Modular Building Institute

Discussion Forum

From Disruptive Concept to Mainstream Practice?

Original Comment:
I recently had the opportunity to attend the National Institute of Building Science’s (NIBS) Building Innovation Conference in Washington D.C. While the show was smaller (about 500 attendees), it was eye-opening in several regards. I find it healthy to attend conferences like these in an effort to broaden my perspective.

One of my favorite sessions was from Dr. Perry Daneshgari from MCA, Inc. called “Improving Construction through Industrialization.” What was interesting is that Dr. Daneshgari did not start off his career by focusing on the construction industry. Some of his earlier work in the field of improving productivity through industrialization was in the auto industry, not surprisingly. From there he was asked to look at the financing arm of the auto industry, which led him to the banking industry. Many bankers then asked him to review the construction industry since they lent a lot of money to this sector and had little knowledge about it.

Dr. Daneshgari made a point that stuck with me. Aside from the healthcare industry, the construction industry is the only remaining industry that still relies on skilled labor to deliver its final product. All other industries have evolved, automated, and industrialized to the point where products are assembled and value is added elsewhere in the process. Ford doesn’t hire mechanics to build cars. Computer engineers are not assembling I-pads. The average cost of an automobile compared to per capita income has steadily decreased over the last 100 years. Conversely, the same measurement yields the opposite result for home ownership.

He cited several factors that are showing the construction industry trending in this same direction. For example, in New York City, the International Brotherhood of Electrical Workers (IBEW) market share has dropped from 98% to 57% in the last five years because of less on-site skilled labor needed.

Dr. Daneshgari also cited the five steps of industrialization consistent in other industries: 1) the separation of, and management of labor 2) management of the work 3) lean operations 4) modeling and simulation and 5) feedback from the source. In other industries, these five steps have happened sequentially. In construction, however, he sees many of these steps occurring simultaneously.

He noted that several other countries have embraced the industrialization of construction to a greater degree than in North America. I appreciated the matter-of-fact style of the presentation and Dr. Daneshgari’s unapologetic conclusion that the industrialization of construction will lead to a decrease in the need for skilled labor.

In addition to this session, I attended the meeting of the Offsite Construction Council (which I serve as vice-chair). This meeting brought together about 30 individuals including general contractors, government agencies, academics, and other industry associations such as the Associated General Contractors (AGC), the American Institute of Steel Construction. This meeting was further evidence to me that Dr. Daneshgari was on the right track. Rather than trying to convince people that modular and offsite construction is a more efficient and productive way to build, this group STARTED with that belief. More universities are interested in teaching their students about various offsite techniques, and more agencies want to find ways to ensure offsite companies can bid on their projects. It was refreshing to see so many people in the construction profession embrace the offsite concept. It’s a start!

By removing politics and emotion from the conversation, Dr. Daneshgari provided a very clear glimpse into the future - If the North American construction industry does not embrace the “industrialization” of the construction industry, other countries that have will benefit at our expense.

In short, industrialization in construction will happen. Will your company be prepared and benefit from it?
Started on January 17, 2017 by Tom Hardiman
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