The AEC Industry is Infatuated with Modular Construction, so Why Hasn’t It Become Mainstream?

I’ve always been fascinated by the dialogue around modular construction. It seems like something that the entire AEC industry has strong opinions about, with large groups of professionals obsessively brainstorming visions of the future. However, the concept remains on the fringe of the industry, with Permanent Modular Construction market share moving from 2.14% of annual construction starts in 2015 to 6.03% in 2022 (per the Modular Building Institute). A significant increase year over year, but still not a significant enough total to call it anything remotely close to mainstream. If modular construction is as great as its proselytizers say it is, then why isn’t everyone doing it?

Almost everyone in the design and construction industry agrees that construction can be done more efficiently. Typically they imagine lower cost and less waste, achieving the same outcomes as current construction methods, but using less material, less labor, and less time. Behind this sentiment, there’s an inherent feeling that the existing construction process can be improved. Entire organizations are focused on solving this problem, from the Lean Construction Institute, (focused on systems and process), to the Modular Building Institute (focused on manufacturing), to the Design Build Institute of America (focused on teams and collaboration). And, to make matters more confusing, the industry has created unhelpful, somewhat arbitrary boundaries around potential solutions, giving them names like “modular” or “prefab” or “industrialized”, with sometimes squishy definitions. Modular implies that the module of construction can be rethought. To paraphrase the Modular Building Institute definition, modular construction is a process in which components are constructed off-site, under controlled plant conditions, and are then assembled into the final state on-site. When MBI uses the term “components”, they aren’t talking about typical components (metal studs, windows, sheets of drywall, etc.). They’re talking about bigger components, arguing that the more that can be done before reaching the construction site, the better. Prefab (a term I’ve always found curious with the use of the prefix “pre-”, as in “pre-” what?) also implies that completing more assembly prior to materials arriving on site will create better results. There is a generally held belief that assembly in a factory can be done more quickly with more precision, that raw inputs can be cut and assembled in a factory with less wasted material, and that on-site construction is inherently messy and imprecise.

The beauty of the basic modules that are in broad use today (e.g., the metal stud, the self drilling screw, the sheet of drywall, the pane of glass) is that everyone knows how to use them, they are part of a loose framework of rules and dimensions that generally work together, they are easy to modify with tools that most builders own, they are assembled in ways that are tested with demonstrated performance, and they provide a high level of design and spatial flexibility without requiring a great deal of precision. That’s a difficult set of benefits to overcome in the name of potential efficiency. That hasn’t stopped the industry from trying, though, and I would group the attempts into three broad categories:

• Volumetric Modular: Maximizing the size of the module, volumetric modular manufacturers build components that are as large and complete as possible while still being able to be transported to the site. As a trade off for maximizing the amount of plant fabrication, this approach typically includes an enormous capital investment to build the production infrastructure, transportation costs are high as you end up transporting a lot of air, design is limited to the capabilities of the module, and it can be an uphill sell in the marketplace (if the company isn’t a vertically integrated developer buying its own product).
• “Smart” Building Components: These are smaller (but still large) components with integrated systems that play well with existing construction systems, from modular concrete or steel structural systems, to unitized curtain wall systems to interior wall and room systems. The components are easy to manufacture and transport, and they play well with traditional construction practices, but the potential efficiencies are less than volumetric modular. I’d also put 3D printed buildings into this category. It generally feels like a good scale for incremental innovation.
• Furniture: Yes, let's throw this in there. The line between furniture and interior construction has become a fuzzy one. Is a phone booth furniture or is it a room? Furniture seems to be as close as we get to the beloved car industry manufacturing efficiency comparison. It’s basically site-less, easy to transport, and can be put together by almost anyone. Design options are clearly limited to superficial changes within a limited palette. It feels like it comes full circle with volumetric modular as we scale the furniture approach, especially if transportation on roads is no longer an issue.

Regardless of the approach, it feels like everyone developing these systems is playing in a relatively small sandbox. The modular advocates seem to be talking into an echo chamber without achieving significant impact. 

I’d argue that the ultimate question is not how we modularize buildings or how we shift a greater amount of fabrication from the site to the factory. It’s how we achieve the base goals for improvement that we can all agree on: less material, less labor, and less time. Whether you call it “modular construction”, or just “construction”, improvements to existing materials and processes, big and small, will take hold if they achieve these efficiency goals while giving the designer a better tool kit from which to create compelling spatial environments and, at the same time, empowering the contractor to build with more efficiency and less risk.

So, let’s talk about how we rethink the way that building components are designed, manufactured, and installed. I would argue that any innovation needs to excel in these criteria to gain traction:

1. Play well with existing building systems: You can’t assume that the rest of the project will be using this system or that existing conditions meet unreasonable tolerances.
2. Be simple to understand and simple to install: Designers already know how to design with traditional construction materials and builders know how to build with them. Any new system can’t create additional obstacles.
3. Come with a robust supply chain with short lead times: You can source traditional construction materials from basically anywhere, quickly. A new system needs to provide the same certainty and speed.
4. Be price competitive with traditional construction: Modular building manufacturers focus on quality of product while minimizing site construction time, and first-cost is usually spun into some calculation that talks about schedule savings and material efficiency. If it’s more expensive than traditional construction, especially if the system doesn’t have a proven track record, it’s unlikely to take hold.

I’m passionate about moving the industry forward, furthering design capabilities, pushing the limits of materials, and broadening the reach of quality design and construction, all with less material, less labor, and less time. I’m just not sure that the current approaches to modular and pre-fab construction are getting us there. I’d love to hear your thoughts in the comments.