PREFABRICATION: the CHANGING FACE of ENGINEERING and CONSTRUCTION 2017 FMI/Bimforum Prefabrication Survey Table of Contents
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PREFABRICATION: THE CHANGING FACE OF ENGINEERING AND CONSTRUCTION 2017 FMI/BIMForum Prefabrication Survey Table of Contents 1 3 25 29 Executive Summary Key Findings Business Implications Looking Ahead TODAY’S PREFAB ENVIRONMENT IS DIFFERENT 77% of respondents think today’s prefab The amount of project work using prefab has environment is different than in 2013. almost tripled between 2010 and 2016. 35% 13% YES NO 77% 23% 2010 2016 Most contractors perform single-trade Project inefficiencies and improved technologies prefabrication. are driving prefabrication. 32% 47% 21% Provide Provide Provide Multitrade Single-Trade Kitting Prefabrication Prefabrication Services THE BIG STRUGGLE TO MAKE IT WORK Contractors struggle to make Contractors using prefab on more than 50% prefabrication effective. of their projects are more effective compared to those who do less prefab. 14% 40% 46% Effective Needs Not Improvement Effective Three key challenges for making prefabrication 48% of respondents see less than 5% in effective: savings on total annual labor hours related to prefabrication. Culture Lack of Outdated Commitment Control Mindset he construction industry is back on track since the Great Recession, andT total construction employment has re- bounded to almost 6.7 million workers (still a far cry from its peak of 8 million workers in 2006). “Construction spending in November 2016 hit a 10-year high, with one-month and year-over-year increases in all major segments,” says Ken Simonson, chief economist at Associ- ated General Contractors of America. “Looking ahead, contractors say they expect more work in every category in 2017 than in 2016.” Executive Summary However, despite being about 16% below its 2006 employment peak, the industry is still struggling to find qualified labor. Compound- The past doesn’t always match the future. ing these statistics, baby boomers are reaching That’s the nature of disruption. Patterns retirement age at a rate of 10,000 per day, of change build gradually until they merge and rapidly reshape the business while fewer, less experienced workers are mov- landscape. At that point it’s too late to ing into the engineering and construction in- respond. dustry. In short, labor has become a key con- straint for contractors that want to take on and Dr. Stefan Hajkowicz, Senior Principal Scientist complete more work. CSIRO 1 Executive Summary Simultaneously, the evolution of design and are based on almost 200 participants—a mix findings also revealed a relatively small, construction functions has taken a leap for- of both specialty trade contractors and GCs/ fast-growing cottage industry of prefabrication ward over the past decade, with the transition CMs—most of whom work in the commercial innovators who are driving change and shap- from electronic drafting to high-resolution sector. The companies that participated in this ing the future of the industry. digital modeling (also known as Building In- study collectively generate approximately $38 formation Modeling or BIM). Ubiquitous digi- billion in industry revenue each year. To gain a deeper understanding of prefab best tal connectivity, cloud computing, 3-D printing practices and promote a constructive dialogue and big data are just a few of the evolving Our study sheds light on big-picture indus- within the industry, FMI will be assessing and trends responsible for the current melding of try trends that are organized around the studying several of these successful firms over engineering, architecture, fabrication, con- following four themes: the coming year. As with many new concepts, struction and other related disciplines. success breeds success. Prefabrication is no 1. Today’s prefabrication environment isn’t different and therefore all industry players the same as it was in 2013. Today, all of these factors are setting the stage must alter their mindsets and educate them- for revolutionary change in the engineering 2. Most contractors struggle to make selves on the benefits of modularization and prefabrication effective. and construction industry and have helped prefabrication. Everyone will need to be open prefabrication and modular construction make 3. Contractors want to double their labor to new approaches to designing, manufactur- investments in prefabrication over the a comeback during an era where low cost, re- ing, sequencing and putting construction proj- next five years. source efficiency and tight schedules are prior- ects in place. Rather than viewing prefabri- ities. 4. In today’s environment, project sched- cation as a threat or disruption, contractors ules are considered a critical benefit of who embrace it will be best-positioned to prefabrication. Within this industry context, FMI and the BIM win in the built environment of today and Forum partnered in fall of 2016 to take a pulse Our insights paint a mixed picture and show tomorrow. of today’s prefabrication developments to see that most contractors are struggling to make what—if anything—has changed since we last prefabrication effective and are slow to surveyed the industry in 2013. Study findings adapt to today’s fast-changing world. Our Executive Summary 2 Key Findings The challenge with doing prefab is, it’s not just thinking about prefab. Instead, it’s more about thinking of how your prefab strategy fits within the overall strategy of delivering a project. Atul Khanzode, Ph.D. Head of Technology and Innovation DPR Construction 3 Key Findings s tdas prefabrication environment in construction different compared to three years ago? n fall 2016, FMI and AGC’s BIM Forum Exhibit 1: Is today’s prefabrication environment in construction different surveyed 156 contractors (both GCs/CMs compared to three years ago? Iand specialty contractors) in the U.S. construc- tion industry. To delve deeper into the key topics identified in the survey, FMI subsequent- ly conducted more than 30 follow-up inter- views. The following key findings represent the main takeaways from this research; FMI will continue to investigate these topics in more detail through in-depth industry case studies in 2017. Finding 1. The prefabrication 77% 23% environment has changed. Yes No Almost 80% of our survey participants in- volved with prefabrication indicated that Source: 2017 FMI/BIMForum Prefabrication Survey today’s prefabrication environment is dif- ferent compared to the conditions in 2013 Source: 2017 FMI/BIMForum Prefabrication Survey (Exhibit 1). According to many of our respon- Geoffrey Golden, president at Golden Con- Looking back at our earlier industry studies, dents, prefabrication is more widely adopted struction, explained: “Ten years ago, we were the numbers confirm the increased use and across all stakeholder groups (e.g., owners, just trying to prove that prefabrication worked adoption of prefabrication. In 2010, only 26% GCs/CMs and specialty contractors), and proj- (functionally)—that it was a good product. of survey respondents were using prefabricat- ect participants are expanding the use and Today the conversations have shifted to, ‘Just ed assemblies on more than 20% of their proj- application of prefabrication beyond “tradi- how much can we impact projects’ bottom ects. In late 2016, this number was more tional” projects. line and schedule?’ We have transitioned from, than double, with 55% of respondents ‘Does it work?’ to ‘Yes, it works and it has be- using prefabricated assemblies on more come a clear competitive differentiator.’” than 20% of their projects (Exhibit 2). Key Findings 4 What percentage of your project work is currently accomplished using prefabricated When looking at the project work being ac- Exhibit 2: What percentage of your project work is currently accomplished complished using prefab assemblies, the num- usingassemblies? prefabricated assemblies? bers are even more dramatic: In 2010, the average use of prefab was around 13%, and in 2016, that number increased to 35%— 55% almost three times that of 2010. 2016 2010 Aaron Thompson, VP of Design & Fabrication at Corbins Electric, stated, “When you’re talking about large commercial projects, I don’t think prefabrication is going to be an 26% 26% 26% option in the future. We’re seeing more and 23% more written into the contract that off-site 19% fabrication is mandatory, and the owners are 13% not giving us a large laydown yard on-site. 9% And if I’m already seeing that now, after the past three-year push, I can only imagine what’s going to happen in the next five to 10 years.” 1% to 5% 6% to 10% 11% to 20% >20% Our data suggests that most contractors per- form single-trade prefabrication (47%), Source: 2017 FMI/BIMForum Prefabrication Survey while a third (32%) provide multitrade pre- fabrication, and 21% provide kitting services Source: 2017 FMI/BIMForum Prefabrication Survey (Exhibit 3). Not surprisingly, specialty con- tractors perform almost double the amount of project work (on average) using prefabricated assemblies compared to GCs/CMs: 44% versus 23%, respectively. 5 Key Findings Which of the following do you perform? Other differences include: Exhibit 3: Which of the following do you perform? Specialty contractors provide almost double the amount of kitting services compared to GC/CMs (24% versus 13%). Both contractor groups perform almost 32% 47% 21% the same amount of work using sin- gle-trade prefabrication (between 44%- 50%), but GC/CMs provide substan- tially more multitrade prefabrication (coordination) compared to specialty Provide Provide Provide contractors (43% versus 27%). Multitrade Single-Trade Kitting Prefabrication Prefabrication Services 1a. Project inefficiencies and improved technologies are driving Source: 2017 FMI/BIMForum Prefabrication Survey prefabrication. Source: 2017 FMI/BIMForum Prefabrication Survey According to our study, chronic productivity issues and new technology advancements are key factors in driving the broader use of pre- presenting opportunities for companies to in 2013, the need for general contractors to fabrication at a time when lower cost, re- prefabricate with greater accuracy. improve project schedules was listed as the source efficiency and sustainable construc- top driver (see Appendix). tion are becoming priorities.