Distant thunder can signal an approaching storm or merely suggest conditions are much different far away. For LBM deals, the rumblings you heard this past year about off-site construction carry similar portents. For some dealers, the results within a few years could be calamitous. Others will barely feel its effect.
The reasons for the variations are part philosophical, part economical, and a lot regional. That’s because when people talk about off-site construction, they often expand the phrase’s original meaning—i.e., to make components like trusses and wall panels in a factory and then bring them to the jobsite—to also take in highly organized, computer-dependent, systems-based residential construction.
Advocates of that expanded definition included 400 or so attendees at the Industrialized Wood Based Construction Conference. Speaker after speaker at that event in Boston last October called for transforming a wickedly underperforming U.S. construction industry into one that can build more quickly, more cheaply, and better than what’s typically possible today.
For instance, Entekra, a California firm that builds much of a home in factories and then assembles it at the jobsite, brings together at the start everyone who will touch the building at the jobsite and makes them indicate on the plans where all the pipes, wires, and HVAC units will be installed.
“The phrase, ‘It’ll get worked out in the field,’ is a euphemism for, ‘I don’t know,’ ” said Gerry McCaughey, Entekra’s founder and CEO, at the conference. “The site isn’t an R&D facility.”
Doing things ahead of time also helps keep mistakes from creeping in, such as when architects draw plans with wrong or missing measurements. In this world, being just a quarter inch off can cause huge problems when stuff built off-site gets placed at the site. Thinking ahead also promotes efficiency by deciding in advance how materials should be put on delivery trucks so the goods can be unloaded in the order required.
All this will challenge a construction industry that “has become very good at doing the wrong things very well,” quipped Matthew Linegar, director for research and development at Stora Enso, at the event. And the truth is, many builders will only be partial revolutionaries. Survey results released in December by Home Innovation Research Labs (HIRL) found that builders plan to buy more trusses and wall panels. Builders FirstSource is betting on this trend, as it plans to invest in 25 new components facilities over the next four years, while BMC is investing in automated truss facilities while continuing to promote its Ready-Frame system.
At the same time, the same HIRL survey found that just 23% of builders plan to continue or increase their use of modular construction techniques. Integrated construction systems like Entekra’s make the most sense in multifamily construction, tract housing, and in areas with high labor costs. And if you sell a lot of wood to big builders who frame on-site, you should be particularly nervous, because in the future that wood might go straight to the off-site factory and from there to the jobsite, bypassing you entirely.
If you deal mainly with custom builders, sell a lot to DIY customers, or live in a state with relatively cheap labor, the storm might never arrive. But be aware that it’s happening elsewhere.
