DOES THE OFFSITE INDUSTRY NEED AN ‘ELON MUSK’?

Some would say the offsite industry is currently in mild turmoil – an exaggeration or fair comment? Darren Richards, Managing Director of offsite experts Cogent Consulting, has a pragmatic view on what makes the market tick.

The recent House of Lords Built Environment Committee criticised the Government for lacking a clear strategy on MMC investment, saying it ‘too easily accepted that the way to encourage MMC was through undirected and non-strategic investment of public money’.

I should declare an interest here – I am not head of some remote business that parachutes in and corrects things when they go wrong. To coin a crude phrase: I have skin in the game. I love this dynamic industry – it has been my life for 30 years. I am not some ‘textbook’ consultant or media commentator with little or no actual experience. I have run major offsite facilities, developed new and groundbreaking offsite technology and have invested heavily in the offsite industry.

Big brains with deep pockets

Comparisons are often drawn between the offsite manufacturing and the automotive industry. But we must ask if the electrification of vehicles would have been as fast without the intervention of Elon Musk. Love him or loathe him, no one can deny his genius. His transformative impact on the automotive industry through Tesla cannot be overstated. He has done this by popularising electric vehicles, advancing battery technology, building charging infrastructure and pushing autonomous driving capabilities. Something we are trying to replicate here in the UK with little success.

Hype cycle

For those not familiar with the Gartner Hype Cycle, it is a graphical presentation of specific emerging technologies through five distinct phases – technology trigger, peak of inflated expectations, trough of disillusionment, slope of enlightenment and plateau of productivity. Whether it be the electrification of vehicles or the development of an iPhone – the graph pretty well remains the same across all emerging technologies.

What I am trying to say here is that it is a natural progression – the way of things. With offsite construction we have been through the inflated expectation phase and are now in the trough of disillusionment. But it will not last, with the right government intervention – we can soon start climbing the slope of enlightenment before we reach our equilibrium and plateau of productivity. There is no turning back, what is the alternative – we do not have a Plan B! We know we need offsite construction – what we need now is a plan from Government.

Natural selection

There are many theories I could quote here but I will refrain and focus on just one – evolution. With offices in Shrewsbury – the birthplace of Charles Darwin – I understand that extinction is part of evolution. Some adapt and survive by developing coping and collaboration strategies, others do not.

Anyone who has tried to get a product tested will know testing facilities are struggling to keep up with demand. The Government has invested public money in established and new entrants to the market. These companies have developed and tested a vast array of panelised and volumetric systems in total isolation. There is a ‘cutthroat’ competitive approach. My view is that the market is not established enough for these tactics. Margins are slim, vast factories need robust pipelines of work to stay afloat – then disaster strikes and the residential market crashes. The perfect storm which many have not survived. But this issue is not exclusive to the offsite industry, traditional construction firms are taking a battering, and many are going under.

But we could do things so differently. Seismic for example helps clients use offsite manufactured solutions and sub-assemblies while promoting standardised design practices and fostering maximum interoperability. The aim is a more efficient and interconnected industry that spans onsite and offsite manufacturing options with greater vertical integration.

Currently there is no standardisation across offsite technologies, particularly in the manufacture of volumetric modules. Each manufacturer produces to a different size and specification. So, would the Government not be better to invest in collaborative ventures involving new ‘big players’ into the UK market who have sizable budgets working alongside the most innovative of established companies with the specific remit to deliver a range of standard housing systems? A bit of a spread bet approach which limits exposure.

What does success look like?

Whilst the spotlight firmly shines on the residential sector, the commercial volumetric modular industry has it ‘virtually nailed’. Yes, there has been the odd exception, but it is not the norm. There are some big players in this space who have been around for decades – predominantly serving the healthcare and education sectors. We do not have to look far. With specialist skills and tried and tested technologies, these firms know what works well for their construction clients and form long lasting relationships, so it can be done.

Unlike SpaceX, this is not rocket science. We need to use the right technology for the right applications across low, medium and high-rise sectors. We need collaboration and standardisation throughout the supply chain, with greater integration, openess and genuine collaboration.

The Government has invested millions – but as identified by the House of Lords Built Environment Committee – throwing enough money and see if it sticks is not a recognised strategy. In my opinion we need an Offsite Thinktank – an industry backed initiative bringing those with vast actual manufacturing, product development and offsite construction experience together to help the government practically define a way forward, for the good of homeowners, social landlords and tenants. And I think we can do this without the intervention of Elon Musk.

To read the full article: offsitemagazine