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Drivers and Barriers of Modern Methods of Construction
Work produced by; Blayse (2004), Goodier (2006), Koebel (2008), NHBC Foundation (2006), Pan (2006), Pasquire (2004), Rosenfeld (1994), Sexton (2005), Taylor (2009), The Barker Review, (2003), Venables (2004), The Market Transformation Programme (2008) and The Parliamentary Office of Science and Technology, (2003) have all suggested the necessity to increase the adoption of Modern Methods of Construction.
These sources have stated the following perceived advantages associated with MMC's
- Tackling the skills shortage.
- An easier method of compliance to building standards.
- The ability to achieve high standards, including high thermal and acoustic performance.
- A reduction in waste materials, with a larger incentive for suppliers to reduce waste.
- Shorter build times.
- A better quality construction in finish with fewer defects.
- A reduction in both accidents and health concerns.
- Construction that is less effected by inclement weather during the build.
- Less local disruption in the form of noise dust and site traffic.
- Fewer and less skilled triads required on site.
- Creation of employment in a fix location due to the permanence of the factory resulting in shorter distances for the workforce to travel and thus making workforce shortages easier to address.
- Reduced cost/increased cost certainty, not only due to decreased erection time and economics of scale, but also do to a reduction in preliminaries, site storage requirements and welfare facilities
- Improved traceability of components enabling improvements to maintenance regimes.
- Improved accuracy and tolerances, due to the use of jigs and templates in factory conditions
- Reduced life-cycle costs
- Increased accuracy on completion dates
- A more simplified procurement process
- Reductions in CO2 emissions.
- Increased on-site productivity
- Generally increased ‘value' of products Increased rate of housing supply
Although not all MMC solutions offer all of these advantages, it is the opinion of the vast majority of the literature that they would have a beneficial impact on the UK construction industry, if increasingly adopted. The most significant of these drivers for an increased uptake of MMC's will be discussed in more detail in the latter part of this chapter.
There are however, a number of potential barriers to increasing the adoption of these methods suggested by the sources listed above. These include:
- Real or perceived additional cost and the lack of accurate cost data.
- Long lead-in times and the associated difficulties in integrating MMC's with traditional procurement systems.
- Clients negative perception.
- The lack of publish information and guidance.
- Increased risk and the industries reluctance to change.
- The lack of published codes and standards.
- The lack of local availability of the materials.
- The lack of experience of the construction process and the materials.
- Difficulties obtaining finance.
- Insufficient worker skill.
- Difficulties in achieving economics of scale.
- The fact that the quality and durability of the techniques over time have not been proven.
- Difficulties integrating MMC's with traditional works.
- The inflexibility of factories to respond to fluctuating demand.
Similarly as with the drivers, not all MMC's are perceived to have these barriers to increased integration. Again, the most significant barriers will be discussed in more detail in the latter part of this chapter.
As stated in Chapter 1, due to restrictions on time all of the above drivers and barriers and their significance to an increased adoption of MMC's cannot be discussed in detail. It is for this reason that the paper will now aim to establish the most significant issues for in depth discussion.
Pan (2006) produced a survey of the top 100 private housebuilders (in 2004) by unit completion, to ascertain the most prolific drivers and barriers of MMC's in their opinion. As “the top 100 house builders contributed 113,882 (65%) of the total amount (of new houses) by the industry” (Pan, 2006, p.185) in 2003, the level of use of MMC's within the sector will be largely determined by these companies. “large housebuilders (...) account for the vast majority of housing completions and thus are determinant in increasing the take-up of MMC technologies” (Pan, 2006, p.189) It is for this reason that the significance of the issues to these housebuilders will have a large effect on the adoption of MMC's within the housing sector.
The work produced by Pan (2006), found that the top 3 advantages to MMC's from the opinion of housebuilders were addressing the skills shortage (61%), ensuring time certainty (54%) and ensuring cost certainty (54%). These results were followed closely by achieving high quality (50%) and minimising on-site duration (43%). Venables (2004, p.10) also found reductions in on-site assembly time as an important driver to MMC's adoption, but interestingly found that “the quality of production and finish as the most significant advantages”, in the opinion of suppliers.
The same study by Pan (2006) found that the top 3 barriers to MMC from the opinion of housebuilders were higher capital cost (68%), difficulties in achieving economics of scale (43%), the inability to ‘freeze' the design early on, and complex interfacing between systems, both at (29%). The nature of the UK planning system was also ranked relatively high by 25% of the respondents.
Contrarily to this, work by Edge (2002, p.V) found that the major barrier to MMC's was the negative perception of the client. Suppliers were found by Goodier (2006, p.598) to have a similar opinion, with 65% of respondents viewing the negative image of MMC's as the major barrier to increased adoption of the methods.
This demonstrates that the significance of the barriers to increasing the adoption of MMC's varies, depending on the position within the industry. Following investigation of the literature however, the overriding issues, which will now be discussed in detail, are: Addressing the skills shortage, ensuring cost certainty, improved quality, minimising onsite duration, high capital costs, difficulties in achieving economics of scale, and the perception of MMC's in and around the industry.
Significance of Drivers and Barriers
The Negative annotations associated with modern methods of construction are an issue for the industry. Edge (2002) conducted a study to ascertain the causes for the resistance by clients and the market to prefabrication and standardisation in housing. Findings revealed that a large proportion of the resistance was within the housing industry itself. The commitment for change that was found within senior management was failing to defuse throughout the organisations enough to bring about the transformation. Interestingly the study found that the public was not resistant to new forms of construction entirely, although there was a partial resistance when considering the ‘value' of the new materials and methods. The study concluded that house buyers are strongly influenced by the negative association of the post-war ‘prefab' and as a result of this will resist changes to what a ‘traditional' house looks like. An example of this would be the adverse media coverage that was received by timber framed houses. Edge (2002, p.I) explains that this adverse media coverage severely reduced the application of this method in England to nearly 0%, whereas in Scotland it constituted 65% of new houses in 2001.
The findings of Edge (2002), it would seem, have not diminished over time. Goodier (2006, p.589) found that the negative image of MMC's are “by far the greatest influence on the industry's ability to expand”. This sentiment, although not listed directly as a barrier by the housebuilders, was found by Pan (2006 p.118) to be the most significant area to tackle, in their opinion, to see increase adoption of MMC's. “There exists significant prejudice against the take-up of MMC among housebuilders and in the wider context of housing supply”. This negative view towards MMC's was also found by Edge (2002 p.I) “lenders are reluctant to give mortgages on non-traditional construction, (...) valuers put lower values on it (...) and that planners delay the process of acquiring the necessary permissions”. Edge (2002) attributes these problems to the fear of the unknown techniques and potential maintenance problems, due to MMC's unproven nature that was discussed earlier.
This Negative opinion towards MMC's is likely to be having a negative effect on the adoption of the methods. To increase MMC's take-up there will need to be considerable measures taken to improve its image. These measures are discussed in more detail in chapter 4.
The suggested ‘improved quality' that is presented as a driver for an increased adoption of MMC's may also have an influence in changing people's perceptions, although it would appear that the industry is aware of this advantage. Pan (2006, p.187) found that 50% of the top 100 housebuilders viewed the ability to achieve high quality as one of the top 3 drivers for MMC's. Goodier (2006, p.588) revealed similar findings, with 79% of clients and designers and 77% of contractors viewing increased quality as an advantage of MMC's. Venables (2004, p.30) found that 39% of manufacturers viewed quality as the most important advantage of MMC's. A reason for low adoption of MMC's, even though the improved quality is known as a major advantage may be due to the point raised earlier, that the commitment for change that was found within senior management was failing to defuse throughout the organisations enough to bring about the transformation. This is because the surveys that were carried out in both Goodier (2006) and Pan (2006) were answered by persons high up in the management structure and so the advantages and disadvantages of MMC's may in fact not actually be realised by the persons choosing and using the systems.
There is a large amount of supporting literature that agrees that improved quality can be achieved with the use of MMC's. An example of this would be the Parliamentary Office of Science and Technology who state that “MMC houses typically have fewer defects (...)” (2003, p.1). The improved quality of MMC can be seen as a major driver, especially when considering that “traditional building practices often fall short in conforming to design specification” (The Market Transformation Programme 2008, p.3). A reason behind the apparent lack of impact that this advantage is having on adoption of MMC was given by The Market Transformation Programme (2008, p.3), “Changes in construction practice, such as the use of drylining instead of wet plaster and the internal walls being studwork instead of blockwork, may give the occupants the impression that houses are less solid or robust than they used to be”. This relates back to the negative perception of MMC's and the fear of the unknown that was mentioned earlier and show how it is having a much wider impact on the uptake of MMC's than was first suspected. Work produced by Pan (2006, p.189) however states that “the end market has shown little interest in how a house is built (...) location and price are the two main determinants of which house to buy.” It was argued that this is due to the housing shortage and that housebuilders themselves should reassess their attitudes towards MMC's.
The quality of MMC's it was discussed by Taylor (2009, p.6) is greatly improved, in comparison to traditional methods. This was attributed to the controlled working conditions resulting in fully tested services and a better finish in an environment that inherently reduces risks of accidents and ill health among the workforce.
The potential quality improvements that can be made with the use of MMC's will have a large impact on their take-up. This is because as quality and other advantages become more apparent within the industry, not only to the persons implementing the systems but everyone involved, than perceptions are likely to change resulting in an accelerated adoption of the methods.
One of the largest incentives of an increase in the level of MMC's to be used in the UK is that of time and cost. “The construction industry (...) should use more offsite and standardisation in order to (...) reduce cost and time,” Goodier (2006, p.587). Similarly “innovative systems which take less time to construct on-site can lead to savings on, e.g. site prelims and equipment hire” NHBC Foundation (2006, p.5). Goodier (2004, p.4) supports this stating that “the belief that using off-site is more expensive when compared with traditional construction is clearly the main barrier to increased use of off-site in the UK.” This proportion of the literature suggests that there are cost and time savings to be made by the use of MMC's along with the work by Pan (2006) who found that cost certainty was viewed as a driver for 54% of the respondents.
Although there is a view within the industry of cost savings, Pasquire (2004, p.2) found that “the use of off-site production, by many of those involved in the construction process, is poorly understood. Some view the approach as too expensive to justify its use (...)”. This point was heighten by Venables (2004, p.33) who states that “the general view is that it (MMC) is currently more expensive.” A study conducted by The National Audit Office (2005) had similar findings, “Volumetric and hybrid methods were slightly more expensive (than traditional methods).” Lusby-Taylor (2004) also revealed that “projects would cost more than if traditionally built”. The most recent sources show that there is around 7-10% increase in MMC'S costs, compared to traditional methods (The Market Transformation Programme, 2008, p.5). Taylor (2009, p.7) interesting states that “Tenders often take no account of the shorter delivery and erection times (...) Other savings are made in the reduction of preliminaries, reduced site storage requirements and welfare facilities.” This implies that the knock on savings of MMC's are often not included in the tender price. This was a sentiment that was also the opinion of Goodier in 2006 (p. 588). “Many projects are still judged purely on first or initial cost.”
These sources show that there is much confusion as to the true cost of MMC's and if savings are achievable. The Parliamentary Office of Science and Technology mention that accurate cost comparison is difficult as “project financial information is financially confidential” (2003, p.2) and that traditional masonry costs vary widely. The unclear cost information is quite significant in effecting the uptake of MMC's as if cost comparisons are unclear or inaccurate than there is likely to be a reluctance to move away from familiar traditional methods by actors within the industry.
Gates (2004, p.2) suggests that MMC's have failed to deliver cost savings and that it is expensive because the industry is small. The fact that the industry is small is suspected to be a cause for the higher costs, “Many MMC suppliers currently design their products around tradition housing types. This is seen as a market entry strategy since it allows developers to demonstrate that a house produced using MMC components can be indistinguishable from a traditionally built home. Redesigning houses to better suit the specific characteristics of the MMC product would certainly allow for a cost reduction,” Venables (2004, p.33). This again points towards negative perception of MMC's and results in production of products aiming to look like a traditional construction. This means that improved quality and cost reductions could be achievable without the need for the products to be disguised as traditional construction. It was the opinion of The National Audit Office 2005 however that the cost of building elements could be reduced by 15% as the MMC market matures. This is encouraging for the MMC market as a definite cost saving could result in an accelerated uptake of the methods (The Market Transformation Programme, 2008, p.3). Work produced by Goodier (2006, p.588) indicates that this may be the case with 67% of clients and designers, and 77% of contractors viewing the higher expense of MMC's as the main barrier.
Whilst it is unclear as to the true cost of MMC's in comparison to traditional methods in practice, a number of studies have shown that the higher capital costs are a major issue for the industry. Pan (2006) found it to be the most significant barrier to MMC's in the opinion of the top 100 housebuilders with 68% of the respondents. This may be due to the supply chain of traditional building practices, where there is more of a uniform expenditure throughout the duration of the project. With a number of MMC techniques there is a large expenditure at the beginning of the project, for example when commissioning the construction of a large number of volumetric units, which can cause problems to the cash flows of many projects. Interestingly however, the study conducted by Goodier (2006, p588) found that reduce initial cost was in the opinion, of 44% of clients and designers, and 15% of contractors, to be an advantage of MMC's. This difference of opinion could be attributed to the vastly different methods that constitute an MMC and varying project delivery methods that are used within the industry which result in lower capital costs then with the traditional equivalent. The opinions of the top 100 housebuilders show that measures are required to combat the issue of high capital costs, however it should be noted that Goodier (2006, p.590) found that only 25% of suppliers thought that a reduction costs would overcome the resistance to MMC's. It is for this reason that possible solutions are likely to include promoting the other advantages of MMC's to ensure that tenders are based on value as appose to cost. This will be discussed in more depth in chapter 4.
87% of clients and designers, and 92% or contractors in the survey conducted by Goodier (2006, p.588) found decreased construction time as the main advantage to MMC's. The study conducted by Pan (2006, p.187) found minimizing onsite duration as the 4th most important driver for increased adoption of MMC. This shows that there is a clear benefit to using MMC's with regard to construction time onsite from the industry view point. This is because much of the work can be performed in factory conditions before work is needed to take place on site. This lessens the chance of accidents and defects, and reduces reliance on clement weather. As a knock on effect there is a reduced cost of rectification of defects, equipment hire, dangerous working conditions and delays. Taylor (2009, p.7)
An example of reduced time on site of a project was given by The Office Of the Deputy Prime Minister (2003, p.1) “the time on sight to complete (...) the project was 50 weeks, saving some 40 per cent compared with traditional site-based construction”. Venables (2004, p.33) however, makes an interesting point in that “while the actual on site assembly time for many off site manufactured components is significantly less than traditional components, the design and production lead in times, and in particular redesign times, can remove this time advantage...” This point demonstrates that a major drawback of some forms of MMC, particularly those performed offsite, is the amount of pre construction work that is required in comparison to traditional methods. This point was found by Goodier (2006, p.588) as the 2nd most important barrier to an increased adoption of MMC's, with 46% of clients and designers, and 62% of contractors.
Other associated problems inherent with these forms of MMC can be defects. As it has been established, MMC'S generally result in fewer defects and improved quality, however when they occur, particularly in mass produced items such as a bathroom pod, the defects are likely to be present in all of the products. This is due to the repetitive nature of the construction, as opposed to traditional construction where a defect in the roof construction of a house is likely to be due to poor workmanship and expected to be present in only one roof. (The Market Transformation Programme, 2008, p.2)
Venables (2004, p.33) states that if standard components can be used in a creative way to create variation in designs, whilst minimising alterations in the production lines, it will allow for the best advantages of economics of scales to be had. It should be reiterated however that Goodier (2007, p.590), found that only around 25% of the suppliers in the survey viewed a reduction in price as a means of overcoming resistance to modern methods of construction. This was in spite of the fact that it was viewed as the main barrier to MMC's adoption in the study conducted by Pan (2006). Goodier (2007, p.590) concluded that this was possibly due to the other appeals of MMC's, and so were basing their opinion on value as opposed to cost.
Pan (2006, p.192) suggested that not all MMC's are applicable in all circumstances, however certain instances allow for significant gains to be had via economics of scale. By mass producing products there can be a number of benefits that result in quite substantial savings, however due to the specific instances that are required for this to take place the impact of this issue on further adoption of MMC's, as a hole, is likely to be minimal.
A large proportion of the literature has expressed that a shortage of a skilled workforce as a barrier to MMC adoption. The Parliamentary Office of Science and Technology (2003, p.3) found that in 2003, 80% of housebuilders reported difficulties with recruitment. The skills shortage it would appear does not only exist within contractors on site but also at factories where a large proportion of MMC's are constructed. 11% of the respondents in the study conducted by Pan (2006, p.188) viewed the skills shortage as a barrier to MMC use. The study conducted by Goodier (2006, p.588) found that insufficient worker skill was an issue for 21% of clients and designers and 23% of contractors. This low rating by those within the industry may be due to the point raised by The Parliamentary Office of Science and Technology (2003, p.3), who argued that “using MMC to build house parts in factories, and faster on site construction, means that fewer labourers are required.” This would suggest that increasing the adoption of MMC's is likely to decrease the problems found by housebuilders with recruitment.
Goodier (2006, p.592) expressed that between 70% and 80% of the workforce within UK construction has no formal qualification, with a narrow skill base and limited training. The study found that the skills most lacking were Electricians, Joiners and Brick layers in the opinions of suppliers, designers and clients, and contractors. Goodier (2006, p.588) concluded that this is a driver for an increased application of MMC's, due to their findings that most within the industry viewed MMC's as requiring an equally or less skilled workforce. Contrary to this Clarke (2002) argues that “a skilled workforce is required to enable innovation (...) to be applied” and that due to the lack of broad basic training in construction after which they specialise, workers are usually trained for one role. This makes it difficult for the workforce to become multi skilled which is required for increasing the adoption of MMC's. Venables (2004, p.38) indicated that suppliers usually had to provide additional training as 89% of the general Labour available did not possess the multiple skills required. This was because suppliers normally require “semi-skilled and multi-skilled workers with a medium level of training, rather than specific trades”, (p.593).
Taylor (2009, p.7) puts forward the idea that increasing the adoption of MMC's will reduce the impact of a skills shortage as permanently based factory units allow for the numbers and levels of skill to be more easily addressed than on static sites. It is also suggested that due to the lack of locally available skilled labour, the workforce will have to travel large distances with traditional construction, where as with offsite methods the workforce can be more centrally based increasing local employment.
This shows that the skills shortage in some instances is acting as a driver of MMC adoption but at the same time may actually be limiting its take-up. A lack of skill on site may drive for an increased use of prefabricated components that require less skill to construct (Goodier, 2006, p.588), but if suppliers and manufactures of the products cannot obtain the skills required to build the components than MMC adoption is likely to fall. Chapter 4 will discuss the potential solutions suggested within the literature for coping with a shortage of skill in the workforce.
The discussion so far has established that there are a number of potential barriers and drivers to the industry if attempting to increase the adoption of MMC's. Major barriers have been determined and include: the negative public perception, the perceived or actual higher cost, the perceived or actual higher initial cost and the shortage of skills. The major drivers were also determined, these include, improved quality, reduced onsite duration and, again, the shortage of skills. Although advantageous to the industry it was discussed that they also have their own associated drawbacks.