The future of construction will be offsite and wood will be an important part of the change

Prefabricated wall element at Welement factory

There is a growing demand to use timber and more specifically mass timber on large scale construction projects. This puts the emphasis too much on just changing materials of the building envelope, whereas the focus of construction should be on the rearrangement of processes in the overall value chain. Timber as a construction material has many positive aspects but the gains are easily nullified when the management principles fail to look at the supply chain as a whole. To increase productivity the industry should shift the focus from unit face values to time and process management. Prefabrication or in other words, offsite construction, is one of the best solutions for achieving this because it consolidates a large part of the value chain and automatically forces the involved parties to plan ahead. Although prefabrication as a concept has been around for several decades, it is going through a major new wave driven mostly by the urbanization megatrend and enabled by development of digitalization tools.

Most of the issues that limit the implementation of new systems and technology as well as the solutions are actually relatively simple with the barriers more linked to cultural habits within the construction discourse. Technology is social before it is technical, so the shift towards innovation is limited first and foremost by the established institutions within the building community of a specific region or country.

Technology is not something that determines the destiny of people but is the manifestation of people.

The misconception that technology has a life of its own is especially prevalent in building culture where the process of construction has not shifted dramatically in over 60 years (Smith 2009).

Buildings are becoming machines

Like every other product in our lives, so have buildings become increasingly more complicated. Especially the complexity of building technical systems and the energy that is required to make the different parts work harmoniously. The cost of technical systems is now approaching 50 percent of a building’s overall cost (Kieran & Timberlake 2005) and we are adding new systems every year. Not only do the systems cost a lot by themselves but getting them to work, all together completely coordinated and integrated within a building is the biggest contributor to complexity, cost, time delays and supply chain management issues (Kieran 2018).

The construction industry has up to now spent a lot of energy trying to convince everybody that it is nothing like manufacturing, that there is nothing to learn from these sister industries and that a process of erecting a building is far more complex compared to most consumer products. Because of similarities related to physical size and project budgets, the comparison of construction with the shipbuilding, airplane as well as the car industry is actually very justified. A modern car or a plane has an enormous amount of small parts and processes with an extreme focus on precision and quality. The fact that in one case the end product has to move safely through space and is not fixed to the ground, just makes the point even stronger. What started off as simple line production with Ford has evolved into complex modular assemblies and moved away from vertical integration. Production is divided between multiple tiers of suppliers which deliver the prefabricated chunks to the OEM(original equipment manufacturers), who then puts them together. These subassemblies can be on different continents, controlled by complex IT and ERP systems and today a car actually becomes a whole at the very end of the final manufacturing process.

It is almost counterintuitive that the more one attempts to undertake at the point of final assembly, the more difficult it is to control quality.

This increasing complexity is one of the main reasons construction productivity has lagged behind and also why it should start looking for answers from the manufacturing industry which has developed its supply chains in correlation with the development of the product. Compared to OEMS (original equipment manufacturers) in the automotive world, building contractors, as well as architects and product engineers, are still in the nineteenth century. Buildings continue to be assembled largely piece by piece in the field, in much the same way that the car was put together before the advent of mass production (Kieran & Timberlake 2004). One of the key aspects behind this lack of innovation is that mainstream construction, compared to other major industries, has almost neglected research and development (R & D). As with technology, innovation does not happen on its own but takes a lot of energy and continuous funding. The technology and IT sector has spearheaded product development and innovation with enormous funding possibilities because the end products are easy to scale. In construction the scalability effect seems extremely difficult to achieve because of all the cultural and normative differences of various countries as well as simple variations in climate and soil parameters effecting the structural parameters of the product. There has been development in material science and BIM software, but these are just tools, not solutions. This dead-end cycle has kept construction regionally restricted to a homogenous cultural area and it is time the industry starts finding solutions and services that are scalable.

One of the main questions in construction is who among the biggest value chain influencers: the client, the architect or the main contractor — has the economic and psychological incentive to take the lead and force innovation. The assumption that it should be the client or owner who initiates this and knows the detailed requirements and expected outcome in the initial conceptual phase is frankly not very competent. Like a patient visiting a doctor to know the diagnosis, the architect and the engineer should be educated to be the professionals that guide the client to the right path, helping him navigate the complicated process and ending up with a product that for the right price achieves all the economic and aesthetic purposes.

The abstract at hand will try to contemplate on the possibility of the two remaining parties: the designer (meaning architect and structural engineer) and the contractor (meaning main contractor or more specifically the project manager) — taking the leading role for improving productivity and bringing innovation to the industry. Also propose an alternative strategy where nobody actually takes the lead, but the different alignment of processes in the form of offsite construction will itself lay the foundation for improvement and a gradual mindset shift.

The perfection of the image versus the reality of use

Architects, compared to engineers and legislators, tend to have a higher level of social empathy and better contextual understanding, which is important because we are talking about products that dominate our public space and last several lifetimes. Living in the Anthropocene there is no other artform that trough the ideas about physical space have more power to influence our everyday lives at a subconscious level than architecture. We enjoy spending time in a room with beautiful details, sufficient light and a form which is in harmony with the surroundings. Architects have the power to create spaces that inspire learning, bring together people as well as add layers to the philosophical concept of a home. Yet often the initial architectural idea never becomes a reality because it gets redesigned and deconstructed by the realities of cost, legislation and supply chain possibilities.

The misalignment of architectural design concepts is also one of the root causes why the productivity benefits of prefabrication often cannot be fully utilized, and the first critical point where we should focus our attention to improve all the other processes downstream. Whereas in the prefab design and engineering sector, Design for Manufacturing and Assembly (DfMA) is a generic knowledge, it is still a fairly new principle for general architects and design engineers. This means that when the client hands over the architectural drawings to the prefab company, the projects usually have to be redesigned to optimize the costs of manufacturing and logistics. This type of rework is unnecessary waste contributing to the overall cost of construction and should not be allowed to happen in the first place. What is even more, if the design has to be altered too much, it might lead to new permits and approvals and a loss of valuable time. Understandably if the banks are already involved in the process, the developer has no incentive to return to the Kafkaesque bureaucratic municipality administrators and NIMBY attitude of the neighbours.

There will always be some level of cognitive dissonance between the perfection of the image and the reality of use and the possibilities of the client budget. One can almost say that the less an architect tries to express unique creativity with each project, the less he or she is thought of as an artist. Since it may seem that architects have to compromise with all the other downstream members, this game of egos and miscommunication is deeply rooted in the system, generating huge amounts of friction and waste of resources. The philosophical problem with prefabrication and building systems is that it leads us to the question of good vs. bad architecture and a one-off product is still perceived as a handcrafted work of art, and the repetitive industrialized house does not conjure up images of the beautiful home (Knaack et al 2012). Architecture is not black or white, so there is no reason for admitting defeat and separating affordability from beauty. It would be quite unfortunate if aesthetically pleasing form and space would only be possible with either public money or as an elitist hobby for rich clients. Nevertheless, just as much as architects need to understand the basics of construction and economics, so do the builders and engineers need to understand the cultural importance and fundamentals of good design. This would help to lay the foundations for mutual respect and allow engineers to understand and help architects find the middle ground between the two apparent extremes.

Welement project in Sweden

It is important to note that this abstract does not focus on the design and delivery of cultural landmark public buildings but on affordable housing, more specifically low to mid-rise residential and commercial real estate. This means that these specific design principles must fall into the framework of basic capitalist supply and demand logic. Whether architecture, starting with education up to the practitioners’ mindset, should be part of liberal arts or product design is a bigger debate. Yet it is not difficult to assume that the root cause to some of the most underlying problems is in the educational system which seems to focus more on unique form and not supply chain possibilities. With consumer goods we celebrate the value of good design just as well, but we seldom emphasize a single creator as the artistic hero. There are of course pioneers and great examples from Dieter Rahms to Chris Bangle and Jony Ive, but they are to a large part great because they have never pretended to work in a vacuum separated from the realities of manufacturing, supply chain efficiencies and basic capitalist profitability.

System thinking in construction and architecture

The new client desires choice, expression, individuality and the ability to change our minds at the last minute. Most commercial product industries already answer to this client mandate. By breaking down the product into smaller parts and by using supply chain management and information technology, they can tailor the product to the customers’ choice with reasonable time and reasonable cost (Kieran 2014). With similar principles of modularity and standardized interfaces, almost every product around us today, is in some form, mass customized based on personal or regional choices. A lot of the times these modules are difficult to comprehend, but the underlying principle is to combine the low unit cost of mass production processes with the flexibility of individual customization.

One should never underestimate how relatively effortlessly and unreasonably cost increase happens during the design phase. What makes it worse is that every project in construction is a one-off prototype and because most of the knowledge is project based, these mistakes, even if eliminated, will happen again and again in a slightly altered form on different project. This does not include the basic human errors and design clashes that are to a certain extent unavoidable and understandable. In this case the error is usually caused by the lack of knowledge of a single intellect and it takes just one small principally wrong decision or an idea that fails to take into consideration the directly or indirectly related costs. Even if this type of miscalculation is found during the building or procurement phase, each corrective step is nevertheless waste. The solution is to build in systems organized around a main idea or concept. Only by working in a systemized way of combining readymade modules is it actually possible to noticeably lower the time and efficiency of the construction value chain. It not only speeds up the actual process but ensures that the possibility of mistakes is lowered to a manageable level and these mistakes can be traced back to the source.

Mass-customisable housing concept developed by Welement, Creatomus Solutions & Pluss AB

A mass-customized building system should abide by the following supply chain rules:

1. All possible solutions and components are within a “platform of possibilities” creating a specific system of solutions or a concept.

2. If the concept platform does not contain a solution or component, it must be developed taking into consideration all the necessary constraints from the effected down-and upstream supply chain members.

3. The new solution or component must be modular, meaning that the interfaces (not necessarily the shape) must be standardized based on the network of solutions within the concept.

4. If the new solution cannot connect with a critical number of existing solutions within the concept catalog it is either left out or it forms itself another catalog of solutions.

The benefits and limits of mass customization and its related supply chain operations must be understandable to all members in the construction value chain. To achieve real benefits the first goal must be to keep all phases of the design of a building within certain boundaries of the specified platform. Besides the architects and design engineers, this applies of course also to the client, who is composing the initial program, but also to main contracting project management, who tends to focus only on unit face values. Raw materials and labor costs will not get cheaper, so the only aspect we can actually control and improve, is lead time. In order to achieve this and the increased efficiency we should first fix as many of the variables as possible and more often than not the interfaces, not the general dimensions, of the modular components are the key to the puzzle.

Project Management

Traditional Project Management, or the so-called waterfall method, is the most common form of project management technique in the construction sector today. Everything from planning, budgeting, the contract methodology and risk management works around the simple assumption that the project value chain is sequential in nature and all the workflows are divided into very distinct stages or milestones, with each process only moving “downhill” towards project completion, much like an actual waterfall. At the same time everybody participating in the building process knows these assumptions are only theoretical and the general expectation is that the schedule as well as the budget will not hold.

Whereas other industries such as manufacturing and especially software development has increasingly moved away from this method by accepting the volatility in the system and working with agile methods and collaborating in teams, construction is still for some reason repeating the same process and expecting different results. There are some ‘Lean Construction’ methods like the ‘Last Planner System’ which is very similar to ‘Scrum’ planning and project management method prevalent in the IT and start-up industry. Yet this form of planning and project management remains a niche and is not considered as a norm starting from the university education. The natural human reaction to all these failing assumptions is to start blaming everybody up and down stream and this is also one of the main causes for the misconceptions between architects and engineers, clients and builders, main and subcontractors etc. This reaction means that all the fragmented members are trying to minimize risk. The powerful members in the value chain try to put as much as possible on the downstream members and the weaker members translate this into extra money which raises the overall cost of the value chain and the one who actually pays for this is the end user. How to create incentives for real collaboration so that the information about cost and the best-case solutions from downstream members who actually build the houses, is communicated to the front? Modern contractual methods with shared risks and rewards are showing promises but it still keeps the knowledge project based. The most effective way for managing risk could be the emergence of powerful offsite construction companies who incorporate architects, designers and procurement specialist in the creation process of building solutions so that the design can take into consideration how to assemble the buildings more efficiently and how to manufacture and transport with all the best practices already part of the initial conceptual design.

Construction Supply Chain Management

The building industry thinks of supply chain management as simple logistics, just moving products from point A to B. Shipments being late and with poor quality, materials being damaged with double handling and temporarily storing on site are all just part of the regular day-to-day operations of construction. All these mistakes lead to extra cost which is accepted as unavoidable collateral and the data is almost never collected for systematic improvements. All other advanced industries have harnessed information technology to have complete control and visibility over supply chain operations. Long term partnerships with suppliers allow companies to work on time and quality and continuously improve efficiency.

Welement factory windows assembly station

Whereas a building is location based, the components don’t have to be. In the future buildings will be built in factories and only assembled on site. The size and complexity of the components will be limited by the distance from the offsite factory to the site. The question from the beginning should already not be if offsite methods should be used, but how large is the degree of prefabrication (DOP) on specific projects. The DOP level of a component or module depends on many parameters within the supply chain: architecture, available time and information, transportation distances, manufacturing and logistical constraints etc. This is why timber is an excellent material for offsite construction. It is lightweight, widely used, easily accessible and therefore the price is controllable. Timber is also quite robust and handles logistics very well. When something is wrong with a prefabricated unit it is easy and fast to make alterations, so that assembly can continue. Like any other material, timber has pros as well as cons. Moisture, Sound and Fire are the top three. Fire and sound are mostly manageable in the design phase. Moisture on the other hand becomes a problem mostly when project management and risk analysis techniques are inadequate. This problem can actually have a positive effect because it instinctively forces the project team to tackle this risk by planning ahead and act as fast as possible.

Wood is also a great material for automated production of modules and elements. The industry providing machinery for prefabricated timber frame panels is well-developed and embraces innovation, especially in Germany and Sweden. We should of course be critical in this sense that we should not go into extreme with the use of timber as a construction material. The selection of materials should be guided by their best mechanical properties and functional characteristics and not just because. Mass timber for instance should not be propagated for low- to mid-rise buildings and probably in most of these cases hybrid structures, like combining concrete with timber, will form the most optimal solution.


In the near future the construction industry has to start improving productivity to provide buildings more quickly and in mass quantity with acceptable quality. This all starts with a shift in the mindset and in practice the most foreseeable and efficient improvement is to figure out how to take the construction activities that traditionally occur on site to a factory. Offsite construction methods are one of the best solutions to solve this problem and the productivity gains are easy to comprehend with simultaneous subassemblies and only the final assembly left to be done on site. The higher the degree of prefabrication, the more control is automatically forced in the hands of one player with an incentive to streamline the process. Volumetric modular unit manufacturing companies already control a large part of the value chain, but the reality is that a lot of the times they don’t control the initial pre- and conceptual design which means that they have to compromise and redesign around abstract constraints. In order to achieve the full benefits of prefabrication the whole value chain of a building must be looked at as a whole and the knowledge of downstream specialist must be brought to the first conceptual design phase. To achieve the real benefits of economies of scale and streamlined processes the initial design must stay within the limits of a systemized building solution that considers DfMA principles (Design for Manufacturing and Assembly, including Logistics). This all means that the whole framework of processes, project management methods including the contractual agreements and risk management that actually define the collaborative human relationships, must be redesigned.

At the moment the construction industry is at a developmental point where is should not be hoping to get all the answers right and solutions solved but instead understanding what are the right questions. How to approach architecture of affordable housing and how to rearrange the processes in the construction value chain are just some of the immediate ones.

  1. Changali, Mohammad & Nieuwland. 2015. The Construction Productivity Imperative
  2. Smith. 2009. History of Prefabrication: A Cultural Survey.
  3. Kieran & Timberlake. 2009. Refabricating Architecture.
  4. Kieran. 2018. The Future of Cities podcast. Series 1, Episode 3
  5. Knaach, Chung-Klatte & Hasselbach. 2012. Prefabricated Systems