How you can build an effective business strategy to incorporate this technique
by Ethan E. Cowles
September 14, 2017

As we collectively look into the crystal ball to determine where the construction industry is moving, there is one thing that most of us can agree on: the war for talent is only going to continue to intensify and play an increasingly larger role in every contractor’s success.

One way smart contractors are getting around this issue is through the adoption of prefabrication (prefab) techniques. There are a number of reasons why this strategy works. Typically, prefab shops can relegate less-experienced employees to a few, simpler tasks. Not only does this keep new employees productive, but it also provides an ideal training ground in a controlled environment. And because prefab construction occurs in a consistent, controlled environment, labor becomes much more productive.

The endless delays that include setting up a jobsite and waiting for materials and tools to arrive occur far less often. With the use of prefab construction, the 30-percent recoverable lost time experienced in this industry is drastically reduced. Contractors stand to benefit significantly from considering this solution.

The Nature of Disruption

“The past doesn’t always match the future. That’s the nature of disruption. Patterns of change build gradually until they merge and rapidly reshape the business landscape. At that point, it is too late to respond,” said Dr. Stefan Hajkowicz, senior principal scientist, strategy and foresight, at Commonwealth Scientific and Industrial Research Organisation (CSIRO).

In 2016, FMI and the BIM Forum partnered to conduct a survey to understand both where the industry currently is and where the industry is headed. Some of the major themes that came out of the study include:

  1. The environment has changed drastically in the last few years, and investment is expected to continue to increase.
  2. Most contractors still struggle to make it effective.

You read that right: FMI widely expects the marketplace to double its investment in something most of us don’t even know works. This is a tremendous opportunity for everyone in the industry. It should go without saying that contractors who embrace this will be better positioned to win in the built environment of tomorrow.

Of those companies that perform some level of prefab, just 14 percent perceive their process/initiative as being effective. This is partly because many contractors simply do not understand how to measure and track these efforts. On the whole, contractors have had a difficult time compiling accurate cost-to-completes in traditional construction, where adding in multiple delivery methods can complicate the process. To mitigate this, contractors need to adopt a completely different mindset when it comes to sequencing and control.

Achieving this goal isn’t always easy, though. The industry is trending in the opposite direction in this regard: we want more prefab but with less and less information, drawings and specifications. As contractors, there isn’t a lot we can do about this issue. As the industry’s mindset continues to shift to more manufacturing, we need to communicate, collaborate and set aside as much time early in the project as we can to work towards identifying and planning for prefab opportunities.

“I refer to prefab as a process, in that you have to constantly evaluate it and be willing to experiment and try different things. You have to stay after it. You have to listen to the field, as they are living in it. Work out the problems they are communicating to you, and, eventually, you will hit on it just right,” said Steve Foot, vice president and operations manager at Greiner Electric.

Cultural Shift

For prefab to be most effective, a corporate culture shift is usually in order. Getting people to embrace new ways of thinking and doing work differently is without a doubt one of the most challenging aspects of any organizational initiative. This is especially true with prefab. Introducing innovative procedures requires curious, relentless employees who are willing to take risks and make mistakes.

As the construction industry is still adjusting to a younger workforce, timing for fresh thinking could not be better. Focusing teams on a common purpose, effective processes and communication amongst key stakeholders could help transform companies and develop future business leaders.

Another challenge in implementing prefab is the failure to commit to it. According to our survey, almost 80 percent of participants use prefab on less than 50 percent of their projects. Those contractors are considerably less effective compared to those who prefabricate on more than 50 percent of their projects.

It Starts at the Top

Like most major strategic initiatives, prefabrication success starts at the top, with committed leaders who communicate a clear strategy, strong vision and achievable goals around the firm’s goals.

Because a successful prefab initiative typically spans across multiple business units, a champion on the executive level is usually required.

Operational excellence is about providing a specific value to customers at the lowest cost consistently. Prefabrication is one of several tools that, when implemented properly, has been proven to enable contractors to do this successfully.