Rebuilding Productivity in Home Construction

00:00:03:25 - 00:00:29:24
Mike Collignon: All right. Hello, everyone. You know, our webinar today falls on one of the most somber anniversaries in U.S. history. So I didn't think it would be appropriate to highlight other observations today, even though we do appreciate substitute teachers, security officers, women police officers and chefs. On today's webinar, we're going to look at how the labor shortage continues to challenge productivity across the construction sector.

00:00:30:00 - 00:00:51:14
Mike Collignon: But there is good news. Advanced building systems can help solve this crisis. And we're going to dig into how here to cover this topic is Sam Raskin, who is considered the father of Energy Star and the Zero Energy Ready Home program. Sam is also the creator and teacher of the housing 2.0 content, which is based largely on Sam's book housing 2.0 Disruption Survival Guide.

00:00:51:16 - 00:01:11:24
Mike Collignon: The full program was established to help empower you are building professionals to design and construct higher performance, healthier, more sustainable homes at a fraction of the cost. Sam is going to lead us through today's seminar and also address your questions at the end. Now, before we get started, we need to recognize our main sponsor. That's Panasonic Healthy Indoor Living Solutions.

00:01:11:26 - 00:01:37:15
Mike Collignon: And they are helping builders across the country differentiate themselves with powerful, code compliant and cost effective indoor air quality solutions to provide a safer environment for home buyers. Now, during the course of today's presentation, you can submit questions for sale. Simply use the Q&A function that's located in the menu bar at the bottom of the zoom window. I'm going to look over those questions and, pose those to Sam after his presentation.

00:01:37:17 - 00:01:40:09
Mike Collignon: All right. Hello again. Sam.

00:01:40:11 - 00:02:05:20
Sam Rashkin: Hey, Mike. And good to be here. Welcome, everyone. Last seminar we covered how to manage uncertainty with housing affordability. Now, this, seminar today, it we address the fact that even if you're affordable, if you can't find the workers to build the affordable housing, we're still in trouble. And we have incredible crisis with workforce as well as with affordability.

00:02:05:26 - 00:02:33:15
Sam Rashkin: So we're going to talk about four survival strategies. So you will be prepared moving forward. And again this is a subject today housing workforce for Survival Strategies as part of our seminar series on managing Uncertainty. And prior weeks we covered how to manage uncertainty with high performance home certification and likely changes and concerns that were happening, particularly with the federal Energy Star Certified Home Program.

00:02:33:17 - 00:03:05:18
Sam Rashkin: And then we talked last time, as I mentioned, about housing affordability, incredible uncertainty there, and six strategies for how you manage affordability. Next, session on October, we'll talk about how to manage uncertainty with translating very hidden value of high performance, six science based strategies conveying value. And finally, we'll wrap up with uncertainty, with homebuyer expectations and how to integrate high performance homes with, designs that look better.

00:03:05:20 - 00:03:31:13
Sam Rashkin: So this is a, series for this year. Let's move forward with today and our session on, housing workforce. Ignore the title. And, what we're going to do is a quick background, as we usually do in housing 2.0. We'll talk about why workforce uncertainty is such a crisis right now. And then for workforce survival strategies. Number one is leveraging the business case for recruiting.

00:03:31:15 - 00:04:08:18
Sam Rashkin: Two is enhancing productivity. So you need less workers. Three is managing the shrinking skill base. And four is how to reduce trades significantly. So we'll go into that and wrap up with our Q&A and discussion at the very end, as we always do. So let's jump into the housing 2.0 background. Again, the key critical data point that we start with always is this one about where people spend time detailed surveys, with homeowners and asking on your home and your work, dining, other indoor locations, vehicle outdoors.

00:04:08:20 - 00:04:34:18
Sam Rashkin: And lo and behold, we nearly 70% of our time in our homes every day. Which leads us to this epiphany, this incredible observation. Home is where life happens. And what we try to do with housing to point out why we exist. Our core reason is address the fact that we are absolutely, essentially needing to build homes where life happens better.

00:04:34:21 - 00:04:59:24
Sam Rashkin: And as I just quickly went through in a prior slide, I suspect as we've gone through, more telework, conditions, probably the time spent a home may be increasing from 70 to 75%. So what do we do to make that happen? Is we realize that housing, has a kind of a framework for the total user experience.

00:04:59:26 - 00:05:27:02
Sam Rashkin: And most of my audience, coming from my background reading Zero Energy, Ready Home and Energy Star, know that we've been focusing a tremendous amount on maximizing or optimizing performance, but that will not get the job done. In fact, there are four other critical experiences for housing and homeowners that they expect to have design, community, sales and quality as well as performance.

00:05:27:03 - 00:06:06:24
Sam Rashkin: So these are the fundamentals that we address is how do we attract each of those with, solutions for optimizing the performance? I mean, the user experience. And also our key focus for us is getting that better experience at lower cost. So, what we do in a little more detail in terms of these five experiences for community, we have three strategies, 24 best practices for design, five strategies, 60 best practices for performance, five strategies, 48 best practices for quality, for strategies, 24 Best Practices and Sales is three strategies and 20 best practices.

00:06:06:26 - 00:06:31:29
Sam Rashkin: And if you apply all of these or some of these, we're agnostic. We want everyone to do one thing to apply their experiences, their preferences, their knowledge and data points for their markets to pick a framework that they adopt and use consistently. So you effectively create a brand and just focusing on performance again is the key message is not enough.

00:06:32:00 - 00:07:04:00
Sam Rashkin: It's a must have, but it's not enough. So that's what we teach with housing 2.0 and how we get you there, at lower cost is we recognize that we do have to, compare what we're doing with the business as usual approach to housing. The existing business model focus on minimizing first cost. And so if you do housing 2.0, you'll wind up investing more in experts and special features that are a sure thing for delivering transformative user experiences to you're investing and user experience.

00:07:04:03 - 00:07:26:16
Sam Rashkin: But as we covered in the last seminar, we apply this cost optimization six strategies for really knocking the cost down consistently. And if we do that, we have cost savings. We have added value because of the better experience and also lower ownership cost. That leaves a net cost advantage compared to the old business model of first cost dominance.

00:07:26:19 - 00:08:06:02
Sam Rashkin: And the outcomes are tens of thousands of dollars. Cost advantage based on empirical data. And just a little more detail on how we get that cost optimization is we want to go from excessive to optimize across six key strategies. We want to go from excessive waste to optimization. We want to go from excessive complexity to optimize simple from excessive systems as an afterthought to an optimized system integration from excessive quality assurance expenses, rework and other costs associated with quality to optimize quality.

00:08:06:05 - 00:08:32:23
Sam Rashkin: And then we want to go from excessive customization to optimize mass customization. And we want to go from excessive cycle time and process to optimize productivity. And we apply those across all of the five key user experiences community design, performance, quality, and sales. So whenever you sign up for housing 2.02.0 workshop and go to our training, where do you see me doing this kind of curriculum?

00:08:32:25 - 00:09:00:24
Sam Rashkin: Basically, I'm dressing dressing the entire concept or aspects of the concept that all focus on this amazing, powerful solution giving better homes at lower cost and I mentioned empirical results. Here's one example. Not expecting you to read these diagrams and drawings, but more about the data point that, is so important. We Mike and I ran some action groups with, dozens of builders, the first year of the program.

00:09:01:00 - 00:09:18:20
Sam Rashkin: And in the left side, you have the original first floor plan, and then you have, with all the notes. There were about 26 notes for the first floor that you see here in the boxes. And the lower level had another 12 or 14 notes on the exterior. You had about a dozen notes. And then on the right you see the optimized floor plan.

00:09:18:22 - 00:09:55:26
Sam Rashkin: And I again point not to explain why this is better, but what we did after we optimize, our designs in the action groups is have every builder go back using our spreadsheets to figure out the cost advantage through the savings and through the added value. And unless you do these calculations and you can't manage what you don't measure, and in this case, Tim O'Brien found on that home that you save $46,000 in costs and you added $70,000 in added value and ownership.

00:09:55:28 - 00:10:35:07
Sam Rashkin: Homeowner. Cost of ownership savings $118,000 benefit. So when I say tens of thousands of dollars cost of energy, I mean tens of thousands of dollars cost to manage key resource, as Mike mentioned, is book housing 2.0 Disruption Survival Guide. I hope many of you take the time to go to the Green Builder website and, try to get a copy, not because I'm trying to get book sold, but because I want this critical, skill set for doing better at lower cost spread across my, community of of builders and professionals invested in high performance homes.

00:10:35:10 - 00:11:06:05
Sam Rashkin: Okay, let's address why workforce uncertainty is such an issue. Now, why is this another crisis that the industry is dealing with concurrent with affordability and, and regulatory crises and others? And, and let's start with this one. First is just the fact there's a shortage, 52% of of, builders surveyed across nine different, contractors, have consistently been saying there's a huge shortage.

00:11:06:05 - 00:11:27:04
Sam Rashkin: And when as high as 90% in 2022, it's come down to about 52%, as industry has had a little bit of a slowdown post-Covid. But these red bars, vertical bars are basically results of surveys. The, the vertical axis on the right, the shortage percent that they report is what you want to focus on. The last one is about 52%.

00:11:27:07 - 00:11:59:27
Sam Rashkin: As the industry was peaking and we had, quite a strong period of construction, we were pushing up to almost 80% or above 80%. Some trades were over 90%. So we, we just didn't have enough trades. And then because we didn't have enough trades, significant delays, work, consistent outcome that was being experienced when half the contractors, 54% report project delays due to workforce shortage.

00:12:00:00 - 00:12:35:22
Sam Rashkin: And 94% of construction firms in this article reported having a hard time finding workers to hire. And so it just adds tremendous challenges to staying on schedule. The other problem is skill. You know, with, with the shortage of workers is less, diligence and making sure they have the, critical skills and, and it can be, but again, another article by the Associated General Contractors of America found that the skill deficit among workers can be found.

00:12:35:25 - 00:12:58:18
Sam Rashkin: That's one of the main reasons that the labor shortage is so severe. You know, just without the adequate skills, you just don't know what to do. So this is this is another key point. And then the other one is as the skill shrink and obviously as supply shrinks, costs go up. So there's been approximately a 10% year over year wage increase on the residential builder worker side.

00:12:58:21 - 00:13:19:23
Sam Rashkin: In September 24th, the last data point I can get, and that's from an HP. And, and the key thing is that growing at record levels, the cost for labor. So that's one point on the other side is the fact that the workers are getting older. The average construction worker age, reported by Bureau of Labor Statistics was 42.5.

00:13:19:26 - 00:13:54:06
Sam Rashkin: In a recent study. Another study by the Home Builders Institute found that for every five workers who are aging out and retiring from the workforce for construction, there are only two in the pipeline behind them. To replace them. In other words, increasing pressure, downward pressure on the availability of workers. Just, again, a real crisis. This is one of the recent numbers reported in terms of workers needed each year over 720,000 to, combat approximate 1.5 million shortage of homes.

00:13:54:09 - 00:14:20:24
Sam Rashkin: So, you know, just this is a huge backlog of workers we need. And then you look at another pressure in the industry is where are the workers going to come from? The immigration policies have been evaluated. One study done by the American Enterprise Institute looked at what were the likely availability of, immigration workforce, to work in construction.

00:14:21:01 - 00:14:48:13
Sam Rashkin: And you can, you can see that the shift from prior years is draconian. This is the high forecast on the left is about 115,000 available to come and work. And in the worst case, the low forecast is a negative half million workers coming in. So there's no question that immigration is a significant uncertainty in the workforce. That's likely to lead to more shortage of workers.

00:14:48:15 - 00:15:08:28
Sam Rashkin: For the industry. And then on the workforce side is also factor workers. We do have how bad the productivity is, example of how productivity has grown in other industries, the auto industry. In 1903, it was manually made again, much like the car industry, the product we built up in a back room somewhere, you assemble a car.

00:15:09:00 - 00:15:39:22
Sam Rashkin: Then in 1913, the model two subway line was in full operation, making cars 100 X faster. And you look at a line today with less workers and robotics and advanced systems, even another 1000 X faster. And so the auto industry, in terms of productivity of of production per worker is going up exponential rates. And you look at the housing industry, this is how we make homes, at least in closure 150 years ago, in 1877, home being built in Omaha, Nebraska.

00:15:39:24 - 00:16:08:22
Sam Rashkin: And then you look at how it is built today, and it's a shocking glacial growth. And productivity is the same issues with all the workforce, with all the materials lying around, the jobsite workers not in the safest, working, conditions, obsessive use of lumber material. There's so much going on here. So the, one study has found a 50% decline homebuilding productivity since 1968.

00:16:08:22 - 00:16:31:06
Sam Rashkin: With while every other industry has become more productive. And this lines up with the fact that the growing the cycle time as a result keeps going higher and higher. The industry average reported by NP is about 8.6 months, from cycle time from permit to finish construction. And you can just see the growth is just not going in the right direction.

00:16:31:08 - 00:16:58:25
Sam Rashkin: So, that is so much of a concern because time is money. And when, McKinsey and company did an analysis of all these numbers very similar findings, again, every other industry is going through major growth in productivity, 1.7 times greater than construction industry, the only one with negative productivity growth. And when they quantify what that imposes on the industry, it's extra costs.

00:16:58:25 - 00:17:38:21
Sam Rashkin: It's about $200 billion. And we keep finding that it could be close by adopting 21st century manufacturing methods. So, I mentioned that on that picture. And their work is they're still not working in the safest working conditions. That's verified by the data. This is, the number of occupational, fatalities by industry. This is from 2023, and by far construction, you see, shows up at the top among all the major industries, highest retail fatalities in construction, all industry sectors accounting for 1 in 5 workplace deaths in 2023.

00:17:38:24 - 00:17:59:15
Sam Rashkin: So now, even moving slowly, we're not working fast enough. Making it, optimizing safety for the workers that are there to work. So when you look at all this, it just screams you have a crisis. In terms of we don't have we have a huge need. We don't have enough workers coming. We have more people retiring that are backfilling behind them.

00:17:59:22 - 00:18:27:19
Sam Rashkin: We have already, a gross lack of, movement and productivity and safety. We don't we are getting delays where everything's working against us. And with all this uncertainty, if you're building and not now looking for solutions, that's a real problem in terms of your ability to adapt to a certain future ahead for the industry, a very severe challenge to finding workforce.

00:18:27:21 - 00:19:06:15
Sam Rashkin: So I'm going to give you four strategies that could be applied to how we do this. One is to get more workers in. And by leveraging this incredibly strong business case for people want to think about the trades as a career choice. The second is enhancing productivity with the workers that we do have. The third is managing the shrinking skills that we have and taking more and more workers out of the equation so that you can't mess things up, making it kind of worker protected and getting insurance against less skills.

00:19:06:17 - 00:19:33:28
Sam Rashkin: And fourth is just to reduce the reliance on trade significantly. Just take more and more trade work out of your, responsibility by leveraging, again, advanced manufacturing methods. So we'll look at all these four choices and how they work. And I'll give you recommendations as we go along. So let's start with the first world's first workforce survival strategy is leveraging the business case to recruit.

00:19:34:01 - 00:19:58:29
Sam Rashkin: You know, we have a really strong hand to get people interested in the trades. Why are we not, talking about it more? Right. I put a lot of this together about, last year before I left, during 2020, I was asked to do a short presentation on workforce with two other colleagues. I just focused on this business case for why people should join the workforce.

00:19:59:02 - 00:20:24:25
Sam Rashkin: Some of the data will show you as a whole, but it's not worth updating because the numbers are still relatively the same in terms of what's happening. So let's look at, what I'm going to talk about in terms of this business case. There's a compelling story about why to work for the trades. One is the substantially less cost to be educated or trained and substantial less time as well.

00:20:24:28 - 00:20:53:23
Sam Rashkin: The second is the competitive salaries. People don't even realize how strong a, trade salary is becoming now, notwithstanding the comment earlier about how they are, like exponentially increasing costs for the trades that the industry is experiencing. Third is the amount of job availability five retiring or two coming in at a time when jobs are getting incredibly more challenging for workers.

00:20:53:25 - 00:21:18:24
Sam Rashkin: And then fourth is greater job security. This is a working in construction is one of the career paths that has the most job security. We'll talk about those things. So first less training cost and time. On the left you have discussion about time. And basically the comparison would be a normal college for your degree is twice as long as a two year trade school.

00:21:18:26 - 00:21:54:21
Sam Rashkin: And even that comparison is not fair to the working in the trades or such a shortage of workers. Many, many contractors will take people on as apprentice apprentices and teach them almost it while they start to work to learn the trade. And that's how it's almost like zero years of time. And if you think about the cost of college over four years can be sometimes hundreds of thousands of dollars, easily over 100,000, even for going to a state school and starting with community colleges, you look at cost of books, deferred income.

00:21:54:28 - 00:22:14:12
Sam Rashkin: You look just the cost of tuition. You had all those expenses up, and it's tremendous. So the average number I got from one source was 150,000, but very old. So again, I think we're into the hundreds of thousands of dollars and the cost of a trade school for those who do choose to get formal training is about 30,000.

00:22:14:15 - 00:22:40:17
Sam Rashkin: So if you choose that path and not the apprenticeship, working directly for a trades, and learning. So learning by doing so to speak, even if you take the trade school path, that's five times less cost and getting a college degree. So time and cost huge advantage. Next comes salaries. Okay. When you look at the salaries again these are a little bit older 2020 when I did this presentation.

00:22:40:20 - 00:23:28:06
Sam Rashkin: But just everything's higher. But again the concepts are the same is that when you look at plumbers, carpenters, electricians, Hvac technicians and look at, starting engineering salaries, computer science salaries, business and communication salaries, they're so close to, working in the trades. And so, you know, it's a very competitive salary working in the trades. And for those that were in the trade and start opening up businesses, becoming an Hvac, local Hvac contractor or a local plumber, you can really set up an incredibly successful business and have higher end salaries that are very, very significant with higher level salaries for success in business professions and computer professions as well.

00:23:28:08 - 00:23:56:24
Sam Rashkin: Then comes job security. The total contract value of outsourcing market America's this is for 2020 2019 hasn't gotten much, has been a huge, growth. And using workers who are much lower costs from India and other countries to do a lot of work and, work like the trades has so much less work, so much less risk of outsourcing trade, jobs can't be outsourced.

00:23:56:26 - 00:24:26:24
Sam Rashkin: While jobs and information technology customer service sectors can always be contracted out. So it's a very secure job when it comes to outsourcing. And, also it has much greater job availability. This was, a managed jobs available on the next 15 years forecasted by the Bureau of Labor. And, you can see at the low end was the federal government, which has really come to fruition.

00:24:26:27 - 00:24:49:07
Sam Rashkin: At the high end was healthcare and social work, which is also very accurate forecast. But the next highest was construction and red more highlighted for you. So you can see the percent change. It is a vertical axis and you can see the construction has a very, impressive a growth opportunity for people. I want to go into this career path.

00:24:49:09 - 00:25:19:06
Sam Rashkin: And in terms of job security, I also know the Elephant Room. So I and how that's going to affect, careers and job security and the jobs, likely is for AI to take over. Are shown, from a recent study that was featured in that CBS Morning News, coverage. The most likely jobs are coding, accounting, copywriting, translating, customer service, legal illustration, graphic design, songwriting, and for management.

00:25:19:09 - 00:25:49:25
Sam Rashkin: You've heard these many times over and the job save from AI or health care, which we mentioned teaching social assistance, mental health, police, fire, engineering, wind and solar tourism. But there's construction and plumbing and electric right in there. So very strong, job security, both, in terms of outsourcing, you mentioned earlier, as well as with, exposure to job jobs being taken over by AI.

00:25:50:00 - 00:26:25:10
Sam Rashkin: It's an amazingly, more peace of mind career choice for so many people. And in terms of, job security, this is another, study being done by tech, a, PDR, which had the very same outcomes that skilled trades are going to do. Very good. And, with more information on where, I will impact construction will be on project planning, safety monitoring, repetitive tasks, design processes, QCD tracking and managing supply chains.

00:26:25:10 - 00:26:52:02
Sam Rashkin: But for the most part part, the necessity for the skilled trades is a very robust future career opportunity. Opportunity. Okay, so that's about recruiting. And I'm not talking about the details in house and watching what you do. What I'm saying is you have incredible business case work. It. Next strategy number two for workforce survival is get more and more workers.

00:26:52:02 - 00:27:17:21
Sam Rashkin: You have how do you enhance productivity. And we talk about three ways to get more from less labor. One is to use strategy. You talked about last time for cost savings, which is mass customization. If you're building the same product, building blocks over and over again and perfecting them and minimizing the, level of work, level of movement, level, material complexity.

00:27:17:25 - 00:27:53:20
Sam Rashkin: If you minimize everything for those building blocks, it takes less labor to build them. If you digitize it, you optimize everything before it's built in the field. So it can be built more efficiently with less labor. And also finally, recognizing touring shouldn't be, put together for the building departments. You have to meet the requirements, but your construction documents are a way to create more and more certainty that the workers can do their work easily with less errors and and do what we call trade based construction vacuum.

00:27:53:20 - 00:28:22:24
Sam Rashkin: So we'll talk about each of these. So, with mass customization, the key elements for you here is you want to leverage optimized building blocks optimized for architectural construct. Concepts that are easy to build and require the least, complexity and, and risk for errors. And you want to have interior building blocks fast and kitchen. So you're building over and over again optimize and have the lease work.

00:28:22:26 - 00:28:45:07
Sam Rashkin: And then you want expert solutions that get you there to that optimization target. And you want, strategic limited choices. You don't need a lot of choices. A few limited choices create a perception of much, much more choice. And you really offer while you build the same blocks over and over again. And the benefit of you have more than ample customization with huge savings.

00:28:45:10 - 00:29:09:04
Sam Rashkin: Now there's a market. I will always have all this massive customization. I think you're a bell curve of incomes, and there's a whole part of, hire and customers that want that customization. Let them have it. If you're going to build housing that's attainable, we have to get to a point where we recognize this is a product that has to be optimized.

00:29:09:06 - 00:29:40:07
Sam Rashkin: The more choice we offer, the more we price out people from being able to buy the product. So the concept with mass customization, I, like you said you've seen me present before on this topic is best, demonstrated with the analogy to clothing. We can make mass customized clothes, clothes retailers who just for our very specific, sizes and body type, will come up with an absolute perfect fit piece of clothes.

00:29:40:07 - 00:30:04:08
Sam Rashkin: And so it put it together for us with a lot more, time and material and effort, as opposed to making clothes. A factory with modular building blocks of size and fit and trim and building it over and over again. And then we choose from those building blocks our size are fit and trim, our style preferences.

00:30:04:13 - 00:30:25:19
Sam Rashkin: We get the clothing we want on a fraction of the cost you get with the tailor involved and with very, very, significant cost savings, but very, good proximity quality. We're looking for we're going to do the same thing for House. So here's an example of a mass customization concept for a product that was done north of Chicago.

00:30:25:22 - 00:30:49:10
Sam Rashkin: School Street was built at Libertyville, Illinois. But the concept is you have abcdef these building blocks, and they create a first floor and a second floor and a third floor over and over and over again. And they're optimized for framing. They're optimized for plumbing. They're optimized for all the, construction, connections and elements. So it is just it's going to build that over and over.

00:30:49:10 - 00:31:08:13
Sam Rashkin: You can just take the time to just take every cost wasted cost out of the process. And then you do another set of building blocks for the second floor. And this third floor, you just put them on top of the third floor and the key point here is now you can invest in expert solutions because it's going to be average amortized.

00:31:08:20 - 00:31:33:19
Sam Rashkin: The cost of those experts and world class design solutions that you get will be amortized over many, many uses of those building blocks on many, many, many projects and many, many different house plans to design buildings, science, health, smart lighting, color, landscaping. The things that you optimize can be done over and over again. So this particular project looked like this on the elevation sketches.

00:31:33:22 - 00:31:59:26
Sam Rashkin: And yet they're going to rise to 2 or 3 stories. And there are 2 or 3 truss configurations and one or 2 or 2 different pop out windows. And I think 2 or 3 variations for front porches and a few siding trim packages and a few color packages. Yet the perceived customization is impressive, and when you see the actual construction is off the charts, this is a production built, tracked home project.

00:31:59:29 - 00:32:29:24
Sam Rashkin: It looks almost like a custom street. And then any of you attend my design seminars. Now, I've always preached at landscaping terms architecture because as trees grow up and the street today is even more fully developed with the trees, the trees and the landscaping become the strongest impression you get when you come to the street. But I use this early shot of School Street before the trees are fully matured, just so you can see how rich the architecture can be with the same building blocks over and over again.

00:32:29:27 - 00:32:57:25
Sam Rashkin: And the savings as you keep using these building blocks keeps occurring. And to give you a sense of what, that customization looks like on a special design project, on this company digital that's really good at doing mass customization. I collaborate with them. As a matter of disclosure, we'll take a project where you have a street and you set up a certain with, like to be used over and over again, and you can develop three different floor plans that create interest.

00:32:57:25 - 00:33:25:15
Sam Rashkin: And they can be either Adu or it can be three car garage options work at home, options can be used instead of ADUs, but then you can have a bungalow set of options that can have six distinct exteriors, and you can have a craftsman option. And you get to see that there's so much diversity, even just with these limited choices, that the street, again, can have a sense of a more not a track built project, but more of a customized project.

00:33:25:17 - 00:33:52:25
Sam Rashkin: We don't have to do as much as we're doing. And because these are going to be optimized and they'll be used over and over again. And so that's the power of mass customization. Then comes digitalization. If I've invested in a set of building blocks, I'm going to use them over and over again. Mass customized. Now I cannot invest in digitization because it's not cheap unless you're doing over and over again the same building blocks.

00:33:52:27 - 00:34:19:22
Sam Rashkin: First, I want to talk about the lack of computerization within this industry. Here's construction at the bottom of all these industries where the darker red and orange who are, it's an indication, have hardly any digitalization being applied in the industry. As you get greener and greener, you get industries that have a much higher level. But for agriculture and hunting, construction just isn't at the bottom of all industries.

00:34:19:25 - 00:34:45:12
Sam Rashkin: And so it's a tremendously lagging. So when you look at all cars made the amount of confidence, the reduction in waste, the reduction in rework, the reduction in labor, the reduction in time, the reduction in customer issues and callbacks. And when you look at a car, it's made on a computer. So by time you get to the plant, everything is fully optimized, uncertainty is removed.

00:34:45:14 - 00:35:12:01
Sam Rashkin: It's fully, optimized process. But when you look at housing, it's completely analog with drawings. We do and it's the opposite. And there's so much room for error in the field interpretation of what the drawings say. On understanding what the drawings say, of knowing that you've done everything and it's complete and things are missing, and all the details work properly because you can see everything three dimensionally.

00:35:12:04 - 00:35:37:25
Sam Rashkin: You really know that you have the product on nailed down. So you're creating a virtual twin on a computer with a digitized business model versus analog, where you just in two dimensions. And when research is done again by, in this case, McKinsey and company, look across all the key metrics for profitability of companies price to earnings, total shareholder returns, return on, tangible equity.

00:35:37:25 - 00:36:10:00
Sam Rashkin: And they compare businesses with that, have a lot of digitization with those that don't, about 26 to 65% outperformance by digital, digitized, leaders in the industry. So amazing business case. And so we can make an assumption that housing is different and digitization won't make a difference. Or we can truly understand the power of building these virtual twins is even more compelling.

00:36:10:03 - 00:36:32:29
Sam Rashkin: And housing. And I expect to see bigger performance advantages for companies that do so. When you digitize, virtually everything is integrated. Your structure is mechanical, electrical, plumbing, details, trim finishes. So it's faster, it's better. There's tremendous cost savings. I again, I won't go through a lot of details. All the pictures kind of show you. Here's a digitized house.

00:36:32:29 - 00:36:53:06
Sam Rashkin: You know, all the plumbing is going to go, how it connects, how it's going to be run, some low level plumbing, trainer training in the fields, not figuring that out. Same with the ductwork. It's optimized for size for layout and how it gets to each run. And the guys in the field have this is much easier to make sure it's done right.

00:36:53:06 - 00:37:14:03
Sam Rashkin: All the electric and the lighting, the integration with the solar, all that is done. So the plumbing, vents don't go through the solar system, the foundations, the framing. How much would you need is optimized where the wood use is optimized, all the structure where you need penetrations and openings for lighting, for plumbing, for electric, for mechanical. All that's work out.

00:37:14:03 - 00:37:36:18
Sam Rashkin: And you understand and you can see how it will be assembled, three dimensional and even the finish, you see. So are all the casings where there's transitions, let's say from a baseboard from A to a door trim. Are they right from the handrails? From the stair post to the other trim, from all the cabinets, all the lighting is everything done set in the right locations?

00:37:36:20 - 00:38:05:26
Sam Rashkin: You can only do this to this level if you're digitized. So recognizing some many of us are going to lag getting to that level. We're stuck doing analog drawings, but even analog drawings at least can be done better. If you're going to do this is the best you can do. This is a typical non trade specific drawings. There's a lot of notes and section cuts and references to specifications and some other sheet and a detail on another sheet and a section on another sheet.

00:38:05:28 - 00:38:26:24
Sam Rashkin: And you got to hope that someone will work through all the drawings and figure this out in the field. And it's kind of a mess that this is where we're at in 2025. So trade specific drawings, just put all the details, all the notes on the same page. This is the foundation plans where the foundation details and it's design for the trade.

00:38:26:26 - 00:38:48:19
Sam Rashkin: This is a framing plan first floor only for layout. All the wall layouts, all the framing details, and even the integration with cabinets and openings and how they're framed. Everything's on the same page. And window schedules and door schedules are called out right on the same page for the first floor. Second floor would be the same on cabinets and plumbing.

00:38:48:19 - 00:39:13:00
Sam Rashkin: Again, you layout all the, locations on the cabinets or even in this case, three dimensional. You see, everything fits. You make sure everything is set and all the specifications are included on this page. And then on the roofing plan, you have the exact roof layout. You share the details. You have, the flashing that goes up the eaves, you have, all the details and everything.

00:39:13:00 - 00:39:47:24
Sam Rashkin: Connection fits. It's all there. And roofing contractor only needs a few notes and specifications are here as well, so you get the idea. If you're going to stay true to at least take the risk out of, as much out of the equation as possible by doing trade specific drawings. Okay, so those are the strategies I'm recommending. For addressing, so, taking risk out of the, productivity.

00:39:47:26 - 00:40:20:26
Sam Rashkin: Let's talk about what we do to manage the shrinking skill sets. And I'm going to give you three of four choices here. One is mock ups, two is checklists, three are inspections and testing, and four is inherent quality control technologies I can use technology, require a lot of skills. I can use the technologies that don't. If I don't count the benefit of reduced training, rework customer calls and warranty calls and services, I'm not getting an accurate assessment and an informed decision.

00:40:20:28 - 00:40:40:11
Sam Rashkin: So let's address each of these mock ups are the most simple. It's there's some places, you know, it's it's complex, the way the trim works and the detail and how it wraps around. In this case, you can see on the left, how, you know, kind of a dormer trim works with the roofing on the right. You see how a windows flush?

00:40:40:19 - 00:41:11:26
Sam Rashkin: It's great having these on site. So there's no question what the expectation is. Yeah. You don't have to speak English. You understand what your job is or what you have to do. Ultimately, at lower cost, you can go and have virtual mock ups. In the case of, my friends at Construction Instruction, they have an incredible library, three dimensional, mock ups, if you will, that where you see every detail animated step by step by step, how to do it properly.

00:41:11:26 - 00:41:31:17
Sam Rashkin: So on the left would be a window on the right, how to do, air gap for siding and so forth. So again, it's just so simple in the field. Pull it up and you have a mock up right there to show the trades before they start the work. The other thing is checklist. Checklist. To me I'm always a big fan of them.

00:41:31:19 - 00:41:57:18
Sam Rashkin: This is what I put together for the Energy Star program version two. It's a thermal bypass checklist. I spent about six months going to every building science conference. I could research every, training program on air barriers, and it was kind of scattered and things were all over. There's a lot of good content. I curated it into a way that in the field you can make sure, it was easiest to inspect.

00:41:57:18 - 00:42:23:25
Sam Rashkin: So in the field, you can have the greatest chance of not forgetting something because the checklist followed the construction process. And so, this is a thermal bypass checklist. And, I'm always frustrated that it's no longer provided with the program because I think this is a great tool for, doing a critical, part of the oversight with the air barriers that are so important.

00:42:23:28 - 00:42:43:21
Sam Rashkin: But checklists can be used for a lot of different, aspects for mechanical, for deduction, how to run. You can use them for a lot of framing details and so forth. Then, of course, you want to test and inspect the work. You can't manage what you don't measure. We talked about before. So here you see traditional blower door casting plaster casts.

00:42:43:23 - 00:43:19:15
Sam Rashkin: So for all my friends that work in these great certification programs, Energy Star, Zero Energy ready, it's baked in. Or if you get a Herz rating, it's a Big ten. And leverage those because they're great for holding the work accountable so you don't have to pay the price as the builder. And then lastly, these inherent quality control technologies are so many great innovations, and I don't think we fully account for their benefit because they eliminate so much risk in terms of quality construction in the field with a shrinking skilled workforce.

00:43:19:18 - 00:43:44:26
Sam Rashkin: And so here's what I love is a plug and play duct system by rear, essentially, plenum. You have these cuts. Eventually they'll be cut. The platforms will come precut for you. But they they're easy to do. And then you have a home run, to each room for as many outlets as you need with each duct being, I think, a two and a half three inch stack fits and framing even a wall frame, you can get it through.

00:43:44:28 - 00:44:07:28
Sam Rashkin: And what it means is every that has only a plug and play, air tight connection plenum and a plug and play a tight connection or lower left to your grill. Each one is about 2530 CFM. So if I need, let's say 75 or 80 cfm, I might have three rooms to a room and I can mix it up in the room and get better mixing by having different locations.

00:44:08:00 - 00:44:32:24
Sam Rashkin: It's a much smaller package of materials that comes to the site for the Hvac contractor to install the skids much smaller. It's faster, it's better. It's inherently airtight. You get the ducks in condition space, especially for the zones. You really can't program specifications and much greater comfort because predictive airflow, much more mixing with, multiple diffuser locations in many rooms.

00:44:32:27 - 00:44:56:20
Sam Rashkin: And it's cheaper when you can't cycle time waste and callbacks and rework. I think more and more people need to look at this. You take the quality control out of the equation from the Hvac contractor, and a lot of challenges we won't go into with that. That part of the trains, your ceiling, again, critically important work for high performance.

00:44:56:22 - 00:45:20:21
Sam Rashkin: You have this almost what I call digital air sealing or air selling, where you automatically inject the, surfactants throughout the space. It will find any crack. It will accelerate through the cracks and holes and accelerates. It drops the particles or drops the particles and automatically, automatically seals everything. Up to about three eight inch hole or crack.

00:45:20:27 - 00:45:46:21
Sam Rashkin: So it's a beautiful technology. It goes fast, efficient. It comes in $0.85 a square for a dollar a square foot. Sometimes this council will lower than that. So it's it seems a lot higher than traditional manual air selling. But you can get down to almost passive house level or the energy ready home air level so much more easily, so much more confidently, less risk.

00:45:46:21 - 00:46:30:02
Sam Rashkin: That's free work. Less having to go back and fix things. So we figure out lower costs, very, very significant innovation for selling, for enclosures. You know, again, I'll talk more about this at either at the pre-conference, next week. But, you know, on the left, you see, continuous insulation frame assembly, and you just look at how many moving parts you've got to manage, how much quality control you have versus a sit panel where you have virtually no risk of vapor flow through the assembly, no risk of anything less than grade one insulation, no risk of air leakage for virtually the way it's assembled, no risk of dimensional problems.

00:46:30:04 - 00:46:52:25
Sam Rashkin: Stronger, impact resistant, stronger wall fire resistance. About half the wood of traditional framing. It's just in every way superior to a framed enclosure. And we're just glacially embracing this innovation. So we have these ways to just take all the quality of the equation, and we have to count all the cost to then see which is best.

00:46:52:27 - 00:47:21:05
Sam Rashkin: Now a big issue with ships. I'm going to come back later on and remember this term design for manufacturing. Let's move on. Last thing I want to talk about in terms of inherent quality control technologies, is one that the industry let go drop because no one used it enough. Now, Emerson doesn't still provide the sense we predict, but we got to work for the Hvac industry to give us automated fault detection and diagnostics a f d day.

00:47:21:07 - 00:48:05:28
Sam Rashkin: Now, in this case, the Emerson system would put in ten sensors, take 15 30 minutes to install, and all this crazy work we do with Energy Star trying to get, static pressure and refrigerant charge and all that stuff done. Right. You can take all that away from record if you just had this simple 15 30 minute installation and, you would, you would hold to the Hvac installation accountable because insulate after it's installed, any indications of, improper airflow or charge would be, you know, right away such a more elegant way than having like 12 pages of checklists and forms and things you got to do for Energy Star, Hvac quality, installation,

00:48:05:28 - 00:48:35:24
Sam Rashkin: compliance, or now ResNet requires this stuff as well. It's just so much more simple. We just have accountability baked in. So the quality control is there. This innovation, it just fell through the cracks. No one used it enough. Now we have to just go manual. So we got to embrace these innovations okay. Last workforce survival strategy I want to talk about is significantly reducing the amount of workers we need by reducing the number of trades on the job site.

00:48:35:27 - 00:49:11:11
Sam Rashkin: And the three options here are systems building. But systems building is not enough. And I'll talk about why systems building is just glacially growing in the US. And it's because of two things design for manufacture and design for assembly. And I'll add a third because, the regulatory issues are to me insanely, over aggressive for construction industry at large and for the offsite construction especially.

00:49:11:13 - 00:49:34:20
Sam Rashkin: So, that's a separate issue for right now, even with the regulatory barriers we have, if at least a design for manufacture and design for assembly with systems building, now we have a path forward to really reduce and trades. So let's talk about systems building and the fact that there are two types of systems building. One is subtractive manufacturing.

00:49:34:22 - 00:50:08:20
Sam Rashkin: And that's where you take material and and whittle it down to the parts what you need. I'll talk more about this. And that then is additive additive manufacturing where you take the material and you build up till you have the parts you need. So subtractive manufacturing is our kit homes or or frame packages. Panels come in various excuse me come in various forms structural insulated panels conventional framing panels, insulated concrete panels, precast concrete, same number choices.

00:50:08:20 - 00:50:37:15
Sam Rashkin: They're modular, or volumetric boxes that you buy, sometimes finish, sometimes rough and finished in the field. And hybrids are where you have both panels and modules used for kitchen and bathroom course. So where you have this huge concentration of trades and kitchens and bathrooms, fill them in a factory where you're just building volumetric spaces that don't have a lot else going on, use panels and create the airspace in the field.

00:50:37:15 - 00:51:01:08
Sam Rashkin: When you assemble the panels, much more cost effective is a concept there. All these are faster cycle time. All of them have better quality, accuracy, and strength. All of them have huge cost savings through time, rework and waste and all have added revenue from increased velocity. You built many more homes with systems building and you can with traditional construction.

00:51:01:10 - 00:51:24:01
Sam Rashkin: So let's talk about additive versus subtractive. So again on the top is subtractive. To take a piece of material you whittle away to get the shape you want the product and all that whittling leaves all that waste. Hey, you have to get rid of okay. But it tends to be able to be done with a lot more conventional, equipment and automated systems.

00:51:24:03 - 00:51:48:06
Sam Rashkin: So it's why you'll see mostly subtractive processing, additive processing 3D is where you take the material, you put it into the printing machine, and then it prints the product and the only way. So the finishing at the end just scraping off any, any meaning little, blemishes. And that's, that's your waste. So hardly any waste with additive manufacturing.

00:51:48:09 - 00:52:38:27
Sam Rashkin: So those are your two categories when you go to advanced manufacturing methods and all these systems systems, body choices reduce cycle time. And the reason they do is you start off whether you're a systems building or conventional building with the same design, engineering and permanent approval, requirements and time, because that just doesn't go away. But with systems building at the same time that you're starting the foundations and site, the site lot development foundations, you're building the home and the plant and you're building it and you're managing the waste and your construction process, all that's being done there so that when it's time to start, once the foundation is done, you're only beginning the

00:52:38:27 - 00:53:12:07
Sam Rashkin: building construction process with traditional methods, and then you got to restore the site and get rid of the waste. Well, with systems building, you're assembling the panels or assembling the modules incredibly quick with hardly any site restoration work. And hardly any waste in the field. So this time savings can usually be 30 to 50%, because you simultaneously are building the home and the plant on the site like development and foundation work storage that's use your your vantage from systems building.

00:53:12:09 - 00:53:38:01
Sam Rashkin: So when you have one research study found just the enclosure stick framing was 95 days offsite with 65 days. That's 30 days savings, cost to the builder operation, all their costs for leasing equipment, office space or overhead insurance. And, vehicles and everything that have going on is about 5 to $800 a day for one study.

00:53:38:03 - 00:54:17:20
Sam Rashkin: So that means that 30 days of savings, just that alone, that cycle time benefit for the offsite is a 15 to $24,000 cost component that goes need to be included in your choices of how to build your home. Additionally, besides these, cycle time savings, which improves, which reduces recurring costs, improves efficiency and interest cost, for your construction loans and everything that reduces, there's a huge benefit from enhanced profitability from the velocity.

00:54:17:23 - 00:54:40:23
Sam Rashkin: When you improve sales and closing closing, you have more profit per home. So I build another 100 homes a year because of systems building that I can sell because there's a housing shortage. And, each of those homes, I profit margins about 20%. So it's much or 15 percentage, 40,000 per home times 100 homes. These are huge numbers.

00:54:40:26 - 00:55:03:00
Sam Rashkin: And if you're not counting them, you're not getting the right answer. Should I use the systems building or the conventional methods. And then you have reduced rates shorter time. It takes less. You may move into a market condition that's less favorable or less inflation risk that certain prices increase or economic uncertainty is that people stop buying this. Market conditions change.

00:55:03:02 - 00:55:37:05
Sam Rashkin: All those things are lower. So, and there's a recent study I just picked up, I think last month factors over $10 billion cost the homebuilding sector due to longer construction times associated with scarce skilled labor. That's a huge cost to the industry. And we talked to you earlier about delays. This is a quantified number, 2.2% reduction in global work hours projected by 2030 just to protect workers from heat stress.

00:55:37:05 - 00:56:00:25
Sam Rashkin: So beyond just the delay trying to find workers, the working conditions get worse and worse due to climate factors that seem to be, I don't care if it's climate change and I don't go crazy on me or I'm agnostic, but I do believe in data. And like 19, the 20 hottest years have just happened in the last 20 years where things are hotter.

00:56:00:27 - 00:56:29:13
Sam Rashkin: I got a I got to address the data. If I'm in business and the data tells me it's getting hotter, I got to know that he is going to reduce the number of work hours in the case of this one study 2.2%. And in a city like Phoenix, we have 113 straight days or 100 degrees in 2024, probably 2.2% was incredibly generous in terms of the lost percent of work hours lost.

00:56:29:15 - 00:56:53:13
Sam Rashkin: Okay. So let's look at the system's framing options. And first let's start with case. The very first kits came at the turn of the century from serious starting in the early 1900s. Here's one Sanibel Island where I happened to go visit before the hurricane. It wasn't sustained, if you care which one went through and just leveled Sanibel.

00:56:53:13 - 00:57:13:22
Sam Rashkin: So I don't know that this is still there, but it just amazing. Up for $1,500, you get up thousands of parts and assemble it on site. You had a home. Walking through the home was pretty amazing. You know, the finishes and things of course, get improved over time, but essentially this is a serious kit home of, here in 1924.

00:57:13:25 - 00:57:35:26
Sam Rashkin: So today, mostly what we see in kits is just framing packages where the lumber is precut in the field. It's all done with advanced cutting machines that reached CAD drawings directly. And then next to cuts, numbers, the lumber so that you can't, you can't make any errors using the wrong piece of lumber in the wrong location and, significantly reduces waste and time.

00:57:36:03 - 00:57:55:08
Sam Rashkin: It's a good first entry into systems, building it. You know, if you want to ease your way in, conventional framing panels built with traditional lumber are available. They're faster. Still a lot of material. A lot of ways. You got. It's still a lot of things going on. You got to do the insulation and fill the cavities and your ceiling and so forth.

00:57:55:08 - 00:58:17:27
Sam Rashkin: But that's one option. Are high performance framing panels. My good friends at unity Homes make a beautiful panel. It's really efficient. It's really incredibly well crafted. It makes some beautiful homes. So, you know, these these technologies are available. But, and then again, I'm a huge fan of ships. I love how it virtually takes moisture flow out of the equation.

00:58:17:29 - 00:58:43:10
Sam Rashkin: And, you know, me, for my presentations and for high performance homes, we got significantly greater risks when we increase air tightness and insulation. So I'm a low risk guy. I love technologies like this. I take all that out of the equation. I can't go wrong with ships with some basic modicum of quality control, oversight. And again, SIP homes can build beautiful homes and silk.

00:58:43:15 - 00:59:07:24
Sam Rashkin: Elegant, elegantly simple. They are just on the right. When you see I'm finished on the number of commission people have an amazing cozy, low energy use. Same with insulated concrete panels. Very efficient, very little risk on little bit of things. You've got to manage, you know, with pressure bracing the walls and, and not having the concrete, poured south on you.

00:59:07:27 - 00:59:29:19
Sam Rashkin: But again, the panels are numbered. It's easy to do. They're elegant. How these are constructed. I know I'm running out of time, so I'll go fast, faster through these, but here's a insulated concrete panel. Home assembled, you know, very simple, elegant and low risk, precast concrete panels, been made for years. Very low uptake uptake because of, cost.

00:59:29:19 - 00:59:57:15
Sam Rashkin: The first cost is higher. There's so many cost savings or 5000 or so, 70% less concrete and conventional concrete foundations for that use. They're, insulated. Our ten on the inside and on the website. And then there have a cap on the website. You can attach drywall directly to them. They are almost bulletproof for moisture and for thermal control and for comfort to really amazing systems, for foundations.

00:59:57:15 - 01:00:23:26
Sam Rashkin: But they also can be used for above grade walls as well. And then there's the marginal homes. Volumetric. This is an unfinished panel. These are, us this is a more finished panel that's been deliberately scrapped. And insulated. And here's a modular factory in Napa, Idaho. Out of all and makes these marginal y metric modular units predominantly for, multifamily housing.

01:00:23:26 - 01:00:48:11
Sam Rashkin: So I have, I think, 53 six act access robots in the center of a square donut building and on the perimeter of the have all the advanced assembly rigs and cutting machines, and it goes around and they build these modules and ship them on site and assemble them again, mostly for work, multi-family housing, you know, make a very nice product.

01:00:48:11 - 01:01:13:29
Sam Rashkin: They claim 40% less cycle time. Again, quality accuracy, strength. They also claim 20% cost savings at $100 a square foot. On the website. But again, this is a huge investment. They have the robotics and they have advanced rigs and cutting machines. This is a whole package. And then, I like my good friends at Plant Prefab.

01:01:14:01 - 01:01:38:19
Sam Rashkin: They've expanded from just, modular to modular and panels that do both and make beautiful homes. They really, truly integrated, finishes everything. It's a beautiful product that they make. And this is a palm company that makes kitchens and bathrooms, and you'll see more and more of that pop up as well. And here's a 3D home that's made in a plant, shipped and dropped on site.

01:01:38:21 - 01:02:02:18
Sam Rashkin: This is you can see, obviously vacation home or Adu accessory dwelling unit. And now we have, more and more we have some interest in 3D printing in the field, particularly in job sites that are relatively flat except the printers and can print almost anything you want. And very resource efficient. You 24 seven. You're printing homes and just producing these homes.

01:02:02:20 - 01:02:23:05
Sam Rashkin: And so, seeing some really, new players come into the market. And I'm also seeing some really strong interest in our, and, other large builders are kind of testing the waters for 3D printing. So we'll see what happens. And left. I like it because you start with the 3D in the first floor. Thank you. Ships.

01:02:23:05 - 01:02:45:02
Sam Rashkin: Maybe on the second floor you start integrating some of these systems together so, you know, additive on the base and then subtract off subtractive on the top. But here's the bottom one. All these systems options. And you look at us uptake versus the rest of the global markets. And here's a sampling. You see that US is right.

01:02:45:02 - 01:03:12:01
Sam Rashkin: Still about 3%. And HP just put out the 3% number. A couple of weeks ago and got it 3%. We're still staying there for decades. Well, UK is growing just 2013 to 2018, from 7 to 11 all the way up to Sweden, which has been the kind of the flagship for offsite, basically, 85% of all their homes sold.

01:03:12:04 - 01:03:39:17
Sam Rashkin: It's a longer presentation about why Sweden is 85% and the US is 3%, and why are things moving faster. And UK, Germany and Japan, they say, oh, I'm moving 20% higher. You know, again, we there's a lot to go into. But, key issue are two things I mentioned earlier. Design for manufacturing, assembly design for manufacturing means we stop the craziness that we do in this country.

01:03:39:17 - 01:04:22:11
Sam Rashkin: We're building develops plans and that goes to manufacturing says build my home. The plant. That's not the way advanced manufacturing work works. The way advanced manufacturing works is you have a system and then you conceive the product based on what the how the system can be optimized to create designs. And your the whole design concept is about all the parameters of how a plant works and the size panels and the size openings and how they're assembled and, and, and how roof panels work and how everything works when you're unsure how everything works in the span of roof panels and so forth, you get to a point where you have a home that's optimized and

01:04:22:11 - 01:04:52:02
Sam Rashkin: that, in my calculations, is like another 5,060% cost savings. If you design for manufacturing of a specific offsite choice, you have, you know, in general, as a concept design for manufacturing, you have a concept development based on how you manufacture, you optimize for how you manufacture it. You build prototypes and tests, and then feedback is integrated and you get final designs and you keep iterating, improving, improving.

01:04:52:04 - 01:05:20:13
Sam Rashkin: But the goals are critical. Early consideration I want to use this manufacturing process. You want a simplified product design, standardized components, optimization of material usage, and you want to reduce the assembly steps. You think about everything that goes on and how you make a car and look at how they do it. That's how cars are optimized for cost, and design for assembly is now.

01:05:20:15 - 01:05:52:12
Sam Rashkin: It's designed for making stock design the process of how the, the components are made. Now let's design for how they assemble. So you want error proofing techniques and components, standardization, modular designs, things we talked about simplified assembly steps. So it's just a sister design for manufacturing. Often the design for manufacturing is combined DFM the, DFA design for manufacturing, design for assembly is a single concept, and the goal is to prevent assembly errors.

01:05:52:15 - 01:06:20:23
Sam Rashkin: You want interchangeable and uniform parts, so you have less risk in the field of using the wrong connectors, or the wrong nails, or the wrong screws, or the wrong brackets. Independent, easily assembled units reduce complexity a little more. Just to graphically explain this concept before, you may have had four different parts completely different, and then after you have one port is maximum, minimizing the port count standardization.

01:06:20:23 - 01:06:46:10
Sam Rashkin: At three different parts, you get the same port, the same screw or narrower fastener over and over again. Orientation handling before you had some awkward components after it's all designed. So the components are minimize the risk of incorrect placement or installation and then movement motion analysis before to have a lot of movement to get that piece in place after.

01:06:46:10 - 01:07:15:13
Sam Rashkin: It's the least amount of motion to assemble that part. So that's all assembly is doing. It all is logical, makes sense. And we're all comes together is with the Swedish offsite homes. There's a reason Sweden set 85% of the market. And two big reasons are designed for manufacturer designed for assembly. And it, I'll just walk you through what it looks like when you do it.

01:07:15:13 - 01:07:36:22
Sam Rashkin: Right. And every time people ask me why is it not happening in the country, I keep saying I am shocked. You have a perfect example of what works. And then people come to this country and they do what doesn't work. And so I'm always I consult a number of offsite companies. I'm always working with the same basic concept.

01:07:36:22 - 01:08:04:17
Sam Rashkin: We got to get to where we do what works, not what doesn't work. So first thing about, offsite with the Swedes is that it's systems built. It's a whole product concept. It's mass customization, and it's optimized user experiences. They optimize design, they optimize performance virtually. A passive house level performance is consistent almost across the industry and optimize quality.

01:08:04:17 - 01:08:32:03
Sam Rashkin: You cannot match the quality of a cycle time. There's a reason why across the board, Swedish buyers reject cycle times. They don't want to give up the quality, the performance, the design, and then the sales process is completely optimized. The amount of stress, friction burden you have with the US process versus the Swedes, it's like ten x or 100 x greater.

01:08:32:05 - 01:08:56:02
Sam Rashkin: It's so easy to buy a house in Sweden. So at one side the plant and trees come in. They're milled to create. They create the lumber. And that the other income, the belt that's still homes in the world essentially it's designed for manufacturing simple exterior forms, boxy but beautiful trim, symmetry details, not so good, and the color for me in the top one.

01:08:56:02 - 01:09:19:00
Sam Rashkin: But, but they're even that Swedes can have room for improvement. They have mass customization. They have these basic building blocks that you can reconfigure to get many options with only some subtle changes. And they would never, ever not use the attic space as an attic. If you're going to build a volume, you use it. It's the most efficient way to build.

01:09:19:00 - 01:09:38:29
Sam Rashkin: You get all that extra space. I it's just shocking to me that we build vented attics and all that wasted volume. Never with the Swedes. And then their business lessons are in the factory. They focus on the process and the team. So they. But in the field, they focus on the product and the customers and how that product assembles.

01:09:39:01 - 01:09:59:25
Sam Rashkin: Small producers are doing well in Sweden as well as the big ones, and they don't pay. They use advanced cutting machines and hand diggers and and flipping machines, but they don't believe the robotics. And this is great. They get incredible productivity just with the basic machines and perfected it to the highest level. So this is a typical Swedish production line.

01:10:00:00 - 01:10:20:12
Sam Rashkin: Again you see the flipping machines, advanced cutting machines. There's in this case you'll see one, two, three, 4 or 5, six, seven workers are building hundreds and hundreds of homes a year. And just because it's so optimized for production and in the plant, you can see the quality, the lumber that they, when they know and cut it, they have great quality lumber.

01:10:20:12 - 01:10:41:25
Sam Rashkin: They own the parts, they make these, they don't build rough openings. By the way, you see that window? It's a precise because you don't need a rough opening. I don't need a half inch or an A window and a plant. It's right up a perfect fit. And again, you can see the quality framing and the wall construction. It's passive house is a typical thermal performance of the enclosure.

01:10:41:27 - 01:11:12:19
Sam Rashkin: They use all the details for air gaps. And so forth. Vance Lazar, technology for, framing, trusses and reframing. But this is the key part to design for assembly. If you ever notice, crews install siding to replace siding in homes in this country, the first thing they do in a common build a scaffold around a house that looks very much like this, because it makes it so ergonomic for them to basically attack the house.

01:11:12:19 - 01:11:35:20
Sam Rashkin: And in one day or a day and a half to replace a big house siding, and they can really do their work faster, better, cheaper with this system. And oddly enough, it's the same system the Swedes used to build the homes. They build the scaffolding first, and then all the panels arrive in sequence in order as needed. And the crews assemble and put these signs together beautifully airtight.

01:11:35:20 - 01:11:54:23
Sam Rashkin: Right away they come and you see pre finish all the kids materials and trim that the signing contractors have. They have so they can handle any detail in the field. You see the roof assembly being dropped in and for assemblies being dropped in. And now they mention the sales process. You know the way you go to a lot of a car, lots to pick out a car.

01:11:54:26 - 01:12:15:29
Sam Rashkin: All the manufacturers have to work jointly, have their product at a showcase center for homes where you can go shop five or 6 or 7 different manufacturers, go through the catalogs, put the building blocks in one together, and then probably an incredibly short amount of time, you can have a home on site once that foundation is done.

01:12:15:29 - 01:12:36:02
Sam Rashkin: And the foundation, in the case of the Swedes, I believe is done by the manufacturers, they handle whole product solution, unlike the American manufacturers. It's amazing what happens. So this is a basic building block, simple home, $134 a square foot passive house level performance. And you can just buy this and you have this on on your on your site.

01:12:36:05 - 01:12:59:27
Sam Rashkin: Want to move up to $170 a square foot. This is a next one. Two again, beautiful home, simple boxy design details, attention to trim, finish, color make a difference. This is a higher end higher end finishes and trim and detail. So it's $240 a square foot. But you kind of get the sense there's a lot of choice, a lot of different manufacturers doing different numbers.

01:13:00:00 - 01:13:29:10
Sam Rashkin: But 85% of all homes. So what's my recommendations is for those of you that aren't yet in a situation, we do want to consider systems building this fourth strategy moving forward. Let me be clear. 5,060% cost saving opportunity if you design for manufacturing and I have examples of a builder who's doing this and so forth, we're at a time site.

01:13:29:12 - 01:13:55:01
Sam Rashkin: There's only so much we can cover. But if you if you want to really reduce costs up to 60%, really start from the very first time you put that CAD drafting system concepts together with all the parameters from the manufacturer, what you need to do to optimize for that system, and also design for assembly as well to reduce friction.

01:13:55:03 - 01:14:26:19
Sam Rashkin: Keep encouraging companies to offer you set up solutions. Some some manufacturers will actually have set up crews. Other will have referrals to contractors that you can use. The American industry needs to get better at reducing friction, both, whole product solutions and set up solutions for their products. But keep asking and looking for that and finding companies that reduce the friction the most to make it easier for you and then for uncertainty.

01:14:26:21 - 01:14:53:25
Sam Rashkin: You got to integrate all the trades early in the process. You're still going to need a plumber or electrician. Cabinet maker or whatever you're going to still need. You got to make sure that you're involved early and investing, getting past learning curve first times hard, second times a lot easier. But third time you're selling along and many lose a heart after only the first project because they're not willing to grasp that learning curve.

01:14:53:27 - 01:15:21:28
Sam Rashkin: And key point here is systems building fails if it's afterthought, not integrated in a complete product development process. Okay, we can do this. For those of you that are building housing for mainstream home buyers who are absolutely, hammered trying to find affordable housing. So this is there for you. So I hope this makes sense. We covered four strategies.

01:15:22:00 - 01:15:47:22
Sam Rashkin: Give yourself some grace. Start easy getting into this, but start, you know, at least start from the very beginning. You know, working your way through all strategy by strategy to, to figure out how to prepare yourself for the certain future ahead, this enemy of reduced trades and trade skills. Mike, any questions you want to share?

01:15:47:24 - 01:16:06:14
Mike Collignon: Yes, indeed. And, that is, to put out the call to, our audience for questions. We do have a question. Actually, from our friend Zoran. He wants to know how can I help improve home performance?

01:16:06:16 - 01:16:52:27
Sam Rashkin: What have you got? You guys going to have a significant impact on, again, tracking quality. Managing supply chains on repetitive tasks. So look at all the things that sit in that realm, and basically, you'll get a good track of where I is going to have the most impact on the construction industry. But, you know, also, I think I will be integrated, construction sites will be cameras and sensors and, you know, or maybe replace some of the inspection work done, some of the testing work being done, real field time measurements and systems, you know, that, of, automated fault detection and diagnostic system for mechanical, you know, you could you

01:16:52:27 - 01:17:24:05
Sam Rashkin: can have sensors for plumbing, for leakage. You can have sensors for air linkage, have sensors for moisture content. You can have there's a lot of things I can do and process and signals and, and, and control the work. So but a lot of the basic construction details, AI's impact will mostly be at the plants. If we see, as I forecast, a big, big growth in the systems building part of the industry.

01:17:24:08 - 01:17:25:09
Sam Rashkin: All right.

01:17:25:11 - 01:17:56:24
Mike Collignon: And there was a question earlier about, being able to, you know, get some of the materials from, this webinar. And the response to that typically is that we post all of these recordings on Greenville, the media's YouTube channel. So you can go, check them out to your heart's content. Rewind, fast forward, pause. And that's how you can rewatch and, and kind of refamiliarize yourself with the content and some of the slides that Sams used.

01:17:56:26 - 01:18:20:01
Mike Collignon: I don't see any other questions right now, Sam. So I'm going to go ahead and conclude today's seminar. But I do want to definitely thank our audience for attending. Thank you once again to Panasonic Healthy Indoor Living Solutions for their generous sponsorship. And speaking of Panasonic, our next webinar takes place next week. That's right. It's going to be on Thursday, September 18th.

01:18:20:01 - 01:18:42:17
Mike Collignon: We're going to visit with Don West of Panasonic Ecosystems. We're going to discuss ERV for new homes. It's going to start at our usual time of 2:00 pm eastern time, and you can register for that. And all of our webinars at Green Builder media.com. Until next time, have a wonderful rest of your week. Stay safe, stay healthy and take care everyone.

01:18:42:19 - 01:18:44:03
Sam Rashkin: Hey. Thanks, Mike. Bye bye.