Cab for construction?

An article in the Financial Times suggested that the UK construction industry was approaching its ‘Uber moment’. The reason? The use of offsite production to slash programmes and cost.

For those of us with long memories it’s easy to be cynical. We’ve heard this before. Remember Deputy Prime Minister John Prescott’s Design for Manufacture competition back in 2005, which asked for solutions to provide better quality homes for a cost of £60,000 each?

But thirteen years on, it’s a different world. Digital design – BIM, if you like – is forcing a change in the way designers and specialists interact, major investors such as Legal & General are putting money into offsite, and central Government has promised to favour offsite on some publicly-funded projects from next year.

Consultant Arcadis reckons the offsite sector could double in size between now and 2020 to £2.8bn a year. However, many of the barriers that have prevented the oft-predicted offsite boom for the last 20 years, still prevail.

One of the biggest hurdles is the size of offsite manufacturing specialists. There are only seven modular fabricators of any size in the UK, with balance sheets that are too small for many clients to risk. They are a potentially weak link in a project’s main supply chain.

In a chicken-and-egg scenario, offsite suppliers can’t get bigger without a good pipeline of projects ahead of them. Only with this can they attract the investment they need to expand.

The Government’s announcement this time last year could help with that. Five departments – Transport, Health, Education, Justice and Defence – will adopt a presumption in favour of offsite construction by 2019 across ‘suitable capital projects where it represents best value for money’.

In the meantime, some housing developers – such as the one that inspired the FT article – are already ploughing ahead with offsite. Experts suggest that more growth in the residential sector could pump-prime the offsite industry so that it can supply other sectors too.

Offsite doesn’t have to mean modular, though. It can also be a systems approach to design and construction, where buildings are bespoke, but designed from a kit of parts.

Either version of offsite will require some serious overhauls to the construction process, from planning through procurement, design and delivery. Current contractual arrangements won’t fit the bill.

The interesting thing is that main contractors won’t be part of the picture. Instead clients will be contracting directly with alliances of suppliers, with an integrator to orchestrate delivery. A main contractor could in theory be an integrator, but it would require new skills and a totally new business model.

Does that constitute an Uber moment? Well, yes, it probably does.