Thursday, January 31, 2019

Something Just Doesn’t Make Sense About Autovol Modular

I was pleased when Prefab Logic announced they were spearheading a project to build a factory in Idaho called Autovol that would produce automated modular production to the US. In order to be successful I assumed they would be producing large amounts of limited unit plans over and over.

Now they’ve announced that the goal is to have the automated modular factory running at 80% capacity soon after the factory is built and certified to begin operations. They also announced that it will service the West Coast affordable markets.

That’s when I decided to look at some facts about modular production and what it could mean for their dreams of producing 1,600 volumetric modular units a year.

First let’s look at Autovol’s location in Nampa, Idaho which is at least 7 hours from their target market of affordable housing in major West Coast cities. Portland, OR is 7 hours, Seattle is 8 hours and San Francisco, CA is over 10 hours from the Autovol factory.

Let’s hope their transport drivers don’t violate the new FMCSA regulations of the 11-Hour Driving Limit where a driver may drive a maximum of 11 hours after 10 consecutive hours off duty. This means some cities will require a 2 day delivery and the total turnaround drive time for all those cities will be at least 2 days.

1,600 units a year means 30 units a week need to be produced. That could require as many as 24 transport trucks on the road at any given time and if the loads are oversized they will require between 30 and 60 escort vehicles. That is a lot of people.

And that is just the delivery side of the business. Add in service after the sale, different regional and local building codes and regulations, developer holdbacks and the total cost of investing and servicing all that automated equipment and 1,600 units may not be enough to break even.

I really hope that Autovol’s automated volumetric modular concept works as good if not better than they hoped for and that they set an example of what can be done in automated volumetric modular housing.

This will be an interesting story to watch


Steve L said...

Idaho's unemployment at 2.6%. An automated factory makes since given this number. Other factories might follow this lead into AI and automation to exist in the West Coast.

Backyard Home Pro said...

I see a big disappointment in their future. Automation depends on a stable of highly repetitive products. At this point the "affordable" market space has such a wide array of product needs that stay in the lower end of the units per project which would be difficult for the system to adjust to on an active production line.

Tom Hardiman said...

This company could do nothing by multi-family housing and stay busy all year. They could do nothing but hospitality and stay busy all year. Developers are paying to ship modules in from Poland and China for Pete's Sake! I hardly think a 7 hour road trip will be a deal breaker.

I find it sad that so many are quick to criticize a company for taking a risk to be more innovative and efficient. For the sake of the industry, we should all be rooting for them (and others like them) to be wildly successful!

Or we can keep fighting over that same 3%!