Friday, April 20, 2018

Roger Lyons Part of Prefab Logic’s Startup Services for Modular Manufacturing Plants

Prefab Logic, a leader in volumetric modular construction, has launched services that help startups develop best-in-class modular manufacturing plants.

Roger Lyons, Prefab Logic

Rick Murdock and Roger Lyons, founder of Penn-Lyon Homes in Selinsgrove, PA, in-house manufacturing experts at Prefab Logic, have developed many volumetric modular factory operations worldwide. In the face of a vast increase in modular building projects, Prefab Logic is now offering services to design and build new factories and meet surging needs outpacing current capacity.

Murdock co-founded Prefab Logic after decades on both sides of the industry—factory operations and construction site. The firm hired Lyons last year to add extensive manufacturing expertise.

“Most early factories were designed for movable structures,” Murdock adds. “Today, the vast difference in the type of modular construction needed along with the labor challenges we face dictate more progressive design and layouts. We can help owners avoid common pitfalls.”

Murdock and Lyons recently completed the Factory_OS facility on Mare Island in Vallejo, California. The Prefab Logic team brought the expertise needed to turn a former US naval facility into the modular factory of the future. According to the San Francisco Business Times, Factory_OS is fully booked for the first year, with projects including studios for formerly homeless people in Oakland, 110 new apartments in West Oakland, and 300 homes for Google parent-company Alphabet.

CLICK HERE for more information

Thursday, April 19, 2018

Lennar First to Build New Homes' Tech Around Alexa

Lennar announces that Estancia, a new community of upscale townhouses and single family homes is coming to the southern tip of the San Francisco Bay Area peninsula and at the heart of Silicon Valley.

These homes provide a great location close to major technology employers including Google. Each of these new homes also showcase Lennar's new Wi-Fi CERTIFIED™ home design which offers built-in wireless access points for commercial-strength Wi-Fi in every room.

Lennar's Everything's Included® program also provides a high level of features and upgrades that come as standard. These include quartz kitchen countertops, stainless steel appliances, designer-selected cabinetry and the latest in home automation features and technology from Ruckus®, Samsung SmartThings®, Ring® Video Doorbell, Honeywell programmable thermostat and more, that can all be voice controlled through Amazon Alexa!

PA Loses Another Modular Home Factory

Foremost Industries’ modular home and panel/truss plants near Greencastle Pa were sold recently but not to as a modular home factory.

Pennsylvania Cherry LLC closed on the purchase of the 52-acre parcel with three large buildings on March 30 and hopes to begin operations by January 2019. The company plans to hire 42 employees over the next three years.

Officials with the Pennsylvania Department of Community Development said Pennsylvania Cherry's investment will total $15 million with land and building acquisition, infrastructure development, machinery and equipment purchase and job training.

Pennsylvania Cherry will receive cherry boards from mills throughout a five-state supply area, then grade and kiln-dry it and package it for shipment to China. The market for cherry in the United States is nominal however, in China, they really like cherry.

Proximity to ports in Baltimore, Philadelphia and New York helped to draw the company to Franklin County.

The former Foremost property had been the subject of a legal battle over the sale of the company in 2016 and the ensuing bankruptcy complicated and delayed the purchase.

With modular’s growing popularity, especially for commercial work, it’s too bad this ‘ready to go’ factory and the accompanying panel and truss plant wasn’t snatched up for modular major hotel and apartment business. I guess investing in the future of our industry is still not a major priority.

Wednesday, April 18, 2018

When Will Horton Hear a Modular Who?

On Monday I posted a request for people in our industry to make suggestions about improving it. As I suspected most of the suggestions centered on what the modular home factory folks should do and only a couple of suggestions for builders.

Getting everyone on the same page is tough in this industry.

Here are some of the suggestions and for what it’s comments.

1. Eliminate the HUD mentality from the modular production: "On the floor and out the door."

Modcoach: Since our industry was founded by HUD oriented owners, that still follows us today. This is not a bad thing overall but it does make innovation in modular housing confined to what we have always done.

2. Eliminate the lack of promotion. Get out of your chair and out in the field. Make the phone ring instead of waiting for a sales call to come in.

Modcoach: In years past this was all we had. Today social media reaches millions of potential customers faster than any regional print, radio or TV marketing effort ever could. If you don’t have a social media person on board doing blogs, video and social media marketing, you will never reach the tech-connected new home buyer. You are “the who that Horton” needs to hear.

3. Eliminate the "It's a mobile home" mentality. Talk to your local municipalities and introduce them to the modular world that is great for vacant lots, in-fill projects and multi-family housing. If need be, invite them for a plant tour, including the Council, development services, inspectors, and zoning personnel. Yes, I work for a municipality. Yes, I came from the modular world. Yes, I have promoted and permitted 3 modular in 9 months, while previous administrations permitted none in 10 years.

Modcoach: This is exactly what needs to happen especially in the East. Between the media pushing ‘modular’ as the future and you introducing local building and zoning officials to the factory we can begin making vast headway to total acceptance.

4. Factories need to join the BSC and the MHBA

Modcoach: While currently focusing mostly on the East Coast and New England regions, both of these organizations need everyone’s help. If you don’t belong to at least one of them, you are missing something whose time has come

5. Builders need to stop expecting the factories to be the source of leads and marketing for them

Modcoach: I can’t believe builders are still looking to factories for all their leads. That ship has sailed. Today it’s the builder’s responsibility to generate their own leads. I can still remember the good old days when factories would send out leads galore to every builder and weeks later nobody had even reached out to them.

6. Factories need to improve their service departments right now

Modcoach: Builders have been complaining about service since the first modular home was delivered over 50 years ago. Jesus was a carpenter and I would bet that even he got complaints about shoddy work once in a while. It happens.

7. I have been involved in almost every aspect of this business -- finance, running factories, wholesale sales, retail sales and as a builder. The greatest need is for proper coordination and alignment between factory and builder, including:
1. Clear and unambiguous delineation of scope. 2. Rapid (or automatic) estimating, even if a fee is required. 3. Rapid drawings and engineering, even if a fee is required. (3D drawings are becoming the new standard.) 4. Factory assistance to the level desired, and paid for, by the builder.

Modcoach: What you’re talking about here is what should have happened years ago. Asking builders for a fee to do work at the factory is tantamount to heresy. That said, it really should happen if builders want to be more involved with the factory processes.

8. There is way too much customization to get the drawings done any faster.

Modcoach: Word to the wise. Watch for some, if not most, to begin cutting back on the ever expanding demand for more difficult and expensive custom work. The factories want to do it and can do it but the builder and their customers are demanding low cost and fast turnaround and that simply cannot continue to happen without some very serious conversations between all parties. Related Article: Has Customization Gone Too Far in Modular Housing

9. I'm a multiFamily guy in Modular. I can think of a couple of things that would help us out. AIA contracts specifically designed to include, not exclude, modular construction. Developer adoption of Design-Build, not Design - Bid - Build. It just makes sense and realizes savings for everyone. Do your "do-diligence" and pick your team before you hire an Architect. Project Management - Project Management - Project Management. It's not just overhead.

Modcoach: Rough truth- As long as single family modular home factories enter into contracts to build large commercial projects on a part time basis you will not see the dedicated staff or effort put in place to make all the things happen you mention above.

I suspect that there are a couple of modular home factories in the East that have already made the decision to do commercial right and even open a second line or a second factory to produce commercial. It has to happen.

10. Order Entry Software that is as customized as our product is. Software that is modular friendly, instead of software created for a similar industry that really can't be tweaked properly for our industry. Software that is NOT an ERP software.

Modcoach: Installing a BIM program into the mix is really expensive and time consuming to get installed properly. The current ordering system from factories range from paper and pencil entry (Yes, there are more of these than you think) to semi automated where manual entry is required for special order items and procedures to fully automated entry systems that is used more in the ‘plan book’ factory side of the modular industry.

If Horton is ever going to hear a Who, the Who needs to get working on taking the current modular home industry on a trip to “Innovation World”.

Tuesday, April 17, 2018

When Angie Speaks Consumers Listen

Hats off to Angie's' List for introducing their clients and hopefully more of their builders to the benefits of modular home construction.

The Video showcases Unibuilt Homes in Vandalia, OH.

Sunday, April 15, 2018

The Real Cost of Building a Custom Modular Home

Meeting the builder’s and their customer’s expectations for personalization and customization requires flexibility. And such flexibility can provide a distinct competitive advantage — as long as costs aren’t spiraling out of control. In a study of nearly 250 manufacturers over a 10-year period (2005–2015), it was discovered that 78% of firms had improved their ability to fill their total actual market demand but had lost control over costs.

Apparently, chasing the often elusive custom home customer can come at a cost that many factories are overlooking. That cost is increased production time on the line, more homes being sent out incomplete and severe increases in service work before and after delivery.

The labor and overhead costs to do ‘one-off’ custom work is increasing every day while nobody seems willing to put the brakes on it.

Many modular home factories have turned to commercial work like hotels, dormitories and apartment buildings to keep their lines filled. With all the best intentions management tries to calculate what profit will be made on each project. A team is put together to come up with a cost to present to the commercial customer and everyone buys into it.

Related Article: Can Modular Fill Specialized Housing Needs?

The dark side of commercial work is cost is a very elusive thing. Overruns in materials, overruns in labor and in the case of commercial projects holdbacks of up to 15% until the project is completed which could be 90-180 days after delivery were not fully figured into the bids and quotes.

A negative of commercial work is the abandonment of the single family modular home builder by many factories. Big companies like Cavco, Champion, Clayton and Commodore work in both the modular and manufactured home arenas. If and when they take on large projects they do it away from their strength product, the HUD home.

When a factory that doesn’t have a HUD line to fall back on takes on a major 100 module project and they can only turn out 10 modules a week, what happens to the builders that have customers wanting to know why their new home they saved up for has been delayed 10 weeks or more. They paid their deposit, the bank has given them a mortgage, the builder has pulled all the permits, they have given notice to the people buying their old home or notice to their landlords and now because the builder’s factory is under a performance clause in their contract to build a hotel, they could lose thousands of dollars.

There’s an old joke in the modular home building world: “We lose money on every house, but we’ll make it up in volume.” This bit of sardonic humor hits close to home for many small builders and even factories struggling to balance growth with profits.

But there doesn’t have to be a dark side. If a modular home factory wants to do custom homes, they must charge enough to make a profit and allow for enough time to complete the work. Is it the factory’s fault the customer balks at the price? NO! It’s the customer’s problem because they underestimated the expense and really can’t afford it. How many builders have lost a home to a competitor because they thought your cost was too high only to build a house without those ‘custom’ features with your competitor? If it has never happened to you consider that you might be drastically underpricing your homes.

If a factory wants to offer custom work for their builders pick a limited series of popular custom options and work through the numbers so the price is both cost effective and easy to produce. Or think about shipping the home prepped for the custom features the customer wants and let the builder price it at the job.

Being innovative is the real answer to building a custom home for individual customers.

Clayton Homes is acquiring large regional builders across central US. I’ve been told they are designing the homes with limited custom features for their new communities. The number of house plans are limited as are the front facades and interior options. Limiting the number of SKU’s is how they are making each house profitable.

Related Article: Clayton Acquires Largest Private Homebuilder in Texas

To recap, if your factory wants to do custom work, sit down and honestly work through the numbers, both financially and time. Both of these are quantitative. Then don’t back down from those numbers. Let’s be honest here, the builder and their customer really don’t care if you lose money on custom features.

If you want to enter the commercial side of modular, enter it completely. You can’t play in the muddy field of commercial work on a part time basis. If you want to serve both the builder and the commercial markets, considering building another factory. You don’t see Ford building mustangs and F150’s on the same assembly line.

And lastly, if you want more builders in your network instead of commercial developers, start a real program to recruit new to modular builders and entrepreneurs, train them thoroughly and mentor them through their first 3 homes.

Modular construction in both commercial and single family homes has nowhere to go but up. Developers know it, investors know it, Architects know it. The media is shouting its benefits from the rooftops. The only people that don’t understand that modular construction is the future seems to be us.

Beracah’s Zero-Energy Homes Arrive in Delaware

Milford Housing Development Corporation, Beracah Homes and Delaware Sustainable Energy Utility are collaborating to offer zero-energy modular homes.
Two models of the energy-efficient homes are built on the assembly line at the Beracah factory in Greenwood. The two-bedroom, two bathroom models include the 14-by-70-foot Solstice, which costs $143,800, and the 28-by-43-foot Sundial cottage, which costs $161,800. The cottage was unveiled during the 2017 Delaware State Fair. That model home has been sold to a mother and son who live near Dover. The cottage – with handicapped accessible modification added – will soon be moved to their lot, and they will be the first family in Delaware with a ZeMod house.

Related Article: Beracah Homes Open House Totally Awesome Russell Huxtable, vice president and chief operating officer of Milford Housing, said while the cost per square foot of the houses is slightly above industry standards, energy incentives and down payment assistance added to low utility costs all make the homes more affordable. “It's not just the mortgage, but the utilities that have to figure in the cost,” he said. Huxtable said the homes are available to everyone, but it would be liberating for a low-income family to avoid high utility bills. Similar homes in Vermont – known as Vermod houses – have had zero-dollar energy bills, Huxtable said.

Related Article: Vermod Homes Growth Linked to Solid Design The Vermont Energy Investment Corp. did a feasibility study to jump-start the program in Delaware. The goal of the three-year pilot project is to build 25 homes in Delaware. Milford Housing is charged with day-to-day management of the project. Focus on air quality as well
The houses feature well-insulated roofs and floors, 10-inch walls and airtight windows. The air inside the house is monitored by a state-of-the-art CERV air-quality ventilation system, which automatically delivers fresh air when levels of carbon dioxide or volatile organic compounds exceed 1,000 parts per million. Beyond that level, studies show people will see a decrease in mental performance, sleep quality and productivity, according to the ZeMod website. The houses are all-electric with high-efficiency HVAC systems for heating, cooling and hot water with no fossil fuels used in the home. Solar panels produce all the energy required, and all appliances meet Energy Star standards. Heat and air conditioning are provided by one indoor, wall-mounted unit. Even the washer and dryer are high tech – humidity from the dryer is recirculated into the washer. Efficient utilities help lower cost
Huxtable said the homes are suited for couples who are downsizing. And the 14x70 home is perfect as a new or replacement home in a manufactured home park. For those with credit issues, Huxtable said, Milford Housing offers credit counseling to help rebuild credit history. Huxtable said adding in mortgage and utility costs, a ZeMod homeowner would pay about $620 a month, compared to about $800 for a new manufactured home. He said typical monthly utility costs are about $230 for a new manufactured home, or 10 times higher than with a ZeMod house. That doesn't take into account land cost or land rent.

Fire Destroys Canadian Modular Home Factory

Flames destroyed the 75-employee plant of Habitaflex Concept Inc., located in an industrial park in the town of Montmagny, about 30 miles from Qu├ębec City

The fire was reported about 2 a.m. Friday morning, April 6, in the central section of the building. Management said it is working to minimize the impact and continue operations. The Habitaflex Concept Inc., which manufactures smaller fold-up, transportable home building kits.

It is one of several sister production plants in the area operated by Maison Laprise, which employs 300 manufacturing a variety of sophisticated prefabricated homes.

The fully finished homes can include cabinetry, flooring and millwork and are designed to erect rapidly at construction sites. Production at other plants was unaffected by the fire, according to Bastien Poulin, Vice-President and CFO of the Laprise Group and employees of the factory have all been relocated to sister plants.

Established in Montmagny since 1989, the manufacturer of pre-manufactured homes and commercial structures launched its Habitaflex Concept division in 2000 and then bought Doors and Windows Laurendeau the following year. In 2009, the company made the jump to the international scene, launching Laprise SAS, a builder of wooden frame houses in Tours, France, and in 2010 built 7500 temporary homes for the victims of the earthquake in Haiti

While production at Habitaflex is interrupted for an indefinite period, other divisions of Maison Laprise continue to operate.

Thursday, April 12, 2018

Only 4 Ways to Build a New Home

Let’s get today’s new home building terminology put into its proper place. “Prefab”, “Offsite”, “panelized” and “affordable” are terms we are hearing more and more today. Fact is, all of them should be banished from the home building vocabulary, taken out and beaten to death and forgotten for eternity.

There are only 4 main methods of building a new wood framed home.

"Manufactured", "On-Site", "Component" and "Modular". All the other types of home construction could be put in that minuscule bucket that includes the 3D printed, concrete, tiny, container, log and the rarely used in the US, steel framed houses.

Of these 4 methods one is in a category all by itself, the manufactured home or HUD home. It is the only one federally regulated under the Department of Housing and Urban Development. These homes are usually built on steel frames with wheels and tongue attached. They are well built and a huge segment of the housing market. They aren’t built to the stringent IRC codes that regulate the vast majority of all single family homes in the US but rather to HUD standards.

On-Site home building still enjoys the largest chunk of the single family home building business. Laborers swinging hammers, using nail guns, circular saws, levels and sawsalls can be found at job after job building the same way they have for the past century.

Components have also been around for decades. Factories building wall panels, trusses and even flooring systems have automated part of the On-Site building process doing work that today’s laborers can no longer do at the job site. All that is left for builders using component systems to do is to make sure their laborers can follow the numbering order to put up them in their proper positions. Some component factories are now setting their own product which eliminates the builder's need to even hiring unskilled labor to put the house together.

This type of construction has recently been touted as a time saving, precision method of building the frame of the home cutting the framing time by up to a week and its market share has nowhere to grow buy up as labor shortages continue to hit home builders hard.

The most unique and possibly the best method of the 4 is modular.

When On-Site homes are framed at the job site there is still a lot of skilled labor that needs to be brought to the house, work to be inspected and reinspected, rain and snow that needs taken into account, waiting for subcontractors to show up, more inspections and so on. Yuck!

Modular on the other hand is the only IRC building method that brings all the best of component walls and trusses, skilled labor, factory inspected work (prior to arriving at the job site) and good weather together, loads this skillfully built home on a carrier, ships it to the job site about 80% complete and has it set 2 days or less.

With the resurgence of new home building in the US, the combination of 70% fewer GC’s than 20 years ago and the extreme shortage of day laborers, one has to ask the ultimate question…”Why isn’t every new home builder at least trying modular housing for some or all of their new homes?”

With all the positives for modular home building I have to wonder why modular factories are still pricing their homes like supermarkets selling turkeys at Thanksgiving? It’s the only time of the year that everyone wants to buy whole turkeys and the supermarkets sell them below cost or simply gives them away.

Why are modular factories reluctant to charge more for all this skilled labor they have assembled to build homes which in turn would allow them to pay their production people more and provide the best quality built home the US has ever seen?

It all goes back to turkeys at Thanksgiving and the fear of being the first factory to price their homes properly for all the benefits modular brings to the table.