DISRUPTION, COLLABORATION AND REASSEMBLING THE JIGSAW
OFFSITE METHODOLOGIES REPRESENT THE KIND OF DISRUPTIVE INNOVATION AND SWEEPING CHANGE THAT PRECIPITATES WIDESPREAD TECTONIC SHIFTS IN DESIGN, CONSTRUCTION, MANUFACTURING, EDUCATION, RESEARCH AND EVEN THE WIDER ECONOMY. HERE, THOUGHT LEADERS IN THE OFFSITE / PREFAB SPACE ASSESS THE MULTIFACETED FORM THIS CHANGE LOOKS SET TO TAKE. GERARD NORSA REPORTS.
Like patiently dedicating yourself to a 1000 piece jigsaw puzzle and all that it demands of you, offsite construction shares many of the same skills to complete the picture.
Making the pieces connect quickly and efficiently not only allows you to stand back and admire your work but to those professions who work collaboratively in the offsite construction space, it will reward individuals and organisations with the completed building far sooner and to a higher standard.
What is not so readily understood is the fact there are many broader economic and social benefits that are made possible if the industry fully embraces opportunities from manufacturing components of buildings of all shapes and sizes off-site and then efficiently assembling them where they are going to reside.
Australia’s construction industry is a significant contributor to the nation’s Gross Domestic Product (GDP). According to data published by the Australian Bureau of Statistics (ABS), construction represented 9.5 per cent of national GDP in the financial year ending June 30, 2016. On these numbers, construction was an industry that generated in excess of $32.2 billion of profit on turnover in excess of $150 billion in the last financial year.
The peak industry body for offsite construction, PrefabAUS says that about 3 per cent of construction industry revenue is generated from off-site construction with this forecast to grow to at least 10 per cent within 20 years as awareness improves and technology evolves. Clearly change in this space is inevitable. It is already happening all over the world and has shown an amazing growth trajectory globally. If Australian building professionals (architects, building designers, structural engineers, quantity surveyors, building surveyors etc.) can work collaboratively, the local offsite construction industry has potential to blossom.
It also has the opportunity to be a great fillip for the Australian economy as it is a beacon for jobs, innovation, entrepreneurial opportunity and export income from services and manufacturing. Thought leadership in education, research and development, design, engineering and construction of offsite buildings is a valuable commodity on a global scale and is a potentially significant foreign trade earner.
According to experts in the area of offsite construction, Australia has the opportunity to leverage skills and innovation to create a significant contributor to a sought-after smarter economy. At the same time, public and private investment in offsite construction will mitigate against the risk of having a critical national industry, construction, disrupted by overseas competition that is delivering the efficiency, cost saving and other benefits afforded by it. Duncan Maxwell is a registered architect and PhD Research Candidate within The University of Sydney’s Faculty of Architecture, Design and Planning. He works within the faculty’s Innovation in Applied Design Lab.
Maxwell’s research concerns increased design value in off-site construction based on case studies from overseas where adoption of offsite construction is more mature, in particular Sweden.
Maxwell says advanced manufacturing is the perfect opportunity for Australia’s economy to transition from an economy previously dependent on the resources and traditional manufacturing sectors to one that is built around knowledge and services. He also thinks that if the local construction industry doesn’t embrace this change, it will miss the boat.
“I think that one of the major exports of the future will be knowledge from research and sustained tracking of industry improvements, such that Australia might become a regional leader for the huge advances and growth that we are seeing in the Asia-Pacific,” Maxwell says. “There is great value in considering how this sort of change will occur in the construction industry in the coming decades, and in pursuing this change agenda.”
“Other industries are undergoing rapid change, and if the construction industry does not lead on the testing and adoption of innovation, then it’s quite possible that we will see other industries moving into construction or international construction companies flourishing here.”
Associate Professor Tuan Ngo is another academic who has based his work on the idea that prefabricated construction creates numerous advanced manufacturing opportunities that would be competitive on a global scale. As Director, Advanced Protective Technologies for Engineering Structures (APTES) Group and Research Director, ARC Centre for Advanced Manufacturing of Prefabricated Housing (http://camph.eng.unimelb.edu.au) at the University of Melbourne, Ngo is fully across the prefab space.
The ARC Training Centre is devising solutions to be embraced by industry. It is also training PhD and Master students as well as collaborating with industry to up-skill the Australian workforce. Additionally, the learnings of the ARC Training Centre will be disseminated through the peak industry body for prefabricated construction and ARC Training Centre Partner, PrefabAUS. “Prefabricated construction requires new thinking, new ideas and new technology, thereby creating fertile ground for new IP,” Ngo said. “For this reason, it is strategically important to Australia’s economy due to the inherent efficiencies, improved productivity and enhanced quality it offers.
“In addition, prefabricated construction creates a pathway for employment in an industry that can absorb workers from the declining mining boom or automotive manufacturing industry whilst also contributing to Australia’s future exports.”
To realise the opportunities from offsite construction, the construction and manufacturing sectors of the economy need to transform themselves and work together for mutual benefit. “I think that having an open-mind to change is vital to provoke change in an industry sector such as construction which is complex,” Maxwell says. “Research investment and industry collaboration is happening in Australia, on a number of joint research projects which are typically funded jointly by government and industry.
“The temptation is to funnel research investment towards aspects that are largely ‘technical’ in nature – improved materials, connections, reduced waste, construction efficiency etc. These are absolutely critical, and the history of prefab research has often focused on these types of issues.
However, there is also a growing awareness of ‘softer’ aspects concerning issues of process and design, which are just as important in order to fully benefit from the range of change opportunities that are out there.”
“Greater integration of working relationships within the construction industry is vital. As my research shows, Sweden has demonstrated the value that is to be gained through collaboration of private companies but also companies with academia.
“My research shows how Swedish companies have begun pursuing a platform approach to manufacturing to carefully manage and co-ordinate design and manufacturing teams, so as to benefit from feedback and continuous improvement as products are tested in the market place.”
Meanwhile, Associate Professor Ngo laments that historically, Australia’s construction industry has been relatively slow to embrace new technologies but believes because “we are faced with rising living costs and what many consider a housing affordability crisis”, the Australian economy and construction industry must transition.
“Financial pressures mean our economy cannot sustain the high cost, low productivity model of conventional construction,” Ngo says.
I think that one of the major exports of the future will be knowledge from research and sustained tracking of industry improvements, such that Australia might become a regional leader for the huge advances and growth that we are seeing in the Asia-Pacific. Duncan Maxwell – University of Sydney
“The transformation to prefabricated construction requires a change in mindset and the impact is broad. “We need a revised approach to design, new and innovative materials, facilities that can build houses in a factory environment, and new models for finance and the supply chain. In addition, to accelerate the uptake of prefabricated construction we need to take a multifaceted approach that requires extensive collaboration amongst all stake-holders in innovation and education, including policy makers and regulators.
“At present, prefabricated construction has a stigma attached to it that is associated with cheap building solutions such as temporary classrooms in schools. Modern prefabricated construction is vastly different in that it transforms construction far beyond the realm of temporary classrooms to a high-quality premium product fabricated in a controlled environment.”
Associate Professor Dr Karen Manley from Queensland University of Technology’s Science and Engineering Faculty says scale is one of the hindrances to Australia fast tracking the development of an offsite construction industry.
“We are a relatively small population and so it is hard to justify investment in sophisticated factories that feature mechanised production lines and robotic assembly such as you would see in leading Japanese factories operated by companies such Sekisui and Misawa,” she says. “Our population is smaller and our industrial base is less complementary
“We have the population to sustain a few major factories. We just need to demand to justify the capital investment. And we need to sort this fast, because overseas interests, like Sekisui and Misawa, have already entered the Australian market.
“Perhaps early joint venture discussions will prove advantageous for Australian builders/manufacturers. Of course, there are ongoing problems around cost; and these tend to endure because there is insufficient demand and investment to reap significant economies of scale. Pockets of success exist in the apartment/office market, where there is greater scope to achieve some volume benefits.”
So where are the agents of change going to come from? As is the case with any industry that is transformed by disruptive technology and thought leadership, change agents and early adopters will have a competitive advantage in the construction industry.
Maxwell is adamant that the industry as a whole needs to drive change in the pursuit of greater efficiency, market need, their companies’ business model, or prior experience lending itself to industrialisation. There is “no silver bullet” he says.
“Construction is incredibly complex, let alone the increased sophistication of industrialised construction, so an integrated approach is vital,” Maxwell says. “In Sweden, the transfer of ideas has been really important to aid progress.
“Often Sweden is looked at from a statistical point of view because it has around 80 per cent of single dwellings built off-site and the multi-residential sector is undergoing strong and sustained growth.” “However, this hasn’t happened by accident and rather has been through a concerted and organised effort over eight decades, not just from government, but industry itself to lead and create institutions and innovation.”
Melbourne University’s Associate Professor Ngo says some of the seeds for a successful prefab industry are being sown in Australia but increased attention and collaboration will eliminate the possibility of being left behind and seeing international organisations take up the slack.
“Perhaps early joint venture discussions will prove advantageous for Australian builders/manufacturers. Of course, there are ongoing problems around cost; and these tend to endure because there is insufficient demand and investment to reap significant economies of scale. Pockets of success exist in the apartment/office market, where there is greater scope to achieve some volume benefits.” Assoc Prof Dr Karen Manley – QUT
“Australia is already home to many highly successful prefab building companies who are gaining momentum,” Ngo says. “An uptake of prefabricated construction could help facilitate a transition from Australia’s automotive manufacturing environment to advanced manufacturing for the construction industry.” “Further facilitating an uptake of prefabricated construction is very much multifaceted, requiring extensive collaboration, innovation and education.
We are facilitating that at the ARC Training Centre, which provides a focal point for innovation and training in prefabricated construction as well as contributing to testing and certification.
“One thing is for sure, ignoring the benefits of prefabricated construction would be a missed opportunity for the Australian economy.
“Ultimately, the uptake of prefabricated technology will be market driven but Australians are currently confronted with a construction industry that is based on a high cost, low productivity model.”
“If the Australian construction industry does not service the demand for more affordable and high quality housing through advanced manufacturing, then the demand will be serviced through imports from the global market.”
Maxwell and Dr Ngo agree that there are potentially significant economic impacts to the foreign trade ledger and lost jobs if Australian industry does not embrace the opportunities created by offsite construction as the global market meets demand and innovates.
“I would imagine that continued foreign investment and imports will be par for the course unless there are some changes in government policy regarding the increased liberalisation of trade,” he says. “There may be tightening with regards investment.”
“So, if we accept that, then the response must be to ensure that what is produced here; in terms of material products but also ideas and concepts are of the highest quality and highest value.
“In this way, there can be a clear market differentiator which ensures local industry is valued here. Otherwise we risk seeing our best ideas and research being commercialisation overseas.
“I think it would be a shame if the work we do here goes down a similar path as did Australian innovation in Solar PV panel research which was pioneered locally but relied on overseas investment to commercialise and manufacture.”
“Prefabricated construction is a golden opportunity to build Australia’s advanced manufacturing capabilities and to absorb workers from the automotive industry who have skills that are directly transferable,” he said. “Additionally, prefabricated construction has a vast supply chain with many flow-on effects in terms of employment and other economic benefits.” Assoc Prof Tuan Ngo – University of Melbourne
Dr Ngo also believes the offsite construction industry has the potential to help plug gaps in the local economy created by the decline of the local manufacturing sector as well as meeting the rhetoric from policy makers to create a ‘knowledge economy’.
“Prefabricated construction is a golden opportunity to build Australia’s advanced manufacturing capabilities and to absorb workers from the automotive industry who have skills that are directly transferable,” he said. “Additionally, prefabricated construction has a vast supply chain with many flow-on effects in terms of employment and other economic benefits.” ■
