Modular: The next big trend in construction

Bill Maris’ new highly automated home construction plant cashes in in Skagit County


Transform’s Skagit County facility produces modular houses using computer-aided design software, which runs the facility’s equipment. The technology saves time and conserves resources, lowering the overall costs of construction.


Transform’s modular plant is — in the words of a certain summer blockbuster — more than meets the eye.

The new 115,000-square-foot facility in Skagit County — the brainchild of Cabochon Construction’s Bill Maris — operates a bit like a life-sized Tetris game, using a highly-automated system to construct entire buildings under one roof.

Inside the vast facility is a Darwinian evolution of building parts — from stacks of two-by-fours, to entire wall panels, to skeletal four-walled structures, to final finished homes complete with paint, trim, fixtures and carpet, which are then shrink-wrapped and shipped.

The recently opened plant, one of the first of its kind in Northwest Washington, follows in the footsteps of the Eastern United States and, to a greater extent, Europe — where the benefits of modular home building are transforming it into a growing construction trend.


‘The natural next step’

Maris decided to start the modular plant back in 2005 after running his Bellingham-based residential construction company, Cabochon Construction, with his wife for 11 years. He felt modular would allow the best avenue for delivering cost-effective, quality housing, and he felt there was a huge, untapped market for the kind of modular construction he wanted to build.

“I had always been interested in how to blend the repetition of the construction process with the potential automation of manufacturing,” he said. “It is the natural next step in construction. We see automation in every facet of our life. A very high percentage of everything we use is either manufactured or processed in a plant, so why not homes?”

Unlike manufactured homes, Transform’s modular buildings are built to at least the same standards and codes as site-built homes, but according to Maris, they are built with greater precision, quality control and engineering standards than most site-built projects. Whereas manufactured homes are built to Department of Housing and Urban Development (HUD) standards, Transform’s homes are built to higher International Building Code (IBC) standards.

At Transform, entire buildings are constructed under the warehouse’s roof using an automated, assembly-line process modeled after the Toyota Production System (TPS), or “lean manufacturing” system, which focuses on waste reduction.

The buildings’ plans are usually designed by the clients’ architects, and then turned into data in a three-dimensional computer-aided design (CAD) software program, which runs the facility’s equipment, including its saw and wall-framing machines that build walls to within one millimeter of accuracy, Maris said. This process leads to precision and waste reduction, he said.

Maris based Transform’s specific process on several systems across various industries, including the Boeing 737 assembly line and 13 modular plants in four countries. After months of research, he purchased German equipment and software, which he said were decades ahead of their U.S. counterparts.

In all, Transform’s equipment, software, employee training, land and facility cost $16 million.

The greatest benefits of modular construction are its time savings and quality and cost control. Maris said this is especially beneficial as land and entitlement costs continue to rise — construction costs and timing are the only components left for developers and builders to control.

“We chose from the onset to aim to achieve the same price structure as site-built (homes) but provide better quality materials,” Maris said.

When the facility is fully operational, Maris said it will take approximately seven days on a single shift to build a 1,500-square-foot home, and he expects to complete one home a day when many will be in various stages of completion.

A result of the automated process is that it allows for more productivity per employee on an output basis — about 10 percent to 20 percent more compared to site-built employee productivity, Maris said. This decreases the number of employees needed per job compared to site-built construction, but Maris frames it in a different way.

“Rather than reduce the number of employees, we will be able to produce more projects with that same number of employees,” he said.

Currently, about 70 percent of Transform’s contracts are for multifamily or commercial construction. Most of its residential clients are large, multi-unit buyers.

While most of the plans will be designed by outside architects, Maris hopes to offer five to 10 different models for building construction in the next three months, and eventually offer models for 25 to 40 homes.


The stuff green is made of

By its nature, modular construction employs some green elements. Because it is all manufactured indoors and is protected from the weather, modular construction avoids mold issues, said Emily Reid, Transform’s sustainability consultant.

The process also cuts down on waste.

“Waste is pretty darn minimal because we can optimize lumber cuts and use scraps throughout the building process,” she said.

Reid said the company has a goal to be able to use 95 percent of its scraps in the construction process in the next five years.

Transform’s particular modular process also uses insulated headers, energy efficient doors and windows and formaldehyde-free insulation as a standard. Developers also have the option to use linoleum instead of vinyl flooring, certified hardwoods, low-VOC paint, natural fiber carpets and solar power systems, she said.

Transform’s homes are also easily able to be LEED, Built Green, and Energy Star certified, if the developer so wishes, Reid said.

Nick Hartrich, green building program manager for Sustainable Connections, said he appreciated Transform’s potential for incorporating sustainable building elements such as LEED certification and Energy Star rating, as well as the waste reduction and material efficiency.

He also said the fact that Transform’s homes are all built inside reduces the chance for mold to grow, an important health hazard to consider in the damp Northwest climate.

Bill Quehrn, executive officer of the Building Industry Association of Whatcom County, said from what he knows of the company, he thinks it’s a good idea, especially with their opportunities to build green and make homes more affordable.

While Quehrn said the entire home manufacturing industry is growing, which would have some impact on labor, he said he doesn’t think it will displace many construction workers overall, as modular homebuilding represents only a small niche market in the construction industry.

“It’s a shame they couldn’t do it in Whatcom, but the business climate here does not promote good ideas,” he said.


Locating in Skagit

So far, Maris is unaware of any modular plants in Whatcom County, although there are a few companies building open wall panels to use in house framing. He knows of several other modular companies around the Northwest that use standard site-built construction within a facility, but nothing as highly automated as Transform.

Modular housing represents only about 3 percent of the construction market in the West, Maris said. But elsewhere, the trend has caught on. On the East Coast, the industry captures upward of 12 percent to 15 percent of the market, and in some European countries modular construction consumes more than 60 percent of the new housing market, he said.

Transform began operations at its Burlington facility, on Bay Ridge Drive just east of the Skagit Regional Airport, in April, although employee training and initial construction began in a Bellingham warehouse in January.

While he would have liked to locate Transform in Whatcom County — where he lives and operates Cabochon — Maris chose to locate the facility in Skagit County for several reasons, including the ease of dealing with the local jurisdictions, availability of land and proximity to a market between Portland and Blaine along I-5.

Permit timing was a key element for an expedited schedule, Maris said.

“We were amazed to be able to locate a site, design our facility and permit and construct a 115,000-square-foot facility in less than 10 months,” he said. “It would not have been possible without receiving a building permit within 60 days from application.”

Along with support from Skagit County and the Economic Development Association of Skagit County (EDASC), Transform received its primary funding from Horizon Bank and the Bank of the Pacific, both of which worked with the Small Business Administration to help Transform secure additional financial support needed to complete the deal. The EDASC also helped Maris contact the Washington State Department of Community, Trade and Economic Development (CTED), which provided Transform with several funding opportunities for employee training and infrastructure improvements.

Maris hopes to add a 17,000-square-foot office for administrative staff within the next year, and may eventually expand the plant as well. Currently, Transform is operating at about 30 percent of its production capacity and Maris said it will take years to operate at 100 percent, which would allow for 3 million square feet of construction a year.

However, the plant is designed to make a profit at only 15 percent of capacity, and Maris said he expects to achieve that benchmark by the end of 2007.

As for Cabochon, Maris said all his efforts are currently focused on Transform. While Cabochon still has a large portfolio of land and vested interests in Whatcom County, and will continue to do projects in the future, most of these projects will be done in some form of a partnership with the help of Transform, Maris said.

“Our partners will address the development and construction aspects of the projects, and Transform will provide the modular component of future projects,” he said.

In the next year, Maris expects to double Transform’s staff and to be a $75 million company within two years.

In the future, he said the company may expand within Washington, or in the Southwest, or even Canada. It may also delve into light-gauge steel building construction.

“However, for now we need to concentrate and focus all of our energy on getting this plant up and running as efficiently as possible, as quickly as possible,” he said.

For Maris, modular construction is his ticket to transforming the scope of construction in the Northwest, one wall panel at a time.

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