The sheer number of new technologies available to build homes today is greater than it has ever been. Manufacturers have invested and continue to invest hundreds of thousands of dollars in product research and development to produce product innovations that make home builders’ jobs easier and more profitable.
Home builders view manufacturers’ product innovations from a slightly different point of view. How can we be sure new products will stand the test of time, they ask. What about market acceptance, they wonder.
The disconnect between builders and their suppliers when it comes to new product technology is significant. On average, it takes more than 10 years for a new technology to be absorbed into the mainstream of housing, according to a study by the NAHB Research Center. A separate survey of 417 builders conducted at LeMoyne College found that those polled had adopted just 1.6 improvements out of a list of 10 changes in construction methods and materials.
To bridge this gap and put builders and manufacturers on the same page when it comes to new product technology, Professional Builder, with the NAHB Research Center, recently sponsored an industry roundtable on the subject in Tuscon, Az. Some of the issues addressed by builder and manufacturer participants were:
How do we get manufacturers to develop new materials and products that are responsive to builder needs in the field?
How do we make builders and their trade contractors more willing to adopt new technologies designed to enhance value to the customers?
How do we overcome the information disconnect between the building trades and the manufacturers?
Are they ways to future-proof new technologies so that they are less likely to involve the builder and manufacturer in future litigation?
Is it possible to simplify the installation process through product design?
How do we measure and assess the potential performance, cost and long-term impacts of innovative technologies?
Builder Perspectives: One builder participant, Randy Luther, vice president of construction technology at Centex Homes, suggested that manufacturers consider new product development from a value perspective.
"Value is the same product at a better price. Value is a better product at the same price. Value is a better product at a better price. Value is not the same product at a higher price," explained Luther.
In considering new products, Luther outlined his review process. Key points in the process are:
Stage of development: How long has the product been in the market - more than five years, one to five years, less than one year or not in the market today?
Stage of construction: The product is slotted into one of 28 stages of construction.
Description of innovation: What current problem or opportunity does this new product or technology address?
Best current practice: Reviews state of the art as it presently exists and the impact a new product or technology has on redefining it.
Principal advantages: The positive ramificiations of adoption, be it lower cost, less maintenance, reduced energy costs, increased comfort, improved safety, better security, more convenience, higher resale value or good market acceptance.
Principal disadvantages: Higher cost without significantly improved performance, longer installation time, negatively impacts other systems in the home during or after construction, etc.
Cost comparison to best current practices: Value is the real determination of impact rather than cost.
Cycle time comparison to best current practices: Does this new product or technology significantly reduce or increase the number of days it takes to build a home?
Benefits to customer: Products are rated from a -2 to a +2 in terms of buyer impact.
After collecting this data, Luther compiles a final score that includes the impact of technology, the cost compared to current best practice and the customer benefit rating. Of all the material presented to Luther for review, fewer than 10 percent of the products receive a composite score that merits further action.
While the review process among custom and small-volume builders is less formal, it is no less intensive. Michael Mendelsohn, a custom builder in Scottsdale, Az , regularly uses new construction technology in his homes.
"It is a point of differentiation for me in the market," explained Mendelsohn. "My clients are very savvy and expect the most sophisticated products in their home."
Manufacturer Wants: More than anything, building material manufacturers participating in the roundtable discussion wanted:
Face time with the right people: Too often manufacturers or their sales agents are unable to meet with anyone beyond the purchasing department in a home building company. While these folks write the order, manufacturers said the best scenario would be a new product task force that includes representatives from marketing, operations and purchasing.
Multi-Year Commitments: Shopping suppliers against each other every 12 months discourages innovation, said all. Only by creating a real relationship between the manufacturer and builder can product advancements occur, and multi-year contracts are a part of that process.
"If I know I have a builder’s business for two years, I’m more likely to work with the customer to understand his business issues and find ways my company can help solve them," said Mike Ulinski, director - national builder sales for Masco Corp.
