Monday, September 12, 2016

When Your Suppliers Choke, Build Your Own Factory


The processes by which homes are built have changed over the years as technology has improved, so much so that it’s getting hard to find a hammer on residential construction sites. And although Santa Monica, Calif.–based LivingHomes is ahead of the technological curve—it doesn’t build stick-built homes on site in the traditional fashion—its leaders still have to spot problems and invent solutions in much the same way as traditional home builders.

Steve Glenn founded LivingHomes, a designer and developer of prefabricated homes that focuses on sustainable construction, in 2006. The company has sold most of its homes on the West Coast, but recently has placed units in Montana, New Orleans, and Toronto. LivingHomes has had 18 homes certified as LEED Platinum and one LEED Gold.

LivingHomes had a supply chain problem, though, and it was a big one for the modular builder: Without a factory of its own, it relied on third-party factories to build its homes. But, as Glenn explains, once the industry heated up post-recession, those third-party factories didn’t have much free time to complete the kind of work LivingHomes needed done.

“They’re taking more time to get back with bids and engineering, and in some cases they’ve turned us down for projects because they were too busy,” he says. “They are really set up to do standard, non-customized, lower cost, non-sustainable homes. The biggest category in the industry is mobile homes and low-cost modular homes. So it’s always been a bit challenging working with those guys because we’re doing more custom, high-quality sustainable homes compared to what they do.”

About a year ago, Glenn started to conceptualize a sister company to LivingHomes that would specialize in manufacturing sustainable construction materials, processes, and operations. That idea is now known as Plant Prefab.

The Operation
Plant Prefab has fewer than 20 employees at its 61,000-square foot factory in Rialto, Calif., but Glenn, now the CEO of Plant, expects that number to rise by year’s end, adding that the company’s project load will dictate its size.

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