This is a new entry in the blog Construction Physics‘s series on construction productivity. They argue that one reason it is hard to achieve economies of scale in manufactured housing is that there is a relatively small transformation from the raw materials to the finished product. And then transportation costs are high. This contrasts with an industry like oil refining, chemicals, or electronics where the opposite is generally true. I would have thought part of the answer would be that there is still a significant amount of site work required to install the manufactured housing – clearing the site, pouring the foundation, extending and hooking utilities and driving/parking areas, etc. But they don’t talk about any of this.

They talk a little bit about robots, and say the factories still tend to be relatively small scale and do not use robots as intensively as electronics or car manufacturing. One would think there would be potential gains in this area. But then again, if you are limited by the size of a shipping container, the more assembly of the parts you do in the factory, the harder the finished product will be to transport, and vice versa. So at some point, you need to figure out how to ship the pieces efficiently and assemble them onsite. And we don’t seem to have robots operating much in complex outdoor conditions yet. I assume that will eventually change.

The article also seems surprised that large homebuilders do not have much higher profit margins than smaller ones. But I suspect part of the answer there is that the smaller operators are much more lax on labor, safety, and environmental requirements. I also wonder if larger commercial/industrial/heavy construction companies might be realizing more gains from better scheduling, sequencing, and risk management using computerized systems/AI. Then there is inspecting progress and comparing what you are actually building to the plan in closer to real time, when issues are easier to correct than when the project is largely finished. Drones and even just AI processing large amount of camera footage should be able to help with this. Streamlining administrative processes like accounting and legal paperwork would seem to be another area where efficiency gains might be possible.