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Improving Construction Efficiency & Productivity with

Modular Construction

Prepared by
The Modular Building Institute 944 Glenwood Station Lane, Suite 204 Charlottesville, VA 22901 USA with Excerpts from: “Advancing the Competitiveness and Efficiency of the U.S. Construction Industry,” a report issued by the National Research Council

Recently, the National Institute of Standards and Technology (NIST) requested that the National Research Council (NRC) appoint an ad hoc committee of experts to provide advice for advancing the competitiveness and productivity of the U.S. construction industry. The committee’s specific task was to conduct a workshop to identify and prioritize technologies, processes, and deployment activities that have the greatest potential to advance significantly the productivity and competitiveness of the capital facilities sector of the U.S. construction industry in the next 20 years. The committee identified five breakthroughs to improve the efficiency and productivity of the construction industry, including breakthrough number three: “Greater use of prefabrication, preassembly, modularization, and off-site fabrication techniques and processes.” The modular construction industry has made significant advances in implementing processes and materials to build and deliver more sophisticated and complex facility types. More and more customers are turning to modular for multi-story, steel framed structures, health care facilities, educational structures, and large scale military projects. Always known for its time saving advantages, modular is now being recognized for being a more resource-efficient, inherently greener process. This report includes portions of “Advancing the Competitiveness and Efficiency of the U.S. Construction Industry,” a NIST/NRC study, along with supplemental supporting information, reprinted with permission by the National Academies Press.

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IMPROVING CONSTRUCTION EFFICIENCY & PRODUCTIVITY WITH MODULAR CONSTRUCTION

Overview
U.S. industries have experienced almost continuous productivity growth for the past several decades. The one anomaly has been the construction industry, for which overall productivity declined from 1995 to 2001 (Triplett and Bosworth, 2004). For industries other than construction, improved productivity could be attributed to advances in and increased usage of information technologies, increased competition due to globalization, and changes in workplace practices and organizational structures (Triplett and Bosworth, 2004). Studies focusing on construction efficiency, in contrast to productivity, have documented 25 to 50 percent waste in coordinating labor and in managing, moving, and installing materials (Tulacz and Armistead, 2007); losses of $15.6 billion per year due to the lack of interoperability (NIST, 2004); and transactional costs of $4 billion to $12 billion per year to resolve disputes and claims associated with construction projects (Federal Facilities Council (FFC), 2007). Because the concept of productivity can be difficult to define, measure, and communicate, the NRC committee determined that it would focus on ways to improve the efficiency of the capital facilities sector of the construction industry. It defines efficiency improvements as ways to cut waste in time, costs, materials, energy, skills, and labor. The committee believes that improving efficiency will also improve overall productivity and help individual construction firms produce more environmentally sustainable projects and become more competitive. To gather data for this task, the Committee on Advancing the Competitiveness and Productivity of the U.S. Construction Industry Workshop commissioned three white papers by industry analysts and held a 2-day workshop to which 50 additional experts were invited. A range of activities that could improve construction productivity were...
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