David Chandler on the future of construction

Faster, cheaper and better quality are the trifecta dazzle terms for justifying many decisions around property, development and construction. This is particularly so in relation to “modern methods of construction” including prefabrication, modular construction and design for manufacture and assembly. However, former NSW Building Commissioner, David Chandler, says these claims may not actually be evidenced.

Chandler is a long-term proponent of what he calls Off-site Construction Manufacturing (OSCM). He has been an advocate for industry modernisation for more than 15 years. He was the industry lead in setting up the Centre for Smart Modern Construction at Western Sydney University.

Instead of buying into the talk around faster, cheaper, labour efficiencies and so forth, Chandler says we need to first ask, “what’s the problem with business as usual?” – BAU

While BAU is not sustainable without some adjustments such as reducing waste, reducing rework, improving compliance and implementing efficiencies with programs and schedules, Chandler points out it is the baseline against which any improvement from MMC needs to be measured.

Researchers working on MMC are finding it hard to get data, which means any research outputs are based on hypotheticals, not actual delivered projects.

And what data is available doesn’t match the claims of the MCC advocates.

“Cheaper” might be a furphy

For example, cheaper has not yet been demonstrated,” Chandler says.

The challenge with “cheaper” is the key cost of a project is not just the cost of the manufactured items after they leave the premises. It also includes site costs, development processes, site preparation, installation works and final commissioning.

Meanwhile, a buyer may struggle to obtain the kind of finance that enables them to make progress payments for the offsite production costs. Most banks fund land and in-situ home construction, not factory production. The exception is Commonwealth Bank, which this year became the first bank to join PrefabAUS and develop a loan product specifically for MMC dwellings.

Even with the dedicated loan product, the fine detail may be problematic. This includes requirements around which suppliers are approved to provide the dwellings, the process of milestone payments, labelling of goods, and allocation of risk.

In general, Chandler says only a government agency, community housing provider or other major organisation is going to have the sophistication and the scale to navigate the hurdles.

The question of quality

Chandler says it is important to define what is meant by quality. If the word is being used as a synonym for “compliance” then MMC cannot claim to deliver improvements compared to BAU approaches because compliance is a yes/no proposition. A process can’t be “more compliant” than another compliant process.

If quality is being used for non-compliance matters then this will be aspects such as choice of benchtop materials, paint work, and so forth, and there is no automatic reason to predict MMC will deliver a more compliant product than BAU.

In terms of whether MMC offers a lower rate of defects or non-compliances, then this will depend on the degree of oversight and scrutiny applied within any individual manufacturing facility.

“Everyone I speak to in the offsite space has yet to come up with a convincing methodology to assure compliance with Australian Standards, and everywhere I go, I can see that there are departures from those standards which run the risk of becoming custom and practice and getting baked into the offsite process.”

The quality and compliance of materials being used also needs to be factored in.

See Building products still a risk in construction – here’s the download 

Is it really faster?

The process of an actual build of a structure can be faster in a factory, because they “avoid a whole range of things” including inclement weather.

“The point is that they don’t ask, when do you start the clock in terms of faster? Because my view is that you must start the clock at the time you seek a development consent,” Chandler says.

“It’s no good starting the clock after you’ve got a development consent, because if you haven’t gone down the prefab construction intent at the time of a development consent, then it’s very hard to go back and put prefab into a development consent, which is not based on prefab.”

It’s also very difficult to put prefab into a design if the design hasn’t been “purposefully wrapped around prefab” from day one.

Chandler says the clock needs to start at the commencement of the development application process, and finish at the point of occupancy certificate. And the process of receiving an order and then manufacturing the building is only a fraction of that time period.

Does it solve labour shortages?

Chandler says he has been invited to tour numerous prefab facilities and has asked about the number of staff employed full time. Typically, around 30 per cent of the workforce on any given day are direct employees, and the others are from labour hire. These workers do the low-skill work, and generally there is minimal investment in improving their skill levels.

So prefab isn’t necessarily addressing the need to recruit, train and retain an increased number of skilled construction workers, because the “body hire” workforce deploys across whatever sector needs the muscle on any given day.

“The other thing I noticed in the factories is that the supervision to worker ratio is also very low. So typically, there’s a lot of electrical work going on, and there’s only one licensed electrician working for the manufacturer, or in fact, that person could be a subcontractor to the manufacturer.

“But in the manufacturing space, they might have one electrical supervisor and 10 to 20 workers. Now it’s very hard to supervise people who have low skills with very thin layers of qualified supervision.”

Finally, is it more sustainable?

Explaining claims around “sustainable” depends a lot on the metric being applied. In some cases, the claim is around taking a circular economy approach where modules or DfMA prefabricated elements can be reused, redeployed or reconfigured at end of life. However, if that claim is being made at the factory stage, there is no guarantee that in 30 to 40 years of occupational lifetime later modules will be reused, redeployed or reconfigured.

Chandler notes that the buildings also require additional strength and structure to “make them mobile”.

“A building constructed on site using business as usual doesn’t have to be dragged 1000 kilometres on the back of a truck and then joined up. So, these buildings come in a way where they’re significantly over engineered.”

“So, you’re kicking the circular economy conversation down the path by a long, long way to justify buildings that on their initial creation, seem to have more embodied carbon in them than business as usual.”

Where there are measurable gains is waste, he says.

“In business as usual, there is considerably more avoidable waste and that needs to come out of the industry.”

MMC will never replace BAU – Smart BAU will. It’s the starting point for what may follow.

Overall, Chandler believes that MCC is unlikely to prevail “beyond government supported projects” in the foreseeable future.

There is also a need for the prefab industry to have conversations with the insurance industry.