The Power of Integration in Modular Construction: Why Nordic Homes Leads the Way

In an industry ripe with both promise and complexity, modular construction has emerged as a potent solution to long-standing challenges—particularly slow productivity, labor shortages, and sustainability demands. Yet, while innovation and demand are on the rise, success in modular isn’t guaranteed. In McKinsey’s August 21, 2025 analysis, “Putting the Pieces Together: Unlocking Success in Modular Construction,” the key differentiator between success and underperformance lies in value chain integration: companies that control development, design, manufacturing, and assembly outperform others. 

This post explores how integrated modular developers shape the future of construction—and why Nordic Homes, with its vertically integrated structure spanning design, production, and technical systems, stands as a leading example. With recent expansion into full technical room systems through the acquisition of Intrex Serviss SIA, Nordic Homes now offers complete, turnkey solutions—including heating, HVAC, solar, and energy systems—empowering real estate developers to build better, faster, and more sustainably in markets like Germany.

1. Modular Construction’s Promise—and Its Pitfalls

McKinsey’s study, drawing on over 700 companies across more than 50 countries, underscores modular construction’s wide potential—from accelerating timelines to improving ROI and enabling energy-efficient, low-emission buildings. Yet it also highlights the market’s high fragmentation: 60–70% of modular players generate less than €50 million in revenue, while only 5–10% exceed €500 million in revenue . That split underscores why scale and integration matter more than ever.

EBITDA margins average around 7%—but with high variability. This implies that success is uneven and often tied to strategic approaches—not simply producing modules McKinsey & Company. McKinsey categorizes companies into several archetypes, of which the most resilient and successful is the Integrated Modular Developer—those that internally manage everything from development through off-site manufacturing to on-site assembly McKinsey & Company. Such integration yields a virtuous cycle of efficiency, consistency, and quality control.

2. Why Integration Drives Value and Stability

A. Risk Mitigation

In modular construction, coordinating multiple external partners—development, engineering, manufacturing, logistics—adds coordination risk. Integration reduces that complexity, aligning all stages around a unified process, mitigating delays, quality mishaps, and budget overruns.

B. Factory Optimization

Consistent demand across projects enables high utilization of manufacturing facilities. Rather than intermittent batches, integrated firms schedule production efficiently, reducing per-unit cost and waste. McKinsey emphasizes that stable, high utilization is critical for maximizing factory economics McKinsey & Company.

C. Systematization of Building Systems

Integrated players build reusable, modular systems—standardized components that can be adapted, not reinvented, project to project. That systemization supports rapid delivery, easier scaling, and quality control.

D. Strategic Scaling

Scaling modular beyond a proven, controlled pilot—especially across building types or geographies—can be perilous. McKinsey’s advice: start with one building type or geography, validate performance, then scale. Integrated developers can replicate successful systems widely and consistently McKinsey & Company.

3. Nordic Homes: Integration in Practice

Nordic Homes’s structure demonstrates integration at its finest:

• SIA Nordic Homes oversees production and assembly of prefabricated timber-frame and hybrid modular buildings, achieving impressive scale—with 65,000+ sqm delivered since 2010 and strong footprint across Sweden, the Faroe Islands, Iceland, the UK, and Germany.

• NH Engineering SIA handles design and engineering, including 3D modeling, structural and MEP design, digital‑twin-based production drawings, and full architectural services aligned to modular build processes www.nhe.lv

• The recent acquisition of Intrex Serviss SIA extends capability to full technical-room and systems integration—gas heating, air-to-air and air-to-water heat pumps, recuperation (ventilation), solar PV, and more, with project design, delivery, and installation fully in‑house www.intrex.lv

This structure enables Nordic Homes to offer fully integrated modular solutions—from initial development and design, through manufacturing, to turnkey installation of energy, heating, ventilation, and even solar systems. Providing for our Real estate developments in German market a full cost transparency. A single-point solution that manages complexity and fosters efficiency.

4. The Integrated Edge in Action

A. Streamlined Coordination

With design, structure, engineering, manufacturing, and systems all under one unified organization, Nordic Homes ensures consistent quality, alignment with the architectural vision, and responsive execution—even accommodating late-stage tweaks without disrupting timeline or integrity.

B. High Factory Utilization & Efficiency

The internal feedback between design and production—via digital twin modeling—enables accurate, repeatable manufacturing. With known volumes and modular systems, the company avoids idle capacity and inefficiency.

C. Complete System Delivery

No longer we need to juggle multiple contractors for shell, HVAC, heating, and renewables. Nordic Homes delivers a cohesive building—complete with high-performance thermal envelope and integrated systems—reducing coordination risk, speeding delivery, and reducing costs.

D. Market Expansion with Confidence

Starting from markets like Sweden and Iceland—challenging environments with high wind, seismic, and salt exposure—Nordic Homes built resilient, tested systems. That backbone supports successful our developments in Germany, where integrated delivery and energy efficiency are critical.

5. Tying Back to McKinsey’s Framework

Nordic Homes exemplifies McKinsey’s Integrated Modular Developer archetype: controlling the full value chain delivers higher margins, lower risk, and stronger growth potential McKinsey & Company.

By anchoring capabilities in design, production, and technical systems, Nordic Homes has:

• Supported architects’ visions while standardizing modular delivery;

• Minimized rework and misalignment through well-orchestrated integrated processes;

• Improved internal rates of return via faster timelines and cost efficiency;

• Positioned to scale effectively across geographies and building types—a core recommendation in McKinsey’s report.

6. What This Means for Stakeholders

For Developers and Investors

• Developers benefit from one-stop execution, improved ROI, and lower risk—a clear advantage that fits McKinsey’s guidance on early modular adoption and embedding practices in early design.

• Investors gain confidence in business models anchored in value chain integration, high utilization, and system adaptability—a recipe for stable returns and defensibility in a fragmented market.

For Contractors and Engineers

Integrated models set a high bar: subcontractors may find opportunities to partner with integrated developers or adopt modular strategies themselves to stay competitive.

7. Conclusion: Integration Wins

Modular construction holds transformative promise—but only firms that master integration will consistently deliver. As McKinsey underscores, controlling the value chain from design through manufacturing to systems installation is what separates winners from the rest McKinsey & Company.

Nordic Homes embodies that success. With SIA Nordic Homes’s production prowess, NH Engineering SIA’s design and engineering capabilities, and the technical systems finalize through Intrex Serviss SIA, the company offers a turnkey solution that spans everything—from timber frame shells to HVAC, heating, and solar. In doing so, Nordic Homes not only meets McKinsey’s playbook for success but sets a practical, scalable, and replicable model.

Find full report here: McKinsey & Company+10McKinsey & Company+10McKinsey & Company+10.