When someone asks if modular will save them a lot of money over site building, most people in the know will say “not really” but it is faster from the foundation to finish.
Now you ask what that savings will be if I go modular. If your project is huge you could save a ton of money in carrying costs over site building but that doesn’t get you anywhere near the magical 20% total savings modular people say it could be.
One of the biggest problems facing the current modular industry is a reluctance to adopt new production processes.
Another is the failure to adapt to a logistics system network of organizations, people, activities, information, and resources involved in the physical flow of products from supplier to customer.
Along with the savings from carrying cost and correcting the two above problems, savings of 20% is now a real possibility. This savings could be achieved from what is already available to us today.
Adding more vertical integration into the process along with more automation will surely be the next steps but only after those first two problems are corrected.
As more processes are added to modular’s toolbox in the future, that 20% savings may even be higher.
But there is a darker side that many industry leaders don’t want to discuss in public. If these processes are not put into the US modular construction industry in the near future we will soon be the nation where Europe and Asia sends their modules simply because they are adopting these processes now and are eager to add even more to insure a better built and less expensive product.
Related Article: Commercial Modular Quickly Becoming the Norm for Residential Factories
The modular housing industry in particular builds their product for particular customers each time which naturally raises costs. That is why new home builders doing custom modular homes see little or no monetary savings over site building the home. Builders that sell from their factories approved plan sets will see savings because the factory can use a manufacturing mindset rather than a builder mindset.
Modular construction truly is the next logical step in construction and as the labor market tightens up we will have to adopt and adapt to new procedures, processes and products or we will become a market for foreign competitors and let me tell you. “They want our business!”
Gary Fleisher (the Modcoach) is a housing veteran, editor/writer of Modular Home Builder blog and industry speaker/consultant. [email protected]
