Value engineering shelters construction projects from lumber price increases

The price of lumber has shot up over the past two years, and the price continues to be unstable. Along with supply chain issues, there’s been a surge in new construction and renovations since the pandemic hit, putting lumber in high demand. 

These high prices have raised construction costs dramatically but Big Block clients have been relatively sheltered from these price fluctuations because of our focus on value engineering and our fixed price contracts. 

Value engineering is looking at the most efficient way of using the materials we have. 

In the case of rising lumber costs, we’re looking at changing the design in small ways. Saving a few inches could mean a lot of material savings over the entire project. We can eliminate material if we redesign the drawings in a more efficient manner. We can also substitute similar products, so we could use a steel frame instead of wood. 

But each of our projects is very carefully designed. With modular, all of the drawings have to be done prior to anything being purchased; building in a factory and assembling it there means you have to know in advance what materials you’ll need.

Factory-built modules are efficient by design. Our waste in the factory is almost negligible because any waste is used in other parts of the plant. 

Stick build approaches to building are more susceptible to changes throughout the construction process, sometimes leading to purchasing too much material that is then discarded. You won’t see a row of six waste bins lined up on our work sites, or outside the Grandeur factory where the modules are built.

Lumber thefts

Another challenge with the stick build approach are lumber thefts. Big Block projects haven’t had the same problems with thefts as some other businesses due to the modular building process. 

Because most of the work happens in a factory, it minimizes the amount of deliveries made to the work site, as well as the amount of materials needed to be stored on site. It’s a “just in time” delivery model, mitigating the risk of thefts.

Planning efficiently from the start, being creative with changes in the design phase, and our fixed price contracts mean the rising lumber prices haven’t had the same impact on our clients’ bottom line.

Despite these mitigating effects, we’re still looking forward to the day the price of lumber comes down! We expect prices will eventually fall once the pressures on the housing and renovation markets have eased. While it’s hard to say where those prices will end up, these extremely high prices are only a temporary feature of the market.