Productization in Modular Construction: How Tomorrow’s Marvels Are Made

The construction industry is in a period of exciting growth as the demand for various facilities continues to rise. For example, McKinsey estimates that the global demand for data centers could rise annually between 19% and 22% from 2023 to 2030. Addressing future artificial intelligence (AI)-related workloads would require at least twice the data center capacity built since 2000 to be built in less than a quarter of the time¹.

However, the construction industry faces several key challenges such as skilled labor shortages due to retiring experts, increasing regulations around sustainability, high material costs, supply chain disruptions and weather unpredictability.

Additionally, productivity in construction has remained stagnant due to its reliance on craft production with bespoke designs and on-site, labor-intensive work. Sustainability is one of the biggest drivers for the industry as 40% of emissions are from buildings².

It's imperative that builders find innovative ways to build new buildings faster and more sustainably with increased safety and quality. Modularity in construction and offsite manufacturing will be how we get there.

The demand for modularity in construction is rising as part of the overall transformation sweeping the construction industry. With an estimated compound annual growth rate (CAGR) of 7.45% annually from 2024 to 2034, modular construction is predicted to reach a market cap of US$214.76 billion³. The market value for modular construction in new real estate construction alone could reach US$130 billion in Europe and the United States by 2030⁴.

Modular construction also enables greater efficiency; McKinsey reports that it can reduce project timelines by between 20% and 50%. Industry players that pivoted to modular construction have been able to improve the certainty of project scheduling and costs. As a result, they can complete and deliver projects faster and more efficiently than traditional construction.

Industry players that pivoted to modular construction have been able to improve the certainty of project scheduling and costs. As a result, they can complete and deliver projects faster and more efficiently than traditional construction.

Offsite manufacturing allows for the prefabrication of building modules in controlled environments. With this high degree of control, builders can reduce weather-related delays, improve quality and enable parallel work to save time.

Despite the rising demand for modular construction, builders still face several key challenges. They must balance the need to create cost-efficient products that match customer demand while managing thin profit margins and cash flow.

Our long history in the manufacturing industry has enabled us to streamline and optimize product design, manufacturing and logistics.

We have the unique experience of combining knowledge from both construction and traditional manufacturing industries and applying it to address the specific challenges of modular construction.

How do we pull this off? By bringing in methods that are commonplace in the automotive and aerospace sectors to streamline the construction process. Instead of looking at buildings as standalone projects, we treat buildings as an assembly of modular elements. This is an approach called productization.

With productization in construction, buildings are broken down into standardized, interchangeable building modules called virtual construction bricks. These bricks are connected through standardized interfaces, making them interchangeable. These bricks can be used to generate production drawings and detailed bills of materials. When the design is updated, these drawings and bills of materials can be automatically updated.

A detailed product virtual twin is created and used across all phases of the manufacturing workflow. This greatly reduces the design effort and time and helps with more precise cost estimation, helping decision-making early in the design phase.

Builders can further enhance flexibility and design variability through generative design and virtual construction bricks. This shift enables the construction industry to move closer to a more efficient, manufacturing-like approach.

All of this is done on the 3DEXPERIENCE® platform. It connects all stakeholders and suppliers across design, manufacturing and procurement, ensuring a seamless flow of information and enabling modular builders to master their prefabricated construction methods.