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24 March 2019

Off-site manufacturing


Construction lags behind other industries in terms of investment in research and development, and consequently the rate of innovation is slow. However, the emergence and acceptance of Off-Site Manufacturing (OSM) at scale in the UK and USA in recent years signifies a shift that has the potential to significantly change the way buildings are designed and constructed. This shift comes at a time when the design process is undergoing significant change, with increased digitisation in the industry and manufacturing processes, and the increasing use of BIM modelling. Speed of delivery is a key element in addressing the housing shortage, and off-site manufacturing (OSM) plays a fundamental role in achieving this.

While OSM expertise existed in Ireland in advance of the economic downturn, it contracted significantly during the economic crash. But it is re-emerging in recent years, with manufacturers established in Galway, the Midlands and Northern Ireland. The opportunities for OSM in BTR are proven by its successful adoption in markets such as the UK, and this success is attributable to three key characteristics – repeatability, standardisation of design and speed to market.

Funding and cash flow

The funding and cash flow model for OSM differs from traditional on-site construction. Traditionally, payments are made for works completed to an acceptable standard on-site, with occasional payments for materials vested securely off-site.

The cost of entry associated with the OSM model is high, with significant up-front investment in manufacturing facilities, materials and labour required by the supplier. Current funding and cash flow models will have to change to address the risk that goes with this level of up-front financing. There needs to be better alignment between developers and suppliers, with early investment in research to develop and certify systems before they can go into manufacture. Inevitably, this will result in risk transfer towards the funder, with early financial commitment required well in advance of modules being delivered to and installed on-site. Pre-planning design costs are also likely to be higher. Pre-planning design costs are also likely to be higher. In the UK, construction information needs to be approximately 60% complete at planning stage for OSM, as against 35% in traditional building.


A critical issue with OSM is that very significant responsibility lies in the hands of a single entity – the module supplier. The timely delivery of modules is fundamental to schedule and project success - therefore, the traditional risk profile of a construction project needs to be examined to ensure there is fair apportionment of risk. Ultimately, this will mean the client taking a greater level of risk than in the past, when this was passed to the Tier 1 contractor and down the supply chain.

Successful adoption of OSM requires a high degree of collaboration, and early engagement between all parties, down to the supply chain, from the beginning of the design stage. 

  • Early supply chain involvement ensures that the building is designed for ease of manufacture and installation on-site. 
  • The apportionment of risk is fundamental in establishing and maintaining this collaborative working environment.

Standards and insurance

OSM can produce a higher quality finished product than traditional construction. A high standard of workmanship is only part of the story; the insurance industry needs to have comfort that the risks with OSM are known, defined and addressed. This issue has been tackled in the UK by the establishment of BOPAS (Buildoffsite Property Assurance Scheme).

Through a durability and maintenance assessment undertaken by BLP Insurance, formal process accreditation and a web-enabled database of details on assessed building systems and registered/warranted properties, BOPAS provides assurance to the lending community that innovatively constructed properties will be durable enough for resale for a minimum of 60 years. It would be very beneficial to the Irish OSM market if BOPAS accreditation is embraced.

Early design process

Traditionally, a very proactive and iterative approach has been taken to Cost Management, including the tendering of selected subcontract packages while the main construction works are on-site, engaging in value engineering exercises to optimise cost/value, and addressing overruns at various stages throughout the design and construction life cycles.

With OSM, a significant number of these opportunities occur early in the design process and cannot be re-evaluated once the modular system goes into production. This requires a change in approach to design management, and recognition that a significant aspect of the traditional change management process will not exist once design is released to manufacture.

Engaging experienced planners, design and manufacturing partners who understand the early-stage value management process, and have the expertise to evaluate options and value in a structured and timely way, is key to the success of the process.

On-site advantages

There is no doubt that OSM is a more efficient form of construction than traditional build, benefitting from the digitisation of construction, and leveraging available technologies to streamline the design and construction process. An emphasis on the decision-making process during the early design stages pays dividends once the development is approved and goes to manufacture.

The most significant benefits of OSM on-site include:

  • Construction works undertaken in a controlled factory environment - improved quality, working conditions and efficiency, and health and safety
  • Speed to site - modules are complete internally when delivered to site. Build time on-site is fast, with Buildoffsite estimating that it is up to 60% quicker than traditional construction
  • Rapid build time is particularly effective in city centre sites, reducing on-site time and construction disruption
  • Labour force on-site is significantly reduced, requiring a small, experienced crew to locate modules and connect services
  • Waste reductions of up to 80% are reported by the Financial Times, with a 95% recycling rate
  • Fewer mistakes are made, the work is more repetitive and snagging is greatly reduced
  • The requirement for early decision-making reduces the risk of delays on-site and additional costs, as there is more certainty and less scope for change

In a recent editorial published by the Financial Times, John Fleming, founder and chairman of Tide Construction is quoted that he is “convinced that Britain is on the brink of a modular revolution, predicting that 30 to 40% of construction will be built off-site within the decade.” Tide is currently building two of the tallest modular buildings in the world in London, at 38 and 44 storeys each.

It is only a matter of time before the OSM revolution is embraced by the Irish development industry.


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