A Value-Based Cost-Benefit Analysis of Prefabrication Processes in the Healthcare Sector: A Case Study

Eric I. Antillón1, Matthew R. Morris2 & William Gregor3

1Research Assistant, Civil, Environmental and Architectural Engineering, University of Colorado,428 UCB, Boulder, CO 80309-0428, Phone +1 303/492-3706, Fax 303/492-7317;eric.antillon@colorado.edu
2Instructor, Civil, Environmental and Architectural Engineering, University of Colorado, 428 UCB,Boulder, CO 80309-0428, Phone +1 303/492-0468, Fax 303/492-7317;matthew.morris@colorado.edu
3Construction Executive, Mortenson Construction, 1621 18th Street, Suite 400, Denver, CO 80202,Phone +1 303/295-2511; william.gregor@mortenson.com

Abstract

In the building construction industry, the healthcare sector is considered to have the highest opportunity to implement prefabrication. Some of the benefits attributed to itsimplementation are cost savings, schedule acceleration, improved quality and saferwork environments, among others. The decision to use prefabrication tends to be based on anecdotal evidence rather than rigorous data, given that no formal methods are available to determine the impact of prefabrication on project performance outcomes. A value-based cost-benefit analysis was conducted on an on-going 831,000 square feet hospital consisting of 360 patient beds, with the input from the major parties involved in the prefabrication process. Four specific prefabricated components were studied: prefabricated bathroom pods, exterior wall panels, overhead MEP utility racks, and patient headwalls. To determine the impact of prefabrication on theproject, prefabricated versus traditional site-built performance outcomes werecompared in terms cost, schedule, safety, and quality. Each prefabricated component was analyzed individually, as well as the combined impact from all four components. A cost premium of 6% over the traditional site-built cost, as well as a schedule reduction of 10% and over 150,000 work-hours diverted from the jobsite were among the findings from this study. A value-based benefit-to-cost ratio of 1.14 was estimated to be accomplished in this project. This case study shows that direct costs savings is not considered to be the primary benefit of prefabrication, but rather the indirect benefits achieved, such as schedule savings and reduced on-site labor, which can be quite significant when quantified.

Keywords

Prefabrication, Cost-Benefit Analysis, Healthcare Sector, Bathroom Pods, Wall Panels, Overhead Utility Racks, Headwalls

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Reference

Antillón, E.I. , Morris, M.R. & Gregor, W. 2014, 'A Value-Based Cost-Benefit Analysis of Prefabrication Processes in the Healthcare Sector: A Case Study' In:, Kalsaas, B.T., Koskela, L. & Saurin, T.A., 22nd Annual Conference of the International Group for Lean Construction. Oslo, Norway, 25-27 Jun 2014. pp 995-1006

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