Supply chain failure, upward cost pressures and programme slippage. As construction moves into the post-Covid world, it faces unprecedented challenges that require new and innovative solutions. Solutions that Modern Methods of Construction (MMC) are perfectly placed to provide in order to create new resilience in the industry.
Design and resilience
Design decisions have consequences for the supply chain. The coronavirus crisis has highlighted the fragility of supply chains and the need to use readily available materials that can be found domestically or from multiple sources.
By reducing labour and combining bespoke solutions with standard processes, MMC increases efficiency by 40% and increases the pre-manufactured value (PMV) of a project. In turn, these measures decrease site working risks and ensure that safe site social distancing measures can be observed. Secure local jobs in modular construction facilities safeguard projects against labour shortages in the long term.
As MMC moves construction towards a retail pricing model, standardised manufacturing norms will allow systems and their sub-assemblies to be stockpiled. A much overdue conversation needs to be held among the currently disjointed modular solutions to allow for greater standardisation and interoperability between manufacturers, giving modular solutions the same flexibility and appeal as Lego.
The price is right
Post-Covid, there's a need to balance any possible price compression with value for money. Project scheduling will be required to reflect impacts of site working restrictions including social distancing and staggered shift patterns plus any longer-lasting impediments to productivity.
The focus in any project will switch to the design and procurement phase, ensuring that the client retains the commercial benefit as well as the downside risk. Pre-planning, front-loading of supply chains and setting the right price for the project upfront will better support the integration of risk and delivery certainty in a redefined procurement model.
Collaboration, innovation and integration
The move towards MMC looks set to disrupt existing contracting models. By shifting from cash flow to profit margin led models, procurement for MMC will allow a better allocation and managing of risk. Vertical integration of the manufacturing process and specialised Integrated Project Insurance will create greater assurances in the market that MMC and collaborative working methods have the stability and assured outcomes desired.
But innovation in procurement won't succeed until there's a progressive shift in thinking from the focus on input to output cost. Procurement models will then be empowered to enable innovation and deliver predictable and assured outcomes. Integrated procurement, in turn, supports the greater use of MMC and delivers skilled and resilient jobs in modular construction.
The Covid crisis has seen construction firms undergoing an unprecedented level of digital transformation. Going forward, clients could make decisions based on a digital marketplace with standardised designs cascaded to a number of manufacturers with a dynamic pricing policy. This, in turn, could accelerate the use of technology from design to assembly. Digital literacy should also become a baseline for team management, resilience and contingency planning.
The new normal
As construction heads into a new cycle, the industry needs to learn the lessons of the Covid-19 crisis and use this information wisely. This unprecedented lockdown has created a space for MMC to flourish and for the construction industry as a whole to reset. Building resilience, innovation and good practice going forward will help to break the vicious cycle in which the industry has been trapped for too long.