The offsite revolution in Construction : The Advantages

The offsite revolution in Construction : The Advantages

The construction industry is a paradox. The annual global growth rate is more than 3%, but the sector is in crisis: prices are soaring, jobs remain unfilled, and demand far outstrips supply. The crisis can be attributed to one broad shortcoming: unlike almost every other industry, construction has been reluctant to modernize and thereby boost its productivity. The car factory of 2019 looks nothing like the car factory of 1919, whereas the construction site has hardly changed during that time.

Of course, construction is not easily amenable to mass production, but it could certainly exploit modern industrial techniques more than it does. Offsite construction, or “prefabrication,” is the key: creating in a factory various parts of a building before assembling them on the building’s actual site. The parts can be either precast (concrete) or made from compound materials (such as sandwich panels). The offsite factory of today may produce flat-pack components (such as walls or beams), volumetric modules (bathroom pods or bedrooms), or even entire buildings. The practice of systematically constructing houses offsite goes back to the 20th century: builders in the US began selling “kit homes” in the early 1900s, for example, and European governments on both sides of the Iron Curtain turned to offsite construction after World War II to address housing shortages.

Despite its history, however, and despite the pressing need, offsite has remained a niche approach. That is changing at last. Offsite construction is now being adopted for projects as varied as high-end condos, hotels, and airport terminals. The disruptive potential is huge. Industry executives, as they weigh their options, need a clear understanding of the offsite phenomenon—why it is gaining in popularity, how companies are participating in it, and what it implies for the industry.


Offsite construction alleviates several problems associated with traditional “onsite” methods. By moving a large proportion of the work from a messy, exposed open-air setting with limited working hours into a safe, controlled indoor factory setting with 24/7 production uptime potential, offsite construction offers five main benefits.

  1. Shorter Building Times and Lower Risk.Offsite construction is far less affected by the vagaries of the weather and by the heavy burden of onsite project management. It is also far less subject to the risks—legal and financial—inherent in complex collaborations with subcontractors. So offsite typically reduces building-completion times by more than a third and improves punctuality, with best-in-class builders approaching 100% for on-time delivery. That can be of great value to project owners; a hotel, for instance, can begin taking reservations earlier, and the risks of overspending and delays are reduced.
  2. Higher Quality.Thanks to standardization, a controlled environment, and in-factory quality checks, the defect rate can be halved; at best-in-class producers, the defect-free rate on new buildings is now above 95%.
  3. Lower Costs.The controlled, weatherproof workplace raises the productivity of individual employees, while also allowing economies of scale, optimized logistics, and lean manufacturing. The result is a saving of up to 10% on overall construction costs—savings that can be passed on to customers or reinvested in higher-quality finishes, for example.
  4. Improved Working Environment.Workers are protected from the weather and from many of the traditional dangers (such as working for long periods at great heights or underground), and their daily commute remains unchanged from project to project. Workplace accidents are halved, and recruiting becomes easier as the jobs are now more desirable.
  5. Reduced Environmental Impact.Construction waste and emissions can be halved, by virtue of production efficiencies and increased recycling.

These benefits merely mirror those of other industries as they modernized. With offsite construction now gathering pace, the industry is advancing into the 21st century.

Source: BCG

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