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Prefabrication: Follow the Money

The industry is adding more prefabrication and panelization capacity—when it makes sense.

Why should your company look into prefabrication and panelization? A recent Dodge Data & Analytics survey of contractors, engineers and architects learned that these professionals say overwhelmingly that off-site construction works.

Among the respondents to the Dodge survey, 90% said that prefabricating single-trade assemblies, and other off-site techniques, improved construction productivity, quality and scheduling versus traditional methods.


At least 80% of the respondents saw higher cost predictability, greater client satisfaction and less waste on jobs featuring prefab and modular construction when compared to traditional stick-building methods.


With that much good coming from off-site construction, can we expect more of it to occur? Yes. The Dodge survey found that modular construction, prefabrication and panelization activities will increase over the next three years.


And, wall and ceiling contractors are hip to the trend. Several AWCI member contractors are adding prefab facilities, purchasing additional fabrication equipment and planning rigorously for prefab activities when they bid on jobs.


Is that because prefab is the thing to do? Is it due to COVID-19’s new distancing requirements on job sites? Not really. It’s about following the money.

From PanelMax to Trumpf TruLaser

California Drywall Co. got into the prefabrication business about six years ago. That’s when the company bought a Grabber PanelMax, a machine that cuts and scores gypsum board without breaking the paper facing or damaging the core material. It has allowed California Drywall to manufacturer J shapes, knife edges, L corners, U corners, trifolds and other ready-to-install drywall assemblies. The list of possible shapes is long.


Prior to purchasing the machine, California Drywall had not done much off-site pre-assembly work. It was “a little bit here, a little bit there type of thing,” says Stephen Eckstrom, president of California Drywall. But the PanelMax opened the company’s eyes, Eckstrom says, and nudged the firm to look into kitting metal components and assemblies.


“They do a lot of free-standing pod projects at Google,” Eckstrom says about the type of buildings favored by the nearby tech giant, whose general contractors California Drywall works for regularly. Such modular structures are the perfect types of projects that favor pre-building parts and pieces, packaging them up and shipping them to job sites as kits to be assembled in the field “like Erector Sets,” Eckstrom says.


In time, California Drywall purchased a second PanelMax machine and a third PanelMax Hybrid CNC machine. The company also bought a brake machine, which bends flat pieces of metal to make specialized parts. Then came a second brake machine. Next, a small plasma cutting table, followed by a Trumpf TruLaser 2030 2D laser-cutting machine. Later this year, the company will begin roll-forming its own cold-formed steel studs and track.


“It’s not like I’m going to be a stud manufacture supplying other people,” Eckstrom says. “I’m just trying to supply myself with the hot orders that need a quick turnaround.”


Today, California Drywall touts a full-service prefab operation located in half of the firm’s 48,000-square-foot warehouse in Santa Clara, Calif.


Need a door opening framed? The firm now welds the jamb studs and builds the box headers under cover, no longer in the field. Got a project with multi-soffit drops? Those are manufactured off-site. A dozen to 16 employees work in the Santa Clara facility, and a second facility will soon be added, Eckstrom says.


Why expand? Because 12 fabricators can manufacture the same assemblies and components as 24 stick-builders in the field.


“It’s exponential what they can do,” Eckstrom says.


Follow the money.

“No Other Contractors Distracting Us”

Patrick Arrington at Commercial Enterprises, Inc. in New Mexico, tries to find prefabrication potential in the projects he bids.


“If I’m on a prevailing wage job and I can do the prefabrication off-site with non-prevailing wages, that makes a lot of difference,” Arrington says.


Large projects with repeating assembly designs present opportunities. Such projects might have common exterior walls that can be panelized in the company’s Albuquerque yard. What Arrington calls “the complicated areas” of a structure—its entryways, for example—can still be stick-built on site by a small crew of carpenters.


This happens frequently.


“We do a lot of steel stud framing,” Arrington says. “We cut our backing and blocking off-site. We build our box headers and stuff them with insulation off-site. Even in a non-prevailing wage job, if we can do it in our yard, it’s beneficial because we have a constant power supply and no other contractors distracting us.”


Is COVID-19 nurturing more off-site construction, so that fewer workers are needed on job sites? That’s too soon to tell, AWCI member contractors say. It will come down to basic dollars and cents.


“Dollars drive everything,” Arrington says. “Follow the dollars.”


One of Commercial Enterprises’ current projects is located in the Navajo Nation, 16 hours by truck from Albuquerque. The closest hotel is 80 miles from the job site. As a result, distance is the driving factor favoring off-site construction for much of this job. The company is building as many of the assemblies and components as possible in a covered area of its yard. By doing so, it’s closing the distance between workers and the project.


Setting up the prefabrication operation is not that difficult, Arrington says. What’s hard is knowing what to prefabricate, since many construction documents these days are rather ambiguous.


“We start many projects without documents,” Arrington says. “We’ll have 60%, maybe 90%, complete documents. We know we’re going to build with lots of change orders.”


One of the company’s current projects is a $545 million hospital with contract language that reads, according to Arrington, “Subcontractors will be required to furnish design instructions, whether or not it is shown in the drawings and specifications, in accord with the designer’s intent.”


With that kind of contract language, Arrington gravitates to details he believes won’t be modified. He rolls the dice, so to speak, hoping he can count on pre-building assemblies for those details. This usually works when the project is a hospital, school or office building, which generally have prefabrication potential.


Follow the money.

What Industry Data Says about BIM

One way to avoid having incomplete documents is to be involved with the planning and design of buildings early on. That’s where Building Information Modeling comes into play.


AWCI member contractors say that modeling is directly related to running a successful prefabrication and panelization operation. Respondents to the Dodge survey agree.


Of the contractors, engineers and architects surveyed by Dodge, at least 50% of their construction projects reported “improved schedule performance” 60% of the time and “improved budget performance” 50% of the time when BIM was used.


Fewer respondents, 30%, reported “improved schedules and budgets” with prefab and modular construction when their projects did not use BIM.


Thus, the data shows that wall-and-ceiling contractors would, ideally, benefit from being involved in the planning and design stages of their projects. Many in the industry are doing just that. Baker Triangle, California Drywall, F.L. Crane & Sons and South Valley Drywall, for example, all run visual design and construction departments that employ modeling teams.


Currently, California Drywall has five modelers on staff. One is dedicated full time to the company’s prefab facility in Santa Clara, Calif., Eckstrom says.


The firms with modeling teams on staff are betting that more architects and building owners will open their doors to the specialty contractor’s input at the start of their projects. To encourage that trend, these firms tout prefabrication and panelization’s benefits: better building quality, less material waste, improved schedule performance, to name a few.


“If they [architects] could come up with some standard details for rooms, you could really start kitting the headers, jamb studs, backing—everything,” says Eckstrom.


Many industry wall-and-ceiling firms are seeing an uptick in the number of general contractors touring their prefabrication facilities. Such GCs typically work with owners to come up with designs that enhance off-site construction’s potential. As success stories mount, perhaps more owners and architects will see prefabrication as a viable option.


Follow the money.

Doing the Easy Things

Not all AWCI member contractors, however, plan to grow their prefabrication and panelization operations. Like others, they see profit potential in building components off-site, but also find their current levels of off-site construction activity to be sufficient for their niche markets.


RWE – Richard Wagner Enterprises, LLC in North Carolina pre-builds box headers, jamb openings, bearing posts for point loads, mansard framing members and more. The company has been doing this for more than a decade, says Richard Wagner, the company’s owner.


WE, however, is “not into big-time panelization,” Wagner admits. The firm’s pre-assembly and prefabrication efforts serve merely to improve the productivity of the crews in the field. RWE handles “the easy things off-site,” Wagner says, such as pre-building box headers and jamb openings.


Will COVID-19 drive more firms, such as RWE, to do more off-site construction? Not really. While his firm has stepped up its hygiene procedures, mandated physical distancing for its crews and added a few new policy guidelines, such as not sharing tools on the job, Wagner says these COVID-19–related procedures are not slowing down production or creating a surge in off-site construction for his firm.


hile large projects in North Carolina’s major cities might see some hindrance in workflow as GCs take workers’ temperatures at jobsite gates, Wagner doesn’t think his crews will be affected by such delays. RWE crews tend to work on smaller projects where physical distancing is easier to achieve.


“We’re a small firm, and we work mostly in rural areas,” Wagner says.


Arrington agrees: “I don’t think the virus will have that much effect. We already have open work areas in construction,” he says. “If anything, prefabricating wall panels brings people closer together. They’re doing repetitious things on one or two fabrication tables close by each other.”


What stands in the way of future prefabrication and panelization? In the Dodge survey, AEC professionals cited three obstacles to prefabrication most frequently:


Project delivery. The chosen method can hinder effective prefabrication planning.


Design. Prefabrication may not be factored into the design.


Project type. Prefabrication is not always applicable.


“What drives a lot of this is the design,” Eckstrom says. “If architects and owners design their buildings so that manufacturing components is a good option, then that will be a big driver for prefabrication.”


Follow the money.

The Future of Prefab

Several AWCI member companies are in prefabrication expansion mode.


Jeremiah Lowell, who runs the Off-Site Construction Gulfport Facility for F.L. Crane, says his firm is adding a 50,000-square-foot plant with a two-story office in Mississippi by Thanksgiving this year.


California Drywall has its first exterior panelization project lined up in the Bay Area. The company also plans to buy a 50,000-square-foot warehouse in the San Joaquin Valley, half of which to set up as a prefab shop.


Roll-forming steel studs and track has become popular among some AWCI member contractors. Roll-forming steel gives a wall-and-ceiling contractor a measure of control when fulfilling certain requests. When a job needs special-length steel studs, and a traditional stud provider needs three weeks to fill the order, a roll-forming subcontractor can knock down the lead time to less than a week. That’s a big service to clients.


What about modular construction—building volumetric components, pods and rooms? Are AWCI member contractors moving in droves to do this kind of work? Not really.


“Just doing two bathrooms doesn’t make sense,” Eckstrom says. “Plus, how do I get a bathroom into a construction elevator? The plumber and the electrician are in front of me, so how do I get their infrastructure out of the way of my bathroom?”


In the end, some things about construction may never change. Some assemblies just have to be built in the field. And, manufacturing and shipping finished components are their own animals—with lengthy learning curves and precarious returns on investment for operations new to them.


“A long time ago, we learned that an enclosed panel plant actually limits your ability. It holds only so many workers. Overhead cranes can be slow at moving material,” Arrington says. “In some ways, prefabrication cuts your production down below the open field.”


Yes, construction remains a business largely about delivering custom-made products. Even if you know how to prefab components, a lot of projects today are renovation and refurbishment jobs that are hard, if not impossible, to program off-site.


Just follow the money.

Mark L. Johnson writes for the walls and ceilings industry. He can be reached via

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