Monday, June 7, 2021

Is Innovation a Good Fit for Established Modular Home Factories?

Recently I’ve been asked quite a few times what I thought of innovation and automation in modular construction and I’ve always answered that question the same way…”When it’s needed.”

But that is such a vague answer that I think it’s time I elaborate on it. 

The first thing we should look at is exactly what is Modular Construction? In this discussion, it’s a six-sided module that is built in a factory, either on a production line or cribbing. The module will have most of its interior and exterior finished when it’s ready to leave the factory. That could be as high as 85% if the modules are generic plans or very similar modules. Modular is not panelized construction.

Two Types of Modular Factories

There are essentially two types of modular construction. Residential single-family housing and “everything else”, which includes commercial modular such as Chick Fil A restaurants and other retail outlets, apartment buildings, dormitories, hotels and anything else that isn’t a single-family home.

When we talk about innovation and automation, they live in the “Everything Else” world of modular. New factories have been popping up across the country to feed all those big projects for developers and housing authorities and almost every one of them has the latest in BIM, automation and innovative ideas as part of their basic structure.

Software and applications that study worker movement and arrive at more efficient systems, as well as innovative new building processes, are the goals many want to achieve. Each new modular factory believes they have the secret sauce lacking in their competitors. Hopefully, all those millions being spent to “modernize” those new factories will eventually pay off but at the moment, many new “innovative” factories are struggling to get more than 10 floors out of their factory a week.

Most, if not all, of these new factories, have shunned building for the single-family home market. The advantages of automation and innovation are realized in building repetitive modules in the hundreds. Efficiency in producing those modules means profit. 

But what about those modular factories that primarily build single-family homes? Are innovation and automation part of their plan to modernize their factories?

To get a better picture of the SFH modular factory, we need to understand when most of them were built. It’s not unusual that almost every modular factory churning out single-family homes is over 30 years old.

During that time they have lived through the ups and downs of the cyclical housing market. They haven’t really needed to be innovative as much as they needed to be adaptive. These factories have been labor-intensive from day one with many of them producing 15-20 modules a week on a regular basis.

When a housing downturn came along, they simply worked with fewer employees and slowed down production. When housing heated up, they simply reversed the process.

Covid-19, unfortunately, has changed that pattern. Housing is going crazy with many single-family home factories wanting to ramp up production but with the shortage of labor, rising lumber and building material pricing and shortages of supply, these “old line” factories are falling back on being adaptive; something they’ve successfully done for decades.

Adding innovative new procedures and automation are expenses very few of them want or need at this point. 

They are survivors!

Once this rush to build as many homes as possible begins to slow down, they will have the time to begin looking at their production line and maybe begin looking at some innovative ways to save themselves time or work more efficiently...”When it’s needed.” 

While all those new factories are adding innovative procedures, automation and even robotics, the old guard single-family modular home factory owners continue to be labor-intensive by choice. When you can turn out as many if not more modules a week than those new factories without having to add millions of dollars automating their processes or hiring people simply to implement and maintain a new type of procedure, the question becomes…”why do it?

Sometimes doing things “the way we’ve always done them” isn’t so bad after all.


Gary Fleisher is the Managing Director and contributor to the Modcoach Network and its affiliated blogs. Email at modcoach@gmail.com

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