Everyone’s talking about offsite, but few understand what’s involved and even fewer are doing it. So what are the barriers and opportunities with offsite construction?
Philip Breese, senior partner, Weston Williamson + Partners | Chris Dale, strategic programme manager – modern methods of construction – ESFA, Department for Education | Lucy Homer, head of design and technical, Lendlease | Kenny Ingram, global industry director, IFS | Richard Crosby, director, Blacc | Jaimie Johnston, director, Bryden Wood | Adam Locke, partnership & innovation leader, Laing O’Rourke | David Rogers, innovation manager, HS2 | Dean Rosewell, commercial director, Nu Living | Sam Stacey, head of innovation, Skanska | John Timson, business development manager, IFS | James Wilmore, acting deputy editor, Construction News (chair)
Over the past 12 months, how to make the transition towards offsite construction has become one of the most pressing issues facing the industry.
It was this challenge that brought a group of industry experts together at the Construction News Summit in November for a roundtable discussion, convened in association with technology provider IFS.
Kicking off the debate was Adam Locke, partnership and innovation leader at Laing O’Rourke, which was the first major contractor to enter the offsite manufacturing space. While Laing O’Rourke has been involved in this area for several years now, Mr Locke openly admitted that his firm was still very much on a journey.
“People talk about design for manufacture and assembly (DfMA) and in some ways it becomes known as the product, but actually it’s the process,” he said. “The hard thing is to design for manufacturing and assembly and the long-term operation and performance of a building. We’ve put in place some of the delivery mechanisms to do that. The challenge is how to set up your project to succeed with a different method of delivery.”
Mr Locke said his team had discovered that the best results could only be achieved by bringing Laing O’Rourke into the design process as early as possible, rather than presenting the contractor with a design for which it had to retrospectively accommodate offsite techniques.
“We’ve seen that when we are part of the team at the earliest possible opportunity in a commercial environment, then we can fly,” he explained. “We’ve seen productivity grow by up to five times. When you get brought in halfway through the design process you can still add value, but mostly it’s modularising design, rather than designing for a modular delivery process.”
Richard Crosby, a director at consultant Blacc, agreed that the effective use of offsite manufacturing required contractors to be involved on a project from the outset. “You need to manage the whole process; to think like a manufacturer,” he said. “You need to set the team up in the right way – you can’t expect to have the same [traditional] structure and expect a different outcome.”
Part of the problem, according to Bryden Wood director Jaimie Johnston, is linguistic. A great many terms are bandied around that may or may not refer to the same thing and may be understood in contrasting ways by different parts of the industry, let alone government clients.
“That interface… nobody wants to know and that’s where it slows right down”
Jaimie Johnston, Bryden Wood
“There is a language barrier,” he said. “People don’t have the sophistication yet to understand the difference between modular and panelised, for example. There are all these terms and people don’t quite yet understand them. It’s a journey we’re all going on, but the language is getting in the way – it can make it seem more complicated than it is. We need a new lexicon to cut across it.”
His take on the situation had Weston Williamson senior partner Philip Breese nodding in agreement. “I’ve got panelised housing going up at the moment with a traditional brick system,” he said. “That interface… nobody wants to know and that’s where it slows right down. As we move forward, if we can get those areas seamless then it will start to fly. But it’s a hard task because it’s about understanding the language.”
To simplify the process, last year Mark Farmer, chief executive of consultant Cast, proposed introducing a design code to create transparency in both the language and the systems deployed. While some of the panel agreed that this would help cut through the complexity, others were more sceptical.
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“How many architects want to design the same thing as their competitors?” asked Lendlease head of design and technical Lucy Homer. “There are many that aren’t advocates of modular, but it has to start with the design process. Where we’ll be in five to 10 years’ time is there will be some buildings that have been modular from day one and others that are on a spectrum. For quite a while, there will be all sorts of ways to do it on that spectrum.”
There was also widespread agreement that for the necessary change to materialise, the industry will have to think hard about how and when capital is deployed. “One of the things we’re all struggling with is that we know that if you do a traditional project, everybody is happy to throw money at it at the last step to get it over the line,” said O’Rourke’s Mr Locke. “But actually, what we might want to do is spend a bit more upfront to drive better outcomes. With our current practices that isn’t the way of doing things.”
The panel also considered what might be required to persuade main contractors to invest in offsite manufacturing. For Mr Locke, the answer was simple: the boss dictated that it was going to happen and that his employees had better find a way of making it work.
“What enabled us to do it was we had strong leadership from Ray O’Rourke,” he said. “He placed the bet on doing it that way. It was a bet based on a lifetime of experience – saying that he had to do it a different way. He put his money where his mouth was.”
Picking up on the theme, Bryden Wood’s Mr Johnston said that without the sort of imperative set out by Mr O’Rourke, it was clients that needed to grasp the opportunities presented by offsite by demanding their contractors adopt it.
“I think the biggest thing is pressure from the clients: we will turn backflips if the client wants us to”
Sam Stacey, Skanska
“If you focus on the outcome, the best way to do it isn’t going to be a two-stage D&B,” he said. “Clients are starting to get wise to the outcomes. What you need is for the client to say, ‘That’s the outcome I want and you lot sort yourselves out’.”
Skanska head of innovation Sam Stacey agreed, adding that the government has a vital role to play – just as it did with the take-up of BIM. “Ultimately, the vast majority of tier one contractors aren’t in the habit of investing in an offsite manufacturing capability,” he pointed out.
“We can talk a lot about barriers, but ultimately some really powerful forces have to do something to make it happen. The role of government is highly important – it is tremendously powerful. I think the biggest thing is pressure from the clients: we will turn backflips if the client wants us to.”
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Indeed, there was widespread agreement that if government – and other clients – were able to package up contracts to provide a solid pipeline of work, construction firms would have both the desire and the ability to finance investment in offsite.
“One of the key parts of this is demand,” O’Rourke’s Mr Locke argued. “Most of the time we procure in a one-off way, but how do you actually join up that demand? “What we need to do is create the pathway. If you could use demand to give people some certainty, that’s a tradable asset. If I’ve got a pipeline of five years of houses to build, I can take that to the bank and use it to unlock investment in production facilities.”
Public sector push
It appears that this message is starting to get through.
Chris Dale, strategic programme manager for modern methods of construction at the Department for Education, revealed that he was now looking at how DfE procurement could better support the development of offsite manufacturing.
“Certainly, from the DfE’s point of view, we’re looking to take it to the next level and change the way we work to look at [procurement] on a national scale,” he said. “We are looking at doing things on that scale. If we can give you the pipeline, then we believe you can give us the economies of scale we need.”
“Traditional construction people don’t understand offsite construction, [so] we’ve brought in manufacturing people and we’re on that journey”
Dean Rosewell, Nu Living
In the nearer term, HS2 innovation manager David Rogers said he was doing as much as possible to provide contractors with a clear pipeline of work to encourage them to invest in offsite. “Our position is we want contractors to carry out offsite manufacturing and we’re clear on the benefits and the potential,” he said. “Our challenge is that we’re trying to encourage our contractors to do offsite and what we’re relying on is the contractors to tell us what they need us to do. There is a lot of talk but not much doing.”
Even without the reassurance of a government pipeline, some organisations are taking the plunge. Dean Rosewell, commercial director at Nu Living, a subsidiary of housing association Swan Housing, outlined his company’s motivation for investing in an offsite manufacturing factory.
“We have the benefit of having the pipeline in place, so it was just a logical extension to do modular,” he said. “We understand that traditional construction people don’t understand offsite construction, [so] we’ve brought in manufacturing people and we’re on that journey. It’s all about getting people to understand it early.”
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Discussion over bringing in people with manufacturing experience from outside construction prompted IFS business development manager John Timson to ask: “Why aren’t you joint-venturing with manufacturers who are willing to share some of the risk? All I’ve seen is people joint-venturing with people they already know. Bringing fresh manufacturing people into the process has a huge upside.”
To this, Mr Johnston replied: “The gulf between construction and manufacturing is just so big. They just speak totally different languages. People doing construction in a shed is so different to true offsite manufacturing. I think we’re still some way from creating a space that manufacturers can step into.”
That called into question whether offsite manufacturing in construction is yet at a stage where it would be recognised in other industries. “One of the things that I see is that people procure for a project, rather than look at demand across the business,” said IFS global industry director Kenny Ingram.
“I think it would be amazing to see if you could reinvigorate females in a factory – that could be a massive shift in terms of the skills shortage”
Lucy Homer, Lendlease
“We need to think in a less siloed way. It’s about shipping and logistics management. There is this basic discipline that doesn’t exist in construction. We see it every day – businesses without joined-up and integrated business systems. If you don’t have that, then really you can’t control anything in your business properly.”
Part of the issue is whether offsite means applying proper manufacturing industry efficiencies, or whether it just means using largely traditional techniques but based in a factory and then shipping to site. On that point, most of the panel believed the best manufacturing efficiencies needed to be replicated, but others disagreed.
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“Personally, I don’t see anything wrong with having construction in a shed on a traditional model,” Ms Homer argued, adding that the simple move to an indoor environment would do a lot to attract a new generation of workers and address the gender imbalance in construction. “I think you can do a lot in a factory environment. I think it would be amazing to see if you could reinvigorate female [representation] in a factory – that could be a massive shift in terms of the skills shortage.”
Clearly, significant progress is needed before construction can be said to have embraced offsite manufacturing. But there are also positive messages emerging, not least that there is a general awareness of the issues preventing this transition.
If the government in particular – and clients more generally – start to mandate offsite as standard practice, then the entire industry will benefit. This would see efficiency savings, better products and could even increase workforce diversity.
What’s not to like?