Key facts
- Taylor Morrison's Austin division adopted offsite construction components starting in 2020.
- Initial component costs showed a 16.1% premium over traditional stick framing.
- Total cost premium narrowed to 0.7% after accounting for efficiencies like faster cycle times and reduced overhead.
- Construction cycle times saw savings of up to 46 days in 2022, narrowing to 16 days by 2026.
- The builder achieved approximately a 29% improvement in overall construction cycle time.
- Offsite components are seen as a strategy to address chronic labor shortages and improve scalability.
Taylor Morrison's Austin division has been increasingly adopting offsite construction components since 2020, seeking to improve efficiency and mitigate challenges like soft margins, uncertain demand, and labor shortages. Initially, components presented a higher upfront cost, with initial comparisons showing a 16.1% premium over traditional stick framing.
However, through a comprehensive 'Total Cost of Ownership' analysis, the builder found that savings from faster construction cycle times, reduced overhead, improved trade coordination, and fewer workers significantly narrowed the cost difference. Once these efficiencies were factored in, the total cost premium dropped to just 0.7%. Internal data revealed substantial reductions in start-to-completion cycle times, contributing to benefits such as faster deliveries and more predictable schedules.
This strategic shift is also driven by the ongoing labor shortage in the construction industry. The company views component usage as a long-term scalability strategy, enabling them to increase output with fewer workers and be better positioned to scale when market demand returns.