Construction Technology - the Factory and Modular Revolution

“I change projects ridiculously.”

So said Rick Holliday, CEO of Factory OS, during a lively and exciting panel addressing the future of modular construction. His joking tone hinted at an alluring theme: Right now, companies in the off-site construction industry have their pick of exciting, futuristic -- and usually very well-funded -- projects.


To a viewer not working in the modular construction industry, which seemed to be most of the audience, the four executives displayed a contagious confidence about the possibilities of the industry. By all accounts, off-site construction is about to have its heyday.


At the start of the panel, each executive played a short video clip displaying both his company’s recent successful projects and proprietary factory processes. The former was helpful in familiarizing the audience with the “new face” of modular: As shown by the Folsom Fairfield Inn and Suites in Folsom, Calif., prefab construction can be indistinguishable from traditional builds.


Andy Ball, Partner and President at RAD Urban, explained that his company’s mission was to deliver transformative construction solutions to fulfill a vision of better cities. He showed a side-by-side comparison of the Empire State Building (completed in 1931) and the Salesforce Tower (completed in 2018). The Empire State Building took 13 months to build, whereas the Salesforce Tower took five years. What accounts for the huge discrepancy?


“One, red tape. Two, people not being killed during construction,” Mr. Ball said. “But if you look at the benefit that technology has delivered -- that hasn’t been fully felt in the construction industry.

“The process of building a high-rise hasn’t particularly changed over time. We have to change that. From 2012 to today, there has been a 50-100 percent increase in construction costs. The margins have gone way up. Productivity has gone way down. The industry is flatlining. How do we solve this?”

For RAD, the answer lies in reinventing modular construction. Their factory has a raised floor, allowing them to build structural steel chassis with non-load bearing metal studs. Also, RAD applies building skins at the factory -- an innovation that is made possible by the non-load bearing walls.

What are the drawbacks of the method? Not many. Mr. Ball confirmed that RAD can build modular structures up to 40 stories tall! And by leaving off the ceiling and side walls during construction, the company is able to save 30 percent of the waste that typically occurs when building “six-sided boxes.”

Mr. Holliday of Factory OS explained another inefficiency of on-site construction.

“With traditional construction, there will be 300 people on a build site. They’re all messing up the neighborhood, bringing in sheet rock, etc.,” he said. “With lean manufacturing, you have a union factory with progressive labor practices.

“Wrench time for on-site construction gives you only 20 percent productivity. It starts with five hours in the car, commuting to the job site -- that’s a bad start. And there are a bunch of different trades and supervisors working on top of each other. Versus at our factory: Everyone’s focused, and you have someone there answering questions.”

As the conversation shifted to regulations and inspections, the panel agreed that synergy is the ultimate goal -- “but it’s more manual than we’d like,” said Dean Riskas at Katerra.


At the same time, offsite construction benefits from a high degree of granular control.


“We are extremely specific about what goes where,” said Mr. Ball. “Everything that goes into the module is inspected by a third party subsidiary of the state. The state is responsible. We have 40 stations -- they can get underneath it all and inspect. It’s a lot higher quality control than you would have in the field.”


Offsite construction companies still face a perception and awareness hurdle. The good news, argued Mr. Ball, is that the technology is so advanced that modular housing can be indistinguishable from its traditional counterpart. Still, he noted, there needs to be an industry-wide shift away from the idea that “every single room has to be an absolutely new layout.”

“There has to be more discipline about repeating what works,” he said.


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