Cogent Consulting – Written evidence (OMC0030)
1: What are the opportunities offered by offsite manufacture for construction? What are the likely drawbacks? What factors are likely to influence clients, architects, design engineers, contractors and the supply chain in deciding whether to choose offsite manufacture?
Offsite manufacture will not solve a construction crisis, but it will prevent a catastrophe.
The previous ‘offsite boom’ lasted circa eight years, until the start of the recession in 2008, but even up to this point the sector had only achieved (optimistically) a circa 7% share of the then £110billion construction sector in the UK. There are several reasons for this relatively small market share but we can conclude that there are two primary reasons; the perceived increased capital cost of offsite construction methods and the under-capitalisation of the sector.
Offsite manufacture for construction involves interchangeable terms referring to the part of the construction process that is carried out away from the building site. This can be in factory or sometimes in specially created temporary production facilities close to the construction site (or field factories). Systems in the offsite portfolio include Cross Laminated Timber, Glulam, Hybrid, LGSF, MEP, Pods, Precast Concrete, SIPS, Timber Frame, Volumetric Modular.
Currently, offsite accounts for circa 10% of the total construction output and is applicable primarily to new-build application rather than retrofit applications. The offsite sector supply-chain and technologies are beset with a series of constraints that must be considered, accommodated or over-come for it to become an established sustainable solution and to obtain a significant double-digit market share.
The house-building sector appears to be grabbing many of the headlines – primarily due to offsite construction being seen as a potential solution to the housing crisis – but offsite construction is also rapidly expanding in other non-residential applications such as hotels, student accommodation and more latterly the schools sector, with over 450 new schools and classrooms required per annum to the 2020 horizon under the Priority School Building Programme (PSBP). This demand has seen a ‘pull’-away in offsite manufacturing capacity from the house-building sector and therefore restricted some of the available capacity being tapped in to by the residential developers. The offsite manufacturing sector is in danger of overheating and this is a significantly negative factor in influencing clients, architects, design engineers and contractors as lead-times extend.
As the construction process has evolved – so has design. Architects, designers and engineers have to orchestrate a collaborative design protocol and help to conceive products for a manufacturing process, as well as know how to integrate them into a design i.e. there is a greater emphasis on Design for Manufacture and Assembly (DfMA) which need to be better understood. This re-skills rather than de-skills the design process and in the context of architects can often be perceived as a threat to the role of the architect, thereby engendering a negative mindset towards offsite manufacture for construction.
Manufacturers know how the materials and processes they use best come together, how to control waste and quality, and how to learn from previous experience. By understanding the purpose of each
component and working collaboratively with the manufacturer, architects can take these virtues from the factory to the building. When architects realise, and not all do, how to design for and with manufacturers, they can design buildings that are easier to build (assemble) with less wasteful of resources, more enjoyable to use and more valuable to their owners.
2. It is often claimed that offsite manufacture can lead to:
• lower costs, faster delivery and increased quality;
• increased productivity;
• improved health and safety;
• greater provision of new, affordable housing.
What is the evidence for this?
It is clear that the drivers for change vary but most would cite predictability (of cost and programme), improved quality (reduced snagging) and a direct method of addressing the skills shortage as the primary reasons for embracing offsite manufactured solutions. There is generally a very limited understanding of the offsite sector and a lack of tangible evidence to support the performance achievement claims of the sector – too many of the benefits of offsite construction are anecdotal. Even bodies such as BuildOffsite cannot ‘underpin’ many of the offsite sector arguments with ‘hard facts’ and often bases communications output on unsubstantiated information. This is a significant achilles-heel of the offsite sector and one that Government can help to address by developing independent evidence of the real benefits using recent live projects.
Cogent Consulting are currently undertaking a report to provide impartial, quantifiable evidence to evaluate the capability, capacity and viability of the offsite sector.
Potential barriers to wider use of offsite manufacture
3. What are the drawbacks to offsite manufacture for construction?
Lack of investment is frequently linked to a lack of certainty of demand or continuity of business. Construction is typically a project-based activity and thus the customer base can be difficult to maintain as key ‘customers’ move from one project team to the next. Whilst parallels are often made with the automotive industry these are very tenuous links as the offsite industry does not ‘tell’ the client what they want, it responds to designs and concepts developed by unrelated (and often uneducated in respect of offsite manufacture) architects, engineers and contractors.
The key issues of standardisation, capital investment in semi-automation and the cost premium are part of the same equation and have a direct correlation. That is, with more standardisation there is a higher likelihood of a production process being repeatable and therefore automated, with automation comes investment in machinery which increases efficiency levels and provides cost reductions. Cost reductions present the opportunity for more volume and with more volume, more automation is required and therefore more efficiencies are found.
Whilst this is an obvious cycle it is one that very few UK-based offsite manufacturers have been able to capitalise on and so the level of investment in UK offsite manufacturing resources is woefully low, resulting in an industry that has businesses that are best described as ‘building sites under a roof’.
There are estimated to be less than 20 businesses in the UK offsite manufacturing sector that we would say embrace a ‘world-class manufacturing’ ethos and have received the levels of investment required to ‘break the cycle’ outlined above. These businesses have therefore prospered and are set to capitalise on the return of the market. As such, the primary drawback of using offsite manufactured solutions is the associated risk with the financial fragility of the supply-chain.
4. What re-skilling of the construction workforce is required to facilitate a change to more off-site manufacture for construction?
The resurgence of offsite has seen a blurring of the lines between manufacturing, engineering and construction - creating the need for new skills and redefining existing ones. We need to not only train new entrants in a range of new skills, but also upskill our existing workforce. The digitalisation of the construction industry and the link that provides to offsite also offers a chance to attract a new cohort of skilled workers.
One of the key recommendations within the Farmer Review was the need to comprehensively review the Construction Industry Training Board (CITB) and institute a reform programme. In response, the CITB have recently issued its own report - Faster, Smarter, More Efficient: Building Skills for Offsite Construction, which is a research summary, and action plan. The report recognises the changing dynamic that faces the UK construction industry, and the growing appetite to utilise offsite construction. Reinforcing Mark Farmer’s observation that new methods of construction will require new skill sets, if the expectations are to be realised, and the benefits and momentum of offsite construction are to be achieved. The report identifies that the successful implementation of offsite techniques will require an integrated understanding of both offsite and on-site implications and the need to redefine current roles.
5. Can the benefits of standardisation and factory manufacture be realised without hampering architectural ambition? If so, how?
More often the offsite manufacturing operation is responding to and accommodating the demands of a range of ‘stakeholders’; planners, clients, architects and residents for example, and as such the ability to deliver high levels of standardisation (at a footprint level), is eroded. The focus is therefore likely to need to be on the levels of ‘invisible standardisation’ (sometimes referred to as ‘mass customisation’) that can be achieved. That is, standardisation at an elemental or component level, and it is these ‘product characteristics’ that need to be appraised in detail when making an assessment of which material or offsite system type to select and implement.
The emergence of BIM (Building Information Modelling) which is now starting to influence the genuine adoption of Design for Manufacture and Assembly (DfMA) which will significantly aide the offsite manufacturer’s ability to address the standardisation issue. BIM will permit greater opportunity for further upstream integration of components and systems and will therefore no doubt generate new types of offsite manufactured technologies. The recent development of the DfMA Plan of Work overlay document produced by the RIBA, shows a direct correlation with upstream architectural design activity and demonstrates how the design team can contribute to the process. As well as delivering projects faster, lowering costs and improving quality, the use of DfMA techniques will also result in better operational and in-use outcomes. Fundamentally, DfMA requires the design team to shift their thinking away from traditional means of construction to scenarios where buildings are assembled rather than constructed, and where opportunities for ‘offsite construction’ are maximized without hampering architectural ambition.
Government actions
6. What R&D is needed, and by whom, to realise fully the potential benefits of off-site manufacture?
R&D is required in area of complementary systems to the primary portfolio of structural offsite technologies e.g. cladding and façade systems, fast-track roofing technologies and pre-engineered foundation systems. Many of the current offsite manufactured systems revert to traditional construction processes on site to complete the building structure/envelope and this needs to be addressed if the maximum benefits are to be fully realised. Transferring more of the site-based activity in to the manufacturing operation is not necessarily the most effective solution to this observation and as such a greater focus on site-based innovation to complement the offsite technology is required.
7. (If published) does the construction sector deal correctly identify the issues faced by the construction industry and the actions that the Government and other stakeholders need to take to address them? What should it contain/what is missing?
The construction sector deal will help modernise the industry and recruit and train the next generation of high-skilled construction workers, but it should not lose sight of the fact that the offsite manufacturing sector also have skills challenges and needs to recruit/train the next generation of manufacturing engineers, capacity planners, DfMA experts, continuous improvement and lean manufacturing experts etc. With the current emphasis there is a danger that the skills and recruitment challenges of the traditional construction we simply be transferred to the manufacturing environment rather than addressing the route challenge which is how do we make the construction sector a more appealing industry in which to develop a rewarding career?
8. What changes could be made to public procurement processes to encourage more economically and environmentally sustainable practises in the construction industry and facilitate off-site manufacture?
The most significant and impactful change that could be made to public procurement processes relates to the aggregation of demand and a greater focus on standardisation at a component level in order to leverage greater efficiency in procurement via integrated supply-chains. Significant economies of scale are realisable through tighter specification control and a more prescriptive and consistent approach to performance parameters. An expansion of consortia or framework-based procurement initiatives will encourage economies of scale and minimise procurement complexities. Greater production volumes of standardised offsite manufactured technology will increase productivity performance and permit the step-change that other high-volume manufacturing industries have realised e.g. the white goods and automotive sectors.
26 April 2018