Opening up the service network implementation to modular construction as well

As serious indoor air problems spread in our schools and early childhood education units, we made zero tolerance for indoor air problems the top priority of our mayoral programme for the 2017–2021 council term, and this fundamental mission guided the preparation of our service network plan. The costs of implementing the service network plan and replacing premises with indoor air problems were already pushing our municipal finances to their limits during the planning phase.
 However, the
coronavirus pandemic radically changed our operating environment and cast a cloud of uncertainty over our municipal finances, which, according to our financial director, has not yet completely lifted. While current forecasts indicate that the number of children being born and moving to our municipality will continue to decline, our social and health care costs and, for example, the number of elderly people and their need for care are on a sharp upward trend. Based on childbirth forecasts, some municipalities have recently built facilities that are too small. It should be possible to reduce and expand the size of facilities as needed. We need diverse solutions for providing services and facilities to support our residents, from babies to the elderly. We are responsible for the well-being of our residents even when our social and health services are provided by the welfare sector.

At present, the pressure on municipal finances caused by the coronavirus pandemic continues. This has also contributed to a sharp rise in indirect costs: construction costs have risen significantly and the availability of building materials has deteriorated. The

technical sector’s responses to the assessment report identify a risk to the implementation of the service network that has already materialised: “Due to a shortage of human resources and inadequate tools in the facilities services, we have had to rely on purchased services in the management of construction projects, quality control of construction work and cost monitoring. This will contribute to an increase in the overall costs of construction, and the shortage of resources poses a risk to the implementation of the service network schedule.” The

technical sector has also been unreasonably burdened by risks arising in new construction, such as indoor air quality problems caused by construction defects in newer units and the extensive structural inspection and repair needs of these units, such as the Roinila and Pellava daycare centres, which were built in the mid-2010s. The technical sector’s human resources have also been reduced due to resignations. The technical sector’s human resources have also been reduced due to resignations. The resulting resource shortage cannot be easily covered, and the sector’s costs are multiplied when mainly outsourced services are used. In addition, indoor air quality issues have caused significant human, health and financial concerns for children, employees and parents, and have been identified as an unacceptable risk in the municipality’s risk assessments.
 
Risks in the implementation of the service network are also caused by the pursuit of architecturally impressive but complex structures in the implementation of projects. This type of construction is more prone to risk structures, which result in higher maintenance and upkeep costs, as well as indoor air risks.

In our municipality, both officials and councillors have a responsibility to take care of both our finances and our residents. In our risk assessments, we must also take into account the additional costs looming in our service network projects, which are more difficult to identify in an uncertain economic situation but which, in light of the above-mentioned laws, are likely to materialise.
 
We must be responsible in our financial management. To avoid risks, we should build our service network in a cost-effective, flexible and long-lasting manner. We must build premises that enable us to respond to the changing needs of our residents.
 Given the
radical changes in the municipality’s overall economic conditions and operating environment, the implementation of our service network as a whole should be reviewed, taking into account the upheaval in the construction industry that has occurred since the service network plan was drawn up: raw material costs in the construction industry have risen enormously, so the costs of our service network projects are expected to exceed our financial capacity. Our current mayoral programme states that we cannot increase our revenue base through tax increases. We must therefore implement our service network projects in a smarter and more cost-effective manner.

We must also enable the provision of modular entities in our service network tenders. Projects must be competitively tendered in a sensible manner, based on clear design principles such as needs assessments, plots and space programmes. We must choose a comprehensive solution for the implementation of service network projects that is cost-effective and high-quality throughout their life cycle.

The premises must be designed to be flexible. An example of short-term flexibility is partition walls, which can be used to create different learning environments. Long-term flexibility, on the other hand, means creating spaces that can be moved, combined, replaced, maintained and renewed, transforming them as necessary to meet the requirements of different uses. We should ensure that spaces can be designed to meet long-term needs: to meet existing/emerging school needs in the area, but also that they can be reused, for example, when school needs decrease and care facility needs increase, e.g. for the needs of disabled or elderly people. This kind of space management would be ecological, recyclable and, overall, a wise use of resources. The design

of spaces should be based on the needs of users. In addition to indoor air quality, the indoor environment should be considered as a whole, taking into account ventilation, temperature characteristics, sufficient natural light, non-toxic, chemical-free structures and fire safety.
 
Currently, our service network is designed so that each school is planned separately, with different solutions and permanent buildings constructed from different materials. We currently have five similar school projects in our service network plan, all of which have similar needs and are almost all time-sensitive. As each school is built using different materials and structural solutions, each design process must be carried out from scratch based on the specific characteristics of the site. This lengthens the design process and increases costs. In addition, property managers must be familiar with all the different structures and systems, which places a burden on municipal staff, sets high competence requirements and increases risks.

At the same time, we are implementing very expensive temporary accommodation solutions. We have found that, in a normal process, a new school can be completed in an average of about five years, during which time we use expensive temporary premises.
 
However, in the time it takes to acquire temporary premises, we could complete a modular school project in its entirety, designed to fit in with its surroundings and creating a stylish whole. A 2,000 square metre school for 400 pupils can be completed as a permanent structure in three months. A larger school, such as Rykmentinpuisto, could be built in nine months. Modular construction is also on average 20% cheaper than traditional construction. Other municipalities in our region have already responded to indoor air quality issues and changes in the operating environment in an effective and user/resident-oriented manner, successfully implementing modular solutions in their new school projects. In recent years, modular builders have also demonstrated that even large schools can be built quickly and cost-effectively. According to Järvenpää’s Mestaritoiminta, modular construction has been 20-30% cheaper for Järvenpää than traditional construction, and Järvenpää has had good experiences with rapid modular construction in both smaller and larger hybrid school projects.  In Espoo, three schools have also been built using the same frame structure by 2020, and the transferability and flexibility of the structure have been found to be beneficial. In addition, the contracts guarantee a life cycle of up to 100 years for the modular frame structure.

Schools should be built primarily to be sustainable. A long life cycle for a building can be achieved with virtually any material. The wisest and most ecological approach would be to make buildings fully recyclable, for example.
 In addition
to speed and total costs (including avoidance), durability, maintainability and versatility, we should strongly consider quality criteria alongside price criteria in service network competitions. Current tenders are strongly price-based. Structural and functional quality must be made the right criteria for tenders. We must not accept risky structures. Structures must also be designed to be compact and energy-efficient. Our

financial responsibility and our responsibility as a service provider require us to investigate whether service network projects can be implemented more quickly and efficiently. For all the above reasons, we must ensure that modular builders can also submit bids for service network projects in competitive tendering.

In addition, we must require long-term flexibility in the tendering phase. This will enable the acquisition of premises for up to 100 years, allowing them to be reused for different purposes.

https://www.mckinsey.com/business-functions/operations/our-insights/modular-construction-from-projects-to-products(switch to another service)

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