SBC Magazine December 2016 : Page 27
bETTER FoR the past 15 yeaRs, says Shelter Systems’ Joe Hikel, he’s been listening to the innovators behind Smart Components work through the challenges of putting the manufactur-ing process that works so well for roofs and floors to work in walls. “It’s a long process and not easy to do,” Hikel said. “You’ve got to invest for a while before you get return.” Early-adopter struggles aren’t for everyone, Hikel emphasizes. In addi-tion to getting sales of a new product off the ground, Hikel said that work-ing Smart Component manufacturing into his existing production facilities was no small task. “It’s a different ball game. You’re doing a lot of drilling and bolting that you don’t typically do in a truss manufacturing plant.” However, introducing a product to the market has perks as well as pit-falls. “It becomes easier to become the roof and floor truss supplier if you have a product that no one else has,” Hikel said, especially one “that’s needed on the job.” Owner: LCOR • General Contractor: James G Davis Construction Corp Architect: SK & I • Structural Engineer: Brian Cates, Cates Engineering december 2016 • sbcmag.info 27 building
Owner: LCOR • General Contractor: James G Davis Construction Corp
Architect: SK & I • Structural Engineer: Brian Cates, Cates Engineering
The Edison Gateway (edisonunionmarket.com) project on Florida Avenue in Washington DC is the first multi-story Smart Component project on the East Coast. It’s going up about one level per week. Shelter is supplying the floor trusses, roof trusses, gravity load components and Smart Components for the project. The framing is being done by Agility Construction, one of the newest members of SBCA’s National Framers Council.
If a new product can solve age-old building challenges, it can work anywhere—and help CMs become the go-to suppliers in their markets.
FOR THE PAST 15 YEARS, says Shelter Systems’ Joe Hikel, he’s been listening to the innovators behind Smart Components work through the challenges of putting the manufacturing process that works so well for roofs and floors to work in walls. “It’s a long process and not easy to do,” Hikel said. “You’ve got to invest for a while before you get return.”
Early-adopter struggles aren’t for everyone, Hikel emphasizes. In addition to getting sales of a new product off the ground, Hikel said that working Smart Component manufacturing into his existing production facilities was no small task. “It’s a different ball game. You’re doing a lot of drilling and bolting that you don’t typically do in a truss manufacturing plant.”
However, introducing a product to the market has perks as well as pitfalls. “It becomes easier to become the roof and floor truss supplier if you have a product that no one else has,” Hikel said, especially one “that’s needed on the job.”
A SLOW START
It not only takes time for an innovator to develop a product, or for a component manufacturer (CM) like Hikel to get up and running, producing that product; it also takes time to make a value proposition clear to customers. Shelter first approached single-family home builders, a group already interested in pre-fabricated components and speedy construction, pitching Smart Components as an exciting new use of truss technology, imported from the West Coast. That tactic had drawbacks.
As Shelter’s Bob Dayhoff explained, Smart Component production “is, relatively, an expensive start up, so there’s expense that we then transfer in the product cost.” Customers doing comparison shopping experienced sticker shock. “A double-sided plywood shear wall, when you break out the components, is cheaper than the design-manufacture price that we have on the Smart Component,” acknowledged Dayhoff.
Trying to show customers savings meant changing the conversation from price to a framer’s time saving potential. It was an appealing pitch, but it still wasn’t a sure sale. “From start to finish, we could show that using Smart Components was a significant time savings,” said Dayhoff; but there was still the matter of putting a price on that time. “To try to put a savings—a labor savings—on panelizations is almost impossible,” Dayhoff admitted. “A framer is going to charge you about the same price to set a panel as to frame it.”
“The approach on the west coast was to convince the framing carpenter they don’t want to live without [Smart Components],” Dayhoff explained. The pitch was that shear walls were always necessary, and Smart Components were the best option. That logic doesn’t work on the east coast.
“The lateral loads on the east coast are a lot less than the seismic loads out in California,” Hikel pointed out, so shear walls aren’t always needed and Smart Components can seem like an unnecessary worry and expense. “In California, it’s different because the alternative is much more onerous,” Hikel explained. “Compared to bolting together three pieces of steel,” Smart Components are a breeze; but because that’s not something Hikel’s customers are usually up against, a complicated shear wall is seen as “a pain,” a perception that Hikel saw rub off onto Smart Components.
Dayhoff is convinced, though, that componentized shear wall solutions will catch on. Even though seismic loads aren’t a factor in his market, wind certainly is—and that means Smart Components “could be a great fit.” In singlefamily buildings, he explained, “the demand load on the building, the shear load, is much smaller than on multifamily units. So really where the Smart Component shines is in a multi-family, multi-story building.”
Calculating the labor cost savings of component framing is “almost impossible,” says Dayhoff. That was true until SBCA built the Framing the American Dream Calculator. With this tool—one of many in the Component Marketing Toolbox— you can make a dollars and cents argument to potential customers about how your products can save them money. Learn more at sbcindustry.com/cm-toolbox/about.
Mark Pasquill of Universal Component Corporation agrees that there are benefits to offering a product “that’s new to our customers here on the east coast.” In many ways, his experience with Smart Components has paralleled Shelter’s.
Like Hikel, Pasquill has been hearing about Smart Components for a long time. Pasquill started offering Smart Components precisely because, he says, it was a good fit with what the company was already doing. “It’s not a huge leap in terms of our technology,” he explained. “There are a couple of nuances that you have to work out,” he admitted, but that simply meant he needed to start small. Just like Shelter, Universal decided the single-family market was the place to begin.
“One has to be able to walk before you can run,” said Pasquill. “So we were cutting our teeth, as it were, in the single-family market to get a good understanding of what the product does, how it’s designed, how to use it.” And there, like Shelter, Universal ran into roadblocks. “The commercial market is really where it needs to be,” Pasquill said. “If you move to a multi-family market, that’s where you get the volume.” Volume, meaning the economies of scale that bring down costs and increase margins.
Pasquill says growth has been gradual. “It’s been a slow process,” he said, to educate the market about a new product. Momentum builds only as fast as new customers agree to try out the product. “The people who have used it are very happy with it. It’s just getting them to understand it.”
Pasquill points out that “some of the same basic principles apply,” in Connecticut as do in California. Both markets have worked to educate customers and perfect a nuanced sales pitch. “As opposed to putting the product in front of them and saying, ‘this is the price, and it’s going to save you money,’” Pasquill thinks the message with Smart Components is: “This product is a problem solver, not a problem creator.”
It takes time to make a value proposition clear to customers.
Smart Component suppliers on both coasts are coming to the same conclusion: introducing a product means starting at the beginning of the build process. “What we have to concentrate on going forward,” Pasquill explained, “is getting education out there to the engineer and the architect— getting them to recognize the product and specify it.” The shift, he says, from reaching out to framers and homeowners in the single-family market to approaching engineers and architects in the multi-family and commercial markets is a shift from pitching the product as a perk to explaining it as an essential part of the package. With shear wall components, Pasquill said, he’s providing building designers “a solution to a problem they might otherwise not know how to solve. And that’s a totally different approach to selling.”
Dayhoff agrees that new products give building designers options, letting them present new possibilities to building owners. For example, a designer working on a pedestal construction project that needs a two-hour exterior fire rating might find that using fire treated wood and Smart Components allows for wood rather than steel construction. An extra story to accommodate a penthouse or mezzanine might even be possible within the parameters of the relevant building code. Collaboration in the preliminary stages of design means the designer can see all the tools in the tool belt and fully evaluate all the alternatives before drawing the plans.
Hikel explains the strategy for Shelter rests on focused recommendations presented at the right time, for the right project, to the right person. “We try to find places where there’s a lot of glass,” he noted, such as a sun porch or another space with little inherent capacity to resist shear loads. And, of course, he’ll suggest a Smart Component “whenever a proprietary shear wall from another manufacturer is specified.”
As Pasquill put it, Smart Component suppliers are still in “education mode, trying to get architects and engineers to recognize the product for what it is—a damn good product.” Bringing shear wall components in at the beginning of the process and getting Smart Components “specified within Plans,” Pasquill explained, means “you’re not trying to reinvent the round wheel square (as one guy put it to me a little while ago) with something new-fangled.”
“Because plans themselves, especially on large buildings, take so long to develop, it can certainly take three to five years before [a new product] starts to catch fire,” observed Dayhoff. By that point, he says, the slow process of convincing framers that building shear walls with components isn’t scary, and that it’s “faster and easier” than the alternative, will be over. A critical mass of builders and designers will be accustomed to “seeing a building go up and seeing how [Smart Components] saved them time and kept them from going to a more expensive alternative like steel.”
In other words, Dayhoff sees a rosy future at the end of the slow road to market growth. “It was a tough sell,” he admits, recalling Shelter’s first outreach efforts. “The hardest part,” he said, was the first step. “Getting that first component in,” Dayhoff explained, that’s what everyone worries about. “It’s just fear of the very first component.” Dayhoff predicts design professionals will be an easier group to bring on board than framers and builders. They are much more likely, he thinks, to see Smart Components as “another arrow in the quiver, another tool in the tool bag.”
Pasquill is very clear: he’s not rushing out to market Smart Components “as something cheap and cheerful,” because they’re not. Instead, he’s saying to potential customers: “Come to us. We have this range of tools in the box that can solve problems for you.” That might be a Smart Component, but it could just as easily be a roof or floor truss. For Pasquill, booming Smart Component sales aren’t the primary goal—a new product is just one more reason for customers to see him as their “go-to person.”
Ultimately, Universal sells Smart Components for the “same reason we do light gauge steel trusses: it’s another product in the arsenal, another margin stream that allows us to expand our company.” For Pasquill, the value proposition is simple: solving customers’ problems and building a better support system for their projects means making money.
In that sense, his message to the market hasn’t really changed. Especially on large jobs, Pasquill noted, many general contractors “don’t like dealing with multiple people. They want to deal with a one-stop shop.” Pasquill tells the story of how builders reacted when Connecticut and Massachusetts adopted new building codes: they scrambled to collect all the information they needed to secure permits, and they showed up at his door, asking where they could get sealed engineering documents with wind load calculations and wall bracing specifications. “We would give them the sealed drawing,” Pasquill explained. As part of the service, they’d replace complicated, code-mandated braced wall nailing patterns with simple Smart Components. “That’s really how we started to plant the seed,” Pasquill said, by telling customers, “you need this information for your building inspector; we can do it for you.”
Solving customers’ problems means making money.
Pasquill’s business model, at its core is: “they have a problem, we solve the problem.” That outlook got him interested in shear wall components and makes him ready to welcome whatever innovations are around the corner. “I don’t see Universal as just a truss manufacturer,” he said. “We’re engineered components.” That means any component that can help customers build better.
ABOUT THE AUTHOR: Dale Erlandson joined SBCA staff in fall of 2015 as the assistant editor of SBC Magazine. She has written for a variety of publications over the last decade and thrives on the challenge of learning something new and passing that knowledge along through the written word.
Hikel is CEO of Shelter Systems Limited, a business he co-founded with his parents, Dwight and Linda in 1976. Today, the company continues to expand its presence in the Mid-Atlantic market, serving a nearly 250-mile radius around its new 120,000 square foot manufacturing facility in Westminster, Maryland.
Shelter was one of the first companies to license Smart Components and has been manufacturing them for the last four years, complimenting a product mix that already included roof trusses, floor trusses and wall panels.
Hikel says that until early this year, he’d been using Smart Components “on kind of a spot situation in single families.” Now, he’s made the switch to bigger projects. In July, he began delivering Smart Components for “a five-story building in downtown DC that’s [got] a lot of glass.” He says there are “nine Smart Components on each level and 45 of them on the whole job. They’re not used on every unit, just where they’re needed to resist shear.”
Bob Dayhoff is Shelter Systems’ director of technical operations— a position, he says, that means he’s “the problem solver for anything that has any kind of technical question or issue tied to it.” When customers want to know whether Shelter’s products can provide shear resistance or solve any other design issue, they call Dayhoff. That’s key to expanding the use of a product, says Hikel.
“If you try to convert existing designs,” Hikel explains, “you struggle with it. So Bob Dayhoff works to get the product spec’d in early on in the process.”
“With Smart Components, working with the architects and engineers, the design professionals, [is] going to be successful for us,” Dayhoff predicts. “What is going to make this catch fire,” he adds, “is actually having the framing carpenter want it in his arsenal as well.”
SMART COMPONENTS HAD A GOOD START in California. Installations have gone better and better as companies like California Truss Frame not only sell the product but also develop instructional materials and retain experienced trainers to explain the new framing method. The same progression on the East Coast comes with its own challenges. There are two customer concerns about new products, says Dayhoff: dismissal, and skepticism.
First come the excuses about not using new products. Customers might argue, “we don’t have anyone on the project familiar with how to install them,” Dayhoff says. That reality led to extraordinary measures to pull the market toward innovation. Hikel recalls flying a framer and general contractor to California; with no projects underway in his own market, travel for observation and training was the best way to make the sale. “It was a day of being on jobsites,” Hikel says, and everyone left “pretty pumped.” Best of all, the enthusiasm has spread. The project engineer is now won-over, says Hikel, “and he’s a pretty well-established structural engineer out on the east coast, so we’re looking at [Smart Components] on other projects.”
A second concern among customers, says Dayhoff, is the assumption that “we’re not going to give them the negative side. We’re going to tell them what it would be like if everything went right.” After sharing start-to-finish install videos, Dayhoff says would-be customers contend, “this is a perfect install. There must be a nightmare install.” At this point, Dayhoff can say with confidence that there is such a thing as a nightmare install—and it’s really not too bad.
Dayhoff uses mock-up panels to show crews that are new to framing with Smart Components how they work.
“We don’t have more than an eighth-inch tolerance for the embeds,” Dayhoff explains. The tracks and rods in which the Smart Components sit have to be just right—and often it’s the concrete contractor raising the most objections. For that reason, Dayhoff talks with crews about potential issues long before the first Smart Component is set on the project. “We have actually invited people to fly out to the west coast and actually view the ongoing project, talk with the installer, get the straight skinny from the installer on what his problems have been,” says Dayhoff. He’s even had crews install a mock-up panel just to get a feel for the product and the process. “That has been real beneficial, too, because it’s kind of taken the fear factor out of the equation,” he says.
That was especially true when all possible fears were realized. Dayhoff recalls one project superintendent who nudged all the Smart Component tracks in the mock-up before the cement dried. “So when I got out there and saw that the rods were set askew, I just about had a heart attack!” says Dayhoff. He hurriedly began assuring the carpenter that adjustments could be made so that nothing would need to be re-drilled. The concrete contractor chimed in with suggestions. (“Two contractors actually working together!” Dayhoff marveled.) In the end, the Smart Component install went smoothly despite the sabotage.
“To have the general contractor actually throw that little whammy in there—he happily admitted to me when I got to the site that he altered the embed on purpose!—that gave us renewed confidence,” Dayhoff says. Even when things go as wrong as possible, the situation is workable—and that’s now a key product selling point.
Universal component Corporation
Mark Pasquill is general manager of Universal Component Corporation, a division of East Haven Builders Supply. Located in Branford, Connecticut, Universal supplies roof trusses, floor trusses and Smart Components in the Northeast market.
Even though Pasquill is currently ramping up production to meet the demand of large-scale projects, he plans to continue offering Smart Components as a niche product for single-family homes. “We’ve had a very good run with what we’ve done so far,” he says. “The customers like it, and it’s saving them a considerable amount of time on site.”
Pasquill says that having shear wall components in the shop is a way to differentiate his company—and he expects it will drive business overall. “I do think it will help in the selling of the bread and butter products,” he predicts.
Read the full article at http://digital.sbcmag.info/article/Building+Better/2651487/362836/article.html.