Offsite production used to be a “nice to have” process. Now it is becoming essential to business survival. This statement may cause a few raised eyebrows, but it is just one reality emerging from the changes taking place in the current business climate. Before the unprecedented disruptions caused by the response to the 2020 worldwide pandemic, disruptions were already triggering an overhaul in construction industry processes.
The June, 2020 McKinsey report, “The next normal in construction,” posits nine shifts that will occur at scale to radically reshape the construction ecosystem. They are:
- Product-based approach – Rather than starting from the ground up, construction projects will involve standardized products that are produced offsite in factories then shipped to the project location and assembled onsite.
- Specialization – As companies need to distinguish themselves to flourish, they will begin to specialize in a chosen field, cultivate skills and knowledge around it and develop their unique competitive advantage.
- Value-chain control and integration with industrial-grade supply chains – Using strategic partnerships and innovation, companies will refine the ways they add value to their portion of the construction project.
- Consolidation – Specialization and technology investments are more efficient when framed in a larger scale, so consolidation of companies will continue.
- Customer-centric business models and branding – In order to appeal to and retain customers, companies will build brands around quality, reliability, service, and warranties.
- Investment in technology and facilities – Construction manufacturing will require factories, machinery and equipment. Research and development will be important for specialty branding.
- Investment in human resources – Developing and keeping inhouse talent, particularly digitally-savvy talent, will become more important as companies specialize and become more invested in technology.
- Internationalization – The global footprint of companies will increase as they grow and specialize in products that may be in demand across the world.
- Sustainability – To comply with ever-expanding concerns around environmental impacts, companies will be required to use different materials, supply chains, equipment, and safety measures.