Sunday, November 9, 2014

Surviving recession, Simplex recreates itself

An Article in the Times-Tribune by DAVID FALCHEK, STAFF WRITER

Having survived the housing construction collapse and the recession by expanding into multi-units and townhouses, Scranton home manufacturer Simplex Industries hopes to continue to reinvent itself by adopting 3-D modeling and using more automated manufacturing processes.

Patrick A. Fricchione with 3D Printed Home
The modular building producer employs 250 in two Scranton facilities that produce complete pieces of homes that are shipped from Maine to North Carolina and assembled on site. Business is better than it was in the depths of recession, but nowhere near where it was in the 1990s and early 2000s.

“We were a profitable company so we had cash on hand to survive off of,” said Patrick A. Fricchione Jr., company president. “A lot of our competitors didn’t and the industry overall was deeply hurt.”
The company tried to expand into different areas, such as solar installation. But the evaporation of the government solar subsidies and the decline in electricity prices eliminated the incentives for customers to buy solar.

Fortunately, the company whose bread-and-butter had always been single-family homes had a sideline — multi-unit building such as townhomes and apartment buildings. Simplex’s modules have the ability to go four-stories high.

Multi-unit housing used to account for the just one-fifth of the company’s revenue. In the post-recession environment of foreclosures and tight credit, new home construction is still languishing. But people have to live somewhere and they are opting to rent, increasing demand for apartments.
Today, multi-units such as townhomes and apartment buildings account for 75 percent of Simplex’s revenue.

Modular construction offers developers an incentive over on-site construction, said Patrick J. Fricchione, M.D, a partner in the company: speed and interest savings. Construction loans carry a higher interest rate and can’t be refinanced until the project is complete. Simplex can carry a large project from conception to occupancy in about half a year, he said, without the change orders or delays common with on-site construction. While single-family home buyers get the same benefits, for a developer, whose goal is getting rents in hand as quickly as possible, the benefit is magnified.
They’ve also developed a specialty in larger institutional projects — such as student housing. The company built large dormitories for Mansfield University, SUNY Cobleskill and Marywood University.

Last year, Simplex collaborated with Penn State University to build the GridSTAR Net Zero Energy Demonstration Structure in the Philadelphia Naval Yard. The highly-efficient home had no net energy use. The collaboration with cutting-edge innovations in building sciences helped Simplex apply efficiency innovations in their everyday production, including improvements in blown-in insulation, combining insulation foam and bats, and techniques for further reducing air infiltration.

The company is looking for other ways to increase efficiency and operations. The company received a $25,000 grant from the Ben Franklin Technology Partners to review its work-flow and manufacturing with an eye toward finding opportunities for automating some of its process, a gut-check of how they’ve settled into doing things.

“We call our competitors (who build on-site) ‘stick builders’ ” Mr. Fricchione said. “But the fact is, we are stick builders, too, but working in a controlled, assembly-line like environment.”
In Europe, modular building companies do what is called “panelization,” automating construction wall sections and floor and joists sets. Dr. Fricchione, a cousin of Mr. Fricchione, has taken the lead in the review.

The equipment is expensive, but there may be opportunities, he said. Simplex may be able to program an automated saw or mill with a chop list that would cut lumber necessary for the next day’s work. Panelization would allow the Simplex to automate wall construction and ship panels stacked, in a flat state, instead of the oversized empty boxes seen lumbering down the highways now.

But there are drawbacks.

Some of the assembly and finish work now done inside Simplex factories would have to be done on the construction site. That would diminish some of the benefits touted by the modular home industry, which points out that home modules are assembled and finished in a climate-controlled facility, free of moisture with greater consistency in workmanship.

Simplex also wants to be able to maintain its high level of customization, able to accommodate any window shape or size, or unique touches such as built-in shelving.

The company received another grant for $50,000 from AmericaMakes, an additive manufacturing group, and the state Department of Community and Economic Development to explore additive manufacturing, also known as 3-D printing, for modeling homes. The model provides a sales tool to give customers a better idea of what they are getting than they may from a blueprint. The colorful polymer models of rooms and kitchens may look like a doll house to some. But they provide an important quality check.

When Simplex fed blueprints for two adjoining home modules into a 3D printer, they made an astonishing discovery that an engineer may have missed: The passageway where the modules were to join was three inches off, a design flaw visible when the two rectangles are combined.

What seems like a fun new gadget is part of a larger process of self-evaluation, Dr. Fricchione said.
“The way to survive in a volatile business like this is constant improvement and being ready to recreate yourself.”

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