Aligning component costs with end-user needs in modular integrated construction: a design management approach

Modular Integrated Construction (MiC) offers advantages in quality, productivity, safety, and sustainability. However, adopting it in the real estate market is hindered by high costs and negative customer perceptions. Therefore, reducing costs while delivering value to customers remains a key challenge. Existing studies have largely emphasised production aspects, while strategic elements such as cost management and customer acceptance have received little attention. This study addresses this gap by developing a structured method that integrates elements of Target Value Design (TVD), Target Costing, and Value Engineering to reduce MiC costs while ensuring the delivery of customer value. Design Science Research was used as the methodological approach, combining theoretical foundations with practical validation through evaluation cycles involving industry professionals. The proposed method enables the systematic definition of customer-required value, supports cost and value management at the component level, and fosters stakeholder collaboration. In doing so, it contributes to the literature by providing a structured and replicable approach for applying TVD in industrialised construction contexts, while also addressing the limited guidance on component-level cost management and end-user value integration. Its application in a real case resulted in an estimated cost reduction of 6.88% while preserving prioritised value attributes. The results highlight both theoretical and practical contributions, facilitating the wider adoption of MiC in the real estate market. For society, the method helps deliver housing that meets user needs without significantly increasing prices.