Put another way, a builder can count on framing three component-built houses for every stick-built house. “If a builder can turn more houses with the same labor, they can turn land faster,” says Don Groom, vice president of operations for Stark Truss in Canton, Ohio, which operates 15 component facilities in seven states. And in builder lingo, land is money.
Even if components do cost more than the same number of sticks required to build a comparable house, Johansen doesn’t charge a premium for them. “Our job is to make panels more convenient [to build with] and to save soft costs,” such as waste and theft loss, he says.
Profits at Advanced Framing & Components instead come from producing and often installing hassle-free components (which reduces callbacks and returns), as well as materials handling efficiencies in the factory and labor savings achieved by the company’s turnkey framing business. “You have to work your tail off to be efficient in this business,” Johansen says.
Reason #3: Components Support Diversity Thanks to faster and more precise production equipment that can engineer components to almost any building design and deliver them on schedule, component suppliers can meet increasing demand for trusses and wall panels for single-family, multifamily, and light commercial projects. “We’re able to handle anything now,” says Carey, whose made-to-order component operations average five or fewer setups per truss or wall panel design, less than half the industry average. “The technology allows us a lot of flexibility [in design].”
Meanwhile, diversifying into multifamily and commercial work represents a growth area for large production builders; such moves may, in fact, introduce them to component framing that could eventually carry over into the single-family side of their business or simply help them make the transition into commercial if they’re already familiar with trusses and panels in their housing operations. “The industry is much better equipped to handle the needs of builders and framers regardless of the type or complexity of their projects,” says Grundahl.
Reason #4: No Change in the Channel Depending on the market, Stark Truss may sell its components directly to general contractors or builders, supply framers, or ship through lumberyards. “Distribution is completely market driven,” says Groom. “Each [manufacturing] plant manager oversees the strategy for that market to determine how builders get their framing materials.”
When partnering with lumberyards in a two-step arrangement, Groom diligently assures dealers he’s not out to steal their customers and sell direct. “We do our best to develop a mutually beneficial arrangement,” he says. “It’s in our interest to partner with people who understand the market and its distribution channels so we can come out with a win-win.”
Dealers that have developed in-house component capability are similarly sensitive to the chain of command. “All of our sales start at our lumberyard branches,” says Richard Pinson, general manager at Hayward Building Systems in Santa Maria, Calif., which manufactures roof trusses exclusively for Hayward Lumber Co., a 12-location, $130 million dealer based in Monterey, Calif.
Specifically, Pinson stations a truss technician at each of Hayward’s seven lumberyards to facilitate truss orders that come in from builders, framers, and design professionals looking for a one-stop LBM shopping experience. In addition to reducing the number of truss salespeople needed to sustain the business, Pinson has fostered goodwill between the company’s two main divisions by selling only through Hayward’s yards instead of also maintaining direct customers on the side. “There’s a synergy between the truss and lumber side to help each other generate business.”
