Fast revenue – Prefabrication helps construction profitability

Fast revenue

Use of wood elements delivers faster revenue

The average productivity of manufacturing companies has risen steadily since the 1990’s, while the productivity of construction companies has stayed flat or even declined. McKinsey reports that the productivity gap between the two industries is currently 1.7-fold. The next 15 years will be crucial, as it is estimated that urban land area will triple between 2000 to 2030. 

“Construction companies are typically operating with thin profit margins, thus relatively small reductions in costs can produce significant positive impacts. Depending on the size of the investment, different degrees of prefabrication may pay off even if their prices would be higher than those of building on site”, says Matti Kuittinen, architect and researcher from Aalto University. Faster building projects lead to faster revenue, thus saving time and reducing construction costs – without compromising quality – are the main drivers for the use of Metsä Wood’s prefabricated Kerto® LVL (Laminated Veneer Lumber) elements.

Fast revenue – Prefabrication helps construction profitability 
 

Less delays, more profitability

For profitability, delays are worse than budget over-runs

Construction projects are often finished late. When delays are compared with budget over-runs, time plays a much greater role in the profitability of a project. According to construction professionals interviewed by McGraw-Hill Construction, almost 70% of projects that used prefabricated products had shorter schedules, and 65% had decreased budgets.

“Utilizing every prospect in reducing overproduction, transportation, rework and waiting times helps in decreasing construction costs. Lean construction through prefabrication is an opportunity to meet the future needs of the global construction sector”, says Juha Toimela, Vice President responsible for Business Operations in Finland from construction and development company SRV.

Projects with prefabricated products

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Prefabrication helps construction profitability 
 

Lean methods increase productivity

Modularity can play a key role in construction productivity 
 

Modularity can play a key role in productivity

The economic status of construction companies benefits from the use of wooden modular building elements. In Sweden, the lean approach to managing prefabricated house factories was found to hold a potential for boosting productivity from 10% to a staggering 230%. Waste generation, greenhouse gas emissions and claims during the construction process decrease the productivity of the construction sector. Construction professionals reported that almost 80% of projects where prefabricated products were in use produced less waste.

“We should be focusing more on the speed of the process without compromising quality. Shorter building time and easier design leads to faster revenue, but is also an opportunity to meet the rapidly growing needs of urban construction and sustainability demands at the same time”, Toimela notes. 

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Smart shortcuts lead to profit

How to improve building times and quality simultaneously

Perhaps the greatest potential for reducing construction costs and improving building times and quality simultaneously lies in smart construction process shortcuts. The risk of accidents and consequent delays on the construction site could be avoided by assembly of prefabricated elements. Metsä Wood’s Kerto® LVL prefabricated products are designed to meet this need. Since fast construction systems are based on the concept of erecting the roof rapidly from prefabricated modular elements, they also provide fast weather-proofing for construction sites.

“Up to 1,500 m2 of Kerto® LVL roof elements can be assembled in a single day. In order to make the building process smooth, prefabricated products need to be delivered just in time”, Kuittinen from Aalto University asserts.  An example of rapid building can be found from the construction of the headquarters of the Diesel-Benelux Company in Amsterdam. An extremely tight building schedule of only nine months resulted in choosing Kerto® LVL roof elements – beneath which the rest of the construction work could be finished on time.

Quick facts

  • ​Lean approach to construction is needed: by 2050 almost 70% of humankind will live in urban areas.
  • Time is money: almost 70% of projects using prefabrication had shorter schedules, 65% had decreased budgets.
  • Less waste: almost 80% of projects using prefabrication produced less waste.
  • Fast and robust weather protection: up to 1, 500 m2 Metsä Wood’s Kerto® LVL roof elements can be assembled in a single day.

 

 

​Matti Kuittinen is Research Manager and Architech in Aalto University, School of Arts, Design and Architecture. His research and lecturing work at Aalto University is focused on wood construction, carbon footprinting, LCA, energy efficiency and humanitarian aid.

​Juha Toimela, M.Sc. (Tech.) is the Vice President responsible for SRV’s Business Operations in Finland and also CEO of SRV Construction Ltd.

​SRV is an innovative construction company that provides end-to-end solutions and assumes customer-focused responsibility for the development, construction and commercialisation of projects. SRV operates in Finland in Helsinki Metropolitan Area, as well as in growth centres Turku, Tampere, Oulu, Jyväskylä, and Joensuu. SRV also operates in St. Petersburg and Moscow, and in Estonia.

Open Source Wood initiative

Open Source Wood: an open platform for innovative wood construction

In June, Metsä Wood launched its Open Source Wood project, where architects, designers and engineers are invited to join forces to innovate and share information relating to construction based on wood elements.

This project is a continuation of the Plan B campaign, and is aimed at expanding the market for urban wood construction by combining expertise from different countries. Metsä Wood is promoting element design by offering EUR 30,000 in prize money for element-based designs that make innovative use of Kerto LVL.

Read more and join the initiative

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