Structural or Operational – which Pays the Highest Efficiency Dividend?

For care home providers looking to expand their facilities to meet growing demand, efficiency is everything. Margins are slim so most providers are looking for the following:

• Rapid build times to bring facilities into use quickly.
• Guaranteed low build costs.
• Low costs for maintenance and heating.

KPMG carried out a major study to assess the time and cost saving potential of panelised offsite construction. They found that construction costs in terms of labour and materials were similar (we’ll say a bit more about this in a minute). They also noted that total construction time was reduced by using offsite construction, leading to significant financial wins through earlier building occupation and reduced finance costs.

They used a very conservative assumption of a 10% timing gain in their calculations. Yet they still came out with a significant overall cost advantage for offsite. We know from our own experience that when design, manufacture and installation are properly coordinated (as they are with our in-house teams), far greater timing efficiencies are possible. Buildoffsite data indicates that 50-60% is a realistic time saving for most projects.

It isn’t just the time to create the structure, it’s also the ability to schedule follow-on trades with confidence based on a reliable schedule.

An Integrated Process is Important

It is unquestionable that the greatest savings occur when offsite expertise is brought in during the design phase. The full benefits of the technology can then be applied, ensuring that ‘as designed’ and ‘as built’ are essentially the same and the promised benefits are delivered.

The KPMG cost model was also based around a one-off build. They also recognised that standardisation results in further cost efficiencies for offsite construction compared to traditional builds.

One of the most significant differences between traditional and offsite methods is that efficiency is built into the design and into the offsite product. With traditional methods any efficiency gains are operational – essentially trying to make an inefficient process less inefficient.

KPMG also didn’t attempt to quantify whole life efficiency and cost savings. They did, however, acknowledge that the improved quality and thermal performance of structures built using offsite techniques would reduce whole life operating costs.

What does this Mean for Care Homes?

The Joseph Rowntree Foundation calculated that non-staffing costs including utilities and maintenance make up 12-16% of the cost for running a care home. Reducing the costs of heating and repairs can certainly help with viability at a time when fees are under pressure.

The built-in thermal efficiency, tight manufacturing tolerances and assured quality of Innovaré  built care home facilities will provide reassurance when it comes to long term efficiency and cost savings. And as the only Offsite Construction specialist in the UK offering unbroken chain of custody from initial design and precision manufacturing to site delivery and installation, every stage is fully integrated and managed by us. To find out more take a look at our website or if you have a project in mind that you would like to discuss give us a call on 0845 674 0020.