Modular Construction

Modular construction is a rising trend in the construction industry. By prefabricating buildings in a factory setting, modular construction offers a modern alternative to traditional building methods that delivers significant cost savings, faster construction times, and sustainability benefits.

Despite these advantages, key factors and potential drawbacks to choosing modular construction must be considered.

Understanding Modular Construction

According to MarketsandMarkets, the market size for modular construction will grow from USD 104.1 billion this year to USD 140.8 billion by 2029, and the modular industry accounted for 6.64% of new construction starts, per the Modular Building Institute’s 2024 Modular Construction Industry Report. These statistics suggest that modular construction is picking up steam with contractors, manufacturers, and customers.

Modular buildings—also known as prefab buildings—are built, section-by-section, in a climate-controlled factory via an assembly line. Each section is transported to the building site, typically set in place on a permanent foundation, and assembled to specifications.

There are several modular construction and manufacturing methods. For example, Permanent Modular Construction (PMC) involves creating modules that remain in a fixed location. In contrast, Relocatable Buildings (RB) are temporary modular buildings that can be moved and reused as needed.

Additional strategies include Volumetric Modular Construction, Panelized Modular Construction, Flat Pack Modular, and Hybrid Modular.

Benefits of Modular Construction

Because modular buildings are built in sections in a factory setting, all materials, resources, and labor are concentrated in one place. This makes it an efficient manufacturing process that  protects all material and employees from adverse weather conditions. Modular construction  allows contractors and manufacturers to replicate the process for multiple projects, saving them time and money.

But fast, easy, and affordable building isn’t the only benefit.

Predictability: The initial estimates and labor requirements needed for modular construction are easier to determine due to the repetitive nature of using similar materials for different projects.

Less Expensive: Stick-built homes require materials and resources to be transported to a building site. With modular construction, construction elements (except for foundation requirements) are located in one, controlled factory setting, resulting in less labor, less waste, and reduced material costs.

Higher Durability, Energy Efficient: Modular buildings, constructed using durable materials and construction methods, can withstand the perils of transportation. They are also known for using quality windows and insulation, making them airtight and an energy-efficient option.

Greater Productivity, Faster Construction: Team members work on modular construction projects indoors and in one location, which means the project is not hampered by weather delays and helps teams be more productive. Projects are also completed more quickly, with estimates ranging from 30% to 75% faster than traditional construction (which includes the fact that site preparation and module creation occur simultaneously).

Eco-Friendly: Reduced material waste, carbon emissions, and site disturbance combine to create a more sustainable and environmentally friendly situation.

Drawbacks of Modular Construction

Modular construction benefits extend to single-family homes, office buildings, hospitals, schools, and more, but modular construction is not without its downsides.

• Customization limitations: Standardization can preclude personalization, though some manufacturers may offer a variety of floor plans from which to choose.
• Financing challenges: Contractors and manufacturers may encounter limited financing options, high start-up costs to build, stock, and run their modular construction factories and will still need to purchase and prepare land.
• Complex regulations: Zoning laws may differ for modular buildings and building codes for modular buildings bring different inspection and approval requirements.
• Transportation Difficulties: Large, heavy modular sections require cranes to get them on and off flatbed trucks and to place them into the proper position on the property.
• Misperceptions: Many people confuse modular construction with mobile and manufactured buildings, which are often seen as less durable and of lower quality than on-site-constructed buildings.
• Traditional Site Preparation: Modular constructed buildings still require traditional site preparation, which can lead to design, engineering, and labor challenges.

Modular/prefab construction is not immune to the workforce shortages and supply chain disruptions that continue to plague the construction industry.

At Acumatica, we’re passionate about helping businesses grow on their terms. Our unique business platform offers industry-specific capabilities that help contractors, manufacturers, and their customers enjoy a seamless, collaborative experience.

Communication between every stakeholder is essential when designing, producing, and constructing modular buildings. Acumatica’s award-winning ERP solution facilitates enhanced collaboration by providing updated, accurate information in a centralized system. Project details, customer information (including quotes, orders, invoices, payments, support cases, and service calls), and inventory management are located and managed from its one platform.

Acumatica natively crosses industry lines to empower contractors with tools to manufacture, construct, and service modular and prefabricated building components. Acumatica’s seamless integrations with certified, third-party applications and its native integrations—including payroll, CRM, inventory management, purchasing applications, and CAD or PLM applications that assist with modular component product designs—bring unparalleled flexibility.

Additionally, users can anticipate completing projects faster, lowering costs, controlling quality, and managing risk by:

• Streamlining project timelines and project material management (e.g., receipts and process material returns).
• Automating warehouse management processes.
• Synchronizing engineering bills of material (BOMs) with manufacturing inside Acumatica.
• Managing part revisions with Acumatica’s Engineering Change Control module (including tailored approval workflows).
• Automating warehouse management processes.
• Managing job site deliveries with Advanced Material Management.
• Expediting material demands for modular components through Material Requirements Planning (MRP), which also helps minimize waste and reduce material costs.
• Building custom bills of material and production instructions based on options and values with our Acumatica Product Configurator.
• Supporting quality control and risk management with Acumatica’s compliance requirement management features.

Ultimately, modular construction is a rapidly growing industry segment. Acumatica’s business-empowering solution gives construction and manufacturing professionals the features and functionality they need to succeed.

Contact our experts today to learn more about Acumatica and how we can assist your modular construction project.