Benchmarking Innovative Homebuilding Technologies Used to Build Exterior Structural Walls
Executive Summary:
The primary objective of this research is to benchmark construction costs for three homebuilding technologies used to build exterior structural walls: conventional site-built (or stick-built) wood frame construction, factory-produced panelized wood-frame construction, and stress skin insulated core (SSIC) panel construction. Benchmarking refers to the direct comparison of a product's performance against that of established competitors with regard to certain metrics of interest. Construction cost is defined as the summation of all resources required to construct the house or its primary components. Construction cost is an important performance metric for a homebuilding technology. It plays a vital role in determining price, profitability and eventual acceptance of the technology. At an elemental level, it can suggest both product and process improvement opportunities. Benchmarking construction costs for innovative homebuilding technologies offers unique challenges as compared to conventional cost estimating. It is labor intensive and difficult to develop comparable estimates. These challenges have been an impediment to solid, quantitative cost reporting.The first step in this research was the development of a construction cost benchmarking methodology which could deal effectively with these challenges. The methodology was based on a bottom-up or industrial engineering approach and involved estimating labor-hours and materials for each element of work, and pricing and accumulating all costs into a total cost estimate. The methodology included a set of guidelines to promote efficiency and enhance comparability of results.
Research findings indicated that conventional wood framed construction costs were similar for both stick-built and factory panelized construction. SSIC construction costs were 17% higher than frame construction of comparable depth, driven primarily by cost differences in materials and labor. These results were consistent with those of Toole and Tonyan who asserted that for most home designs SSIC costs appeared to average 10% to 20% higher than for conventional stick built construction, primarily due to higher material costs. Related sensitivity analyses suggested that future cost differentials may be less than 10%. A more detailed analysis of cost results suggested several avenues for improving SSIC cost competitiveness: 1) development of alternative panel sheathing materials, 2) use of "long" panels versus the conventional 4x8 ft panel, 3) development of alternative materials and processes for framing windows and doors and 4) quantification of potential energy savings and other life cycle cost advantages to justify apparently higher construction cost.
Several limitations of the research restrict generalization of findings. First, results are based on a small sample of homebuilders. Second, results reflect costs associated with the construction of an exterior, structural wall. Finally, results do not explicitly comprehend a number of factory and job site overhead costs (for example, engineering, indirect materials, insurance, property taxes, construction supervision, temporary site office, performance bonds, temporary site utilities, temporary buildings/enclosures, barricades, clean-up, permits/licenses, dust/erosion control). The implicit assumption is that these items are largely independent of technology.
Technical Reports & Papers:
Armacost, R., M. Mullens, and W. Swart, A Cost Assessment of Innovative Homebuilding Technologies Used to Construct Exterior Structural Walls, Report to U.S. DOE, Department of Industrial Engineering and Management Systems, University of Central Florida, Orlando, FL, Sept., 1994. [download report]
Mullens, M., R. Armacost, and W. Swart, "Benchmarking Construction Costs for Innovative Homebuilding Technologies,"Building Research Journal, 3(2)81-102, Fall 1994.
