How to Build More Homes This Year Without Increasing Costs

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Scenario: A home builder hits their target to build and sell 100 homes last year. They had a cycle time of 171 days – just under 6 months from permit to walk-through. All things being equal, how can they grow in 2018? Buy more land? Hire more people? Streamline construction operations?

Constraints on Home Builder Choices

Growth-oriented home building executives seeking to improve profitability are faced with these constraints:

  • Don’t increase the cost of the home
  • Don’t ask for more funds
  • No initiative should take more than a week to implement

Major changes, like switching software or altering construction processes, require major organizational commitment and risk. Wholesale systemic change can cause upheaval and financial loss. Stakeholders may find it impossible to give approval when “just doing it the same way” isn’t threatening the company’s survival.

Cycle Time, Labor Hours – Loose Change Up for Grabs

Incremental change is a safer avenue for improvement. Testing easy-to-implement initiatives involves less risk, and can still lower construction times without sacrificing quality.

“Reducing the number of days it takes to build a house lowers costs and pads the builder’s profit,” says Marv Verlage, vice president of Levven Electronics. “Imagine it’s costing $1,000 a day to carry your operations. If you build 100 homes a year and you save one day per home – that adds $100,000 directly on your bottom line.”

Wire-Free Electrical

Every switch that’s wired into a house costs about 20 minutes for the electrician, the drywaller, and the trim/finish trades to pull wire, install a switch box, and then work around that switch location.

Roughing-in the electrical for a house can be done without running wire to the switch locations. Wire-free switching eliminates the switch rough-in work and saves 1-2 days of construction time.

“We have reliable wireless technology now. There’s no reason to put wire and boxes inside the wall for switches,” notes Verlage. “Wire-free switching puts a wireless receiver with physical wire contacts in the electrical box, for example a junction box above the light fixture. The wireless switch component can mount wire-free on any surface after the walls are painted.”

“Why deploy skilled labor to drill holes in studs and pull wire for switches when that crew could finish a day early and move on to the next house?” he asks. “Wire-free switching is low-hanging fruit for builders who want to cut down cycle time.”

Pre-Fabricated Framing

Framing a house with factory-built wall panels instead of on-site stick frame construction can save 3-4 days of construction time.

“They gain build time by using pre-fabricated panels,” notes Joe Svehla of LTC Construction. “Their volume will increase over the year using pre-fab.”

Objective comparisons between stick-frame and pre-fab panels have been done. Identical homes have been constructed side-by-side using both methods. Pre-fab wall panels consume approximately the same lumber and material as stick-framing, but save 3-4 days of labor and create less on-site waste.

“It’s framer-friendly, it’s construction-friendly. It increases production, there’s no two ways about it,” says Svehla. “Hands down the most efficient way to build.”

Simplify Plans, Simplify Construction

Actual construction – the ‘building’ part of being a home builder – is a hassle. Simplifying this work wherever possible – easier drawings, consistent workflows, less back-and-forth between trades – yields time and money savings. Marv Veralge is a vice president and partner in Levven Electronics, makers of Levven Controls wire-free switches. Learn how builders benefit with wire-free switching here. 

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