Understanding the Key Risks Affecting Cost and Schedule Performance of Modular Construction Projects

Abstract

Modular construction has been documented to be superior over traditional construction methods in terms of schedule, quality, predictability, and other project objectives. However, the lack of understanding and proper management of unique modular risks have been documented to result in suboptimal performance in modular construction projects. Although many previous research efforts have focused on the barriers and drivers related to the adoption of modular construction in the industry, no previous research work has addressed the key risks impacting cost and schedule of modular construction projects. This paper fills this knowledge gap. The authors utilized a multistep research methodology. First, a survey was distributed to and answered by 48 construction professionals to examine the effects of 50 modular risk factors that were identified based on a systematic literature review in a previous study. Second, a Cronbach’s alpha test was conducted to check survey validity and reliability. Finally, Kendall’s concordance analysis, one-way ANOVA, and Kruskal–Wallis tests were conducted to examine the agreement of responses within each as well as among the various stakeholders of modular construction projects. Results showed that the most critical factors affecting both cost and schedule of modular projects are (1) shortage of skilled and experienced laborers, (2) late design changes, (3) poor site attributes and logistics, (4) unsuitability of design for modularization, (5) contractual risks and disputes, (6) lack of adequate collaboration and coordination, (7) challenges related to tolerances and interfaces, and (8) poor construction activity sequencing. This study adds to the body of knowledge by helping practitioners to better understand the key risk factors that should be considered to enhance the performance of their modular construction projects. The outcomes provide insight into the alignment of stakeholders on the different risk factors affecting cost and schedule in modular construction projects. This should help practitioners to establish mitigation plans during the early stages of a project.