Abstract

With the growing demand for affordable housing, increasing construction costs, and a heightened concern for energy-efficiency, builders across North America have recently begun to re-examine their options for the delivery of housing. This trend has resulted in a growing interest in prefabricated building systems, particularly panelized construction. Despite its advantages, the use of prefabricated homes in Canada has been slow in gaining acceptance. While many macroeconomic and regulatory factors have been cited as reasons for this, little attention has been paid to the nature of the homebuilding industry, its operational structures and the ability of the product itself to accommodate the builder's needs and preferences.

A survey of prefabricated panel systems was conducted to examine the characteristics of the products and determine their weaknesses in acquiring acceptance by the average builder. Cost, craftsmanship, technical performance, durability, flexibility, and ease of assembly were analyzed for 9 types of wall systems. Although the products were found to be technically superior to conventional construction techniques, the accompanying disruption to the standard operational routines were considered to be obstacles in achieving widespread acceptance. Cost savings were usually limited to 2-3% of the total cost of a semi-detached unit.

This paper discusses the issues involved in integrating prefabricated systems into the residential construction industry, and examines the impact of several physical and practical system characteristics on their potential for acceptance.

Introduction

It is commonly believed that the prefabrication of housing holds many advantages over conventional construction methods. The assembly of units, panels or components under factory-controlled conditions yields a higher quality product which generally results in more energy-efficient homes. Due to the quick and efficient assembly which takes place on-site, the effect of poor weather conditions, particularly in cold climates, is reduced as is the potential for damage due to inadequate material storage and vandalism. Clean-up time and material costs are also reduced due to less wastage, construction management and trade coordination can be simplified, and the need for large teams of skilled on-site labour for multiple-unit construction is substantially lowered.

With the growing demand for affordable housing, increasing costs of material and labour, and a heightened concern for energy-efficiency, builders have recently begun to re-examine their options for the delivery of housing. The depressed economic climate in recent years has given builders an incentive to look into new markets and explore alternative construction methods. This trend has resulted in a growing interest in prefabricated building systems, particularly panelized construction.

Despite its many advantages, the use of prefabricated homes in Canada has been relatively slow in gaining acceptance. The number of manufactured homes sold in Canada currently account for 15% of total housing starts, as compared to 43% in the United States (not including mobile homes) and 90% in Sweden [1,2]. The reasons for this are varied and remain a question of debate. Industry fragmentation, lack of economies of scale, negative public image, discriminatory zoning practices, inadequate capital and financing, declining housing demand and unstable markets, lack of access to prime locations, limited marketing capabilities, and poor consumer servicing and warranties are reasons most often cited [1,3]. It is odd that the biggest proponents of prefabricated housingignore the single most important source in the production of homes: the small builder. Ultimately, the potential for any building material, product or process to be implemented successfully depends on its ability to gain acceptance from the average builder. Addressing the builder's needs and preferences seems to be an essential starting point in the promotion of manufactured housing.

A survey of prefabricated panel systems was conducted to examine the characteristics of the products and to determine their weaknesses in acquiring acceptance by the average, small builder. Several factors pertaining to quality were analyzed, and cost estimates were drafted and compared to traditional methods of construction. What follows is a discussion of the nature of the home building industry, and the requirements for integration of prefabricated panel systems based on the survey.

Methodology

A list of panel manufacturers was compiled consisting of 304 companies from across Canada and the United States. About one third (105) of these manufacturers were contacted and asked to provide basic information on their products and services. Responses from 55 of these were received, 10 of which dealt exclusively with commercial construction, and were therefore omitted from the evaluation. The systems' quality was examined in technical and practical terms, including craftsmanship, technical performance, durability, flexibility, and ease of assembly. Interviews were carried out with 5 of the manufacturers to determine the economic, marketing and practical implications associated with using their product. Cost estimates were obtained for 1, 10 and 30 specific designs for a semi-detached unit, 1000 sq. ft. in living area. These estimates were then compared to others using conventional construction methods [4].

Prefabricated Panel Systems

Nine types panel systems applicable to wood-frame residential construction (the standard in North America) were selected and divided into three categories: (1) Open sheathed panels (using conventional construction methods), (2) Structural sandwich panels, and (3) Unsheathed structural panels (figure 1).

Open sheathed panels are available in almost as many different variations as conventional wall construction. The most common systems are built either with 38 x 140 mm. studs with plywood or waferboard sheathing, or with 38 x 89 mm. studs and extruded polystyrene sheathing. In either case, the panels are delivered open on the interior to facilitate the installation of electrical and/or plumbing services. Batt insulation is usually installed on site, and is sometimes supplied by the manufacturer.

Structural sandwich panels consist of a foam core rigid insulation which is laminated between two facing materials. In its most basic form, the sheathing materials may be either plywood or waferboard. More complete options offer exterior and/or interior finishes which replace the basic facing material and become an integral structural part of the panel. The core material contains pre-cut electrical chases, and may be either of four different types of insulation: moulded bead expanded polystyrene, extruded polystyrene, polyurethane or polyisocyanurate. A variety of options are available for the joints between the panels (figure 2).

The unsheathed structural panels are built using a combination of wood or metal structural elements combined with rigid foam insulation infill, usually expanded polystyrene. There are four basic variations of these systems available (with different configurations for their structural elements) which provide a continuous thermal break and/or an air space on the interior of thepanel. Horizontal chases for electrical wiring are often cut into the insulation to accommodate electrical wiring.

For each of the systems, there exists a possibility to "add value" to the panel by integrating a larger portion of the building envelope during fabrication. Added components vary from air barriers to exterior and/or interior finishes. The extent to which the panels are finished has different implications for the builder and the worker who will select and install the system.

Prefabrication and the North American Home Building Industry

The organizational structures which characterize the construction industry are complex. In the housing sector, the building process has evolved into a concise, unique system of operation which has been streamlined over the years and has locked itself out of the general industrial framework. This, in turn, has led to a general reluctance to accommodate change, particularly when it involves an innovative product or method [5]. It has been estimated that it takes about 9 years from the time a technique or product is introduced to until it gains widespread acceptance [6]. Although prefabricated panel systems have been on the market for many years, they are still perceived by the average builder as a new method of construction. Because of the industry's special characteristics, the study of any prefabricated building system should be undertaken with due consideration given to the builder's interests. Several characteristics of the homebuilding industry merit some discussion.

Most of the organizations involved in the production and delivery of housing are small, localized, often family-owned operations. In Quebec, 90% of all construction companies have 5 or less employees on the permanent payroll [3,7]. The resulting vulnerability to economic cycles has led to cautious assessment and possible rejection of unfamiliar products and techniques. Furthermore, it has forced the builders to reduce continuing overhead to a minimum, thus discouraging largecapital investment and assembly of large central staff [8]. Consequently, every possible management, administrative and design role is often being assumed by the individual builder despite a lack of training.

This small-scale attempt at task integration has evolved into a "closed system" of operation, whereby an inner circle of communication develops between the builder, the subcontractors and, occasionally, the end user [9]. The system is a tightly-knit, interdependent arrangement of resources with well-established operational procedures and simplified lines of communication. Within this closed system, most, if not all of the construction work is subcontracted, and there is a tendency for the builder to work repeatedly with the same team of subcontractors. An informal working relationship is formed with steady pricing practices and working standards, which simplify the lines of communication even further. A builder may therefore be reluctant to force acceptance of new system or product on a subcontractor for fear of losing him. Similarly, a builder may prefer to maintain contact with a long-time supplier to ensure reduced pricing privileges.

The process becomes streamlined to the point where the need for detailed working drawings is diluted, since each of the team members is quite familiar with his particular task and the builder's working standard. The result is a highly efficient operational standard, which carries through to the product. The units produced by an individual builder are usually very similar in plan, construction methods and materials with stylistic differences which can be integrated without changing the basic design. An architect's assistance is no longer required, with the builder opting instead for the cheaper services of an independent or in-house technician. Design decisions are often carried out by the builder, sometimes through informal verbal communication, and last-minute changes are often made on-site in response to a client's request. The general reluctance of homebuilders to accept change appears to be based on a fear of disrupting this process and complicating the traditional routine.

The situation is aggravated by the very nature of the market. During a lifetime, the purchase of a home represents the largest single personal investment an individual is likely to make. The decision to buy a particular home is influenced by a variety of factors including culture, personal taste and popular trends. The potential resale value of the home, and therefore the house's mass-appeal, is also of major concern. The home builder then needs to consider the preferences and aspirations of a speculative home buyer. An innovative product may be rejected if it is felt that these aspirations will be compromised, even though the builder may be personally convinced that the product itself is superior.

Given the industry's conservative nature, there are two basic requirements which must be met if any prefabricated system is to gain widespread acceptance. First is the need to respect the economic self-interest of the builder. Any product that does not, in one way or another, increase the builder's return on investment runs a high risk of being rejected. This potential can be increased either directly through a reduction of material, labor and overhead costs, or indirectly by providing a product which is more marketable than what the builder is currently offering. Secondly, in advocating innovation one must acknowledge the conservative nature of the industry, and work from within the existing "closed" system of operation, whereby the builder's established operational routines are not disrupted.

Cost Implications

The ability of prefabricated systems to increase the builder's profit-making potential will vary significantly depending on the type, size and configuration of the housing units. Designs which lend themselves to simplicity and repetition are more likely to result in attractive savings for the builder, since they optimize the prefabrication process. A previous study compared construction costs for single-family detached units using modular prefabrication to those using conventionalconstruction, and found that there were no significant savings to be gained through prefabrication [10]. A more recent study commissioned by the Société d'habitation du Québec and the Canada Mortgage and Housing Corporation found that savings of up to 6% are possible with some types of prefabricated panel systems for both single-family detached and rowhouse units [11]. In any case, the question is whether these savings in themselves provide sufficient incentive for the average builder to adopt a new or unfamiliar method of construction, and whether they will translate into savings for the consumer, thereby enhancing the product's marketability.

For uncomplicated designs, it is safe to say that prefabricated panel systems can, for the most part, provide a competitive alternative to conventional construction. The savings that are possible, however, can vary substantially depending on the type of panel system and the degree of prefabrication. Estimates for semi-detached housing obtained from 5 of the manufacturers indicated that some savings, usually in the area of 2% to 3% of the total unit costs are possible (figure 3). Prefabricated systems using conventional construction methods were found to provide the highest percentage of savings over their equivalent value using stick-build methods. The use of basic construction materials and standard assembly procedures appear to make these systems competitive. The prefabrication process is relatively uncomplicated, since no special cutting , gluing or fitting is required, as is the case when rigid foams or plastics are used.

The price for the system becomes less competitive as the materials and fabrication process become more sophisticated, as reflected by the more expensive costs of structural sandwich and unsheathed panel systems. The features which give these systems superior performance potential also increase production costs. The panels' exceptional resistance to air leakage and heat flow is achieved by virtue of its continuous and rigid sheathing and/or insulation, and carefully crafted joint systems. The additional material costs and more complex fabrication processes often reduce the savings to marginal amounts. For unconventional types of panels such as these, savings comparable to those using conventional prefabrication can nevertheless be achieved by increasingthe degree of prefabrication, as with the addition of interior and/or exterior finishes. It should be noted, however, that this notion of "adding value" to the panel system is most easily achieved with those systems that have some form of rigid insulation in their core, in which chases can be pre-cut to accommodate electrical wiring. Systems with batt insulation or an air space are less likely to be built this way unless conduits (or wiring) are integrated into the panel. Otherwise, the installation of electrical wiring on site may become a cumbersome process.

Many of the savings which resulted can also be offset by delivery, installation and inventory costs, as well as by higher fixed costs associated with keeping a plant under operation during the winter months when the demand is low. Economies of scale through prefabrication were not evident for most of the systems investigated. The discounts offered by the manufacturers for orders of 10 and 30 units were generally comparable to, if not less than, those which could be expected from traditional construction methods.

Although some savings could be realized with most of the systems evaluated, the impact that they might have on the market remains debatable. Total cost reductions of 2-3% may not be sufficient to lower the selling price of a house. In quantities of 30 or more units, however, compound savings could be significant. Even with marginal savings in the order of $1,500 per unit (for a $57,000 home), a total savings of $45,000 may be attractive to some builders.

System Quality and Marketability

The fact that a product is new or innovative is not in itself a reason to expect an increase in sales volume, unless it is perceived by the consumer as being of superior quality relative to the price. For prefabricated housing, this is not always the case. Although one of the biggest advantages of prefabrication is the higher standard of quality that can be achieved under factory-controlled conditions, the manufactured house continues to be perceived negatively by the general public. While the reasons for this are varied, the fact remains that people prefer to see their homes built from scratch rather than arriving by truck. The problem is somewhat less severe in the case of prefabricated panels. Because they only form part of the building frame, there may be a tendency to accept these systems as components, much like prefabricated joist or roof truss systems. As such, the panel systems' quality stands a higher chance of being used as an effective marketing tool.

The quality of prefabricated wall systems can be evaluated in terms of three interrelated characteristics: craftsmanship, technical performance and durability. The systems' craftsmanship governs its potential to achieve consistent levels of performance from one application to another. The wall's technical performance, particularly with respect to its air-tightness, will affect the rate of deterioration due to condensation. Fire and sound resistance, critical for dividing walls, will contribute to the quality of the unit's interior environment. The panels' durability depends on the various materials' resistance to several elements, and on the probability of exposure to these given the panels' design.

Prefabricated panel systems are generally capable of outperforming conventional construction methods for most of the criteria. Structural sandwich panel systems, particularly those with urethane or isocyanurate foam, provide exceptional insulation value for a given thickness. This is due partly to their continuous thermal break across the joints, particularly with the double spline variation. These panels also result in the tightest assemblies, due to their exceptionally well-fitted joint systems and the possibility of extending the exterior skin below the floor level, allowing for a continuous barrier across the end of the floor section. High levels of performance are easy to accomplish due to the inherent simplicity of the design. The critical nature of the lamination process, however, requires a relatively high level of quality control. Among the questionable characteristics is a susceptibility for these systems to ridge at the joints because of inadequate allowance for thermal expansion, and a possibility of panels delaminating [12].

The unsheathed structural panels appear to provide good performance in all respects, but benefit from few extraordinary characteristics. The panels' biggest advantage is that they can overcome the inadequate workmanship which may be found in conventional construction without resorting to very unfamiliar building techniques. The use of expanded polystyrene foam between the structural elements significantly improves the performance of the wall in that area which is a key failure point in conventionally-built walls: discontinuous insulation and air barrier caused by improper installation. Tight friction-fit joints and the ability to accommodate electrical boxes without interrupting the continuity of the insulation provide an attractive advantage over conventional construction methods. Furthermore, the relatively simple manufacturing techniques (some make no use of adhesives) to provide continuous thermal breaks and adequate air barriers make them likely to achieve consistent performance levels.

Conventional construction and prefabricated panels using conventional construction were considered to have the lowest overall technical performance potential, due to the lower thermal resistance of batt insulation, thermal bridging caused by the framing members and the unsealed joint that occurs between the insulation and the studs. The biggest advantage of conventional panels appears to be its durability, due not as much to the materials' ability to resist deterioration as to the panel's ability to retain its structural integrity. Because of their lack of dependance on the insulation material for structural stability, temperature variations, rodents (which have been known to burrow through rigid foams) and chemicals have less of a damaging potential on open sheathed panels. While their susceptibility to moisture damage remains higher than that of other systems, these panels benefit from the fact that the interior of the wall can be relatively easily inspected and repaired. Stick-build methods were the least preferable option due to the high variability of craftsmanship and susceptibility of materials to damage from inadequate site storage.

Practical Limitations

Because the units' attractiveness is largely a function of personal taste and priority, the contractor's ability to offer a range of options to the prospective buyer is important. The ease with which a unit can be adapted to meet particular demands, both during the manufacturing and construction phases, is therefore a critical factor in the decision to adopt a method or product. In a recent survey of 107 builders and architects conducted by the Structural Insulated Panel Association, the most commonly cited reason why respondents might not use structural insulated panels was the concern about design limitations [13]. During the occupancy phase, the ability for the buyer to customize the dwelling, be it through modification or decoration, is also of concern. Any method which will inhibit or restrict this freedom should be interpreted as a deficiency, regardless of the technical quality which may be gained.

Another important practical requirement is ensuring that the product or method does not disrupt the existing operational efficiency and simplified lines of communication. The traditional construction process consists of a sequence of work packages of fairly narrow scope. The tasks of any one particular trade are well defined, and the work of one affects the performance of the other. Innovation may occur within any one of these, but its acceptance is hindered if it involves more than one trade, or if the change in one trade affects the work of another. If we divide the house into its physical building elements, a hierarchical arrangement of systems (envelope), subsystems (walls), components (windows) and materials (glass) would result. The larger the element, the greater the operational and physical interdependence between trades. Therefore, the effect of an element lower in the scale (eg. glass material) is less than it would be on an element higher up in the hierarchy (eg. window unit, wall system), making it more susceptible to change.

Flexibility

In the case of prefabricated panel systems, the product's flexibility is derived from the possible size and configuration of the panels and its openings, and from the ease with which electrical (and sometimes plumbing) services can be manipulated in the manufacturing, construction and occupancy phase. In the latter, this involves the ability to inspect and access the envelope's components for repair or replacement.

Because of their similarity with conventional construction, the open sheathed and, to a lesser extent, unsheathed structural panels were found to be the more flexible alternatives. Although structural modifications on site are limited, the installation of electrical and plumbing services remains relatively unrestricted. The inverse is true for the structural sandwich panels, which can easily be modified structurally but provide little leeway for the arbitrary placement of lighting and plumbing fixtures. After occupancy, modifications in this regard do not appear to be any easier.

The structural sandwich panels offer the highest flexibility on site, since openings can be cut in the panels at any time with relatively little reconstruction required. Although the size of the opening is limited by the panel size and the cutting operation may be more difficult, it is the only panel system which can have openings cut into it at any location even after the wall has been erected. The biggest drawback of the structural sandwich panel is its flexibility after occupancy. Inspection and repair of the insulation, which is a critical structural component in these types of panels, is difficult if not impossible, even if all finishes are removed. Furthermore, the ability to hang heavy objects or accessories which require structural support, such as grab bars, may be restricted, particularly after occupancy.

Integration with Standard Operational Routines

As subsystems, it is possible for prefabricated panels to integrate unobtrusively into the established operational routines. Most products that are available however, as they are currently being manufactured, distributed and installed, do not generally fulfill this objective. The practicality of the systems in this regard are governed by three factors: the number of building trades that are affected by the system (with respect to traditional stick-build methods), the level of skill required for assembly and the need for special tools (lifting, cutting and fastening).

The open sheathed panels' ease of assembly is a major asset for these systems. Although the idea of erecting panels rather than studs is not a familiar one for most builders, the use of standard components and construction methods facilitates both the assembly process and the probability of acceptance. Service trades are not affected by the system, and no special tools are required.

While the assembly of the structural sandwich panels themselves provides a simple, straightforward and efficient process, the unusual design of the system requires that some training be carried out. The integration of electrical services remains a problem, since higher cooperation is required between the carpenter and the electrician. Furthermore, special cutting tools, ranging from larger saws to hot knives, are required if any modification is to be carried out on site. The problem could be somewhat alleviated if the openings are cut in the factory, where unconventional skills and tools are readily available. Although some of the system's flexibility would be compromised, the simplification and reduction of on-site labour could lead to savings, while modifications to the openings would still be possible.

Because of their lighter weight and slightly more conventional design, the unsheathed panel systems appear to have a higher chance of being accepted in the market than the structural sandwich panels. From the cost estimates that were received for site labour, it also appears that these systems also benefit from the most efficient assembly on site. In some cases, however, what appears to be a simple assembly procedure may result in complicating, or at least extending the task for the builder. The absence of a sheathing material, for instance, requires that diagonal strapping be added to the exterior of the wall. Although not technically required, it is recommended that fiberboard sheathing membranes be installed on the exterior of the wall panels for acoustical reasons, detracting from the potential savings. Where a panel runs parallel to floor joists, a second joist may need to be installed close to the header joist to facilitate nailing of the wall panel (accessible only from the interior) and to improve structural performance. Otherwise, the wall would be anchored to the floor sheathing.

Conclusions

However conservative the homebuilding industry may be, it has generated an efficient method for housing production. The traditional reluctance of homebuilders to accept change appears to be based on a fear of disrupting this process and complicating the traditional routine. The introduction of change into this established process is difficult but possible. The ability of prefabricated systems to gain acceptance from the average builder will depend on their marketable, economic and practical characteristics.

Generally, prefabricated systems are predisposed to a higher level of craftsmanship and technical performance. Whether these characteristics of prefabricated systems can attract the average builder, however, remains questionable. Any product, innovative or otherwise, will gain support only when it promotes the interest the person who pays for it. In the case of residential construction, the party who eventually assumes the energy costs is not the builder, making itunlikely that the panels' superior energy efficiency in itself will attract the interest of the average builder. The ability of prefabricated systems to offer higher quality and energy efficiency for the same price or lower, however, can be an attractive and effective marketing tool for builders.

While some forms of prefabrication have been estimated to cost less than conventional methods, the magnitude of the savings can vary significantly depending on the size, type and configuration of the units. Prefabricated panel systems using conventional methods are generally capable of providing the highest percentage of savings over the equivalent stick-build value, indicating that system for system, economies through prefabrication are possible. The total savings, however, are often minimal, due partly to the relatively small fraction of the unit costs which are accounted for by the building envelope. The savings may in themselves not provide sufficient incentive for the average home builder to change their established methods of construction, or for the first-time buyer to be given an option which is substantially more affordable than what exits on the market.

Because the savings are marginal, other incentives for builders to integrate these systems into their normal, established operational routines need to be considered. One possibility has to do with simplifying the management of construction tasks. If the prefabricated system does not interfere with the normal operational routines of the average builder, the possibility of acceptance may be enhanced. This may be achieved in two ways: by designing the product so that it integrates smoothly with the site operations, or by providing a complete package, whereby a product is manufactured, delivered and installed by the same party.

For a component to integrate smoothly with the other construction operations, it has to be small enough so that the least amount of trades are affected. In the case of prefabricated wall systems, this is not entirely possible, since just about every trade on the site will, at one point or another,have to work on some component of the envelope. One way of reducing overlapping trades is to increase the prefabricated content of the panel, such as "added value" or closed panels which require only painting after installation. The second option provides a more tangible approach, whereby the panel manufacturer delivers and installs the envelope. If this same party could complete the structure (including floors and partitions), the construction task is simplified in that it virtually eliminates one of the trades altogether. Rather than adding to the number of parties which need to be coordinated, management for one of the trades, namely rough carpentry, could be reduced to a minimum.

This notion points towards the need for a more service-oriented industry. With a predisposition to higher quality and design aimed at achieving competitive prices, the only obstacle left in the acceptance of prefabricated wall systems is the conservative nature of the industry. As is the case with the introduction of any new or unfamiliar product, the challenge lies in educating both the builder and the buyer as to the advantages of prefabricated construction. The consumer needs to be instructed on the potential energy savings which could be gained from air-tight construction. The builder needs to be made aware of the fact that prefabrication may result in less material wastage and, consequently, lower expenses for clean-up and trash removal. The faster assembly process could translate into savings in overhead and financing costs. Construction delays due to poor weather conditions could be reduced, and the possibility of vandalism and theft is decreased since the envelope can be closed in a matter of hours. Specialized labour restrictions are reduced, as are warranty commitments, which are passed onto the manufacturer. Emphasis needs to be placed on how the construction task can be simplified, and, consequently, the managerial burden relieved.

References

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