Strategic Levers for Prefabrication in Construction: an Economic Case Study

The prefabrication industry is expected to grow and offer significant benefits to the construction industry, including improved efficiency, cost savings, quality and sustainability. Despite these benefits, there is a gap in the literature regarding the strategic levers that determine the optimal level of prefabrication. This study aims to investigate three levels of prefabrication (L1: brick walls, L2: brick walls with electrical installations and L3: brick walls with electrical installations and plastering) from an economic point of view. Levers from the literature were validated and supplemented based on an expert workshop with a small to medium-sized supplier of prefabricated elements and construction service provider in southern Germany. The economic feasibility was assessed using sensitivity analysis, focusing on cost drivers for organizational effort and increased efficiency. The results showed that higher levels of prefabrication (L2 and L3) lead to significant efficiency gains, especially in the best-case scenario. Organizational effort increases with the level of prefabrication, but at L3, efficiency improvements outweigh complexity, reducing costs such as material savings and mitigation of weather-related disruptions. ... mehrPrefabrication, when strategically integrated, not only achieves the same goals as lean construction activities such as workflow efficiency and waste minimization, but the economic benefits increase with the level of prefabrication. This means that, under stable conditions, a high level of prefabrication is economically viable.