A cathartic moment for MMC?

This summer we have seen Countryside take a radical decision to close a newly constructed MMC production facility; the failure of House by Urban Splash and the administration of Mid Group, one of the most MMC aligned contractors; now followed by reports of restricted trade credit availability for the MMC sector.

On the face of things, this is troubling, particularly for delivery of housing at scale to address housing need in  key cities.  The focus given by New London Architecture to the position in London mirrors similar debate across the UK, yet the reality is much more positive.

The interim report by the Administrators of House by Urban Splash suggests that design issues leading to production quality concerns were at the core of a loss of confidence. The market will learn more over time, but quality should simply not be an issue with a properly conceived and operated MMC solution. With a sale process announced in June and a new management team in place decisions at Countryside appear to have been made on the basis of organisational priorities. At Mid Group, the reasons behind the financial failure are yet to emerge, but the adoption of risk that the group did not have the financial resilience to weather seems likely to be on the list. In each case the people involved will have valuable real world experience to contribute.

Of these, it may ultimately be the failure of Mid-Group that is felt most keenly, only in 2020 Mid Group landed a double, both the Contractor of the Year (turnover under £500m) prize and the Project of the Year (£20m-£50m) award in the Construction News awards. Judges said the firm’s approach is “truly innovative”, citing its strong focus on technology adoption across both BIM and MMC.

The vulnerabilities brought into focus by these news stories are likely specific to the organisations involved. There is however much that the MMC sector and key clients can do to optimise MMC delivery and improve sector resilience:

• Security of pipeline and security of supply chain are key for any manufactured product. Public sector clients have the opportunity to aggregate pipeline. Pipeline commitment must be progressive and firm. The principles of alliancing over long term programmes and not one off projects would provide significant value gains. "End to end" business plans (MMC manufacturer as land developer) does not provide a panacea.
• Interoperability of system is something the the industry simply must address; funders are inevitably nervous of the point of weakness that makes a change of MMC supplier part way through development difficult or perhaps challenging. Greater collaboration around essential system and structural interconnectivity and performance standards can only grow uptake whilst allowing investment on key differentiators. 
• We still see opportunities lost or masked by a client or funder preference for a design and build single point responsibility - a single contractor who then subcontracts MMC and other elements. Clients, particularly serial and experienced clients have other much more collaborative routes open to them that ultimately are likely to deliver better value

Recent innovations such as the introduction of the platform rule book which was launched in May, may be one solution. By identifying where the greatest benefits will be realised through repetition and standardisation and developing those through a number of suppliers, it will result in a collective supply chain that can deliver the growing demand and therefore result in greater levels of research and innovation. It will also promote a more joined up approach to the circular economy and life cycle of a product.

https://nla.london/news/mmc-innovation-in-housing-delivery