Titled ‘Off-Site Manufacturing: A review of global practices and its impact on project procurement in the Australian built environment’, the report, which will be available in September, outlines the driving forces required to influence change in the local market.
Its author, TSA Associate Director James Marsden, confirmed the publication emerged from the 2017 SmartPrize Award, an internal investment program to expand and enhance TSA Management’s expertise and capability, while also demonstrating the organisation’s continued commitment to invest in its people and in industry.
Marsden, who spent research time on the report in overseas markets including China and the UK, confirmed his intention was “to give the reader a simple yet sound understanding of terminology, the benefits of an offsite approach and why markets around the world are shifting towards offsite.”
“The key takeout from the paper places the onus on clients to ask the market for change and to drive innovation in a way that does not prescribe how the market should innovate. It is suggested this is achieved through introducing an offsite value (OSV) at project conception, supported by a shift in behaviour that responds to the frontloaded nature of offsite projects.”
Offsite value (OSV), is a term coined by Marsden, drawing on a concept advocated by Mark Farmer, the author of the UK’s Farmer Report, now widely regarded as a blueprint for construction industry disruption.
“OSV simply compares offsite and onsite costs within any given project,” said Marsden. “I believe prescribing a target or minimum OSV upfront will act as an indicator for improved predictability and precision of time, cost and quality outcomes – the core benefits an offsite approach brings.”
In terms of the debate around the cost savings component of offsite builds, Marsden cited a KPMG (2016) report indicating an initial saving of 7% could be realised on the first project.
“Realising the cost saving is subject to the point at which offsite methodologies are introduced. The more progressed design becomes, the harder it is to realise the benefits.”
“Any decision to utilise offsite will be project specific, where it is adopted the OSV will form part of our recommended approach,” he added. He said details around how TSA would formulate OSV were currently being finessed, adding that leveraging technology including BIM, was also critical.
“Put simply, to realise the full potential of an offsite approach, the proportion of offsite works (or OSV) should be maximised. It is important to note the OSV is agnostic to the offsite methodology, giving the market the freedom to determine the right approach for a set of project requirements and constraints. Used in the right way, it can be seen as a mechanism that asks for change in the delivery of the project but does not prescribe how change is achieved.”
“To support such a request for change and being cognisant of the frontloaded nature of offsite projects whereby the whole of project team effort is shifted to the front end of a project, I’m suggesting a behavioural shift away from typically linear one-way traditional approaches to project procurement.”
“Traditional project phases should be reshaped to capture project definition, supply chain integration and supply chain engagement. This relies heavily on trust and collaboration. In addition, the whole of the project team needs to support an offsite approach with a ‘decide and commit’ mindset to ensure decisions are timely, committed to and respect an offsite production line approach. Ultimately, as a client-side advisor, I see it as our responsibility not to ask for business as usual but to help drive innovation and change.”■
TSA, Associate Director,