Beruflich Dokumente
Kultur Dokumente
To cite this article: Nick Blismas , Christine Pasquire & Alistair Gibb (2006) Benefit evaluation for off‐site production in
construction, Construction Management and Economics, 24:2, 121-130, DOI: 10.1080/01446190500184444
Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained
in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no
representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the
Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and
are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and
should be independently verified with primary sources of information. Taylor and Francis shall not be liable for
any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever
or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of
the Content.
This article may be used for research, teaching, and private study purposes. Any substantial or systematic
reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any
form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://
www.tandfonline.com/page/terms-and-conditions
Construction Management and Economics (February 2006) 24, 121–130
Evaluating to what extent a component or building system should be produced off-site is inadequate within the
industry. The potential benefits of off-site production (OSP) are commonly cited when justifying an OSP
approach, yet holistic and methodical assessments of the applicability and overall benefit of these solutions, to a
particular project, have been found to be deficient. Common methods of evaluation simply take material,
labour and transportation costs into account when comparing various options, often disregarding other cost-
related items such as site facilities, crane use and rectification of works. These cost factors are usually buried
within the nebulous preliminaries figure, with little reference to the building approach taken. Further, softer
issues such as health and safety, effects on management and process benefits are either implicit or disregarded
within these comparison exercises. Yet it is demonstrated that these issues are some of the most significant
benefits of OSP. A series of case studies demonstrated that evaluation focus is almost solely on direct material
and labour costs of components, without explicit regard for the wider cost or soft issue implications of OSP on a
project. The paper argues that until evaluation is more holistic and value-based rather than cost-based, OSP
uptake in construction will be slow.
usually possible due to interdependencies between Table 1 Clients’ perceptions of the benefits of OSP (from
elements, trades and resources. These complexities Gibb & Isack, 2003)
make the derivation and use of holistic and inclusive
Benefit Description (* indicates high incidence)
evaluation methods difficult. The unlimited combina-
tions of components, site conditions and degrees of Time Less time on-site—speed of construction*
OSP do not permit the derivation of a comprehensive Speed of delivery of product
evaluation system; however sufficient common factors Less time spent on commissioning
exist for a degree of valid comparative analysis. Guaranteed delivery, more certainty over the
programme, reduced management time
A pilot study by Pasquire and Gibb (2002) demon-
Quality Higher quality—on-site and from factory*
strated that decisions to use OSP are still largely based Product tried and tested in factory
on anecdotal evidence rather than rigorous data, as no Greater consistency—more reproducible
formal measurement procedures or strategies are More control of quality, consistent standards
available. This paper extends the work of Pasquire Cost Lower cost*
and Gibb (2002), seeking to provide depth to their pilot Lower preliminary costs
study, which merely identified the problem. The Increased certainty, less risk
current benefit evaluation paradigm of those deciding Increases added value
between traditional and OSP alternatives is described Lower overheads, less on-site damage,
less wastage
Downloaded by [Selcuk Universitesi] at 11:55 30 January 2015
Table 2 Rating of benefits from highest to lowest according dangers, they nevertheless provide useful sources of
to importance and likelihood (from Gibb & Isack, 2003) research data. It is contended, with Kenly (1998), that
construction management research does not make
Benefit (from most highly rated Cost-related sufficient use of existing research for meta-analysis or
to lowest rating)
even re-analysis. The case data provided by Walsh
1. Minimises on-site operations (2001) and Vaughan (2001), whilst supervised by the
2. Reduces congested work areas authors, was ‘pre-analysis’ data as obtained directly
and multi-trade interfaces from their data sources. This paper is therefore not a
3. Minimises on-site duration b meta-analysis in the pure sense. It simply uses appro-
4. Improved health & safety by
priate data collected in the same research field for
reduction and better control
alternative analysis.
of site activities
5. Produces high quality or very Table 3 outlines the main features of the six cases
predictable quality finishes individually. The cases have been labelled A to F to
6. Minimises number of site personnel a maintain anonymity. Ideally, a case study requires
7. Benefits when only limited, theoretical sampling (see Yin, 1994; Blismas, 2001) for
or very expensive on-site labour cross-case comparison, although a more random case
8. Enables existing business continuity choice has been advocated by Simister (1994). This
9. Can cope with restricted site
Downloaded by [Selcuk Universitesi] at 11:55 30 January 2015
modules approach for installing and other from ‘manufacturing’) chose to undertake works
pre-assembled multi-service off-site with pre-assembled units
distribution modules within
an office block development
B Plant room Cost comparison exercise between Cost consultant for chain Vaughan, 2001 Used historical data of previous
system traditional and pre-assembled of stores, module costs project for comparison with a
boiler & cooling plant room provided by manufacturer view to implementing on a
procurement for a particular new development
project
C Skid-mounted Cost exercise between typical Supplier of pre-assembled Direct data Standard solutions marketed
boiler traditional installation and an mechanical services by the manufacturers as saving
off-the-shelf standard boiler time over traditional installation
system, for marketing purposes
D Chilled beam Cost and benefit evaluation of Partnered supplier of Direct data Framework agreement with the
supply various options for chilled beam ductwork and chill-beams client dictated that justification
supply into an airport terminal was required for chosen solutions
produced to satisfy client
requirements
E Toilet pods Cost comparison of traditional Cost consultant and suppliers Walsh, 2001 The high number of options
(residential) bathroom construction versus of the main contractor within this development
pre-assembled bathroom pods decreased the benefits of
produced for bidding using the economies of scale
tenders from other suppliers
F Toilet pods Cost comparison of traditional Cost consultant and suppliers Walsh, 2001 Highly repetitive with low
(office) bathroom construction versus of the main contractor variations and therefore ideally
pre-assembled bathroom pods suited to pre-assembly
produced for bidding using
tenders from other suppliers
Blismas et al.
Benefit evaluation for off-site production
Table 4 Analysis and cross-case comparison
Downloaded by [Selcuk Universitesi] at 11:55 30 January 2015
Case A Traditional 3 3 P 3 7 7 7 7 7 7 P 7 7 7 7 7 3 2 16
Pre-assembly 3 3 7 3 3 3 3 7 7 7 3 7 7 7 7 7 7 0 16
Case B Traditional 3 3 P 7 7 7 7 7 7 7 P 7 7 7 7 7 2 2 16
Pre-assembly 3 3 P 7 7 7 I I I I P 7 7 7 7 7 2 6 16
Case C Traditional 3 3 3 3 3 3 3 7 7 7 7 7 7 7 7 7 7 0 16
Pre-assembly 3 3 3 3 3 3 3 7 7 7 7 7 7 7 7 7 7 0 16
Case D Traditional 3 3 3 3 3 3 3 3 3 3 I 3 3 3 7 3 14 1 16
Pre-assembly 3 3 3 3 3 3 3 3 3 3 I 3 3 3 7 3 14 1 16
Case E Traditional 3 3 7 7 7 7 7 7 7 7 ? 7 7 7 7 7 2 0 16
Pre-assembly 3 3 7 3 7 3 7 7 7 7 3 I 7 7 7 7 5 1 16
Case F Traditional 3 3 I I 7 7 7 7 7 7 P I 7 7 7 7 2 4 16
Pre-assembly 3 3 I 3 7 7 7 7 7 7 P I 7 7 7 7 3 3 16
Total number of 3 12 12 4 8 5 6 5 2 2 2 2 2 2 2 0 4 68
Total number of P or I 0 0 5 1 0 0 1 1 1 1 7 3 0 0 0 0 20
Total 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 192
P5included in the prelims; 35explicitly specified in cost or benefit comparison; I5implied or mentioned in documentation; 75apparently excluded from cost or benefit comparison;
?5information unavailable.
125
126 Blismas et al.
Downloaded by [Selcuk Universitesi] at 11:55 30 January 2015
are based on documents that directly refer to the Emphasis of current methods
element being compared.
Case D clearly incorporated a more holistic view of In order to assist the analysis of benefit measurement
both cost and value within the comparative assessment methods further, a categorisation model was devel-
exercise presented. Case C included broader cost items oped. The model is presented graphically in Figure 2.
that are usually included with preliminaries, in order to The categorisation model comprises of two aspects of
give a much more inclusive and realistic cost of each measurability, identified as hard–soft and simple–
option, yet failed to elaborate on other issues such as complex, explained in Table 5 (from Pasquire et al.,
health, safety and sustainability. The remaining four 2004). All methods employed within the construction
cases were clearly focussed on the simple cost aspects of industry to evaluate various building approaches may
labour and material costs, with further implied inclu- be categorised into one of the quadrants of the model.
sions. Extracting the totals from Table 4 further, Classic cost-based methods, for instance, fall within the
depicted in Figure 1, reveals the emphasis of the cases bottom half of the model, while undocumented or
more clearly. implicit decisions tend to fall into the upper half of the
The cross-case analysis of categories in Figure 1 model.
clearly demonstrates the emphasis of assessments. Taking the analysis of Table 4 above, each case is
Labour, materials, and transport are pre-eminent in placed within the model depicted in Figure 2. All cases,
all cases. Transport is a more prominent factor in OSP other than D, quite obviously reside within the ‘simple–
considerations due to the increased volumes being hard’ quadrant of the model—strongly emphasising the
moved and the associated increase in cost and logistical behaviour of the industry. Case D described the
effort. However, apart from these three explicitly decision process in a graphic decision flowchart, which
included cost items, all other issues are evident in less was accompanied by cost data, advantages and
than half the cases of the study. ‘Softer’ issues such as constraints for each of the options being considered.
health, safety, quality, human and environmental This document, however, was produced at the request
factors are almost totally excluded. Important cost of an experienced and progressive construction client
items relating to quality and rectification of works are organisation, and may therefore indicate that clients are
generally implied within the totals, being accounted for the primary drivers for change in the way the
in the ‘claims’ that will be negotiated at the end of the construction industry views value.
project. The emphasis of the cases is clearly within The problem appears to be that the industry is still
simple monetary measures that can be easily grasped highly influenced by the historically powerful tendering
and calculated. framework, in which tenders are assessed and decisions
Benefit evaluation for off-site production 127
Implications
Value
Figure 2 Categorisation of several different evaluation There continues to be a climate, within construction, of
methods utilised to assess the benefits of OSP over traditional benefit evaluation based almost solely on cost. Non-
construction approaches
Downloaded by [Selcuk Universitesi] at 11:55 30 January 2015
(2002). For example, the overheads and set-up costs of developed and value is achieved for the benefit of all
the factory are covered within OSP unit costs, whereas parties.
the equivalent costs for traditional site-based
approaches are often ‘lost’ in principal contractors’
Processes
preliminaries. Furthermore, in line with a free-market
economy, many manufacturers and suppliers seek the The cases examined also indicate that consideration of
maximum price that the market will sustain. Therefore OSP as a building option appears to be retrospective.
prices quoted may not reflect the actual costs, and thus The cases imply that the building and its components
hinder sensible comparison with conventional con- were designed in a ‘traditional’ manner, with OSP
struction (Gibb, 2001). being considered as a late alternative. The cross-case
A wider account of value-based measures including comparisons were therefore based on existing rate-
quality, health, safety, sustainability, and logistics is based costs, thus forcing the OSP alternative into a
suggested as the means of broadening the comparative direct cost comparison. Case D was the exception,
exercise from the one-dimensional cost basis to a multi- demonstrating a pre-design comparative exercise,
dimensional value-based system. The cases clearly view which enabled more combinations to be explored in a
value as solely constituted of cost items, which holistic and balanced manner.
perpetuates non-value and inefficient means of ascer- CIRIA (2000) asserted that OSP benefit is best
Downloaded by [Selcuk Universitesi] at 11:55 30 January 2015
taining optimal building solutions, and consequently realised when OSP is considered in the early design
disregard the potential benefits of OSP. stages and not as an alternative to a completed
‘traditional’ design. This suggests that the implications
for OSP are compounded, as not only are the benefits
Knowledge not accounted for, but a lack of appreciation of the
The shortcomings of the cases examined are further processes involved for OSP may result in those
demonstrated by the general lack of particular doc- purported benefits not being realised. Indeed success
umentation regarding OSP decisions. All cases, except in OSP requires changes to the design, evaluation and
case D, lacked a set of documents or information that construction processes. Case D suggests that this may
recorded the decision and the process of deciding on only be achieved through the efforts of progressive
whether to use OSP on a project. This leaves an clients.
organisation with no basis for measuring performance
or capturing project knowledge, thus reducing its scope
for improvement. Without structured formats for Conclusion
capturing project data, knowledge is lost within and
between projects. Records of a decision are usually The greatest challenge facing construction practitioners
scattered among different team members and do not is that of achieving the balance between effort
reliably encapsulate all the main aspects of a decision. expended to predict benefits and the value provided
Databases of historical data cannot be constructed, by the evaluation method employed. The advantages of
rendering organisations stagnant rather than growing evaluating benefit in monetary terms are that they can
and evolving entities. be closely linked to profitability, and compared directly
Further, without the provision of a framework for the with other financial measures. However, monetary
methodical assessment of OSP on a project, the measures are inadequate for items that cannot be
opportunity for benchmarking and performance mea- directly attributable to an element, such as health and
surement is lost. Measures of several different aspects safety, or sustainability and wider human factors.
of value offer the basis for performance measures and Reducing all such factors into costs involves a large
indices. Project teams are then able to track their, and degree of speculation, which renders the final cost
the element’s performance throughout the project life figure highly uncertain. A comparison between such
by referring to the foundational document that uncertain figures will not provide any level of con-
recorded the expected value to be gained. The fidence to decisions derived from them. Essentially
auditability of such a framework also allows teams to such exercises are no different from scoring systems to
trace their decisions and ascertain where realised value which numbers are assigned so that a final numerical,
may have departed from expected value. The potential and ‘objective’, albeit questionable, outcome is
for teams and organisations to learn are rooted in produced.
systems that are able to explicitly capture reasons for This paper has argued that the decisions required to
decisions usually made implicitly by team members. choose one method of construction over another
They provide a focus around which innovations are involving OSP are too often based on cost rather than
Benefit evaluation for off-site production 129
value. OSP is hindered by the industry’s perception Industries, Construction Industry Research and
that value is best ascertained using traditional rate- Information Association, London.
based measuring systems. Softer issues such as health BSRIA , compiled by Wilson, D.G., Smith, M.H. and Deal, J.
and safety, sustainability, and effects on management (1999) Prefabrication and Pre-assembly—Applying the
Techniques to Building Engineering Services, Briefing Note
and process are either implicit or disregarded within
ACT 2/99, Building Services Research and Information
their evaluations. The cases provide persuasive evi-
Association, Bracknell.
dence of the deficiency within present benefit evalua- CIRIA, compiled by Gibb, A.G.F., Groak, S., Neale, R.H.
tion methods used to compare traditional and OSP and Sparksman, W.G. (1999) Adding Value to Construction
solutions. Using six cases, it has been shown that Projects through Standardisation and Pre-assembly in
‘simple–hard’ evaluation approaches predominate Construction, Report R176, Construction Industry
when OSP options are assessed in a construction Research and Information Association, London.
context. The increasing complexity and value asso- CIRIA, and principal author Gibb, A.G.F. (2000) Client’s
ciated with OSP components dictates that a more Guide and Toolkit for Optimising Standardisation and
robust, transparent and inclusive methodology is Pre-assembly in Construction, Report CP/75, Construction
required for ensuring that a more precise assessment Industry Research and Information Association,
London.
of the options is made.
Egan, J. (1998) Rethinking Construction, The Egan Report,
The discrepancy between current evaluation systems Department of the Environment, Transport and the
Downloaded by [Selcuk Universitesi] at 11:55 30 January 2015