Making the Leap: From Traditional General Contractor to Modular Builder

That’s one reason we are seeing more traditional contractors making the leap and turning to modular construction. In some cases, GCs are contracting with modular manufacturers on “hybrid” projects that incorporate the best of modular and site-built processes. In other cases, contractors are establishing their own prefab divisions as a hedge against this labor shortage.

PCL Construction, one of the largest general contractors in North America, created its “Agile” division about three years ago to move into the modular construction industry. MBI wanted to find out what drove PCL to this decision.

According to Terry Olynyk, Director of Business Development for PCL Construction, “The world of construction is rapidly moving towards the digital age and with that [so is] industrialized construction. PCL did not want to stay on the sidelines while this paradigm shift is occurring and wanted to lead the market by being the first fully integrated general contractor with its own modular factory.”

PCL’s strategy when approaching a project is to first ask how much of the project can be built offsite. “Our end goal is to target scopes that reduce the project critical path and gain us valuable time,” Olynyk said. He continued, “Another consideration is the complexity of the scope and challenges we have with hours of work, work location, available sub-trades to perform the work, geographical area. We then assess these constraints against our ability to ship the volumetric spaces and the associated costs. With advanced digital tools combined virtual models we are getting better at decoupling spaces and finding advantages with modular.” Anthony Zarilli’s transition took place more than 15 years ago while building homes in New Jersey. According to Zarrilli, he knew modular home building had the potential to change the future of new home construction when he first started researching it.

It all started when Zarrilli, while working alongside his father constructing custom “stick-built” houses, saw an article about modular homes which piqued his interest. After visiting several modular plants and receiving approval to build, he ordered his first modular home. Zarrilli set the home in Point Pleasant, New Jersey by himself, and because his real estate agent wasn’t quite sure how to market a modular home, he decided to sell it himself.

Once the home sold, Zarrilli repeated the process, but this time in Point Pleasant Beach. While working on that project, people started to take notice. Before he knew it, Zarrilli was being asked to build modular homes for others.

“I went from building four homes per year to eight to 12 and it just kept on growing from there,” he said. “That’s really how it all started.” Today, Zarrilli Homes is expanding into new markets such as multifamily.

Making the move to modular construction is not without some challenges. Every aspect of the construction industry is considered from the perspective that the materials and labor show up on a specific site and work begins there. Moving construction to an offsite location requires greater coordination and communication among all parties. Everything from insurance to legal consideration to payment schedules need to be discussed and agreed upon in in advance.