Prefabricated OffSite Modular Building Increases Profits.
You see the construction industry has not changed much since the 1940s. While China has shown us the power of increasing productivity on prices and margins, little has happened to the construction industry. According to Steffen Fuchs, partner at McKinsey & Company a research company, at the World of Modular conference in Florida, the manufacturing industry has seen a 1000 percent increase in productivity in the last 100 years, and the home building and construction industry have gained only 6 percent. The gain seen in construction is the modest gains associated with slightly improved product offerings for a home helping a very moderate boost in productivity.
Despite selling the most expensive and custom product on the popular market many renovation and construction companies barely eek by at around a 6.4% net profit (NAHB Statistic for 2014).
These low margins are also because, 98% of projects run over budget, over time, or both.
One of the fastest ways to address both the schedule and cost aspect of the construction project is to increase productivity. Every increase in productivity will positively impact net profit.
Prefabricated Modular Building, increases productivity, thereby increasing net profit. YOU MAKE MORE MONEY.
A modular builder is uniquely equipped to help traditional builders, multifamily builders, commercial projects, and single family home contractors increase productivity while providing guaranteed cost.
McKinsey Data has shown that a prefab modular build element has the ability to boost productivity by 10 times.
Think about this in a more traditional setting. The bathroom. Imagine the time spent doing a full custom shower with cement board, and dry pack base – what would that take? 2 weeks? Now imagine what Kerdi showers did, allowed the pan and waterproofing to be done within a day, then tile can be placed, doubling productivity, and finishing the project in a week. With Prefab, we could just crane the whole completed bathroom and bedroom into place in a few hours.
Okay maybe not the best analogy, but it shows both the traditional way of doing things, what a groundbreaking product can do for productivity (but at a high cost), and what a modular builder offers at a similar cost to traditional. You benefit because of cost control and concurrent building.
Concurrent Building Reduces Project Times By 90%
Off site builds offer a unique ability to both work on site prep and the structure at the same time. The foundation can be laid at the same time as the bathroom is being tiled. Backfilling can be done at the same time as kitchen cabinet installation.
So Increased cash flow, larger margins and price certainty are all offered by modular building.
So what is holding the industry up, why is it not everywhere? Although the Modular Building Institute (MBI) expects a 100% increase in modular usage in 5 years, the greatest holdback is the mindset. The traditional construction mindset without a deep understanding that a modular building process.
If you are in the business to make a profit, then educate yourself on the unique benefits of modular building. Do this by opening dialog with a Mountainview Rep and sharing your poject and learning what we can bring to your project and business.
One way to consider a prefab aspect is to treat us as another subtrade, but instead of delivering tile in a foyer of one home a modular builder can deliver the completed building once you have the foundations to set it on. It can be put in place in a day or two and is built stronger, quieter, and greener than traditional building all with a guaranteed price and huge increase in productivity. We want to be your partner is greater profits.
Offsites’ boost in productivity allows faster sales to possession time, meaning improved cash flow, and greater margins and profit.