Offsite vs. Onsite Construction Part 2

In Part II of a two-part series, industry pros focus on the multiple benefits offered by offsite construction with increased challenges from inflation, labor shortages, materials availability, and a push to increase sustainability on construction projects. 

The benefits of offsite construction, which comprises the manufacturing, planning, design, fabrication, and assembly of building elements offsite are expansive. Manufacturing building components in a controlled environment results in enhanced quality control, cost savings, a schedule that is less adversely affected by weather conditions, minimized onsite waste, and the ability to schedule and sequence fabrication and delivery. Additionally, the environmental impact is lessened due to minimal shipping and packing materials delivered to the site and enhanced energy efficiency in the final construction. 

Offsite construction enhances the quality of onsite construction for building types including residential, multi-family, hospitality, educational, health care, and commercial while offering distinct advantages highlighted in this article. The panel of experts below, representing the construction, engineering, and building systems industries, explore and explain the many benefits of this alternative construction method.

Meet the Panelists:

Brian Sielaff, M.S.C.E., P.E., P.Eng, CEO, Tamarack Grove Engineering

Mikel Ochs, President-Operations,Whisper Creek Homes

Michael H. Weber, IOM, CGP, CSI, National Business Development Manager, The Euclid Chemical Co. 

Devin Perry, Executive Director, Business Improvement Programs, National Association of Home Builders

Jack Armstrong, BSChE, Executive Director/COO – SIPA (Structural Insulated Panel Association)  

Ken Semler, President & CEO – Impresa Modular

What are the benefits of offsite construction relating to materials an labor availability and budget?

Ochs: To put it simply, using offsite construction saves time and money. The Structural Building Components Association (SBCA) conducted studies in 1995 and 2015 and compiled the results into a comprehensive report “Framing the American Dream.” For offsite construction, manufacturers can buy in larger quantities from distributors further away, easing the local supply chain shortage and enabling smaller builders to compete. The process automation of building components manufactured in an offsite environment equates to being able to hire and retain skilled workers and enhances quality control.

Weber: Offsite construction is a “manufacturing process” which removes many variables from the onsite construction process. Offsite manufacturing typically occurs under cover so weather isn’t an issue; the right tools are always at hand, and employees are responsible for the same/similar tasks from one project to the next providing greater efficiencies. Well-run businesses that pay their bills and buy in volume typically have strong relationships with suppliers to get materials at the most competitive price and on-time delivery to the plant. Offsite construction, with employees repeating the same/similar tasks daily offers an opportunity to train unskilled employees faster as compared to onsite-built construction’s problematic and time-consuming on-the-job training. 

Perry: One of home builders’ chief concerns is a lack of skilled labor. As prefabricated structural building materials are assembled in a factory, offsite construction can greatly reduce builder reliance on subcontractors and the volatile labor market. NAHB (National Association of Home Builders) analysis shows it typically takes two days to set a modular home on its permanent foundation. Generally, onsite build time is greatly reduced using component-based systems – from prefabricated roof trusses to structural insulated panels or insulated concrete forms.

Armstrong: Overall, the answer to budget, materials, and labor is that offsite is cheaper with less waste, less rework, and less damage from weather and theft. Factories have superior buying power and leverage than individual builders and employ a stable workforce with increased ability to hire. In the link attached below, there is an informative set of studies that illustrates SIP (structural insulated panel) installation and construction benefits vs conventional framing: https://www.sips.org/resources/sips-vs-stick-frame-cost-data

Semler: Labor issues have impacted the offsite construction industry; however, working in an indoor environment with a paycheck that isn’t dependent on weather is attractive to prospective employees. The broken supply chain impacts factories but because materials are inventoried at one location, material planning is easier. By supplying so much more in one delivery, the corresponding labor and material handling frustrations are passed over to offsite suppliers to deal with. Consequently, budgeting woes are also passed over to the offsite contractor, freeing the builder/developer to focus on sales and site concerns.

Sielaff: Tamarack Grove works on many different projects where offsite construction, labor, materials, and budgets all came into play. For instance, a four-story children’s learning center located in Jackson, Wyoming had a window of construction of only four-five months due to weather. Moving to modular design allowed for the fabrication, labor, and materials in a controlled environment followed by onsite construction of the entire four-story building within the constrained time period. No other construction method would have provided those results. Equally impressive results can be seen in the many log and timber-frame home projects our office has engineered. An entire home shell can be fabricated off site and shipped to the construction location allowing the shell to be erected and enclosed within one month. Rather than a five-step process of building a wall, insulating it, sheathing the inside and outside, and then installing a final siding element, the well-organized offsite construction puzzle comes together onsite. 

A commercial example of this approach is best represented by a hotel chain located in Redondo Beach, California whose owner chose a modular system. In the end, due to labor issues, material availability, union considerations, budgets, and timelines, the hotel opened 10-12 months earlier than what traditional onsite construction methods would have allowed.  The increased revenue generated by opening sooner was instrumental in swaying the hotel owner to adopt an offsite construction method. 

What is the ideal environment/situation that benefits most from  an offsite construction approach?  

Ochs: With experience, when done right, offsite construction saves time and, therefore, money in all environments and situations. At Whisper Creek Homes, we’re better suited for high-end custom construction in mountain or resort areas typically with shorter build seasons or where there is a lack of skilled labor available.

Weber: Regional preferences typically dictate the construction type and system when using cement-based concrete building systems. In the southeast, concrete masonry systems and cast-in-place concrete systems (with removable forms) both offer price-competitive wall and floor systems. In the southeast, both concrete systems easily meet code requirements for insulation and there is an abundance of manufacturers and contractors familiar with these building technologies. In northern climates, where building codes require higher insulation factors, insulated concrete forms (ICFs) and insulated concrete panels are popular with manufacturers, distributors, and contractors skilled at working with these products.

Armstrong: Benefits can be realized pretty much anywhere, but certainly in areas that are urban and have tight space constraints by allowing rapid delivery of off site materials in a constrained space. Also, any environment that is remote and does not have a steady workforce is great for off-site. Additionally, climate locations with short building seasons benefit from the extended installation season allowed through off-site systems and speed to dry-in so work in colder or frozen conditions can continue indoors. Lastly, light commercial projects (i.e. restaurants, hotels, retail chains, etc.) benefit greatly from off-site solutions because they are predictable, reliably cost consistent, often allowing for speed-to-market to realize income and reduce onsite carrying costs of construction.

What additional benefits does offsite construction offer regarding geography or location?

Ochs: An offsite construction firm must either focus on specific geographic regions and build to those codes or be able to modify their building system to meet building codes in multiple locations. They must also be able to ship to any location and designate who will ship, load, offload, install, check materials, report damage, and oversee the completion of the build. On a recent residential build in a rural location outside Steamboat Springs, subcontractors were difficult to find due to the locale. A panelized building system allowed the builder to dry in faster, leave the structure over the first winter, then return in the summer to finish interiors. Installing windows and siding using off-site construction methods saved six months in construction and significant dollars towards the project budget.

Weber: Proximity to the manufacturing plant certainly affects costs; the farther away the plant, the greater the transportation cost. In remote or mountainous areas with restrictive access to job sites, a builder’s cost for delivery of materials and transportation of work crews can be problematic for any type of build. These factors may affect the type of concrete system the builder determines as the most cost-effective and practical.

Perry: It depends on the construction method. For example, many members of NAHB’s Log and Timber Homes Council ship home packages coast-to-coast and internationally. For modular units, the general shipping radius is 200 miles from the factory. Most panelized components and framing packages – whether wood, concrete, or steel based – are transported regionally.

Armstrong: Areas that are experiencing a shortage of labor or have higher material costs due to low competition often see the benefits of offsite solutions. Explore numerous offsite benefit SIP examples in our online project library.

Semler: Offsite construction is ideal for rural or hard-to-reach places. When you deliver volumetric construction, you deliver labor with the materials. The materials are already installed in the semi-finished module. The reduction in the carbon footprint is significant when using modular construction to reach remote areas.

In your opinion, what is the true value of offsite construction?

Ochs: Offsite construction is not meant to replace a builder or contractor. It’s a means to help solve a variety of problems, is better for the environment by reducing waste, increases energy efficiency, and is more cost-effective. The precision that can be accomplished in a quality-controlled space as opposed to out in the elements (which requires varying levels of skilled labor) is enormous.  

Weber: The ability to build “inside” is extremely important for protecting materials from the weather, but also for maximizing the construction timeline without “days-off” due to inclement weather. Using employees for specific tasks and optimizing productivity is another key benefit of offsite construction. The ability to purchase materials in bulk and deliver to the same location is even more important in today’s marketplace of supply-chain disruptions and transportation issues.  

Armstrong: SIP Design’s Best Practices Series is a valuable resource available free of charge. The simple concept of speed of construction (SoC) is interconnected to every other factor contributing to builder and jobsite logistics. Builders, architects, and owners are focused on the bottom line. SoC is one way SIPs conserve project funds while surpassing the IECC 2021 building codes and energy performance standards. As an example, a recent Gig Harbor, Washington residence is a testimony to SIP SoC, reporting just five days to install the entire project (SIP walls and roof). The builder specifically cited savings in labor, fewer trade involvement, and, of course, expected energy savings.

Semler: Offsite construction is still in its infancy. Offsite will evolve allowing increased efficiency and speed in homebuilding. For every six construction workers who leave the industry, only one enters. With this type of labor shortage, offsite will be the way homes are built in the future. We just won’t have the labor force to do it any other way.

Sielaff: There is power in technology in the offsite construction market. With 3D BIM modeling, clash detection, automation in machinery, and how computer numeric control (CNC) machines are talking to the modeling software, it’s taken what the industry can do to an entirely new level — the precision is remarkable. Whether you’re building with modular, log, timber-frame, SIPS (Panelized), or concrete panelized construction, all industries are utilizing software in today’s world in fabrication, take-offs, and manufacturing. We’re in a new platform of diagnostics with what can be shown, engineered, and designed on the computer and then transposed into the machinery cutting or fabricating the final element.