Offsite, On-Site Insight from the Other Side of the Pond
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I was honored to join Gerry McCaughey, European construction industry legend and my co-patriot on a research trip to our homeland in Ireland, and then to England and Germany. Having sold Century Homes, Europe’s largest fully integrated offsite solutions (FIOSS) provider to global insulation specialist Kingspan Group PLC in 2005, McCaughey now has his sights set on introducing this well-defined process to the U.S. market through his new venture, Entekra. Headquartered in Ripon, California, Entekra is already operating a manual line at a local factory, from which it started shipping open panel house frames last month.

Harnessing mature experience and deep expertise developed in a family business for over 50 years, the company offers a compelling proposition to U.S. builders that want to improve time and cost efficiencies, enhance quality, increase energy performance and reduce waste. In particular, FIOSS will appeal to California builders focused on delivering new homes that use Zero Net Energy by 2020. Entekra’s ambitious growth plans include opening automated factories in northern and southern California over the next three years, and achieving a national geographic footprint beyond that, in both residential and commercial end markets.

Starting with a design and engineering focus, Entekra’s experienced team uses sophisticated software to rationalize the existing floor plans of its home builder clients. From there, state of the art German machines and equipment by Weinmann will be used on automated production lines to manufacture a core kit that includes wall and floor panels, stairs, roof trusses and wall studs, with ancillary products from pre-hung doors to sheetrock and insulation also being offered. In our meetings with Weinmann management at their Stuttgart headquarters, it was clear that their machinery is being used extensively and successfully for wood frame construction around the world. It was unclear as to why the U.S. has yet to embrace this methodology, in particular as wood framing in the U.S. represents 90+% of the total.

As we saw in Dublin this week, FIOSS providers typically deliver their house kits by huge trucks early on Monday mornings, with a seasoned crane operator and framing team on hand to complete the installation. This allows for the new houses to be weather proofed, from external walls to windows, doors and roofing, within 4 - 5 days. The installation process was truly fascinating to watch, and almost unbelievable until you see it in person, as the framing teams work together seamlessly and communicate through non-verbal cues with the crane operator. One visitor in our group commented that it was like watching synchronized swimming, I thought it was like watching a professional hockey team play but in a much smaller physical space, working deliberately but with ease and efficiency towards a common goal. The precision cut, pre-fabricated components seem to snap together like Lego pieces, with accuracy that allows for the quick installation of windows and pre-hung doors to follow, while roofs are typically built on the ground and craned into place to complete each framing project. Most of the frames and panels were either delivered pre-insulated or with insulation that was pre-cut, with PUI, PUR and other rigid insulation replacing fiberglass in some cases for ease of installation or higher performance. The precision and accuracy of the design and manufacturing process significantly reduces waste, estimated between 5 – 7% for labor and materials at the communities we visited, versus up to 30% stateside.

Throughout our meetings with the European builders, delivery times for new homes are quoted in days or weeks rather than months, and while the houses are roughly 50% smaller in size, the design and quality are definitely comparable. By offering an open panel system, this process does not necessarily displace the existing framing crews, they just need to be trained, and it allows for the next subcontractors in the construction process to continue as usual. Overall, the builders we met with stated that they appreciate FIOSS for its accuracy, efficiency, reliability and quality. They find it less hassle to work with a smaller group of subcontractors, and they believe it reduces their risk of future warrantee issues, while increasing safety on their jobsites. Having used FIOSS for 30+ years, they are completely committed to it, and when asked said that even if it cost more than onsite construction, they would never go back.

The question remains as to why this methodology has yet to be embraced in the U.S., if that trend is going to turn, and if so who or what will drive it, will builders commit human and financial capital to ramp up dedicated offsite wood framing supply, or will third parties such as Entekra lead the way? A lot has changed for our industry since the election in November, labor is in even increasingly short supply, while timber prices have spiked due to tariffs on Canadian imports. The labor shortage is secular as an aging construction work force is not being replaced by younger generations, which in and of itself necessitates the switch to a more automated process. Offsite wood framing has been widely used by the international peers who are drawn to and investing in our market for its long term growth prospects, let’s leverage their expertise to accelerate innovation in our industry, so the transition doesn’t have to be disruptive. FIOSS is a proven methodology that results in enhanced working capital management, higher quality and energy performance, less waste and better affordability for consumers. It’s a win win proposition.

Margaret Whelan