Wednesday, January 17, 2018

Modular’s Presence Means World Domination

Modular construction is such a ubiquitous term covering many types of construction methods. This writer is old school and looks at modular as a six sided module built within a factory to IRC standards, shipped to the job site and set in place with a crane.

But the world looks at the term modular in a much broader sense. There are flat pack homes, manufactured homes, 3D printed homes, steel and concrete. Even wall panel and SIP factories are now calling their product modular.
Combining different types of construction methods on one project is rapidly gaining a foothold. With this type of construction-integrated manufacturing, it is estimated that 10% of traditional site build contractors in the US could disappear over the next five years. There is no doubt that modular construction and construction-integrated manufacturing is playing an increasingly important role all over the world. Modular is expected to rise 6% globally by 2022, with some countries already leading the pre-fab charge. Sweden is a model for modular home building — around 84% of detached homes built in the Scandinavian nation use prefabricated timber elements.
Compare this against the U.S., Australia and the UK where the figure is just 5%, and Sweden is practically a modular world leader. Meanwhile, third-world countries are considering how prefab can meet their housing shortages and cost constraints. Nigeria is one example that is taking a long look at modular housing to meet its crippling housing shortage — close to 20 million units at the last count. In Japan, around a quarter of all new houses are prefabricated. Japan’s success shows both the quality of assets manufactured in controlled conditions and how many new entrants they attract. As well as market leaders Sekisui House and Daiwa House, Japanese retail giant Muji recently started developing modules, and Toyota has manufactured prefabs for over 20 years.

Japan particularly prizes prefab construction for its quality and efficiency. Offsite modular construction removes the last-minute changes that can plague onsite construction and reduce the quality of the finished asset. Small wonder from 1963 to 2014 manufacturers built 9 million prefab homes in Japan. With growing skills shortages and a need to build faster and more cost-effectively, it will become a crucial competitive advantage to be able to invest in the right technologies and people and find the right business partners to leverage construction-integrated manufacturing.
My goal for 2018 is to work with the US modular housing industry to find ways to bring skilled labor into the industry and also provide an educational venue for “new to modular” builders where they can learn the best practices of modular construction before they sell their first home.
Join with me in exploring construction-integrated manufacturing through my new series of Symposiums this year. More information forthcoming soon.

Tuesday, January 16, 2018

What If You Ran Your Factory Like a Chick-fil-A?

I love stopping at Chick-fil-A, not only for the food but also to see how organized and disciplined every store functions. The food isn’t bad either.

It occurred to me that there must be a secret to their success that modular home factory management could use to ramp up their sales staff’s performance and bring more builders into the modular home business.
I decided to take a look at what they do differently from all other fast food restaurants that makes them so busy and successful and what I discovered was not really shocking but absolutely brilliant.
Their training process consists of two or three interviews with a Team Leader or Manager and then training that consists of a video curriculum and short tests afterwards. It's not terribly difficult.
Most modular factories I’ve worked for and have observed have little or no formal training program for new sales reps. But I was more interested in what happens after the initial training. My theory is that employee morale is maintained by having good leaders who hire the right people and by the sense of knowing they’re working somewhere special. Every fast food restaurant has a drive-thru but how many have a line of cars that wraps around the building no matter what time of day and has seven or eight registers in the lobby that are operated continuously, especially during peak times?
Even in mall locations, every other place just has one register--period. Chick-fil-A has at least five. That says something, and I think there is a sense of pride that comes from working there. Secondly, management is selected very carefully. If you have the values and the skills to become an operator for Chick-fil-A, then you know that not just anyone is right for your Team. The management must be highly motivated and mature individuals who care about the brand and not just about food service or a paycheck.
These leaders, in turn, keep their workers motivated, who were also hired because of the sense of pride and ambition they demonstrated during the hiring process.
Yes, there are some really good Sales Managers in our industry but as a rule most were given the position simply because they were a good sales rep and the job opened up. There is almost no formal training in our industry for Sales Managers.
A large majority of the cashiers at Chick-fil-A are between 16 and 25. This is rather common at other quick service restaurants, too, but I think this is almost a strategy at Chick-fil-A -- not to accuse them of being discriminatory. I feel that, when hiring, management looks for people who don't have a lot of experience in food service, so that it's not just "another job" or "another restaurant" to them; rather, it's an opportunity to start a career in the industry and represent a valuable brand.
Is this the model for the our industry or do we just hire and/or lure established sales reps from other factories simply because they might bring a couple of builders with them and knowing we don’t have to spend a dime on training a sales rep that must be good because he/she has worked in the industry for more than a year? Most Chick-fil-A stores get plenty of applications each week, so, if the employee’s service and attitude turns out to be not up to par, or they do something stupid, they typically have the luxury of mentoring you only for so long before they will replace you.
Think about this: how many times have you seen a blatant advertisement for working at Chick-fil-A posted on the windows, doors, or walls of their buildings? Most of them generally don't have to seek out the workforce; the workforce comes to them.
There are modular factory sales reps and even Sales Managers that have proven to be sub par and do stupid things but have remained in their job for years simply because nobody is beating down the door wanting to work for you. It all comes down to good training, great leadership examples, and untainted workers who exude positive attitudes and teachable spirits, all because they are proud of what Chick-fil-A represents: great food, great people, and strong ethics.
Now go back and read this one more time and replace Chick-fil-A with your factory and ask yourself if your company is the Chick-fil-A of the modular housing industry or the Burger King.

Monday, January 15, 2018

Carillion, Major UK construction Firm Goes Belly Up, Putting 43,000 Jobs at Risk

The British government has moved to dispel mounting concern about the knock-on effect of construction firm Carillion’s collapse, amid fears for the many companies and workers that relied on it for business.

Concerns mount over the wider supply chain after insolvency of construction company with 450 public sector contracts.
Carillion said it had no choice but to go into compulsory liquidation after weekend talks with creditors failed to get the short-term financing it needed to continue operating. The construction and services company is working on major public works projects, such as the HS2 rail line in northern England, while also maintaining prisons, cleaning hospitals and providing school lunches. Carillion, which managed hundreds of public sector projects and vital public services, collapsed into liquidation after last-ditch rescue talks failed, with a team from accountancy firm PwC drafted in to help manage the process. The government’s Insolvency Service urged Carillion’s 19,500 UK staff to go to work as usual and assured them they would get paid to continue providing services such as school dinners, hospital cleaning and prison maintenance. The prime minister’s official spokesman said that some of Carillion’s 450 public sector contracts could be taken in house, although that was “a decision for further down the line”. Contracts for building part of the HS2 rail link will remain in the private sector, he added. Kier and Eiffage, the other two construction partners, have assured ministers they can build the London to Birmingham section of the line without Carillion. Other companies said they had already drawn up contingency plans for Carillion’s demise, including the UK’s largest construction firm, Balfour Beatty, which expects to take a £45m hit. The PM’s spokesman described the collapse of Carillion as “very regrettable” and said that ministers had been monitoring the situation since the company’s profits warning in July.

The World is Rapidly Accepting Modular Housing

Out of the box: Philippines' prefab village designed by starchitects
On a building site about 50 miles outside the Philippine capital of Manila, construction is underway on a completely new 346-acre town.
But much of the work is taking place elsewhere. In fact, most of the 6,000 homes in the development, called Batulao Artscapes, will be prefabricated -- built in factories and then transported to the site. Expected to complete by 2020, the masterplan comprises 12 different styles of home set across four "villages." Prospective residents can choose from prefabs designed by notable creatives, from artist David Salle to the musician-turned-interior-designer Lenny Kravitz. But given that modular homes were initially created to deliver affordable housing -- quickly and at volume --what can an entire town of designer prefabs offer that conventional settlement can't? For Dutch designer Marcel Wanders -- whose "Eden" house is being made available in Batulao Artscapes -- a large-scale approach makes prefabs more viable for both designers and buyers. "You still need electricity, water, sewage -- it needs a lot of stuff. We'd basically be creating half a product. So I thought, 'Why wouldn't we make a prototype for a developer (who can) build and sell the houses?' "The problem with prefab housing is that while you can buy the house and build it quickly, you have a lot on your plate," he said in a phone interview. "Now you can have a prefab house that has everything you want -- electricity and so on -- that is organized by the developer." CLICK HERE to read the entire CNN Style article.

Sunday, January 14, 2018

Connecticut Modular Farmhouse Balances Modern, Traditional Styles

As architect J.B. Clancy began sketching a country retreat for his longtime friends from New York City, he was looking for the right balance between modern and traditional. Clancy, a principal with Albert, Righter & Tittmann in Boston, refined the drawings with his clients’ input, and each variation included more New England vernacular — a steep pitched roof, a generous overhang of eaves, and a covered front porch — while retaining light-filled, open spaces within.
“They wanted it to feel fresh and new but still fit in with the rural Connecticut landscape,” he says.

To speed the building timeline, the owners hired Huntington Homes of East Montpelier, Vermont, which specializes in energy-efficient, factory-built, modular construction. The house has a superinsulated envelope, and the main rooms are oriented south to capture passive solar heat.

What the owners now call their modern farmhouse sits high atop a rise at the front of their 112-acre wooded property in Litchfield County, Connecticut. A gravel driveway that winds its way up from the road follows a path beside an old stone wall.

Click Here to read the entire Boston Globe article and view more pictures of this great home.

Saturday, January 13, 2018

What Home Buyers Wanted and Built in 2017

At one of the Press Conferences at IBS I learned what new home buyers bought, what they wanted in their new homes, what they don't care about and even a little about tiny houses.

New Homes built in 2017 averaged:
  • 2,627 Sq Ft, same as 2016
  • 46% had 4 bedrooms
  • 20% had a 3 car garage
  • 37% had 3 or more bathrooms

Potential Tiny Home Buyers:
  • 53% of those interviewed by the NAHB said they would potentially buy a tiny house. 28% said yes they will consider buying one while another 25% said they may consider it.
  • 63% of Millennials would purchase a tiny house
  • 53% of Gen Xers
  • 45% of Boomers
  • 29% of Seniors would purchase one

Potential New Home Buyers:
  • 51% of new home buyers are looking for a first floor bedroom suite.
  • 53% want a home office, work space or a family communications center
  • 62% want additional bedrooms with private bath.
  • 32% desire a dedicated game, hobby craft room.

First Time Home Buyers ‘Want List’ in Order of Preference:
  1. Living Room
  2. Laundry Room
  3. Dining Room
  4. Garage Storage
  5. Walk in closet in Master Bedroom
  6. Both a shower stall/tub in master bath
  7. Front Porch
  8. Great Room
  9. Two car garage
  10. Kitchen double sink

Second Time Home Buyers “Want List’ in Order of Preference:
  1. Laundry Room
  2. Living Room
  3. Walk in closet in master bedroom
  4. Two car garage
  5. Garage storage
  6. Kitchen double sink
  7. Dining Room
  8. Patio
  9. Table space for eating in kitchen
  10. Both shower/tub in master bath
  11. Hardwood Flooring
  12. Energy Star Appliances
  13. Great room
  14. Granite countertops

First Time Buyers’ Most Important Factor when choosing new home:
  • Price 60%
  • Location 24%
  • Home Features 8%
  • Home Size 7%
  • Other 1%

Least Desirable Home Features in order by Generation:
  1. Elevator
  2. Golf Course community
  3. High Density community
  4. Pet washing station
  5. Cork Flooring
  6. Only a shower stall in the master bathroom
  7. Wine Cellar
  8. Laminate kitchen countertops
  9. Dual toilets in Master bath
  10. His and Hers baths

Gen Xers:
  1. Elevator
  2. Golf Course Community
  3. Pet washing station.
  4. Wine Cellar
  5. High Density community
  6. Cork flooring
  7. Daycare center nearby
  8. Laminate kitchen countertops
  9. Dual Toilets in master bath
  10. Only a shower stall in the master bathroom

Baby Boomers:
  1. Elevator
  2. Daycare center nearby
  3. Pet washing station
  4. Wine Cellar
  5. Golf Course community
  6. Two story family room
  7. Dual Toilets in master bath
  8. High Density community
  9. Wet bar
  10. Cork flooring

  1. Daycare center nearby
  2. Pet washing station
  3. Elevator
  4. Wine Cellar
  5. Golf Course community
  6. Two story family room
  7. Cork flooring
  8. Baseball or soccer fields nearby
  9. Two story entry foyer
  10. Game room.

The Future Passed You About a Year Ago

The vast majority of modular factory owners, management, builders and suppliers wake up every morning and don’t realize that it’s not 1998 any longer.

That observation was brought home to me while attending the International Builders Show (IBS) in Orlando this week. The changes I saw just from last year’s show were amazing.
Everything from SIP based lumber to Augmented Reality was on display. Speakers at all the different venues were talking about ways to improve your business with many of them giving us a glimpse into the future.
One young woman at a booth featuring a new CAD product summed it up best when she said “The future passed us a year ago and we’re already seeing what we once thought impossible walking in the front door”. I love that line.
But there was one thing I didn’t see this week at IBS…..YOU!

Don’t be like the 3 monkeys not wanting to hear about the future, see the future and most importantly, discuss the future.
With the exception of a couple modular people I didn’t see anyone from our industry there. Not only did you miss all the great exhibits, all the wonderful speakers and all the networking opportunities, you were missing the future.
People everywhere were talking about modular. Case in point. I try to start a conversation about modular everywhere I go. I’m sitting at the window seat on the plane heading to IBS and immediately learn the person next to me is the President of large Baltimore development company that tried modular a few years back. He told me he doesn’t even consider it an option as his company lost a huge amount of money on their first modular project.
Modular construction was not on his radar until we talked about all the ways it could solve some of his problems especially his labor issues. Maybe modular is back in his future.
The point of this is that doing business the way we always have isn’t part of the future. The future is automated wall panel machinery that can do custom walls faster than can be built currently.
The future is the modular builder’s customer seeing the factory process through a VR tour while sitting in their living room.
Visionaries outside the modular construction industries are doing extraordinary things to help improve our industry. They are disruptive, they are young and they are the future of modular construction. Everything from 3D printed homes to better products to imaginative new ways to design a home.
I want to bring a little of this future to you. Some of the top speakers at this years IBS are going to be sharing their glimpse into the future at “The Future of Modular in the East” Symposium on January 24th in Lewisburg, PA.
If you can’t spare one day to listen to what has already happened and what is coming like a rocket into the modular industry, maybe you should just stay home and watch the future run over your business. It takes no prisoners!
CLICK HERE to learn more about my January 24th Symposium and register today. The future waits for no one.

Wednesday, January 10, 2018

IBS - Day Two Update

Another great day at IBS in Orlando. Started the day off at the Marvin Windows breakfast. Thanks Marvin for a great way to start the day.
Sat with quite a diverse group of builders. One builds luxury homes in the Orlando, another is a construction manager from NH and the third is a site builder from PA. Turns out all three share a common problem. Lack of skilled labor.
I could have jumped on my modular soapbox but decided it would be better to listen to them than to offer modular as a partial solution. Glad I did as each described how it was affecting their business.
Then it was off to the 55+ council sponsored event called “Adaptive Housing in a Box:How Modular Construction Can Meet Your 55+ Needs” to listen to 3 modular friendly people talk.

l-r; Valerie Jurik-Henry, Ken Semler, John Colucci

Valerie Jurik-Henry, John Colucci, Westchester Homes and Ken Semler, Express Modular took their hour to take the audience one step at a time through the benefits of using modular to builders meet both the needs of the 55+ crowd and the builder’s need to solve their labor shortage. I was happy to see so many questions from the audience who even stayed afterwards to meet with the speakers. Way to go Guys!
Next up was a press conference about the future trends that new home buyers want in their homes.

Rose Quint, the discussion leader gave us some interesting information. Two other speakers talked about the differences and preferences of mainstream houses and luxury home buyers.
More about this in later articles.
Lunch at the BSC Lounge courtesy of Citizens Bank and then off the exhibits. Look for another update about that soon.

Tuesday, January 9, 2018

Is The SKY The Limit?

Summary Skyline is buying a much bigger, private competitor Champion Housing, and its shares rallied 50% on the news.

Economically the deal makes sense, financially the info is very thin, so at least some investors are flying by the seat of their pants. In that light, the magnitude of the rally is a little surprising, and from what we could tease out, it is possible Champion hasn't experienced much growth lately.

This is the opening lines from a Seeking Alpha article from yesterday.

CLICK HERE to read the entire article and maybe you can understand what is happening and tell the rest of us.

IBS - Day One

Left the house at 6:00 AM for a 9:55 AM Flight to Orlando International Airport. 9 ½ hours later at 3:30 PM I entered the Big Top circus of IBS. Speakers, exhibits and people everywhere….Oh My!

The first day was almost in the books for the day by the time I visited the BSC (Building Systems Council) lounge on the 3rd floor. No sooner did I walk in, Mike Holmes from the “Holmes on Homes” TV show began talking about TimberBlock Engineered Homes along with Parker McGee from the company.

Quite fascinating and he is just as nice and down to earth as he is on TV. For all those not familiar with the BSC, it is the place where the future is happening. Under the guidance of the BSC's Devin Perry it has seen a resurgence in attendance and participation by BSC members. The BSC is composed of all the types of construction that isn’t site built. Modular, panelized, timber, log, concrete, SIP and others. The future of housing lies with these types of construction. People representing each of them was in the room with the blatant exception of anyone from the modular factories. I can only assume there might be a couple at IBS but even if one or two factories are at IBS, not to see a single modular factory person at the reception that followed Mike Holmes was eye opening. The people I met in just my short period of time today were a most interesting bunch who were joining in the BSC activities for the first time and finding that this is place to learn about the future. Let’s hope day two is filled with wonder for Modcoach as I stop by several education sessions, visit the Exhibit Halls and the Professional Builder Village located outside. And yes, eat my fair share of free food.