Australia needs to adopt better practices in order to unlock the benefits which are available through modern methods of construction (MMC), an industry conference has heard.

The Building 4.0 Annual Conference was hosted in Melbourne last week by the Building 4.0 CRC (Cooperative Research Centre). The event saw international and domestic leaders share their ideas about what is needed to increase MMC uptake and to derive best possible outcomes from MMC.

Professor Matthew Aitchison, CEO of the Building 4.0 CRC, acknowledges frustration about the slow rate of MMC adoption across Australia.

But he says that it is important to focus on solutions.

“People like me, particularly me, will (often) get up on stage and talk about all that’s wrong in our industry,” Aitchison said.

“And we have a massive pile on and grumble fest.

“What we wanted to do in 2024 is something slightly different. It’s not brush over the problems. It’s not to deny their existence. But it is to make sure that always when we’re doing that, we’re putting forward solutions that people can get behind.

“(It’s important) that we’re not involved in this race to the pits of despair that we often see in media about how there are actually no solutions.

“We do have solutions. That’s why it made perfect sense to call this conference ‘Making it Happen’.

“That’s exactly what we want to do.”

Otherwise known as industrialised construction, modern methods of construction or MMC aims to redefine traditional approaches to building and construction and instead adopt a way of operating that is more like that seen in the industrial or manufacturing landscape.

Key to this are offsite construction techniques, mass production and factory assembly, standardisation of processes and components, design for manufacture and assembly, prefabrication and offsite manufacture (including modular building) and on-site innovations such as 3D printing.

In short, MMC involves buildings and homes (or parts thereof) being mass produced in factories using standardised processes and components and then being assembled on-site using a kit-of-parts approach.

Success in Sweden

One country which has adopted this way of working is Sweden.

Across the Nordic nation, MMC accounts for roughly 20 percent of the market in multi-storey apartment construction and a whopping 90 percent of the market in detached home construction. In detached housing, the Swedish MMC ecosystem consists of around 100 significant enterprises of which around 10 to 20 are market leaders.

Speaking at the conference, Professor Jerker Lessing, a Swedish adjunct professor of civil and environmental engineering at Stanford University, said that moves in this direction started in his country around 100 years ago in 1922.

At that time, a government entity known as the National Building Bureau published a series of standard drawings for detached houses. This had a documented effect of 50 percent lead time reductions when using these solutions. Further momentum was added as companies begin to produce these solutions in factories – particularly the wall panels.

The next push occurred in 1964, when the Government launched a program to build one million new homes over ten years (in a population of 7 million at the time) in response to a housing crisis. Support of large-scale projects which used mass production was a key part of this strategy.

Numerically, the outcome was a success. In fact, the one million target was exceeded. However, the program had challenges as customer and market needs were overridden by the push toward mass production.

Interestingly, Lessing says that the most successful players in this space have been small and medium sized firms who have adopted various forms of specialisations. These companies have been able to move quickly – something which has proved to be more difficult for larger organisations with pre-established structures.

Finally, additional momentum was generated by the launch of a series of industry and academic research projects around 25 years ago. One such program involved around fifteen companies and focused on developing and evaluating processes, building solutions and business models and strategies to succeed in this area.

Sharing his learnings from these, Lessing says that five points are important.

First, industrialised construction or MMC must extend beyond simply being a production method and should involve an integrated approach to building in a more systematic way. This may involve adaption of business models.

Second, adoption of MMC takes time and patience to get right.

Third, MMC requires a customer centric approach that places the needs of the market at the core baseline. In this regard, Lessing encourages firms to start by first investigating and understanding the needs of their market and customers. Production methods can then be designed to best deliver upon these. Too often, he says that companies have attempted to adopt a new production method and then force the market fit around that.

Forth, success requires collaboration across the whole industry. This extends to developers, architects, engineers, contractors, suppliers and others.

Finally, companies should ‘dare to specialise’ and stick to their strategic approach around these specialisations.

In this regard, Lessing says that companies should avoid picking and choosing their approach on individual projects.

Learnings from Australia

Another speaker was Darryl Patterson, a member of the Building 4.0 CRC’s research team.

Patterson is currently working with Homes NSW on a program that aims to demonstrate the potential role and application of MMC in social housing delivery through a serries of ‘proof of concept’ projects.

As part of his career, Patterson spent 27 years working at construction, property development and property funds management company Lendlease. During the last fifteen of these, his focus involved looking at ways to improve productivity and to generate uplift through means such as MMC.

During his presentation, Patterson outlined several initiatives in which he was involved along with the lessons learned.

For example:

• Initial efforts to generate cost savings through use of cross laminated timber (CLT) did not yield the savings that were envisaged. Delivering two high-quality office buildings in Sydney, for example, the company tried to transfer lessons from one to be applied on the other. Whilst the two buildings appeared similar from the outside, however, there were in fact more than 600 design changes from one to the other. Accordingly, lessons learned from the first building were not transferrable to the second. This made use of CLT prove to be more expensive compared with conventional construction rather than cheaper.
• A factory that was constructed for the express purpose of producing CLT was sold at a value of a few cents per dollar invested after producing CLT for only four buildings across a period of roughly four years. Whilst the factory was well-equipped and staffed with excellent people, its design team had little by the way of agency in terms of overall building design decisions. The factory also did not have its own product and essentially became a custom fabrication service that responded to designs of individual clients. This was not the type of mass production arrangement that is needed to generated scale or significant cost savings.
• A modular bathroom pods manufacturing company that was established solely to provide pods exclusively for Lendlease projects was shut down after three years. Whilst the pods were of excellent quality, the number of different typologies had expanded from an initial target of four to a difficult to manage 38. Even though roughly 100,000 pods were produced and delivered over the three years, the number of typologies meant that the business was not able to achieve viability and the cost of production was no less compared to that which is associated with in-situ construction.
• Finally, in a more successful example, the company partnered with organisations In New Zealand to develop a connector system which enabled parts to snap together with no skill level. When an operator placed a structural column onto a structural beam, they merely needed to guide it into position on the post and it would click together to complete the structure. This technology has now been sold to a European connector manufacturer and is coming onto the market with a demonstrated improvement of a factor of between tenfold and ninety-fold. A critical lesson is that parts are – and should be – simple commodities which are manufactured at the lowest possible price point. The intellectual property then shifts to the connected which provide the interface between the parts.

In terms of strategies, Patterson says there are five conditions for successful adoption of MMC in Australia.

These are:

• Generating learning effects throughout the industry. This is necessary not only drive down cost but also increase the quality of output.
• Looking for consistency of solutions based on standardisation, interoperability and interchangeability that is needed to generate scale.
• Unlocking the potential to create a distributed supply chain based on interoperable parts.
• Starting with the design of the parts. When building Lego, Patterson says that you use the parts which are supplied in the set to construct the building. You don’t design the building first and then see if you have the parts to make it.
• Thinking about procurement models to leverage these parts. Potentially, this could involve procuring parts directly as opposed to procurement through the traditional model which happens underneath the builder.

To illustrate an effective approach, Patterson points to the example of Volkswagen in the automotive industry.

Whilst the company has multiple different brands which cater for varying market segments, all of these are based off the same modular platform that has moved all of the complexity into the engine bay between the dashboard and the bumper under a standardised approach.

Coordinated Research Necessary

As part of efforts to generate greater MMC uptake, Atkinson says that it is important to generate consistent innovation from government and industry throughout the construction economic cycles.

Toward this end, a key part of the CRC’s advocacy moving forward will be to call for the creation of a Research and Development Corporation (RDC) to act as a central point of action to coordinate policy and strategy around innovation across the sector.

According to Aitchison, RDCs have played an effective role in other industries and could draw upon learnings from overseas against which Australia could benchmark.

“I just want to say this has become a centrepiece of our advocacy work,” Aitchison said in his concluding speech remarks.

“And we’ll be working with our partners and our other friends that we’ve developed in this industry, other peak industry bodies, many of which are gathered here today, to put forward this agenda.

“(This will be done) not for any self -interested reason, but to solve all of those problems that we mentioned before.”

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