Prefabrication's predicament: It's much harder than it looks

Trade labor shortages. Thinner margins. Tighter schedules. Quality control issues. Weather events. Increased complexity. Safety concerns. There is a laundry list of reasons why general contractors, construction managers, and subcontractors should be jumping in with both feet to adopt prefabrication on projects.

Many of the nation’s largest contractors, including Gilbane, Mortensen, Skanska, and Turner, have been utilizing prefab techniques on select projects for a decade or more. Mortensen, in a 2014 study, even quantified the cost and schedule savings from select prefab approaches—exterior panel walls, bathroom pods, multi-trade racks, patient room headwalls—implemented on a Denver hospital project. The company’s conclusion: For every dollar it spent on prefab, 13% of the investment was returned as a “quantifiable benefit to the project”—through schedule and cost certainty, improved productivity, fewer safety incidents, and manpower consistency. That’s a 1.13 benefit-to-cost ratio. Not too shabby. 

Yet the prefab movement—while growing—has been relatively slow to take hold in a big way in the U.S. construction market, especially among GCs and CMs, according to a newly released joint study by FMI and BIM Forum. 

Of the 156 firms surveyed for the report, nearly three-quarters (74%) indicated that they use some level of prefab on select projects. Solid adoption rate, right? 

Now look at the numbers based on the volume of project work. Just 23% of respondents use prefab assemblies on more than half of their projects, and less than a third (32%) utilize the process on 21-50% of their firm’s projects.

Shockingly, among the firms that have adopted prefab construction, the overwhelming majority (86%) admit that the process is either “not effective” or “needs improvement.”

Even the most ardent users of prefab concede that the movement, for most firms, is still in the R&D phase. Construction teams don’t have the luxury of repetition. Each project comes with a different set of circumstances—location, client, project team, building program requirements, cost restraints, and schedule demands. 

Trial and error testing requires multiple projects spanning several years to see what works and what doesn’t. Early prefab adopters like Birmingham, Ala.-based Golden Construction are just coming out of that cycle. “Ten years ago, we were just trying to prove that prefabrication worked,” the firm’s President Geoffrey Golden told FMI. “Today, the conversations have shifted to, ‘Just how much can we impact projects’ bottom line and schedule?’” 

Mastering prefab, say the authors of the FMI/BIM Forum report, requires a top-down commitment to the process, a willingness to fail and try again, and an “all or nothing” mindset. Dabbling in prefab often turns into an expensive mistake.