Should Quality be a “Line Item” for Modular Home Factories?

Yesterday I received an email from a Sales Manager at a modular factory telling me that he would like to add a “Line Item” to the contract where the builder could select “Quality Warranty” at a cost of $5,000 so the builder would get his house flagged for Zero Defects.

I read that email several times and I still can’t believe what he suggested as a way to improve quality. Don’t ask, I won’t tell anyone who this is, not even his General Manager.

Modular home factory owners and management seek to contain costs in the manufacturing process and there is no better cost to eliminate than the cost of poor quality. Scrap material, lost labor hours and service and repairs after the house is set add to the cost.

In order to best eliminate these wastes, a modular home factory must plan a strategic approach to quality improvement. And don’t make it a “Line Item”.

By following these five steps, quality can be improved and it shouldn’t cost either the factory or the builder $5,000 a house.

1. Work as a Team Quality won’t be substantially improved by one or two people. To really make lasting and meaningful change in manufacturing processes, it will take a team-based approach.

One of the most important first steps is knowledge of current process and how it got to this point. Why is the process the way it is today? There must be a reason or cause, and that reason should be considered so as not to repeat a problem of days gone by.

2. What is the Quality the Builder and Their Customer Expect Too often, factories want to make a product “better” but don’t really know what better means. With additional cost, we almost always can make a product better.

Someone at the factory should serve as the builder/customer advocate. Typically this voice can come from the sales or marketing departments. Use the builder/customers’ perspective to define what the best-in-class product would be and meet those requirements while minimizing cost.

3. Share Repair and Service Costs in the Field with Everyone at the Factory

The cost to fix a defect in the field once it reaches a customer is dramatically higher than the cost to fix the source of the problem before it is created. It is essential that the production line people be trained to understand the cost multipliers involved with warranty repair or replacement and cost of damaged reputation. Once the staff take this perspective, a desire to find root cause for problem solving is inherently developed. It’s surprising the number of cost saving and quality improvements come from the people that actually do the work.

I remember building some very nice homes when I was a sales rep for Champion’s Genesis Home division. Curved walls, some curved half walls with matching curved oak tops, award winning kitchens and even factory installed Bruce flooring, finished oak staircases and ceramic. When one of then custom homes was finished by the builder I took pictures of both the inside and outside of the home and posted them on the bulletin board of the factory lunch room. None of the people realized that what they built on the production line looked like when completed. I got a lot of people telling me they were proud of the work they did on that house.

4. Look at the Root of the Problem All too often, management tries quality improvements fix the symptoms of failure rather than the root cause. And sometimes those improvements are just as bad as the original symptom.

If a modular factory has started a builder/customer advocate program the root cause may not be found in the production line, rather it might only show it’s ugly head when the house is assembled in the field and that is why the advocacy program can help identify these root causes.

5. Adherence and Discipline are the Keys to a Quality Modular Home Throughout the quality improvement process, it is essential that strong process discipline is employed.

However there is a rather large grey area when it comes to building a custom modular home. Some of the processes and options being asked of the production line people could be new when the module comes down the line. The line worker may not know how to do it properly. These areas need to be identified before the modules hit the line and addressed with the people that will be assembling it.

This doesn’t mean that someone needs to watch over the worker’s shoulder while they are doing it. It means that the problem was identified, discussed with the people that will be doing it and letting them know if they run into a problem that others will be available to help. A guess on the production could cost thousands of dollars in repairs in the field.

These are 5 general suggestions to help insure quality is built into every home and not just a “Line Item”.

MHBA's Five Simple Truths About Modular OFF-SITE Construction

Recently the Modular Home Builders Association reached out to Ken Semler of Express Modular to get the straight scoop on modular homes, starting with these five “truths.”

TRUTH #1: MODULAR DESIGN ISN’T BOXY DESIGN (UNLESS THAT’S WHAT YOU WANT) Modular homes appeal to the masses of home buyers by offering design excellence through classic architecture. Just view the modular home plan collection at one of the top home plan websites, ArchitecturalDesigns.com. There you will see thousands of examples of top architects and designers whose plans and ideas can be “modularized” and built with the advantages of modular construction. While modern architecture offers wonderful design and beauty, most of America still chooses to live in a home that looks much like the one they grew up in.

TRUTH #2: MODULAR INCREASES CONSTRUCTION PRODUCTIVITY A building system is essentially a highly engineered process of producing buildings or components of buildings in a highly cost effective and efficient manner. Roof trusses and floor trusses are components that many are familiar with that are produced using a building system. Almost every residential builder today would not imagine building a home without using roof trusses and even floor trusses. Why? Because they are strong, pre-built (built offsite then delivered and set), and cheaper than building those same components on-site.

Modular is actually a design approach. It is a process that divides a system into smaller parts called modules. These modules are built in a factory using many of the components and subassemblies that are used for onsite construction. These included roof trusses and floor trusses. The advantage is that these components and subassemblies are assembled into larger modules with the assistance of cranes, tooling, and jigs that just aren’t available in field construction. It is the smarter way that industries have discovered to produce custom products using standardized modules or assemblies.

TRUTH #3: MODULAR REDUCES CONSTRUCTION TIMEFRAMES Building in a factory away from the jobsite increases construction efficiency and productivity enables better sequencing in construction processes and reduces weather-related delays. In typical onsite construction, the process is the bottleneck. Everything has to happen in sequence. Building off-site means various aspect of the building is done simultaneously increasing timeframe efficiencies. Overall construction completion timeframes are drastically reduced.

TRUTH #4: MODULAR MAXIMIZES HOME VALUE The process of modular construction is the equivalent of construction efficiency. Efficiency means planning the entire construction process. The process builds efficiency in many ways. Here are just a couple:

• Buying Materials in Bulk – Instead of buying materials by the pickup truck load, factories pull the material needs of many homes together to negotiate better prices with suppliers lowering overall costs.
• Better Use of Materials – Material can be bought in the lengths and sized needed versus being cut as needed throwing away the scrap.
• An often overlooked advantage of faster construction is the reduction in interest and carrying costs. With elaborate custom home construction projects that are financed with a construction loan, there are interest charges every month. These expenses are lost with no tangible long term value. By reducing the overall construction timeframe, money isn’t wasted on interest expense.

TRUTH #5: MODULAR CONSTRUCTION IS RESILIENT CONSTRUCTION

Resiliency is the intentional effort to design and construct buildings and landscapes to withstand both natural and man-made disasters. Modular homes are built strong. The basis for modular construction is to build a home that meets or exceeds building code. However, the modules that make up a modular building are built off site and transported to that site. The effort of getting from a factory to the building site is about the equivalent of surviving a hurricane and an earthquake before a module ever reaches a jobsite. It is placed on a carrier, driven at 55 – 65 MPH on highways, over bridges, and around curves. It may have to navigate back roads or tight residential streets. This 20,000 – 60,000 pound module is then lifted in the air by a crane with 2 or 4 straps or cables and placed on a foundation.

The resiliency built into every module is displayed at every modular home installation. In most cases, a module will only suffer from minor, if any, dry wall cracks. Structurally, the modules are stronger than anything that is built onsite. Resiliency is then exponentially increased when each of the modules are then connected with lag screws, bolts, and/or straps upon final installation. The strong interconnections between modules make modular homes extremely resistant to wind events as documented in the FEMA study following Hurricane Andrew.

ABOUT THE AUTHOR Hi, I am Ken Semler the founder of Express Modular. I am passionate about this industry, our company, and the products we provide. Modern modular construction provides the ability to deliver healthy, safe, and energy efficient living spaces. Express Modular is a licensed builder/contractor in almost every state. I believe that modular homes provide the best way to deliver virtually unlimited design flexibility at the greatest value.

Sea Box Wins Approval for Structural Building Modules

SEA BOX ICC-ES ESR-4082 WILL STREAMLINE APPROVALS FOR CONTAINERIZED CONSTRUCTION PROJECTS.

This past month, Sea Box’s Structural Building Materials from Shipping Containers received an evaluation report, from the International Code Council’s Evaluation Service.

This report provides evidence that the Sea Box Containerized Construction Element (CCE) meets IBC 2015 and IRC 2015 code requirements as a structural building module. Building officials, architects, contractors, specifiers, designers and others can now employ ICC-ES ESR-4082 as a basis for utilizing or approving Sea Box CCEs in construction projects under the International Building Code.

ICC-ES thoroughly examined Sea Box's product information, test reports, calculations, quality control methods and other factors to ensure the product is code-compliant. Both Sea Box’s materials and quality control processes were reviewed and evaluated during the compilation of this report. As a result, each Sea Box building module manufactured from shipping container material will be labeled with a unique identification plate attesting to the product’s adherence to the standards set forth in both the International Building & Residential Codes.
A Sea Box ESR labeled container will streamline the calculations and approvals for any construction project that desires to utilize shipping containers as a main component in its structural design.

ICC-ES is a U.S. nonprofit, limited liability company that does technical evaluations of building products, components, methods, and materials. Its evaluation reports are intended to aid agencies that enforce building regulations by assisting them to determine code compliance.

Sea Box, Inc is a U.S. based small business, specializing in the design, customization, and manufacturing of ISO containers, modular buildings, and container accessories for both commercial and military applications

Thanks to Randy Soper of Sea Box for this important update.

For more information contact:

SEA BOX, Inc. 1 SEA BOX Drive East Riverton, NJ 08077-2022 P: 856-303-1101 E: sales@seabox.com

Innovation or Disruption - Which is the Future of Modular Construction?

Today there is a lot of talk about somebody like Toyota or IKEA finally entering the US modular home industry and being the Disruptor we’ve all heard is coming. Let me be the first to tell you that is BS.

The US modular home industry shouldn't be looking for a disruptor, but rather an innovator.

Looking at Disruption, if it actually came to fruition, you would probably see a modular disruptor have the following in place:

• Get pricing online almost instantly with an approximate date of occupancy
• Have a website where home buyers could choose their home plan
• Choose from a list of standard options and upgrades
• Have a mortgage as part of the process
• Have a large factory with high tech automation
• List of approved site builders for excavation and permitting
• Factory crane and set crews
• Factory finish crew
• Quality control crew arrives after completion to make last minute repairs
• Customer moves in

To say this is a logistical nightmare would be an understatement. As long as there are buyers that own their own plot of land and “want what they want” and don’t want to have a house like everyone else, this will never work. And let’s not forget there is a skilled labor shortage that those disruptors would need to overcome.

It could work if the housing unit was an apartment in a 200 module production run like we see in many foreign countries and in affordable housing like Google’s factoryOS order for their employee housing.

Innovation on the other hand is already available for modular factories and builders. It’s called Extreme Quality Control.

When I say extreme I mean having people look at EVERY part of the process from the initial order from the builder through to the day the house is set.

Every step has to be run through the QA machine including the costing, engineering, production and factory finish. The factory’s QA job should not end at the gate. Quality of the modules when they arrive and unwrapped needs verified. Then the set crew will be evaluated for quality of the set and finally a total walkthrough of the home prior to release to the builder must be made with the builder signing off.

What would be the cost of all this quality control? I’ve talked to a couple of factory owners who thought it could be between $3,500 - $5,000 a house. Could the factory absorb that cost without passing it onto the builder? Absolutely not.

Would the builder be willing to pay an extra $3,500-$5,000 a house to insure getting a house that has been inspected and signed off by the factory Quality Assurance people? Probably not.

Even if this saved the builder thousands of dollars in service and the factory agreed to service or repair any problems incurred by the factory I doubt many would sign up for the program.

The reason is twofold. First, many modular home builder are still thinking that price sells the home and secondly they simply don’t trust the factory to do it right.

For the Innovation of Extreme Quality Control to be the rule rather than the exception, both sides have to believe in it.

The factory needs to place trust in the QA people and give them the authority to actually stop the process and rethink or rework the problem. Can you even imagine one person stopping the entire process because someone made a mistake or an omission? That would be a tough one for any factory owner or GM to swallow.

The builder also has to once again trust the home being delivered that it will be free from defects and if one is found they have to trust the factory will make the repair or service without a major complaint or a delay.

Again, this only works if both sides agree on what exactly is meant by “Extreme Quality Control”. Builders can’t come back on the factory for small repairs as that could happen even if it were site built. And factories have to agree to fix the problem without blaming the builder and do it quickly.

This is the Innovation that will propel modular housing to the forefront of construction. Factories building a well inspected home they will stand behind completely and builders willing to accept the added cost of having significantly fewer problems in the field.

If the industry would do this the big commercial repetitive foreign modular factories that are headed our way would not want to enter the single family or small multi-unit modular market as US modular factories would already own it.

Would you pay extra for Quality? Your comments please.

 

Proof that Modular Housing Predates the Civil War

The Steamboat Arabia was built in West Brownsville, PA, just south of Pittsburgh, at the boat-yard of John S. Pringle in 1853. At 171 feet long and capable of carrying 222 tons of cargo, she was considered an average-sized packet boat.

The 28-foot-tall paddlewheels could push the steamboat upstream at a speed of over 5 miles per hour. It was used on the Missouri River.

The advertisement below was found on the buried Steamboat Arabia.

The above engraving represents a Portable Cottage, 14 feet 7 inches wide by 30 feet 1½ inches long, divided into two rooms, one story, 7 feet 10 inches high or the story may be made 9 feet high, of desired.  I contains six windows, all glazed, with Venetian Shutters to each window.

There are three doors - two of these outside and one inside and it is entirely constructed of wood. Sides and ceiling being composed of posts, rails and panels of uniform size. The roof is made of tongued and grooved boards, covered with paper, such as is used on fire proof roofs in cities, and painted with fire-proof paint which is sanded, and will last longer than shingles.

The perfectly simple nature of the construction enables two persons to put it together in a few hours, and take it apart again with equal ease. No apprehensions need be entertained as to their comfort in winter. From the inclemency of the weather, for from the the perfect manner of their construction, they are much warmer than any other frame building.

Persons serious of purchasing can see a cottage set up, at our factory.

Hinkle, Guild & Co.

No 865 West Front Street

Cincinnati, Ohio

In 1856, five years before the American Civil War broke out 1861, the Arabia hit a huge underwater snag and sunk 45 feet into a sandbar and was covered with soft mud encapsulating the entire ship keeping oxygen from rotting everything.

In 1987, it was discovered intact after years of erosion and shifting sand left the lost paddleboat 45 feet underground and a half-mile from the present channel of the Missouri River.

The excavation resulted in the discovery of the largest collection of pre-Civil War artifacts in the world.

A friend of this blog toured the Steamboat Arabia museum and was stopped in his tracks when he saw an ad for prefabricated AND modular homes found in the ship.

Not only is there proof that modular housing predates the Civil War, there were two modular homes on board when it sank.

If you visit the museum you may even see parts of the modular homes that were supposed to be on board.

Modular Builder's Question Opens Pandora's Box

Recently a modular home builder in Virginia wrote and asked if I knew any factory that would sell him finished modules without interior trim, cabinets and plumbing fixtures? When I asked why he told me that he is getting tired of not having the factory properly install the trim and cabinets or not installing what the customer ordered.

Looking at the reason for his question I realized that “Bob” (not his real name) has been in the modular housing industry longer than I’ve been writing this blog and though he won’t tell me how many homes he builds a year I think the total is North of 20 a year.

It seems that quite a lot of the modular home factories that used to cater to the small builder supplying them with not only standard homes but also true custom designs are now putting huge 100-200 commercial module projects into the production mix which is hurting the quality he used to take for granted from his factories.

Merriam-Webster defines quality as a degree of excellence and superiority in kind or as a distinguishing attribute as a characteristic.

While service (Amazon) and technology (Apple) providers are able to measure specific attributes objectively to determine quality, a modular builder’s customer generally measures quality subjectively through their perceptions.

I reached out to some builders and factory owners to get their opinion of what he asked and the responses I received were quite eye opening.

A New England builder responded:

“The problem is with the service departments…. getting parts and or service crews if needed to resolve things in a timely manner when at times the trim maybe short or a cabinet door may need to be replaced etc. I mean the time frames are really ridiculously long, especially for parts, and most often come in wrong and the wait starts again. However time frames to get parts is often a problem everywhere even for us locally. Getting service crews on the other hand for non-parts problems takes way too long and can really tax a good relationship with a customer that up to that point we have so carefully built and enjoy.”

A Mid-Atlantic builder said:

“This would depend on the market that you are catering to. If you are in the starter to mid market - you are defeating the cost and time efficiency of the modular building process by deleting the trim and the cabinets. In this scenario, the builder would incur additional labor, additional job time and the cost of the cabinets and trim which will never equal the delete credit from the factory. At the high end there can be an advantage. If you are selling a spec home for over $850,000 or have a "high end client" who's lot your are building on, it may be a very good idea to delete the trim and cabinets from the factory.

The high end client will expect all the bells and whistles - including of course custom trim and a custom kitchen that the factory would most likely be unable to provide. The builder will also avoid any during construction job site damage to any high end trim or cabinets that were ordered from the factory. With the high end client, the custom trim and custom on site cabinets can be a additional profit center for the builder. We never ever obtain the flooring from the factory - to few selections to choose from and to much risk of damage during the completion process.”

 A large regional builder replied:

“We don't have labor to do it right in the field. We need to fix a factory mindset issue. Not excuse it. That would just be taking us backwards in the quest for factory built housing…”

An East Coast custom modular home builder:

“I have to be honest, it is getting to the point that stick building is faster than modular anyway. I truly can stick build a house for less money and less time. The factory quality has been abysmal as of late and service is just as bad as always. It’s a complaint I’m getting from other builders.”

A modular factory sales rep added:

“Just look at what happens to the majority of stick build guys that try mods. Their expectations are much greater than the reality of what was delivered. Why, cause we are just trying to fill our production schedule.
Our factories know only one way to sell to those builders. We have asked people with limited building experience, if any, and then refuse to educate them in proper modular housing techniques; engineering departments that cannot clearly understand what the builder wants and/or do not clearly know how to build it and hence can’t communicate it to the production line and we have management that wants only to know how much and how many........”

A Midwest Builder said:

“Today there is no clear cut case for service and repair after a home is delivered. Builders find problems and the factory service department asks you to give them a list of problems and cost to repair. At that point it could take weeks to get an answer and when they do get back they always want to cut the costs in half. It has become a two week negotiation process and we builders always lose money.”

Several major changes have had a huge effect on quality and affordability of modular housing across the US. First is the cost of freight which will continue to climb. Second is modular factories that used to exclusively build single family houses now adding hotels and apartment buildings into the mix where speed and cost are the keys to a developer’s profit while quality is often short changed in order to get them.

Third is the time needed to get state approvals for modular home plans. A truly grueling process for many factories and third party inspection services.

And lastly is the lack of training for quality control inspectors in the factory and for builders, set and finish crews.

Does this mean that modular is not the best way to build? Certainly not. Modular is finally being recognized as the future of construction in the US and around the world. We just need to realize that the old reasons for going modular is saving money and time are almost behind us.

In the future we must see a higher quality product that may cost the builder more up front but will not have the thousands of dollars in service and repair costs we see today.

Just look at the agenda for all those conferences and seminars where modular construction is at the forefront of everyone’s future thinking.

The Vermont Modular Home Factory That Raises the Bar on Custom

Jason Webster, a Co-President of Huntington Homes in East Montpelier, VT, not only looks like someone you could trust building you a truly custom modular home, his family’s company has been doing just that since 1978.

Now they’ve produced one of the best videos I have seen in a long time showcasing their factory, their employees and the custom modular homes produced in their 100,000 sq ft factory.

Related Article: Huntington Homes, Vermont's Modular Gem

Every time I talk with Jason I come away with the feeling I’ve just been let in on one of modular’s best kept secrets, a factory built on tradition and loyalty. A place where Jason and his brother Adam continually monitor quality both in the factory and in the field.

Take a few minutes and watch one of the best videos about why modular construction is the answer to housing. Yesterday, today and tomorrow.

An Insider's Video Viewpoint of the Offsite Housing Industry

Dave Cooper with Connecticut Homes is becoming quite the celebrity doing personalized video tours of homes of his company has built. He calls them Modular Minutes.

Dave Cooper

He is branching out in his video presentations addressing modular housing industry events and gives his own unique view of some of the biggest problems facing builders and factory management.

Related Article: Dave Cooper Quickly Becoming Modular Housing Media Celebrity

The video he just sent me will be the first of what I hope will be many he wants to share with my readers and all I can say is “Bring them on Dave” as his views will hit a chord with many of us.

10 Costly Mistakes a Modular Home Builder Should Never Make

Many new home builders attend seminars, buy How-To books, watch webinars and listen to TED Talks to learn how to improve their business. Heck, even my Modular Boot Camps, Round Tables and Builder Breakfast are all aimed at improving your business.

However if a modular home builder doesn’t correct the following mistakes, all the time spent improving your business could simply be a waste. You need to make sure you are not making these profit sucking mistakes and if you are, Stop Doing It and begin looking for ways to correct them and watch your bottom line at least stabilize and hopefully improve

1. Not being ready for subcontractors. If your jobs aren't ready for the trades, you're setting yourself up for a big problem. Even though a lot of the work is done in the factory and even though you may have your own finish crew, what happens if your electrician, plumber, HVAC, etc is delayed because you weren’t ready for them? Nothing, that’s what. You are at their mercy and if they had to move on to another job while waiting for yours, it could set back your completion date by weeks. Don’t blame the Subcontractor, blame yourself.

2. Paying your subcontractors too early. Pay them too early and you may not get them back to finish the job. As a GC you’ve had subs ask you for an advance or even the total when they are half way through your job. You’re a good guy and do it telling them they have to get the work done ASAP. That may or may not happen. Don’t blame the Subcontractor, blame yourself.

3. Beating up your subs to rebid and cut costs. What part of the job don’t you want done properly? A low bid from a sub because you beat them up will almost always mean corners are cut and in many instances, things are not done at all. It would be better to negotiate a fair price, keep them happy, pay them promptly when the job is finished and you will have a sub that will go the extra mile for you.

4. Lack of Systems and Procedures. This is your business, not your foreman’s, not your supplier’s and definitely not your subs. If not already in place, you need begin to create standard operating procedures for your company. If your systems aren't documented, they don't exist. If you don’t have them already, call your fellow modular home builders that buy from your factory, contact a professional experienced in preparing them or simply sit down with your team over pizza and beer and hammer it out. Anything is better than nothing. Maybe you do have policies and procedures in place but what happens when they are not followed? Do you have the required HR warning procedures in place to fire someone that continually breaks the rules you set up for your business. Do you ever check to see that your procedures are followed? Don’t forget who owns your business.

5. No marketing, sales or business plan. No matter how many times some builders hear me say that these are a ‘must’ for the success of their business, they simply think it takes too much time and effort to do and besides, they have been doing business for years and years and they know absolutely everything they need to know. There will never be another 2008 housing crash. Time to head to the bomb shelters. These plans help guide your decisions and actions and should be reviewed and updated at least annually and should be used, not just put on a shelf or given to lenders.

6. Keeping your employees out of the loop. Nothing will tire your staff quicker than a lack of communication. Keep the lines of communication open both to and from the management level. You'd be surprised how responsive your employees will be if you keep them in the loop. Provide clear direction and they'll be yours forever. Even if you are a one person builder that subs everything out, you’ve got to keep these people in the loop or your business will be in the poop.

7, Not Pricing your homes for the market. Your market will set the price of your homes, not your cost. For example, after doing research you find that other builders are selling a 2,400 sq ft home for $300,000 excluding land costs and you are trying to sell yours for $350,000 based on your costs, you may have a problem. The local market will set the sales price of your homes, not the cost of the goods used. Direct construction costs, not profits, are the only variable in the pricing formula. Time to rethink your position in the market.

8. You can’t control your home buyers. We’ve all the customer that wants what they want when they want if even if it means changing their minds after the house has hit the production line at your factory. It’s time you take control of the process by setting time frames, offering guidance and packing selections, thereby lessening the confusion for your customer. There is a premium to be paid if you just want red M&M’s. This is your business and you have to help your customers in a very business-like way. Stop your groveling.

9. You don’t have a flexible build schedule. Most builders use some type of build schedule. Everything from customers meetings to quotes from the factory and your subs to inspections. What most of you don’t have is any flexibility built into it. When there is a setback such as a delay at the factory, rain for a solid week, unexpected snow or even your delivery being pushed back a week, many of you throw your hands up and think it is the end of the world. It really is if you haven’t built some flex time into your build schedule and shared with your customer all the things that could go wrong when building a modular home. Keep your customer in the loop and they will work with you. Don’t and the surprises never stop coming for them.

10. You don’t inspect your job sites enough. Are you conducting critical point inspections? You should be. Don’t just leave it up to your foreman to do it. It’s your business. Decide what is critical that you personally should be inspecting on every house. Don’t just show up with donuts and coffee. Show up with a checklist and go over the results with the people responsible. Do this before customer walks. You are the one the customer will blame for poor quality workmanship.

Even if you are only guilty of one of these mistakes, that is one too many. Remember, this is your business so start correcting your mistakes.

RAD Urban, Modular’s Hidden Gem on the West Coast

If I were going to build a huge commercial modular home factory in California I couldn’t find a better place to build it than beside the Corporate offices of In-N-Out Burgers. My nose would take me to their test kitchen every day.

That is exactly what RAD Urban’s three founders did. Randy Miller, the CEO, Andy Ball, President and Drew Gissinger, Chairman must really like their burgers.

Wanting to bring quality high rise living units to the Oakland, California market RAD Urban’s factory uses LGS frames as the basis for accomplishing their goals. A huge factory finds workers building sleek modules destined to help curb the West Coast’s need for apartments.

As far as I can determine RAD Urban has no plans to build single family housing or affordable housing complexes. As they grow they may begin looking at hospitality projects like citizenM’s latest hotel in Seattle, WA.

Piece by piece, along a factory line, workers erect walls, string electrical wires, fasten plumbing, hang drywall and paint until a bare 12-foot by 30-foot steel chassis looks almost like a move-in ready apartment.

The Bay Area is one of the most expensive spots in the country to build and RAD Urban’s approach is trying to bring more housing online at a cost that allows developers a chance to sell units faster and at a better cost to customers and of course, make more profit.

RAD Urban is using the principle of finding a hungry market for their modules, building a factory close to that market and transporting modules a short distance to that market saving up to 20 percent over the cost of site building.

Developers see savings through lower labor costs, lower material costs and lower freight costs. There is also little need to them to pay huge trash charges as most of that waste is addressed at the factory.

A few newer U.S. companies are getting in on the trend of producing closer to red hot housing markets. Kasita, a Texas-based startup with a factory in Austin, recently brought a modular house to downtown San Jose as part of a country-wide tour.

The 400-square foot unit — long and narrow, like a traditional modular home — drew hundreds of visitors during its two-day stay.

RAD Urban sees its niche as large apartment and mixed-use complexes with more than 100 units. It set up its factory in 2013, customizing the space with rails to slide frames between stations, and platforms to allow workers access to the underside of the units so they can add insulation and finish ceilings.

The steel frames range in width from 10 to 16 feet, and can be 15 to 40 feet long. A typical unit is 360 square feet. Attaching two or three units together make up a one- or two-bedroom apartment.

Because the need for housing in the Oakland area seems unquenchable for decades to come this “Pop Up” factory could be the model for future commercial modular factories where red hot housing markets exist. Look for more RAD Urban type factories to begin popping close to major cities throughout the US.