Prefabricated Homes: An Architectural Design-Build Firm Value Chain Analysis

Adriana J.M.
4 min readOct 16, 2024

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This case study was written for my fall 2024 Value Chain Integration midterm. I have the slides from my presentation incorporated into this article.

A recent foray into prefabricated homes brought my attention to Marmol Radziner + Associates prefab department. MR is a modern architecture design-build firm with in-house fabrication, construction, landscaping, and interior design. The firm is setting a standard and business model for customizable prefab homes.

Prefabricated, or prefab, homes range from your standard trailer to custom-built, modular structures. These structures are built in controlled environments (inclusive of HVAC, plumbing, etc.) and then transported to their build locations. The homes offer a sustainable and economic option for modern living.

We will go through the value chain and then some bottlenecks and solutions, in this case study.

Part I: The Value Chain

Table 1

A design-build firm that produces custom-built prefabricated homes, like MR, can be modeled with the input-output value chain model. The suppliers provide inputs that are processed into value adding goods & services. The outputs target a particular customer and market segment, as outlined in Table 1.

In this case, suppliers provide the inputs to create the design, planning, fabrication, and construction value. These processes produce the output of prefabricated custom homes that are appreciated by environmental, economic, and design-oriented market segments. This product-process would range from a project-basis to a job shop in the Hayes & Wheelwright product-process matrix.

Figure 1

The value chain diagram in Figure 1 demonstrates the value chain of a design-build firm, similar to Marmol Radziner. Infrastructure, technology, compliance, and human resources are support activities to the primary activities of design, pre-construction, fabrication, logistics, and build. Please reference Figure 1 for details on each support and primary activity.

Part II: Bottlenecks & Solutions

The pre-construction primary activity has plenty of room for bottlenecks to occur. This activity is where compliance, paperwork, and negotiations come into play.

One bottleneck example is over-budgeting. The firm may present the client with a bid that is way over budget. This can happen due to imaginations running wild or a lack of expectation setting. Some solutions can be to give intermittent cost estimates during design phases; have builder involvement in early stages, for accurate estimates; and to prioritize direct communication with the owner/client.

Another example of a bottleneck is non-compliance and delays in regulatory approval. Projects of this size can involve various authorities in compliance areas such as building code, planning code, and local entitlements (approvals to build). Some solutions here may be to build relationships with local authorities through early engagement or networking events. Teams can also implement better QA/QC protocols to reduce review cycles on document submittals to authorities.

A third example of a pre-construction bottleneck is client changes. Clients may change their minds at any point before the prefab home is complete. These changes could prove to be costly and time consuming, especially if the changes are major. Ways to resolve this bottleneck are maintaining consistent communication with the client — regular check-ins and requests for approval at various points in the process. To avoid wasting resources and money, expectations around invoicing and change orders should be outlined from the beginning.

Conclusion

A design-build firm with in-house production, construction, and various types of designers can be a highly competitive and differentiated business within the prefabrication home industry. Having the talent and resources in-house to provide a client with cohesive project management and availability of customization can add a lot of quality and value for the customer — ultimately ending in a well-earned profit margin.

Marmol Radziner + Associates are setting a standard and “master builder” business model for prefab homes that enable living in connection with the surrounding landscape.The firm elegantly moves from outside to inside in how they design — from site, to architecture, to interior, to furniture, to home goods — and they thoughtfully consider how all the materials interact.

The demand, and need, for sustainable and affordable housing is here. MR is bringing the element of well-thought-out, quality, modern design, not just in their creations, but in their value chain as well.

References

1. Marmol L. Radziner R. Marmol Radziner Prefab. In: Packard LN, ed. Marmol Radziner + Associates: Between Architecture and Construction. Princeton Architectural Press; 148–157.

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Adriana J.M.
Adriana J.M.

Written by Adriana J.M.

somewhere between romanticism & modern life angst.

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