Prefabrication – Supply side

Eboss 7/8/19

Outline

1. About Jacks2. What’s a Prefab plant look like?3. Prefab in NZ4. Supplying prefabricators

Glossary

Source: PrefabNZPrefabNZ Glossary:http://www.prefabnz.com/Images/Assets/8532/1/PrefabNZ%20Glossary%20FINAL.pdf

FramesWindows

Beams

ClosedSemi-ClosedSolid (SIPs /

CLT)

PodsModules

VolumetricTransportables

Glossary

• Prefab = Offsite construction = Offsite Manufacturing• Modular is a confusing word• Digital Fabrication: Workflow from CAD through to automated

machinery.• Assembly: On-site assembly of prefabricated components• DfMA: Design for Manufacture and Assembly [and transport]

Who are Jacks?

• Suppliers to the timber, panel,aluminium, and prefab industries

• 75 years young• Mostly a service company

– 45 Staff– 8 based in Christchurch, 37 in Auckland– We commission a machine every day.– Proud partners to PrefabNZ, WMPA, and

the Timber Design Guides

Who are Jacks?

• Our Customers – Timber Mills, Cabinetmakers, Joiners, Prefabricators, Engineered Timber Manufacturers…

Where are NZ prefabricators at today?

• Early adopters (not innovators, generally) arenow up and running with modern technology

• Second wave is coming – there will likely bedisruption

• An enormous amount of interest and air timeis being devoted to scaling up

What’s a Prefab Plant Look Like?

• There are many types –– Frame and truss plants are a form of prefabrication– Closed or semi closed timber frame panels are a logical extension

of this– There are solid panel systems like CLT or SIPs, or beam systems

like Glulam and Steel that tend to have niches– There are hybrid systems combining other systems into volumetric

units

What’s a Prefab Plant Look Like?

The biggest mass market opportunity is panelised timberframe, and the rest of this presentation will focus on it.

Panelised Timber Frame Production

Who Stands to Gain?

• Medium to large design-build firms• Vertically integrated builders and manufacturers who control

their own development pipeline• Developers – recycle capital faster, less risk exposure• Builders of medium density or higher quality buildings• Homeowners – better quality, faster. Eventually, cost savings,

but only with sufficient adoption.• The Government?

Who Stands to lose?

• Whisper it…• Anyone with a vested interest in the current supply chain

• …Unless they decide to innovate themselves?

Scalability

• In prefabrication, scalability is deliveredthrough a strong technical platform

• Efficiency at high scale will require

development of mass customisationconstruction techniques

• Design for manufacture, transport, and

assembly (DFMA) must be tightlycontrolled

• You can‘t disrupt an industry overnight -

Viable scale in NZ

• Industrialised prefabrication starts to become viable around 30-50 units per year

• There are strong economies of scale up to around 400-500 unitsper year

• There are lesser economies of scale up to around 800-1200 unitsper year

• After that, you should build a new factory.

Needs, wants, and insolvencies:

Supplying prefabricators

Supplying Prefabricators

Prefabricators have the potential to be significant drivers ofdemand in the New Zealand building supplies market, but theyhave different characteristics to current operators.

Small Prefabricators Need…

• Strong technical support.They’ll be wanting to donew things with yourproducts and will havequestions.

• Tolerance for lumpy orders.Not all their products willbe the same on each house.

Large Prefabricators Need…

• Rock solid assurance of availability.• Good pricing, or they’ll go

elsewhere. At scale, it’s not aproblem to appraise foreignproducts and we can expect NewZealand certification to become lessof a barrier in future.

• A direct relationship. They will havelimited tolerance for a merchantmodel.

ALL Prefabricators Need…

• Speed. And therefore…• Accuracy of product• Consistency of product• An open mind

Evaluating Prefabricators

Prefabrication is a highly complex operation that can be assess fromthe outside. So how do you decide if you can work with someone?• Business failures in prefabrication are usually caused by running

too lean– Working Capital– Is it a “real” company with their own assets?

• What does their vertical integration look like? Control of pipeline?• What is the track record?

Evaluating Prefabricators

• How many baskets are holding eggs?

Evaluating Prefabricators

• Other best-practice clues include:

– Are they selling buildings? Or just parts?

– Do they take responsibility for design?

– Are they investing in a solid technical platform?

– Who installs the buildings?

– Have they got good equipment?

– How do they get paid? And when?

– Do they have a solid QA process?

In Conclusion

• There is significant potential for disruption• Prefabricators can make loyal customers…• But keep your eyes open for people who

haven’t seen this diagram. • Any queries, get in touch

– Richard.jack@jacks.co.nz– 021 256 2765– www.jacks.co.nz

• PrefabNZ – www.prefabnz.com – conference is normally in