Time-driven activity-based costing (TDABC) model for performance optimization of offsite manufacturing methods housebuilding

Kudirat Ayinla, Franco Cheung and Ben Towe

Construction Management and Economics, 2025, vol. 43, issue 8, 637-656

Abstract: Offsite manufacturing (OSM) for construction is increasingly recognised as a strategy to enhance productivity and performance of the industry through innovative methods, techniques, and best practices. However, many offsite manufacturers struggle to remaining competitive, partly due to the absence of an analytical tool for evaluating performance at the activity level. This study addresses this gap by developing a tailored Time-Driven Activity-Based Costing (TDABC) model for assessing and comparing OSM production processes. A case study approach was adopted, involving mixed-method data collection through observations, document analysis, interviews, and focus groups. The data were systematized using Business Process Model and Notation (BPMN) protocols, and tailored time equations were developed to estimate the cost and duration of two different OSM methods. The TDABC model developed in this study offers two key contributions: (i) it enables OSM manufacturers to identify and apply appropriate time drivers to assess the cost implications of different production designs, and (ii) it supports decision-making by highlighting areas for cost reduction and process improvement. The model improves competitiveness by offering granular insights into production performance, which enables inefficiencies to be designed out. Its adaptability also makes it applicable to various OSM scnearios, providing a practical framework for economic evaluation, process optimisation and strategic planning in offsite construction.

Date: 2025
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DOI: 10.1080/01446193.2025.2492850

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