With decades of offsite experience to draw on – and an early contributor to the Offsite Magazine – Cogent Consulting is hugely busy advising on a wide range of offsite delivery issues across the UK and overseas. We asked Managing Director, Darren Richards, about the present state of the market.
Q: 24 issues ago you described a radical vision for the way new homes to be built with offsite playing a leading role. Is that vision still radical? Or has offsite entered the mainstream of clients and specifiers minds?
Darren Richards (DR): Whilst the industry has made significant progress there is still an abundance of manufacturers in the offsite space that are not embracing digital engineering and design for manufacture and assembly (DfMA) principles at the pace required. The concept of common digital front-end configuration and optimisation software entering our everyday work is quite some way off. Naturally, there are always exceptions – pioneers and trailblazers – but these companies on their own will not create a big enough impact to bring the housebuilding and offsite manufacturing industry collectively in to the 21st century. I think that ‘radical vision’ could still be another decade away but I am determined to see it mainstream in my working lifetime.
Q: How have you seen the offsite industry change and develop over the last 4-5 years? There seems to have been a change in tone in how offsite is perceived at the highest levels since the publication of Mark Farmer’s ‘Modernise or Die’ review?
DR: Without doubt the offsite industry has changed significantly over the past 5-years or so – mainly down to the numbers of new entrants into the manufacturing space and the consistency of messaging from Government. I am concerned that many of the new players in the sector do not really understand the magnitude of the challenge that our offsite manufacturing industry faces in scaling up and transitioning from ‘cottage industry’ to key player, and we are yet to see many significant successes at scale.
Q: So much of the offsite conversation surrounds developing new systems to deliver residential projects – what other sectors can offsite provide a better and more sustainable built environment?
DR: Offsite technology is adaptable and capable of providing solutions across all vertical markets from housing to infrastructure and everything in between. We have seen significant uptake of offsite techniques in education and now healthcare – infrastructure has embraced offsite techniques for decades and now with major projects such as Hinkley Point, Heathrow and HS2 we will see even greater innovation and upscaling. Retail, leisure, hotels and student accommodation sectors have all been huge consumers of offsite technology too and offsite methods are now the norm – not even debated but now assumed. One of my biggest frustrations is the lack of technology migration and knowledge transfer from some of these vertical markets across to housebuilding, so we end up seeing a lot of ‘reinventing’ the wheel instead of ‘evolving’ the wheel.
Q: Volumetric modular seems to have become a popular system of choice above panelised systems in the housing sector. Is that true?
DR: Volumetric modular techniques do grab most of the headlines. My view is that this is because people ‘get it’ without too much requirement to look under the bonnet. They understand the level of completeness and see the process of module installation as being relatively straightforward, whereas understanding panelised approaches requires a much more detailed understanding of the technology and the design co-ordination and logistics processes involved.
In terms of volume, the numbers of homes delivered using offsite techniques is still dominated by panelised approaches – timber frame, SIPS and light steel frame – in a magnitude way above the numbers of volumetric modular homes being delivered at this point in time. The danger in making comparisons is that you are tempted to play one offsite technology or system off against another, when the real question should be ‘how much total market share does offsite technology have of the housebuilding sector’?
Q: You advise many across the construction industry on developing businesses at all levels from the creation of factory facilities to product development – what are your top five pointers when advising clients on entering the offsite arena?
DR: Firstly – do not underestimate the task in hand. Regardless of the technology, a new initiative or manufacturing investment requires deep pockets and specialist skills. Too many new entrants into the sector are ‘men of straw’ attracted because of the obvious groundswell of interest and the theoretical money-making opportunities at hand. Entering the offsite manufacturing sector requires time, money and resource to be planned accurately and significant contingencies need to be allowed for – especially around areas of testing, validation and certification.
Secondly – not over-complicating the manufacturing operation from the beginning. The key is to get the offsite system right and then to consider mechanisation and automation once the product/system concept has been embedded.
Three – don’t skip any steps in the establishment process. Make sure that the prototyping and pre-production phases are not short-circuited, as these are the most valuable part of the process. The danger is that you develop a technology that is fantastic in-situ but very difficult to manufacture, and the key is to find a blend that suits the business objectives.
Fourthly – when looking at DfMA focus on the ‘Assembly’, as there is a massive and indigenous component manufacturing supply-chain in the UK with skills and expertise to support many of the new offsite manufacturing businesses. So there is no point in bringing processing, cold-rolling, laminating, finishing processes inhouse when it is often more efficient to tap in to the expertise and resources that is offered by the supply-chain. All too often we see an obsessive approach to ‘bringing it all in-house’ and in many instances that just serves to create a more complex operating model and a much higher demand on finances to fund all of the Capex required.
Finally, engage the best expertise that you can to support you on your offsite manufacturing journey, to avoid making the same mistakes as those that have gone before you. Cogent has been advising the offsite manufacturing sector for over a decade and most of our team have worked around the world in offsite manufacturing for over 25-years – this pool of expertise should not be underestimated.
Q: There have been many new entrants to the offsite market since 2015-16 and they are now rubbing shoulders with some familiar names and legacy firms – what can they learn from each other in a small but competitive market?
DR: Knowledge sharing and collaboration is key to the future success of the offsite sector. The real competitor is ‘traditional’ construction not necessarily the next manufacturer down the road. The offsite sector has low double-digit market share of the total construction pot, so we have a long way to go before we need offsite manufacturers to directly compete with each other. Yes, there will be tenders and frameworks to compete for, but many in the offsite sector realise that to collectively create a game-changing environment for the industry to prosper, then collaboration is key. The offsite technology trade associations have a significant role to play in facilitating this, and many of the new entrants in to the offsite manufacturing sector need to be nurtured so as not to unintentionally damage the industry with product or system failures, poor quality systems etc. The key is to get the Associations to set the entry level high and to help bring new entrants (and some old laggards) up to the minimum acceptable level of operational and quality standards.
Q: Albeit stymied recently by everything surrounding the Coronavirus pandemic – what can we expect to see in the next 4-5 years in the offsite arena? The integration of digital tools seems an obvious growth area.
DR: The integration of digital tools is definitely a game-changer, but much of this is often seen to be out of reach for many offsite manufacturers, on the basis that there is a requirement to embed and mature much more fundamental operational processes and procedures before getting too carried away with digital tools. Digital tools are a fantastic means to an end – they permit external architects and engineers to access and work with offsite manufacturing details, but often the fundamentals are missing or inadequate. These fundamentals include a robust approach to Bill of Materials generation, labour time planning and lead time analysis, stock control systems (ERP) and basic production capacity planning tools that are the spine of any well-run manufacturing or assembly operation. No matter how forward-looking we are in terms of digital tools – BIM, AR/VR, AI etc – unless we get the fundamentals right it is a futile exercise. The key is to ensure our offsite manufacturing base in the UK is world-class in its adoption of reliable and robust manufacturing operations and repeatable processes, before getting too carried away with the front-end digital tools. My view is that our industry has a long way to go to get the basics done well and to move away from the ‘construction’ mentality to the ‘manufacturing and assembly’ mentality and culture. If we get the basics right then the adoption and rollout of the more sophisticated digital tools will be much easier and will come at a pace.
For the next 5-years? I would say lots of mergers and acquisitions, supported by an increasing influx of ‘outside cash’ as some of the leading offsite manufacturing players begin to show decent financial returns and the venture capitalists and well-heeled private investors begin to see the medium to long-term potential of the sector. I hope we will see much greater migration of personnel from the automotive and aerospace sectors to the offsite manufacturing sector – bringing with them an abundance of knowledge and skills around worldclass manufacturing processes and protocols – this will be the real gamechanger for our sector. Whatever happens, I am certain that we face an exciting future and that our industry will continue to flourish.
For more information visit: www.cogent-consulting.co.uk