Prefabrication & Productivity | Top Prefabrication Challenges

Prefabrication and Productivity – FMI Takes a Closer Look

Published on by Travis Knight in Construction

Prefabrication and Productivity – FMI Takes a Closer Look

As a part of their continued look at labor productivity, leading construction consulting firm FMI delved into prefabrication as a follow-up to the release of their labor productivity study. In that study, FMI noted an estimated $30-40 billion lost annually to poor productivity industry-wide.

Prefabrication plays a bigger role

Given that backdrop, FMI consultants Michael Keller and Tyler Paré note that off-site construction and prefabrication are becoming a bigger part of the labor productivity landscape. Contractors and industry experts are no strangers to the idea of prefabrication and its potential benefits. Improved quality, reduced schedule duration, and a safer working environment are the top three benefits cited by FMI.

However, with challenges integrating the construction and manufacturing operating models and generating enough throughput, it can be easier said than done to justify the capital and time investment.

Creating a vision

As FMI points out, you can’t just flip a switch and implement a successful prefabrication strategy – you must have a long-term vision and strategy to implement successfully. Prefabrication can be used more if implemented earlier in the process, but this requires decisions on design and trade contractors to be made earlier as well. The scope needs to be customized to fit the contractor’s needs and specializations.

Top challenges in prefabrication implementation

One challenge that contractors run into is that many prefabrication implementations take a shape similar to a manufacturing process that depends on reliable demand and throughput, a workflow that can differ significantly from a typical contractor.

The interplay between the prefabrication and construction segments will greatly impact the success of the prefabrication strategy. Considerations such as how prefabrication will be billed, costs accounted for, hierarchy within the company in relation to the construction division, and whether to sell to third parties will all factor in the shape and success of the prefabrication implementation.

Moving ahead

Despite the challenges, participants in FMI’s study see prefabrication time increasing in the future. On average, participants spend about 16% of their craft labor hours in prefabrication, but anticipate this doubling to 34% in five years. With a dearth of qualified labor and the allure of potential schedule savings, it’s easy to see why contractors are taking a closer look.

Talk to a construction industry pro

If you’re considering how a prefabrication strategy could potentially boost your organization’s productivity or looking for other ways to boost bottom-line business results, connect with Barnes Dennig’s top construction industry pros for a free consultation.

You may also be interested in the overall construction industry report – you can watch on-demand as Michael Keller unpacks it and download the slides. And don’t miss the hot-off-the-presses 2024 Construction Industry Compensation & Benefits study, with great insights from contractors of all sizes from across our region – it’s a great planning tool and a way to build a strong competitive advantage in a tight labor market.


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