Model Army

Ed Donald seems relaxed as he drives us across Corus' vast Shotton Works site to Corus Living Solutions' production line. And he has reason to be. It is only a month since the Ministry of Defence announced financial close on Project Allenby/Connaught, an £8bn private finance initiative to upgrade British Army garrisons at Aldershot and around Salisbury Plain.

Three years ago the MoD gave preferred bidder status to Aspire Defence, a consortium of Kellogg Brown Root and Mowlem (now Carillion). Corus Living Solutions (CLS) joined shortly after to supply a key component of the contract: 144 new blocks of flats to house more than 5,000 junior ranking soldiers, valued at £92m.

It has been a long wait but for the ink finally to be drying on the contract is a milestone. For offsite construction, it is a tremendous boost to have a big-hitting client such as the MoD embrace modular in such a big way. For Donald, 62, it marks the achievement of his first big task since joining Corus in 2003. And for his company, the contract is no less than the kiss of life.

"We've anticipated this point so many times, it feels like the end of a triathlon but actually we've only done the first leg," Donald says in his comfy Scots brogue. "We weren't winning a war, just a new order, but you've got to have the same mentality."

For nearly a decade offsite has been hailed as the answer to construction's ills, among them its poor health and safety record and its ragged performance in time and cost predictability. But despite the evangelical zeal with which it has been pushed, and official support from the Department for Trade and Industry, the amount of offsite in the UK as a proportion of overall construction output still makes it a pimple on an elephant's back (to quote Donald). In 2004, according to researchers at Loughborough University, the total output in the modular and portable buildings market was £640m - about 0.6% of total construction output.

Donald argues that most offsite solutions miss the benefits of fully evolved, automated manufacturing: "We talk about offsite construction but most of the time what it amounts to is a building site in a big shed."

So naturally I am excited when we finally pull up to the designated building. Am I about to witness the longed-for synthesis of manufacturing and construction? Corus Group, after all, is one of the world's largest metal producers, employing more than 40,000 people in 40 countries, turning steel into components for the automotive, rail, construction and general engineering industries worldwide. With an annual turnover of more than £10bn, it is nothing if not a top-drawer prefabricator, using the latest in automation and supply chain management. It boasts the most advanced modular housing production line in Europe and it has the financial leverage of a global concern.

If offsite is an idea whose time has not quite come, isn't Corus the one to hurry things up a bit?

That was certainly Corus' idea when it launched CLS in 2003. With countries like India and China taking advantage of plentiful raw material and cheap labour, established steel suppliers saw they had to push further into their end markets - in other words, make more stuff with their basic product. Since construction was already a major destination for its product, it seemed a good place to try. But despite CLS's slick website and brochure, what strikes me about the company is just what a start-up it feel's like.

Later in the day I meet the management team. Donald says I must speak to general manager Scott Carr and, after some mobile exchanges, ushers me into a management meeting in mid-flow. Besides Carr there are two women and one man - heading HR, finance and operations respectively. The average age is 43, at a guess. Because of their casual dress, and the fact that the table is too big for the four of them, it feels like a committee meeting of a bowls club. I get the feeling they are just getting down to brass tacks but Carr is happy to take a few questions.

He says his first task, having been brought in from elsewhere at Corus, was to spend three months with a team figuring out how to apply a manufacturing approach to the UK accommodation sector. They had a lot to learn.

Steel is what Corus is about but it makes up less than 10% of a CLS module. They settled on timber frame production models used in Scandinavia and Germany, but had to bring in Corus plant engineering experts to adapt them for the steel frame that forms the skeleton of a CLS wall or ceiling cassette. As for how the cassettes bolt together to form a room module, rather than start from scratch they licensed a model from Terrapin. Corus spent £4m establishing the production line. "Start building with finished rooms," was the slogan they adopted. The next job was finding someone willing to do it.

"As you can see, when they took me on, the average age rose considerably," Donald quips as he shuts the door on the CLS nerve centre.

They appear to be a keen, committed team, but when he joined in 2003, morale was on the floor. The Aspire Defence consortium had just been named provisional preferred bidder over the only other contender by that point, a team led by Bovis Lend Lease. Ironically, CLS had scored a coup by getting on the Bovis team in the first place, but now it found itself on the losing side.

Bridging the gap

Donald started as an apprentice with his father's contracting business in 1959, and spent a good part of his career selling pre-engineered metal buildings to the Arab-speaking world, ending up with his own consultancy. This background made him attractive to CLS, which wanted to stick to manufacturing and not contracting, as some offsite firms do. It needed him to bridge the gap between CLS and its main route to market: main contractors. As it happened he did not have much time to hang about. The Allenby/Connaught deal was perfect and, to all intents and purposes, gone. Despite the general despondency, he helped galvanise them to do the thing they knew they had to - go and see the KBR and Mowlem people.

This was far from straightforward. Donald and his new colleagues door-stepped and networked for two weeks to get a meeting. Finally they got in front of the Aspire team, and delivered their one urgent message: "Give us 10 weeks and we'll show you what we can do."

They poured all their efforts into a first-class bid and convinced Aspire. It helped, Donald says, that some on the construction side at Aspire were having doubts about their preferred offsite approach, a concrete crosswall system. "It turned out we were pushing on an open door," he says.

To have Corus and the MoD doing this will increase offsite’s presence on the map

Richard Ogden, Build Offsite

It was a door that CSW had to open. Factories don't work on one-offs and this job would see them producing buildings for the next six years, ensuring cash flow and a chance to bed down the production line.

The British Army has been using Salisbury Plain for manoeuvres since 1897, and much of the building stock in various barrack areas such as Tidworth and Perham Down was built in the early 1900s. It is in dire need of upgrading. A report in 1985 ranked some of the living quarters there as among the poorest in the NATO alliance. The new construction segment of Project Allenby/Connaught involves 350 new buildings, valued at £1.2bn, to go up during the next 10 years. Within that programme comes CLS's contribution: 144 apartment blocks for junior ranks.

These blocks break the mould for the Army, moving away from the harsh, dormitory atmosphere of Victorian barracks to give each soldier an en suite bedroom, with communal kitchen and living areas. They break the mould for construction as well, since Aspire has only six years to build them. That works out to two blocks - each containing six flats and housing 36 personnel in total - per month from November.

This is where modular construction comes into its own. Each block has 51 rooms, which CLS will manufacture separately as discreet modules, equipped with completed finishes and services, and truck to site two at a time to erect on the foundations its partners in Aspire will have already laid. Donald, as project director, will have to ship the first block on 8 November, and when the project peaks in activity in the middle of the contract period, CLS will be shipping at least one complete building per week for 18 months.

Finally inside the production building Donald stops to give a safety talk which, despite his evident conviction, is dull and seems over the top. I want the talk to end so that I can see the action. He walks us the interminable distance to the start of the production line. The building, dating back to possibly the 1920s, is vast. It looks as if someone has put a ceiling on the sky.

As we proceed from station to station, Gypsum fibre boards, the size of entire walls, divert on massive rollers to computerised rigs that cut window and door apertures, gouge holes for switches and sockets, and apply coats of paint.

Vacuum grippers manipulate them into place and machines screw them to the wall and ceiling frames made of cold rolled light-gauge steel. The wall, floor and ceiling cassettes start queuing to be lifted into place and bolted to their mates to form a room.

Bathroom pods wait for installation, having come from Irish company Farquhar with a factory in the Czech Republic. Doorsets arrive complete with frame, leaf and ironmongery assembled, ready to be bolted into openings. Wiring is all plug and play, and light fixtures snap into place. Extra steel sheeting on exterior walls provides blast and ballistic protection. Lean manufacturing methods ensure that the right component is delivered to the operative when he needs it.

I see that the process is not totally automated. Operatives in twos and threes fill countersunk holes where the boards have been screwed onto the steel studs. They spread adhesive for vinyl flooring and rivet joints too awkward for automated plant. Skilled trades are not essential. Some of the 100 or so operatives currently on site come from construction, some from manufacturing. What CLS needs most are handymen, manually adept all-rounders. (Or handywomen. Among the 20 or so individuals I see on the tour, two are women.)

I am puzzled by one thing, though. Activity seems sparse and rather leisurely. Shouldn't it be frantic? Donald says this is the first run-through of the baggage room modules, so they are taking it steady, checking that every event on the line goes according to plan. Elsewhere in the building, modules have already been stockpiled.

We stop at a counter devoted to health and safety information and reporting. Donald explains that workers are given slips to jot down near misses since, statistically, a reportable event is just the visible tip protruding from a heap of near misses, bad behavious and unsafe processes. Operatives are empowered to stop the line at any time if they see any behaviour or situation that might be unsafe. The Health and Safety Executive has been involved in reducing risk. Even during erection on site, though the blocks are three storeys, enclosed scaffolding assembled before the modules are craned into place prevents open edges.

Overall, Donald says, they have moved from a regulation-following approach to a habit-changing one, and that it takes just as long to ingrain a good habit as it does to break a bad one. "To put it into perspective," he says, "we're attempting to build 144 buildings without an injury." I feel guilty about my earlier impatience at the safety talk.

Where are we now

Back in the office, Donald says it has been a long haul from what had seemed an early win to its becoming reality. The other members of the Aspire Defence team could get on with their lives during this frustrating phase but CLS could not be entirely sure it had one. Now it is planning extra capacity in the coming years, and gearing up to tap further what it sees as a vast MoD market.

The contract is major news for the offsite construction sector and establishes Corus as a trailblazer. Richard Ogden, chair of the DTI-sponsored campaign group Buildoffsite, believes it is the single largest order for modular buildings to date. At £92m, it amounts to nearly 15% of the total annual modular building market in 2004.

"It's a big event," he says. "As in anything you've got leaders and followers, and most people want to follow because it's safer. But to have Corus and the MoD doing this will increase offsite's presence on the map. Now all we need is for the NHS and the DfES to get on board."

Donald's task is just starting but he is hardly daunted. If 45 years in construction delivery and marketing couldn't prepare him for it, nothing could.