondents see the most future opportunity in health-
43%
care facilities (14%), hotels and motels (11%), commercial
40%
warehouses (11%) and other building types (10%) that
included data centers, prisons, power plants and oil refin- Owner/Client Demand
eries. These opportunities do vary by player type. 31%
51%
35%
SmartMarket Reports McGraw-Hill Construction 4 www.construction.com
SMR0411_ExecSum.indd 4 4/29/11 1:22:26 PM
7. Executive Summary CONTINUED
Level of Decrease in Project
40%
Within a building, prefabrication and modular Schedule Due to Prefabrication/
PREFABRICATION AND MODULARIZATION: INCREASING PRODUCTIVITY IN THE CONSTRUCTION INDUSTRY
construction are used in a variety of areas but most Modularization
often in the building superstructure (27%), mechanical, Source: McGraw-Hill Construction, 2011 35%
30%
electrical and plumbing (MEP) systems (21%) and exterior
walls (20%).
When deciding whether or not to use prefabrication
or modularization, the most important factor is the 20%
job site accessibility (58%) followed closely by the
number of building stories (53%) and the type of building
10%
14%
exterior (52%).
10%
7%
USAGE DRIVERS
The most important driver to current usage of prefab- 0%
rication and modularization is its ability to improve 1 Week 2 Weeks 3 Weeks 4 Weeks
productivity (82%). This is particularly important to or More
contractors (92%). All players also see these processes as
making them more competitive in the marketplace (75%). Level of Decrease in Project Budget
Due to Prefabrication/Modularization
30%
Productivity Improvements— Source: McGraw-Hill Construction, 2011
Primary Future Driver
Architects, engineers and contractors are also very
closely aligned in the belief that the primary drivers to 24%
20%
future usage will be the improvements that prefabrication
and modularization can provide to elements of productiv- 19%
17%
ity including project schedule, cost, safety and quality.
IMPROVED PROJECT SCHEDULES 10%
A key metric of productivity is the project schedule. 66%
of user respondents indicated that prefabrication/modu-
larization processes have a positive impact on project 5%
schedules, with 35% of those respondents indicating that 0%
it can reduce the project schedule by four weeks or more. Decreased Decreased Decreased Decreased
1%–5% 6%–10% 11%–20% More Than 20%
REDUCED COST AND BUDGETS
Another key productivity metric is project cost
as measured by the project budget. 65% of user GREEN BUILDING AND WASTE REDUCTION
respondents indicated that the use of prefabrication/ Green was not a major driver to prefabrication and modu-
modularization had a positive impact on project budgets, larization adoption. However, when asked about elements
with 41% indicating that it reduced project budgets by of green, including site waste and amount of materials
6% or more. used, a different story emerges. 76% of respondents indi-
cate that prefabrication/modular construction reduces
SITE SAFETY site waste—with 44% indicating that it reduced site waste
More respondents (34%) believe that prefabrication and by 5% or more. In addition, 62% of respondents believe
modularization can improve site safety versus those that these processes reduce the amount of materials
who think the practices reduce safety (10%). Most users used—with 27% indicating prefabrication/modularization
believe that these processes are safety neutral (56%). reduced materials used by 5% or more.
McGraw-Hill Construction 5
www.construction.com SmartMarket Reports
SMR0411_ExecSum.indd 5 4/29/11 1:22:27 PM
8. Recommendations
The research findings have varying
implications for different industry players.
Owners: Reduce project design and construction, help achieve green objec-
PREFABRICATION AND MODULARIZATION: INCREASING PRODUCTIVITY IN THE CONSTRUCTION INDUSTRY
Consider using schedules—sometimes engineers should evaluate tives should be promoted
prefabrication and by a month or more. the quality and availability and emphasized in bids.
modularization Decrease purchase and of prefabricated/modular
processes on your installation costs of products and be the Specialty
projects. This is not your materials—ultimately catalyst for their use. Contractors:
grandpa’s prefab! With the decreasing the project Many engineering firms Adopt for competitive
precision bestowed by BIM budget. today are already using pre- reasons. For some con-
and the quality provided Increase construction fabricated /modular ele- struction specialty trades,
by modern materials and site safety—resulting ments for the building such as mechanical and
manufacturing facilities, in fewer accidents and superstructure, exterior electrical contracting, pre-
prefabrication and modular lower insurance costs. walls, roof and floor, and fabrication/modularization
construction offer the Eliminate significant they view their use as a way has become an integral part
opportunity to obtain amounts of construction to differentiate themselves of their business. With the
significant productivity site waste, making the from their competition. inherent efficiencies and
gains on your projects. project greener. productivity gains and cur-
Owner demand is the Allow the specification General rent projections showing
primary driver for architects and installation of Contractors and increased usage on proj-
to include prefabrication / better quality and more Construction ects, specialty contractors
modular construction into sustainable building Managers: need to acquire experience
their project design. materials. Build prefabrication/ with prefabricated/mod-
modular efficiencies ular processes in order to
Architects: Specify prefabrication into your pre-construc- remain competitive.
Understand and educate and modularization in tion planning and bids.
clients on the benefits of your design. Once you Prefabrication provides Manufacturers:
prefabrication and mod- get the client’s buy-in, predictable results for your Promote the green ben-
ularization. As the initial make sure you include schedule and costs. The efits of your products.
interface with the client, the prefabrication/modular- research shows that it can Although most architects,
architect has the greatest ization into your design. decrease the purchase and engineers and contractors
influence during the design The early decision to bring installation costs of mate- do not view prefabricated
phase in determining if pre- it into the project allows rials and compress project and modular products as
fabrication and modular for greater continuity of schedules. These factors a primary way to achieve
construction will be used in design maximizing poten- can ultimately decrease the their green building objec-
a project. tial productivity gains. The project budget and allow tives, all professionals
Understand the key number one reason engi- GC and CM firms to be agree that these processes
benefits that prefabri- neers and contractors give more competitive. reduce waste and the
cation/modularization for not using prefabrication Include the green amount of materials used
offer, such as improved or modularization is that the factor. It is clear that pre- on projects. Manufacturers
project productivity, pro- architect did not include it fabrication and modu- need to raise awareness of
ducing more sustainable in the project design. lar construction can help these green benefits.
buildings and ultimately reduce waste and result Create BIM objects
increasing ROI for the client Engineers: in a greener construction of prefabricated and
and other members of the As the professionals site. Given that green has modular products. BIM
project team. Architects primarily responsible for become a major factor in use continues to rise, and
should educate clients that the structural integrity the construction market- BIM is a driver to increased
using prefabrication/modu- and systems efficiency place, the fact that prefabri- use of prefabrication/
larization can measurably: of buildings during their cation/modularization can modularization. ■
SmartMarket Reports McGraw-Hill Construction 6 www.construction.com
SMR0411_Recommendations.indd 6 4/29/11 1:34:20 PM
9. Data:Section Hed1
Introduction
Construction Trends
Driving Prefabrication/Modularization
P
refabrication and modularization are certainly not new to the
Prefabrication and Modularization: Increasing Productivity in the Construction Industry data
construction industry. However, current influential construction Note About
trends, such as the increasing interest in lean construction, the the Data
rising use of BIM technologies and the growing influence of green The data in this report
construction have caused many practitioners to reconsider their appeal. In are based on an online
fact, the National Research Council’s 2009 report on improving productivity in survey of 809 contrac-
the construction industry recommends prefabrication/modularization as an tors, architects and
“opportunity for breakthrough achievement.”1 These factors, combined with engineers. The con-
tractors comprise 65%
recent advances in prefabrication/modularization, make this a critical trend in
of the total respon-
the construction industry. dents, while architects
total 12% and engi-
Lean Construction neers 23%. The large
The strong increases in productivity offered by using prefabrication and number of respondent
modularization fit squarely into the lean building model. The difficult firms in all three player
economic conditions in the construction industry have increased the appeal of categories provides
a statistically mean-
lean methods and practices. For more information on the use of prefabrication
ingful sample for the
and modularization to achieve a lean approach, see pages 24 and 25. study conclusions.
BIM For full methodology,
The increasing use of BIM also contributes to the potential for increased use see page 52.
of prefabrication and modularization. In a recent study about the use of BIM
on green projects, McGraw-Hill Construction (MHC) found that the use of
BIM model-driven prefabrication on more than one quarter of their projects
is expected to increase from 37% to 73% among practitioners who use BIM
for green work. Even those who are currently not using green BIM expect an
increase from 22% to 57%.1 BIM helps enable prefabrication of tightly inte-
grated MEP systems, allowing designers to maximize space for other uses in
high-tech buildings like hospitals.
Green Building
Green building has grown into a substantial part of the overall construc-
tion market. MHC’s Green Outlook 2011 estimates that nonresidential green
building will comprise 28%–35% of the total market by the end of 2010. This
dramatic increase in market share, from less than 5% in 2005, reflects the fact
that green building sustained steady growth throughout the recession, even
as the overall construction market shrunk by nearly one-third.2
MHC also predicts that the growth of the market share for green will not
abate as the construction industry recovers from the recession. By 2015, MHC
projects that 40%–48% of nonresidential construction will be green.
As the results of this study demonstrate, this has strong implications for
rising interest in prefabrication and modularization, which helps eliminate
waste onsite and conserve resources.
Bringing the Trends Together 1 National Research Council of the National Academies. Advancing
the Competitiveness and Efficiency of the U.S. Construction Industry.
What is most striking about prefabrication/modularization is its ability to Washington DC: The National Academies Press, 2009. 2 Green BIM
SmartMarket Report: How Building Information Modelling is Contrib-
enable all these trends, in addition to being more prominent because of them. uting to Green Design and Construction. McGraw-Hill Construction.
July, 2010. 2 Green Outlook: Green Trends Driving Growth, 2011.
It brings all of them together to improve productivity in construction. McGraw-Hill Construction, October, 2010.
McGraw-Hill Construction 7 www.construction.com SmartMarket Reports
SMR0411_Data_Intro_MarketActivity.indd 7 5/2/11 11:53:49 AM
10. Data:Market Activity and Opportunity
Sectors with Opportunity for
Prefabrication/Modularization
Building Sectors Using
Currently, prefabrication /modularization is being used on Prefabrication/Modularization
Prefabrication and Modularization: Increasing Productivity in the Construction Industry data
many types of building projects demonstrating its appli- Source: McGraw-Hill Construction, 2011
cability across nonresidential construction.
Healthcare Facilities
The five sectors using prefabrication/modularization in 49%
over 40% of projects are:
Higher Education (e.g., Dorms, College Buildings)
Healthcare (49%)
■■
42%
Higher Education (42%)
■■
Manufacturing
Manufacturing (42%)
■■ 42%
Low-Rise Office (40%)
■■ Low-Rise Office (1–4 Stories)
40%
Public (40%)
■■
Public
These sectors also present strong opportunities in the
40%
construction market, which bodes well for a vigorous
prefabrication/modularization future market. Commercial Warehouse
37%
Healthcare
K–12 School
Healthcare is a sector that is well-suited for prefabrica-
36%
tion/modularization techniques. The interior layout of
hospital rooms allows for efficient use of modulariza- High-Rise Office (5+ Stories)
tion, and it is a sector highly responsive to strategies that 30%
shorten schedule—a particular benefit prefabrication
Hotel
brings to a project (See page 18).
29%
According to McGraw-Hill Construction’s economic
forecast, the market activity for healthcare construction Retail
is expected to increase in 2011 and 2012 to become more 24%
than a $28 billion market opportunity in 2012.
Multifamily
Dormitory and Education Projects 23%
Like healthcare buildings, dormitories and school proj- Bank
ects have features that are well-suited to prefabrication/ 18%
modularization. Dorms and classrooms allow for use of
Food Service (e.g., Restaurants, Convenience Stores)
modular room design, and these projects also benefit
from faster construction schedules. 16%
As the largest construction sector by value (over $43 Auto (e.g., Garages)
billion in 2011), education presents a significant oppor- 14%
tunity for prefabrication/modularization—both currently
and in the future (see page 10). Transportation (e.g., Train Stations, Bus Depots)
14%
Variation by Player
Contractors: Across the board, contractors report
■■ (46%), followed by commercial warehouses (43%).
heavier current involvement in prefabrication/ Engagement in the other sectors is 30% or lower.
modularization, predominantly in healthcare (61%),
■■Architects: Their heaviest use is in low-rise offices
dormitory/education (50%) and public buildings (46%).
(43%) and healthcare facilities (36%), with less than a
Engineers: Engineers are using prefabrication/modu-
■■ third reporting use in other sectors.
larization most often in manufacturing buildings
SmartMarket Reports McGraw-Hill Construction 8 www.construction.com
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