In 2017, Mackenzie published “Reinventing Construction: A Route to Higher Productivity,” pointing out that construction had seen very little productivity growth over the past several decades. Improving productivity through better project management, digital tools and more integrated supply chains could unlock up to $1.6 trillion in additional global economic value each year, the report estimated. It highlighted industrialized construction methods — such as prefabrication, modularization, and standardization as key opportunities to change how buildings are designed and delivered.
Consequently, construction was flooded with outside capital. Investors looking to be a part of solving housing affordability and changing the ways buildings were delivered poured millions into “offsite construction,” the new buzzword that was going to change everything. During what would be called the PropTech — property technology — boom, modular home factories and 3D printed subdivisions sprung up across the country. Katerra, a Silicon Valley start-up with the ambitious goal of transforming construction by applying a manufacturing-style approach, raised $2 billion and employed 8,000 people at its peak.
However, the wave of enthusiasm around offsite construction began to cool as many of the most ambitious ventures struggled to deliver on their promises. Large modular factories proved difficult to keep fully utilized, projects often required more customization than factory systems allowed, and the economics of construction, thin margins, unpredictable demand, and fragmented supply chains proved resistant to the scale and standardization investors expected. Several highly funded startups ultimately downsized or shut down. Katerra, with its promise to disrupt and reshape construction, filed for bankruptcy in 2021.
So where are things now? There are still niche companies pushing new innovative ideas across the country finding their way to profitability. The PropTech boom revealed the most durable innovations were often incremental such as prefabricated components and panelized systems, rather than fully factory-built buildings.
Construction needs to evolve. We need to find ways to build more for less. Construction innovation has always had a long runway. It’s the pushing and pulling of the innovators who convince the more traditional operators to adopt new technology and methods. DC Material’s philosophy has made us the leader in Wisconsin. It’s our willingness to integrate robots, computer aided design and newly adopted workflow software with old school lumber supply that has made us stand out. We have embraced practical offsite solutions, like prefabricated wall panels that saves framing contractors 40% of their schedule time, resulting in a lower cost of carry and greater reliability for the trades that follow.
The future of construction isn’t about replacing traditional builders; it’s about equipping them. By combining technology, prefabrication and better workflows with proven trade knowledge, the industry can evolve in practical ways that truly improve productivity.
— Christopher Tatge, president, DC Materials LLC
Visit dcmaterialsllc.com to learn more.
