Innovative offsite construction uptake in the housebuilding sector: A systemic approach to economic justifiability for volume builders

Housebuilding sectors in many countries struggle to keep up with increasing housing demand. This typically contributes to a housing shortage or at least housing supply-demand imbalance. Traditional construction methods commonly used in the housebuilding sector are often criticised for a variety of problems such as low productivity and efficiency, long construction times, high waste generation, high energy consumption and high accident rates. Offsite construction (OSC) has been widely viewed as a solution to the challenges faced by the construction industry and the housebuilding sector in particular. However, despite widely documented benefits and considerable research informing policy interventions to stimulate adoption of OSC, the uptake of OSC in the housebuilding sector, particularly in the Australian context, is lower than expected. The aim of this research is to propose strategies to increase the uptake of OSC in the Australian housebuilding sector through motivating adoption of these methods by Australian volume housebuilders. Due to their innovative nature, OSC methods significantly disrupt the processes of the housebuilding sector. Sector actors' decisions to adopt these disruptive methods, and consequently, OSC uptake on the sector level, are determined by the desirability of OSC from their perspective, which in turn emerges as a result of interactions of these operationally and managerially independent actors. Therefore, there is a need to systematically synthesise the mechanisms that shape the desirability of OSC for sector actors from a holistic multi-actor perspective. In this research a systemic approach is adopted to explore the problem of OSC adoption and uptake in the Australian housebuilding sector. The housebuilding sector is framed as a system-of-system (SoS) composed of an integration of autonomous and heterogenous subsystems, i.e., the sector actors. The uptake of OSC on the sector level is defined as a system-level behaviour of this SoS, which emerges as a result of the interactions of autonomous sector actors on different levels (individuals, teams and organisations) across various dimensions (operations, economics and policy). Volume housebuilders are chosen as the focal actors due to their significant role in deciding construction methodology in the Australian housebuilding sector. Since economic barriers are believed to be among the most salient factors hindering the widespread adoption of OSC, emphasis is placed upon increasing the economic justifiability of these methods for volume housebuilders. The proposed SoS framework is utilised to investigate the barriers to adoption of OSC by Australian volume housebuilders. Guided by the identified salient barriers and using a grounded theory-based model development procedure, a qualitative system dynamics (SD) model is developed to study the feedback mechanisms that encourage/discourage adoption of OSC methods with a focus on economic justifiability. As is customary in the SD approach, strategies to motivate adoption of OSC by Australian housebuilders are proposed via weakening the feedback loops that decrease economic justifiability and strengthening the feedback loops that increase economic justifiability. The impacts of changes in the strengths of the feedback loops on the economic justifiability of OSC for Australian housebuilders are explored through a set of counterfactual scenarios using a quantitative SD model. The model simulates and compares the cumulative profit of a typical Australian volume housebuilder under different scenarios. The results indicate that successful adoption of OSC methods requires a collective effort by the autonomous sector actors. It is demonstrated that the common mental models of the involved actors, which tend to view the costs and benefits of OSC in isolation, contribute to limited uptake on the sector level. A long-term holistic perspective accounting for the interactions of different actors can redefine economic justifiability, and consequently, improve desirability of OSC methods for Australian volume ho sebuilders, which will then feed back into the system to sustain the long-term benefits of all involved actors. The results of the research can be used as strategic blueprints for managers of volume housebuilding companies to pursue a range of alternative strategies for adoption of OSC practices. The results can also help policy makers to create system-wide incentive mechanisms to support higher uptake, e.g., by promoting awareness of the long-term benefits for the end users or motivating the sector actors to share experiences and develop new forms of collaboration. The proposed systemic view can be extended by future researchers to investigate system-level problems of the housebuilding sector from a holistic multi-dimensional multi-actor perspective.