A review of benefits and challenges of prefabricated housing supply chains: as a solution to housing affordability

Abstract

Over the last decade, housing affordability issue has gone through the roof creating a significant mismatch between supply and demand of the houses. Even though this national problem has been addressed by the government, an industry level approach is not sufficient. A collaborative effort of the construction industry is essential to encourage housing construction with cost reduction and quality enhancement. One innovative approach to significantly increase the supply of affordable houses is the adoption of prefabrication. Modern supply chain practices in the prefabrication housing construction would increase efficiency. Therefore, this paper aims to review the literature on the benefits and challenges of the prefabrication housing construction over the traditional counterpart. The study identifies the need to improve collaboration among the supply chain participants and process integration to achieve the benefits of using prefabrication. Even though prefabrication has the ability to substitute traditional housing construction, it has its own limitations, including transportation of large modules and set up costs. Similarly, the bespoke nature of housing construction and attitudes of the customers limit the potential level of standardization through prefabrication.