Offsite Construction – Moving into the Mainstream
Published on: Tuesday, 21st February 2017
Ryan Simmonds, Sales Director of Metsec Framing, explores how the broader adoption of offsite construction could bring both financial and timescale benefits to the industry
Offsite construction has been used in the industry for several years. Ideal for hard-to-access sites or builds with limited timescales, this method has been popular with construction firms as a solution for those logistically challenging contracts.
However, I believe it needs to be considered on a broader scale.
Currently, construction is an unpredictable industry, with nearly 50% of onsite ‘traditional’ developments failing to accurately predict their completion dates.
Whilst offsite construction enables project managers to accurately schedule a build with a precise completion date and fixed costs, as a method it is still confined to projects with logistical issues.
As a manufacturer, we know that efficiency and accuracy are vital to the success of a project, and of a business. Applying these efficiencies to construction will provide a measurable cost saving, and something that should be rolled out more broadly.
Often, the cost of offsite construction is stated in isolation, which can be significantly higher than an onsite build and off-putting for those reviewing it as an option, however it doesn’t give an accurate picture of whole life cost.
A recent KPMG report demonstrated that offsite could cost 6% more than an on-site build, however when reviewed as a total project cost – including management and labour outlays, interest on loans, gained revenue etc., it becomes a far more cost-effective solution. The report states that with a six month reduction in the delivery programme, overall project savings of 60% are possible:
- With the build finished earlier, properties that will be rented out can attract additional rental revenue and those that will be sold can complete the transaction months earlier
- The reduced labour provides significant costs savings as does a reduction in project management time
- Savings on borrowing interest with developments reaching completion within a shorter timescale
Currently, offsite construction is a solution to a problematic project, however by applying this method to public sector and large-scale housing developments, construction firms and the government could be delivering on-time, on-budget builds and finding an overall reduction in project costs.