Modularization Benefits Owners Want

Spring 2015 Event Review

April 9, 2015

Modular has come a long way

Construction Owners Association of America Illinois Chapter held a “Mini Conference” on

Modularization for it’s Spring 2015 event. In addition to having two educational programs on

modularization, a select number of companies had table displays outlining their modular solutions.

Owners learned that although a modular approach to construction is not new, there are new tools and

process improvements that provide new building systems added business value – mainly related to

improved quality, reduced schedule and lifecycle cost savings, not necessarily lower construction costs.

Almost 80 people gathered at a Modular Mini Conference trade

show before the seminars and afterwards for a reception.

(Above) David Pikey, Hill Mechanical; Greg Meeder, COAA Illinois

Program chair; Rob McManamy, BuiltWorlds; John Jurewicz,

Walbridge Technologies.

(Right) COAA Illinois President, Chris Rogan, (University of Illinois)

with new COAA Illinois Board Member, Jim Zumerchik (Governor’s

State University) and Adana Jones, Cordogen & Clark.

COAA National and COAA Illinois Overview

The seminar began with COAA Illinois Board

Members Chris Rogan and Ken Kaiser detailing

benefits of involvement with COAA Illinois and

COAA National. Mr. Rogan, with a background in

construction management before being Assistant

Director of Capital Programs at University of Illinois

and Mr. Kaiser, Manager, Facility Renovation at

Northwestern Memorial Hospital, both emphasized

the value of local networking, locally targeted

programming, COAA National workshops, seminars

and webinars that focus owner representatives on

owner issues. (www.coaa.org) Ken Kaiser at podium describing COAA benefits.

Together, Rogan and Kaiser announced the Fall 2015 COAA Illinois Project Closeout event at the

University of Chicago will be similar to the national conference experience. The Fall 2015 program will

incorporate an interactive workshop with break out teams that come back together to share

experiences. More details will soon be available at: www.coaa.org/Membership/Chapters/Illinois

What’s New In Modular Construction?

The first seminar consistent of four fast-paced presentations of modular system case studies and

process descriptions with cost saving advice on what to do and what not to do. Four speakers gave

approximately 10-minute presentations and then answered questions as a group.

All presenters mentioned the importance of early coordination and collaboration of as many

stakeholders as possible. Seemingly insignificant details can have a big impact on the success of modular

systems as all the case studies described.

The first presentation by Tim Schubert, Integrated

Construction Manager, Mortenson Construction, (right)

highlighted a 15% schedule improvement with the use of

modular systems for a hospital project. Separate benefit-to-cost

ratios were calculated for bathroom pods, patient headwall

panels, prefab exterior walls, multi-trade racks and other

modular units. All but one system showed a positive benefit-to-

cost ratio and the total average was 1.13, indicating a direct

benefit from modular construction on the project.

A savings of 29,500 man hours for a direct cost savings of 6% was reported for the project.

Schubert noted that while modular construction delivered the project benefits, project success also

required Lean Construction practices, Building Information Models and integrated coordination.

Owner-focused presentations have to tell the truth – owners can’t think there is one Silver Bullet that

solves all problems. Since modular processes guided by Lean practices using Building Information

Models naturally contribute to holistic thinking, using modular to kick start early involvement of all

stakeholders can be an effective path to overall project success.

The second 10-minute presentation by John Hill

of Midwest Applied Solutions noted that while

modular air handling systems have been around

for a long time, one new area in modular

construction is ceiling systems for health care

and other complex building types. Mr. Hill

showed images and described how modular

ceilings for operating rooms and clean rooms can

include air handling, fire suppression, lighting,

boom mounts, imaging system supports and

other systems. John Hill cited improved quality as a main modular benefit.

Mr. Hill said that being able to work at waist height in factory conditions contributes to ceiling

installation in 1/6th the time compared to working overhead on site.

Just as importantly, Mr. Hill said prefabrication of air handling systems and other systems helps reduce

contamination and reduces the potential of hospital-caused infections and contributes to reduction in

accidental deaths. In the second seminar, York Chan, Administrator of Facilities for Advocate Healthcare,

made a point of saying reduced accidental deaths is a serious concern for hospital owners, who

appreciate assistance with this issue.

Zak Bottomly of Modular Services Company, (right)

noted Prefabricated is not necessarily “Standardized.”

Because Modular Services Company has been

prefabricating hospital patient room head walls for

decades, the company is able to customize elements

of a system depending on need. Close coordination

with designers to assure medical gas and electrical

outlets are in the right place are critical

concerns that can be addressed with proper

customization management.

The ability to assure local code compliance and worldwide ULI listings is a factor in ensuring accurate

customization in modular headwall construction and installation. When properly implemented, hospital

patient room headwalls can be installed on site in 15 – 30 minutes. Mr. Bottomly discussed projects that

have as many as 300 headwalls, leading to large, predictable savings.

The final 10-minute presentation by John Jurewicz, General Manager of Virtual Design & Construction,

Walbridge Technologies, was a multimedia experience with traditional case study slides, web site visits

and a high-quality production time lapse construction video on bathroom modular construction

processes and practices. (https://www.youtube.com/watch?v=Ko3qqATDa5Y ).

Mr. Jurewicz focused on a University of Michigan residence hall and included examples from other

projects. On the Munger Residence Hall, Mr. Jurewicz cited a

savings of 6 weeks from the use of 730 bathroom modules. The

use of Building Information Models to assist animation of

construction sequences, modular path and equipment

placement are key factors to success, according to Mr. Jurewicz.

He also listed issues to avoid. One of the most important things

is to consider modular from as early in the project as possible.

Modular construction requires a different thought process that

takes into consideration significant logistical details that can

make or break the savings goal. John Jurewicz saved 6 weeks on a project

As important as not having columns or stub outs in the exact wrong place, is the ability to gain more

savings with preplanning. For example, more time to think about system splices at the optimal points in

ceiling systems on one project could have contributed to increased savings of time and money.

A debrief session with all stakeholders to highlight successes and point out lessons learned in the

increasingly significant area of modular construction is a key part of internal modular project training,

Jurewicz said.

Mr. Jurewicz also showed a modular equipment installation in a historic building renovation. A masonry

wall was temporarily removed, a special dolly was built to move the equipment through the opening

with fractions of an inch to spare in all directions.

The short, dynamic focus on case studies showed that owners are very interested in gaining measurable

benefits from modular construction processes.

Modular Panel Discussion

The Modular Panel Discussion by Greg Meeder, COAA Illinois Program Chair and Equity Partner &

Regional Construction Group Practice Leader for the Holland & Knight law firm. The immediate Past

President of the Chicago Building Congress, Mr. Meeder expertly facilitated a lively and insightful

discussion on the current state of modular. He began by introducing York Chan, Administrator of

Facilities for Advocate Healthcare.

Mr. York confirmed that quality improvements and schedule reduction are valued benefits of modular

construction at this time. Eventually being cost neutral is a goal, but for now Advocate Healthcare is

satisfied with the ability to enter a market quicker and with higher quality facilities that support

measurable patient experiences.

If Advocate Healthcare can deliver a suite of operating rooms a few weeks earlier than is typical, it can

mean hundreds of thousands of dollars in revenue that was not possible without earlier project

completion with the help of modular construction.

Patient experience is now part of payment requirements, so healthcare construction owners are highly

focused on measurably satisfying facilities. According to Mr. York, modular construction supports this

goal with improved quality that is worthwhile even though the process is still not cost neutral.

Whether or not to use modular methods is not even a question. Mr. York says that modular is being

used on all $1.5 billion worth of construction projects Advocate Healthcare has in progress. A particular

benefit Mr. York noted was the ability to conduct airflow tests to make sure vents were as clean as

possible. The controlled, factory environment allowed assurance that air flow direction was not

negatively impacting quality during modular construction. Mr. York said that in an on-site, stick-built

environment, it would take longer to gain quality assurance for properly monitored duct installation.

Modular Panel left to right: Greg Meeder; Will McConnell; Don Flight; York Chan; Chris Mattus, and Larry Arndt.

Don Flight, Group Vice President for The Hill Group, noted that excessive checking in factory conditions

has led to 9,000 man hours of modular construction with zero incidences.

Mr. Chan immediately added that the goal for a healthcare construction owner is to have zero incidents

at all times. This desire for a high level of quality was reiterated by Mr. York saying Advocate Healthcare

is committed to having ISO certification for as many aspects of their facilities as possible. Their recent

acceptance of ISO certified bathroom modules meets this requirement.

Larry Arndt, General Manager of Mortenson Construction, noted a financial benefit of improved quality

from modular construction. Mr. Arndt said that higher safety levels and lower insurance rates are

possible when providing factory-quality construction conditions. These insurance savings are passed on

to the owner in direct cost reductions, Mr. Arndt said.

Mr. Arndt pointed out that owners are driving the move to increased modular construction. They are

looking for 8% – 12% reduction in overall schedule using modular, according to Mr. Arndt.

Chris Mattus with DIRTT indicated he knows owners who are experiencing 25% schedule reduction for

specific segments of modular construction. DIRTT provides a variety of modular components and

displays them in a showroom at 325 North Wells in Chicago.

Mr. Mattus pointed to an intriguing impact on quality due to modular construction. He indicated that in

on-site, stick-built construction approximately 60% to 70% of costs are spent on labor and 30% to 40% is

spent on materials. With modular construction, that formula flips and more resources are available for

higher quality materials.

Quality is also enhanced with DIRTT’s highly developed gaming visualization technology that provides

surprisingly accurate virtual walk-throughs that allow professionals to see potential problems and

solutions in modular projects.

Another cost savings Mr. Mattus mentioned relates to reduced waste on modular projects. On site trash is drastically reduced with modular construction. The result is less cleaning at project transition that can contribute to a 50% reduction in contingency expenses, according to Mr. Mattus. Will McConnell, vice president of HOK’s healthcare practice, has been reviewing European construction practices in conjunction with his London office. They found that some U.K. and German projects are being completed with as much as 83% modular or prefabricated construction of some type. Mr. McConnell sees this as one solution to the increased density in European cities and suggests that as major U.S. metropolitan areas increase in density that modular construction will only grow in importance.

Mr. Flight added that the skilled labor shortage is addressed, in part, with modular construction. Not only is it possible to establish more controlled, repeatable factory processes, it is possible to maximize productivity. Mr. Flight stated that with on-site labor, getting 5 to 6 hours of productive work from one person’s 8-hour day is considered a good result. With modular factory construction it is possible to get a full 8 hours of productivity out of an 8-hour day. Modular construction raises union labor issues that are addressed in a number of ways. Advocate Healthcare is in the process of building a new bed tower at Christ Medical Center in Oak Lawn, Illinois. The Hill Group is manufacturing 93 bathroom modules in Franklin Park, Illinois while operating room ceiling structures incorporating HVAC, lighting, medical gas and equipment booms are being fabricated in Portland, Oregon. Mr. Flight said The Hill Group was willing to expand beyond it’s mechanical modular construction to build the bathroom modules in Illinois so drywall, taping and other trade jobs would stay in state, if not in the traditional, on-site union manner. This is one approach to the ever present issue of reducing labor costs while increasing quality. The Hill Group is using installation teams including carpenters and plumbers for the onsite installation of the bathroom modules. All presenters agreed that early involvement is the key to achieving the highest level of success with modular construction practices. Mr. McConnell noted that integrated practices were first applied to sustainability issues, but integration is now understood to be a chief component of successful modular construction projects. Mr. Mattus agreed that it is important to start the modular conversation early on in the project. He added that with highly refined interior wall modules, early discussions can lead to the cost neutral use of modular construction that Mr. York said is his goal for all modular activity. This far-ranging and informative discussion on modular construction processes and benefits ended with

a reception and networking around the table top displays from the following event sponsors:

The Hill Group

Walbridge Technology

DIRTT

Midwest Applied Solutions

Modular Services Company

Mortenson

Presentation Slide Samples

Midwest Applied Solutions provided a clear picture illustrating the difference between on-site stick built

operating room ceiling system and factory-built modular version of a similar system.

Computer Numeric Controlled machinery is at the heart of many modular systems.

Walbridge’s construction of 730 bathroom modules for university housing saved the project 6 months.

On-site installation needs to be planned from the beginning of every modular project.

“Made in the USA” or “Made in Michigan” notifications are a value of modular construction.