Modular Design & Development 101: How to Start a Modular Building Project w/ LAI Design Group [podcast transcript]
Modular Design & Development 101: How to Start a Modular Building Project w/ LAI Design Group
Ken Puncerelli, CEO of Denver-based LAI Design Group, discusses his experience with modular building design and development and offers helpful tips and advice for both young developers and experienced developers who aren't familiar with the modular construction process.
Ken also talks about his upcoming presentation at MBI's upcoming 2023 World of Modular and shares what attendees can expect.
John McMullen
Hello and welcome to Inside Modular, the podcast of commercial modular construction, brought to you by the Modular Building Institute. Welcome, everyone. My name is John McMullen. I'm the Marketing Director here at MBI. Today I'm talking with Ken Puncerelli, CEO at LAI Design Group. Ken is here to talk about modular construction from an architectural and development point of view and give a preview of his upcoming session at MBI’s 2023 World of Modular. Ken, thanks for being here.
Ken Puncerelli
Hey, John, thanks so much for setting this up. We really appreciate it. We're flattered to be here.
John McMullen
It is absolutely my pleasure. So, let's dive in. Tell me about yourself. What's your background and how did you get started in architecture and development?
Ken Puncerelli
Well, that's a really good question. The funny thing is, as a kid, I always loved real estate. It's the weirdest thing, I used to ride my bike through neighborhoods in Tenafly, New Jersey, which is near the George Washington Bridge and takes you to New York City. A friend of mine by the name of Jean Bowen, lived in a really nice neighborhood and I used to help him with his paper route. He and I had snow shoveling routes, lawn mowing routes, did landscaping and all this stuff. I really loved real estate and then I found myself through high school, junior high really working construction jobs for masons and carpenters back before they had child labor laws. I'm not sure if those are really good to have, I think kids should work, but anyway, I did that as a kid. When I got into college, I studied design and then at a graduate level, I also studied business and finance. I think finance is one of the most important things for a design professional, to kind of bring the whole world of development together, just because you then become the complete left brain, right brain professional, and you can be the best advocate for your client.
John McMullen
I have not heard that point of view before that, but that makes a lot of sense. So, tell me about when you started incorporating modular construction into your portfolio. When did you get interested in that?
Ken Puncerelli
Well, that's a good question. What actually ended up happening is modular found us we didn't find modular if the truth be told. That happened about either 2003 or 2004. We had a modular manufacturer by the name of Guerdon Enterprises, and they're very well known in the industry. They were fairly new, as well. I wouldn't say startup company, but they were a new company at that time in the early 2000s. We did a workforce housing project for them up in the mountains in Gypsum, Colorado. Then we didn't work together again for probably close to a decade and it wasn't by choice. It was just kind of happenstance.
We all went different directions. Then we got reacquainted in the Bakken or Williston, North Dakota, when the oil boom was going on, from about 2010- 2011 until everything kind of died down from a development standpoint in early 2015. So, we found ourselves reacquainted and reengaged with Guerdon and others in that region of the US. It was actually pretty cool.
John McMullen
So, tell me about the project itself. Did you have any challenges? I know modular can be sort of a very different sort of skill set when it comes to design and construction. What were your big hurdles for those first projects?
Ken Puncerelli
Yeah, so that's something that really comes down to understanding the parameters for design as well as shipping, logistics, client expectations about what modular is and what it isn't. Now, my philosophy is that you can hang, when I say hang, you can ornament or put ornamentation on any building using modular or virtually any building using a modular construction delivery method. The biggest thing we had to wrap our brains around is okay, how big is a bedroom for example. Then how does that translate into a master ensuite? If you're thinking about apartments, how does that width translate into a hallway and then to a mirror image apartment on the other side? Once you start wrapping your brain around the minimum and maximum as well as optimum width of a modular box, the maximum lengths for shipping and putting that box on a lowboy truck, then the world kind of becomes your oyster, then you can kind of wrap your brain.
John McMullen
So now that your brain is wrapped around modular construction, tell me about how your process starts now. Once you understand the scope of a project, what's your first step?
Ken Puncerelli
So because our firm is involved we have landscape architects that do land planning and zoning. I myself am trained in both architecture and landscape architecture. We start by programming of the site, how big is the site, and then just like you would with a site build project, what's the intended building use, square footage, number of apartments that the developer wants, and hotels, or anything else like that. So, we start out really the same way that we would with a site built project and kind of go from there.
John McMullen
So, one question I like asking architects and designers, because you have definitely a different point of view than manufacturers or anyone else, are most modular products very similar from your point of view or does each project need to have a unique module design that requires sort of starting from scratch?
Ken Puncerelli
Okay, so conceptually, yes they're similar, but each is unique given the fact that each site is different. Oftentimes, each client because of either the site or the economic projections of a client's project, dictate something unique about it. That and site built projects have that same common denominator. We begin really by sketching prototypical floor plans using a modular grid system and using the pattern of sizes and shapes that can be produced in the factory using that system. Then, like I intimated before, we also need to keep in mind the maximum width and links for shipping purposes.
So, we can't just think about design, we have to think about engineering and logistics. The optimum width of a modular box itself is about 14 feet wide. You can go down to 10, go up to about 20 and I've heard people talk about going to 21, or 22. When you get up to about 16 feet wide, you need additional assistance in the transportation of that project. So, you need escorts, the chaser cars, all them with the lights and everything to alert other drivers on the interstates that you've got a wide load semi, hauling these boxes down the road. So that's another part of it. Lastly, the one major difference with modular versus a site build is because the ground floor if it's not a site built ground floor like a podium parking garage, or the first floor of a hotel that's got all of the lobby and all of that kind of stuff in it. The first floor will have a crawl space underneath the foundation. So that's something you have to wrap your head around when designing a module.
John McMullen
So, in terms of modular structures themselves, is there a difference in the design of a module that's intended say for a single family home versus a multifamily or a hotel project or are they all generally the same?
Ken Puncerelli
The short answer is yes, they are different. So, a house falls under a different set of construction standards whereas multifamily hotel and other commercial structures have a host of additional requirements. These include sprinkler systems, fire rated assemblies, sound attenuation between apartments or hotels, ADA, which is the American Disabilities Act. This encapsulates design in hotels, in particular, sight impaired, hearing impaired, as well as wheelchair accessibility. Whereas oftentimes in a multifamily setting, it's often just the wheelchair accessibility.
In addition to that there's occupancy loads for fire and fire separation. I think I mentioned sprinkler systems, as well as other structural considerations such as shear walls and a lot of these kinds of things. Shear walls are somewhat built into the modular design because each box has to be its own sustainable room, so to speak, and series of walls. A lot of people ask me, well is modular shoddy construction? I said, no it's actually better built than my own personal residence, which I was the designer.
John McMullen
What don't people understand about designing for modular construction? Is there something you find yourself repeating to clients about the process?
Ken Puncerelli
I do, especially lately. As I told you, we started in around 2003 or 2004, we picked it up again in the next decade, then it went away. We found in our shop that clients weren't asking for modular after 2015. It kind of just evaporated in our office until about 2020, when the pandemic hit and because of that, I now think it's here to stay. Whereas it was kind of ebb and flow because most people in the construction industry are late adopters. So, something new and different is scary than the way they've done it for 50 years.
One thing with mod, when you say it's modular and it's manufactured in a factory, you still have to reiterate to a client that keep in mind, it's still construction. You're not buying an Ikea bookshelf that's perfectly pristine and without imperfections. This is still construction and there are things that need to be resolved in the field from time to time that weren't contemplated either in design, they were missed in the factory, or a host of other things. You should have a healthy appreciation that about 60% of the construction of your new building is done in a factory, the other 40% is on site. As a result of that, the other biggest thing that I say is make sure you have an experienced contractor build your project. I think that's key because as design or construction professionals, we're also psychologists. We have to be able to convey information, even bad news, and come up with solutions.
John McMullen
As I mentioned at the top, you are planning to speak at MBI’s upcoming World of Modular. Your presentation is about the fundamentals of modular design. I noticed in your session description that you're going to touch on regulatory permitting considerations as well. Can you tell me more about what attendees can expect from that portion of your session?
Ken Puncerelli
Yeah, and it'll be high level at the session, but it's important for the audience. Some are experienced developers of modular and others are trying to learn about it and get into it. One of the things that is important for people to understand, just like when you go through a planning and zoning submittal and there's multiple agencies within an application, the same is true for modular. It's not just pulling a building permit with the local building official, the plans actually are submitted to the state engineer’s office for review. Additionally, there's third party inspections that occur at the factory for compliance with codes. I always think, and sometimes this happens and sometimes it doesn't, I always think it's a really good idea to meet with local building officials. Do a workshop with them, explain how the project works, and have your contractor there in attendance. It's not only educational for a building official, but it's also a good relationship builder for all because once you're in the throes of construction, at least everybody's been briefed on this.
I find that fear comes through ignorance. If enough people don't have a relationship to begin with and they don't have any information to begin with, then there's all kinds of distrust and fear. As a result of that, you can have some real conflicts in the field. What happens is, if you do a little workshop type of meeting with the building officials to begin with, I'm talking to local building officials that may not have experienced module before, it almost functions like a pre application or a prebuilding permit type of meeting to get everybody on the same page about construction details. What's different from what they're used to seeing, life safety, the ADA, fire rated assemblies, how we're addressing this or that, fire sprinkler systems, all kinds of things. It’s really just a great dialogue. I think as we all know in life, if you're failing to communicate, you're failing.
John McMullen
You weren't kidding about the psychology aspect of your profession. It sounds like you've been well versed in all the ins and outs of good communication with your stakeholders. So, that's fantastic advice.
Ken Puncerelli
Thank you. Well, my hair used to be black and I had more.
John McMullen
So, without ruining too much of your presentation, I was wondering if you could walk me through the process of permitting a modular or prefabricated project, maybe a multifamily residential project. Are there common regulatory hurdles that projects face?
Ken Puncerelli
Sure. So, as I stated the state permit process, once you're approved, you walk through the local jurisdiction. You submit to the state, then the local jurisdiction will review the plans. What happens is they'll typically defer to the state engineers office for approval. Typically, a local building department doesn't take over, but they will do periodic site inspections or inspections on site. This kind of goes back to my previous commentary about having that workshop meeting. Sometimes you can have a local inspector, that's new to the building inspection business, new to modular and perhaps wants to make a name for themselves. Sometimes you can get conflicting direction from the two agencies. At the end of the day, you have got to satisfy everybody and get the project built because delays are not good for projects.
John McMullen
They never are and you have to forgive my ignorance. I'm going to ask perhaps what may be an obvious question. Is the permitting process different for different types of buildings? In your experience, does it really matter if the project is modular or not?
Ken Puncerelli
Well, I think it does. It is different if it's modular or not. I think we've kind of cited some reasons but in addition to that, back to your question about multifamily versus hotel, the big items are exiting the building, smoke detection, fire dampers and your heating, ventilation, air conditioning systems, sprinklers, fire rated assemblies and ADA. So, a multifamily building and hotel are very similar. One is an R two type of building, which is the multifamily and the hotel is R one. So, there are similar things but a bit more intense because one is a much more intensified commercial building. So ADA, for hearing impaired and visually impaired, those types of things are more prevalent in hotels.
John McMullen
What’s one piece of advice you might offer to an owner developer who's thinking about or has decided to use modular construction for the first time? What should he or she know at the outset?
Ken Puncerelli
That's a really good question. For me, I would not advocate a developer who has never developed before site built to use modular. I would say, after they're seasoned from a site build perspective, then I would say their experiences and expectations about construction will align better. Honestly, like all construction projects, nothing is perfect. Sometimes you're making modifications in the field to make it work for a variety of reasons.
John McMullen
Don't dive into the deep end of the pool essentially is what I'm hearing.
Ken Puncerelli
That’s probably the best bit of advice. I just had a client ask me about that and he's never done development before. I said, you know, I would just do these townhomes that you want to do for rent as site build first to get your feet wet in development. There's enough headaches with construction and development without, as you said, diving into the deep end of the pool.
John McMullen
Very good. Again, without ruining too much of your presentation because I don't want to do that, can you share what you're most looking forward to sharing with the attendees at World of Modular?
Ken Puncerelli
I want to share design parameters for a variety of case study projects to attempt to take the mystery and myth out of design using a modular system. How I start out my presentation is showing really what modular perception is and what it really is. Then what I do is I go through a series of case studies, beginning with designing the most simple structure, a house. We go from there into more complex buildings, such as multifamily, student housing and hotels to just kind of show how the volumetric parameters of a modular box work in laying out floor plans. How this is the same stuff that you've seen before with onsite two by sixes and roofing nails, but it's a bit different.
John McMullen
So you've presented at other shows before. What made you decide that the World of Modular show was a place you wanted to be? What about the show attracted you?
Ken Puncerelli
I think there's a lot of great networking. There's a lot of different perspectives from people that you meet there. Vendors that serve the industry. So, it's really an opportunity to learn.
John McMullen
What's next for you?
Ken Puncerelli
We're looking at a student housing project in North Carolina that we did some conceptual design for about two years ago. Now it is actually coming to fruition with financing. So, we're looking at that starting up here probably summertime. Then another student housing project for a university down in Louisiana that will also be modular. We're doing a couple of townhome projects in Colorado. Workforce housing where speed to market is the key along with acknowledging a very short construction season. We're also looking at some hotel projects as well and Alabama.
John McMullen
Very cool. Lastly, a question I like asking people from all different areas of modular construction, what do you think the next three to five years will be like for the modular construction industry?
Ken Puncerelli
Well, as I stated earlier, I think the construction industry is predominantly populated by late adopters because you've done the same thing for 50 years and if you change, it’s scary. There can be liability associated with it and so forth. So, here's my take. I think the industry will better embrace this method of delivery now that it's been around and become more prevalent for a while due to labor shortages, tighter construction cycles, improvements in technology in the manufacturing process. Frankly, I think because of that it will likely result in better cost structures for developers.
John McMullen
Excellent answer. Thank you, Ken. I really appreciate your time today. It's been great to talk with you and I'm very much looking forward to seeing you at World of Modular later on in March.
Ken Puncerelli
We are too. Thank you so much. We appreciate the opportunity to speak with you and your audience.
John McMullen
My name is John McMullen and this has been another episode of Inside Modular, the podcast of commercial modular construction. Until next time.
Related Listening:
Getting from Offsite to Onsite: Inside the Logistics of Modular Construction w/ Stream Logistics
Carson Holmquist, CEO of Stream Logistics, discusses all the factors that go into getting completed modules from the factory to the job site, including the specific dimensions of ideal module sizes and what manufacturers and builders can do to optimize the transportation process.
John McMullen
Can you talk about maybe some specific challenges that you've encountered with modular construction projects in the past? Are they maybe unique to projects? Do you see them throughout projects? Maybe some specifics on some of those more difficult challenges that you faced?
Carson Holmquist
Yeah, the reason why we gravitated towards the world of modular, which we think about as a term of art. It includes panelized, construction pods modules, it's a perfect example and environment of high stakes freight, where we have to be on time because there's a set crew waiting. So, if there's idle labor there, it's very expensive. It throws the whole production and construction schedule off. We really love that about the modular industry.
So, the challenges we run into a lot is speed. How can we do this efficiently and quickly to capture the primary benefit of offsite construction, which is speed occupancy. There's a lot of benefits, but that's the primary one. The second thing that we always have to think about is overcoming constraints. Whether that's space constraints, storing modules at a factory, the constraints of a staging yard of ingress and egress to a project site.
There's always some element of constraints and sometimes they look different from project to project. There are overlapping themes where we have to be creative on how do we overcome these constraints to make sure we're super reliable on getting the modules or the components to the jobsite on time. Also, we're very efficient doing it so we're keeping budget in mind. So that's what really drew us to the modular industry. It’s a perfect example of what we call high stakes freight.
John McMullen
So, you've been in the modular industry for a while. You found success, you've been doing a good job, and you are introducing Stream Modular. Tell me about that decision and why and what, where, and when.
Carson Holmquist
Over the last, it's been about three and a half years since we really encountered this industry and started to fall in love with it. These projects really demanded the best within ourselves. So, challenge our team to continue to get better. We also saw that this industry is craving better solutions. It really requires better transport solutions to get the most out of the concept of offsite construction. We've been investing a lot of time and attention thinking about this industry. At Stream Logistics, we also serve other industries. So, we were getting these great experiences in the modular industry, but that experience was fragmented amongst a lot of team members.
The decision to launch Stream Modular is all about specialization. We're taking some incredible team members from Stream Logistics, putting them over at Stream Modular, and they are only working on transport for mods, pods and panels. So, their entire day is steeped in this world. We're learning much faster, there's faster iteration cycles for the development of our solutions. At the end of the day, the whole concept we think about is density of repetition. Our team members are just getting repetition after repetition of designing project solutions, implementing them, managing projects, and we're learning very quickly. That was the decision where it's like, specialization is going to get us to a place where we can help the industry even faster and even more effectively.
John McMullen
So, tell me about the scope of Stream Modular. Are you guys serving all the same areas as Stream Logistics did? Is it different or smaller, you're growing?
Carson Holmquist
Yeah. So, we're definitely going to be growing in the sense of our investment in the industry. Our footprint is still going to be primarily the US, but we are transporting in and out of Canada and starting to ship out of Mexico as well. There are several factories popping up in Mexico, so transport across that border is important as well. We're not bound geographically. It's more about where are the factories, how do they need help and then we'll create solutions around them in their market. Building that network of drivers that allow us to serve both the peaks of demand. When projects are booming and making sure that we have the flexibility to scale down as they have their roles, to make sure that everything's going to be cost effective.
John McMullen
Very good. You guys, I believe, are exhibiting at the upcoming World of Modular. What can attendees expect to hear from you and see at your booth? What can they look forward to in general from Stream?
Carson Holmquist
Yes, you're correct. We are exhibiting and we're very excited about that opportunity. We were there last year as well. It's a great opportunity for us to connect with pretty much all the major players in the industry, which is really exciting for us. One thing that we've got a lot of positive feedback on is we just launched what we're calling factory carrier pool. It's a pool of hydraulic carriers, these very specialized trailers for the modular industry, and we're in the process of building the largest fleet in the industry of these specialized trailers. We've already gotten a ton of interest, have had a lot of project scoping calls around the utility and use of these trailers, and I think that's going to be a really big topic amongst the people in the room at World of Modular.
Hopefully, then come to our booth, talk to us about that among other things, but that's a big commitment we're making. We've seen a high demand for these trailer capabilities, where essentially, the trailer can load and unload a module on and off of cribbing. It's very fast, it's effective. It doesn't put a lot of torsional forces on the module so it's a gentle process. There's far more demand for these trailers than there are supplied today. So essentially, if we wanted to help out and source some of these trailers for factory, we'd have to pull them from Factory B, or C and that's not really helping the industry as a whole. So, we know to solve that problem, we're going to have to make a massive investment in building a fleet of these trailers, and pairing that with skilled drivers who can actually haul them safely and effectively. That's one of the biggest commitments we're making this year and that's a topic where we've got a lot of interest. I imagine at World of Modular, that's going to be our main theme that we're talking about.
John McMullen
Very exciting. So, what's the process for making these trailers? You said there isn't enough supply, everyone wants to use them. Why are they more difficult to make? Are they more expensive? Are they more complicated? What's the issue?
Carson Holmquist
Yes, all the above. More difficult to build, just more complicated. It's not rocket science, but there's more that goes into it. They're far more expensive. I think that's it. The primary hurdle is let's say a factory wants to partner with trucking companies and they want these trailers. Well, it's a massive commitment for a trucking company to go buy a fleet big enough to service any large-scale factory. A lot of them just haven't been willing to make that investment. So, we've heard a lot of factories are having to buy their own hydraulic carriers, then hire a trucking company to do power only just basically pulling around their trailers. These factories are forced to use their credit or their cash to go buy assets to help their business achieve the goals that they want to achieve. They have a lot better uses for that cash or that credit. Like they're in growth mode, a lot of these factories.
So we wanted to take the pressure off of them and make that long term. These financial investments we're making are going to help accelerate the industry, help factories reach their highest potential and in turn, obviously, that's going to be good for our business. It's a bet we're comfortable making because of all these conversations we've had and we know the demand is out there. The early conversations we've had since we started building out this carrier pool is really proving the concept we know is in high demand.
John McMullen
Excellent. And you'll have to forgive me, I know very little about trailers. I've seen pictures of modules, they're on a flatbed, they're going down the highway or wherever, what makes these so much better than a flatbed that you would just put a module on and crane it off?
Carson Holmquist
The first thing is they're built specifically to haul modules. All the little nuances and details have modules in mind. For example, they have outriggers, which are bars that essentially telescope out to add the trip for trailer width. So if you have a 16 foot wide module sitting on an eight and a half foot trailer, it's not nearly as stable as if you put these outriggers on to extend to 16 feet. They also have the ability to extend the length to accommodate longer modules. The first wave of the trailers that we're building, extend out to 70 feet, for example. The primary functionality that makes it particularly useful for modular is this self-loading and unloading capability.
So imagine the deck of the trailer has ability to rise and lower, allowing a driver to essentially back underneath a module that's sitting up on cribbing, lift the trailer up which gently essentially loads the module onto the trailer, then we can move the cribbing out of the way, drop the trailer back down to writing height, strap the module on and it's ready to go. There's no crane, no loading equipment, it doesn't even require any support or labor from the factory workers. The driver can do all this himself. Then that module can be transported to a staging yard and the reverse can happen where we might be staging dozens or potentially hundreds of modules in an empty lot. A lot of those lots don't have any type of lifting equipment so the ability for the driver to do the reverse, which is basically back into position, set up some cribbing, drop the module onto the cribbing and then pull out, essentially self-unloading, is a huge efficiency. It benefits and reduces costs, because the factories don't have to set up lifting equipment cranes or some other type of way to load and unload the modules.
So, it's an efficiency play. It's a cost savings play and the factories that have committed to this set of operations, absolutely fall in love with it. They don't want to do anything else. There's a lot of work around. So, if they built their operations around having access to these trailers and then they don't have them, it's a huge bottleneck that really cuts into the benefits of modular construction, which is one of the biggest ones is speed occupancy. So, if they're late on their deliveries, you're carving into that benefit that they sold the developer on. That's why this is really important for the industry, but it's one of many investments we're making. I think it's going to be one of the most impactful things we do here in 2023.
John McMullen
Very exciting and thank you for the details, I feel educated. So, I brought up World of Modular before, I was wondering if you could maybe help me out as a previous attendee. What can you tell us about your previous experience at World of Modular that might help a prospective attendee who's never been before? Make the jump and register for the show?
Carson Holmquist
Yeah, I think once you go to World of Modular the more appropriate question is why wouldn't you go? To more directly answer your question, it's a place where the industry gathers. It’s some of the brightest minds, the people most committed to solving these challenges are best utilizing the concept of offsite construction. It's a roomful of innovators and very exciting to be around. It's just a unique place where everyone gathers in one spot. So, if you are committed to the industry or interested in the industry, there's no other opportunity like this.
To get in the room with others who are trying to do the same thing. It's invaluable to us. So, we love this time of year. Right now we're already setting up meetings, we're looking at the attendees, we know who we want to talk to and we're making a lot of investments and sending the team out there to make sure that we can connect with everyone who wants to connect with us and vice versa. So, we love the World of Modular and most of the industry does as well.
John McMullen
That was a fantastic answer. Thank you very much. What is next for you and Stream Modular? I know you're making this big investment and 2023 is going to be very exciting for you. Is there a timeline in place for when you're going to start expanding your fleet of these trailers? Are you going to have some by the end of the year? Is it 2024? Is there a general timeline you can give us?
Carson Holmquist
Yeah, yeah. So, with regard to the trailers, we'll have our first order and delivery, which will be six hydraulic trailers sometime in mid to late April. The goal is to have 24 by the end of the year, so they're just going to continually be built in waves of six because that's the capacity in which we could build them. Beyond that, I would imagine a similar pace to continue going into 2024 based off the demand we're seeing. We're also making commitments to make investments in other areas. We're working on API, integration with Moducore, the factory operating system software. The goal there is to make sure that anyone using that software to run their factory operations can also get all the important transport data that they need into their core system.
We can do API tracking details, shipment confirmations, and even documentation such as signed proof of deliveries, and even pictures so that we can close that loop cycle within Moducore. We're going to take that same concept to the other factory operating system software's and try to do that. That's another investment we're making. We'll be announcing over the next few weeks some other things we're working on to make sure that factories can operate at the highest potential. That's our goal. Our mission is to help accelerate the adoption of modular construction. We know we have a lot of work to do to help the factories remove obstacles to doing what they want to do. So, there's more to come there. In terms of the trailers, we will definitely have meaningful capacity being built by the end of the year.
John McMullen
Awesome. It sounds like you guys are really taking a look at everything on a holistic level, where you can fill gaps and provide service and I think that's awesome. If you could identify one thing that you'd like other modular project stakeholders to know about the importance of logistics, what would it be?
Carson Holmquist
I think the factories that are doing it really well take the process really seriously, meaning they see value to be extracted out of the logistics process. So, they're thinking about it earlier in the project cycle. They're asking their partners to be creative and co-create solutions to be more efficient, more cost effective. I think that pays dividends when the project actually starts. They see projects run smoother, they’re more efficient, allows set crews to set more modules a day because everything’s more organized.
So, I think if you're a factory looking to gain some efficiencies, a good place to look is logistics. A good place to start there is to start having conversations earlier and try to work with companies that are dedicated to this industry. If you're working with a trucking company that does all sorts of freight their attention is going to be fragmented. They're not going to be looking for solutions as vigorously as other companies. So, I think those are good places to start.
John McMullen
Very good. I've got one last question for you and I've asked this of manufacturers and designers, but I think you might be able to provide a different perspective, which I'm looking forward to. What do you think the next three to five years will be like for modular construction, I guess in particular for logistics, but for the industry at large? Are we on the brink of something new and exciting? Are we seeing step by step improvements and things? Are we on the verge of something big?
Carson Holmquist
I think we're on the verge of something big if we can pull off something specifically. So, there's a few groups of people and some really impressive individuals who are actively trying to work on getting some sort of nationalized building code for modular. These factories can start doing closed wall manufacturing, they can start building the same product with higher replication and capture the efficiencies that, frankly, a lot of other countries already have. I think if that happens, the industry has potential to explode, where we can really capture the efficiencies on the industrialized construction front. So, making factories run like manufacturing factories. I think right now, the factories are a little handicapped by the fact that they can't build the same thing over and over because of code in a lot of instances.
So, I think that's big. The individuals who I've spoken to who are working on it are very optimistic of that happening sometime in the near future. I don't know all the details of what it's going to take to pull that off, but I can understand the resulting effect it could have on the industry. Our goal is to be prepared for something like that. So it's starting to build the infrastructure so that these factories, when they do take off or when new factories come online, we have systems to support as many of them as we can.
John McMullen
Very good. Well, I know that is going to be a huge discussion within the industry. I know MBI is going to be playing a big part in that. We'll have to see how that turns out, but there's definitely potential there. We'll have to see where that goes.
Thank you, Carson, very much for your time. It's great to talk to you as always and I'm looking forward to seeing you in Las Vegas in about a month.
Carson Holmquist
Yes, same. We really appreciate the time and allowing us to talk about Stream Modular. I'm excited to see you and excited to see everyone else at World of Modular. It’s going to be fun.
John McMullen
My name is John McMullen, and this has been another episode of Inside Modular: the Podcast of Commercial Modular Construction. Until next time.