Joseph Bond of the Kenzie Group says experience in the oil and gas industry shows how offsite manufacturing can improve efficiency and reduce disputes.
Joseph Bond
A growing number of house builders are making the switch to offsite fabrication to speed up construction times and bring much-needed efficiency improvements to the industry, but the benefits of a modular approach can extend far beyond getting the job done quickly.
The 2016 UK Performance Report by Glenigan revealed that only four out of 10 construction projects came in on time, and the rise of modularisation across the industry will reduce delays in 2017.
We have seen the benefits offsite manufacture has brought to the oil and gas industry first hand through the projects we have worked on in that sector.
By bringing increased flexibility and schedule certainty offsite fabrication has drastically reduced the number of disputes faced by firms on oil and gas projects, and this is an outcome that the construction industry must strive to emulate now that the Farmer Review of the UK construction labour model has strengthened the case for offsite solutions.
The causes of disputes
Just as they do in construction projects, delays to oil and gas projects happen for various reasons. Poor productivity, weather, quality issues, availability of qualified labour, trades and subcontractors not performing (in terms of time-keeping, quality of work, or both), and a regional schedule becoming unworkable can all lead to disruption or, in the worst cases, an unscheduled free-for-all.
We have worked on construction projects with as many as 2,500 interfaces, and figures like that are not uncommon across the industry. The inevitable outcome of such complexity on a project is frequent delays that lead to disruption claims, which are notoriously difficult to manage and even more challenging to process given the detailed records that are required to evidence them.
We assisted in the management of a project at a coal-fired station where an absorber tank was being installed to saturate emissions with chemicals as part of the scrubbing process.
The tank could have been manufactured offsite and dropped into place, but instead it was built in-situ and the job quickly came up against quality issues and delays. The outcome was a lengthy dispute in which a subcontractor lost out heavily – all because of a situation that could have been avoided through offsite fabrication.
Price slump solution
When a price slump in the oil and gas industry meant that projects were required to complete more quickly, modularisation emerged as an ideal solution to reduce costs and make schedules more achievable.
The building of everything from giant helidecks to oil rig living quarters to specific process equipment started to take place in factories away from sites, with larger modules either lifted in place in one piece or constructed on skids to be dropped in and connected on site.
This approach allowed for parallel working to take place without the limitations of square metres on site, and the advantages of construction taking place in a controlled environment – with a consistently high standard of skilled labour – soon began to bear fruit.
As well as speeding up completion times, modularisation enabled oil and gas contractors to offer schedule and price certainty and, crucially, lowered the incidence of delays and costly disputes.
Carrying out building works in a controlled environment where possible improves quality control and removes uncertainty. There is now an opportunity for the construction industry to reap these benefits as offsite fabrication continues to grow.
Embracing a new approach
The opportunity to reduce the number of subcontractors working on a site is one that appeals to any project manager. We have been involved in hotel construction projects where offsite fabrication has removed the need to have a floor tiler, a plasterer, a plumber, a joiner, a mechanical fitter and an electrician all competing for space on site, and eliminated the sequencing issues that can so easily lead to loss of costs.
Factory fabrication replaces the sequencing headache faced by project managers with a consistent, reliable process, and it removes the difficulty in sourcing skilled trades. Modular construction in a clean, safe environment, carried out by skilled labourers with extensive experience, dramatically increases the quality and consistency of product.
Offsite fabrication is not short of advocates who acknowledge the time-saving benefits it can bring to construction projects, but we believe that when firms begin to recognise the dramatic impact it can have on the avoidance of costly delays and subsequent disputes, we will see it become even more widespread than ever before.
The ability to offer schedule and cost certainty is no longer a pipe dream. All that is required is a shift in some of the construction industry’s attitudes towards a new way of working.
