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OM in the News: Why Can’t Houses Be Built Like iPhones?

July 14, 2017

Katerra manufactures whole walls—including windows, insulation, wiring and plumbing—in its factory

The world’s housing crisis has many causes, but there is a stubbornly persistent one that we should have been able to solve by now: Productivity. As prices of components and materials for pretty much every other physical object—cars, cellphones, clothing—have dropped precipitously, it still costs too much to build a building. “Over the past 60 years, productivity in manufacturing has increased 8-fold while remaining basically flat in construction,” writes The Wall Street Journal (July 3, 2017).

Some companies think they have a solution. They are reviving old ideas in construction, including prefabrication and modular building. And they’re applying all the logistics and IT knowledge gained from building the global supply chains that deliver mobile devices, and all the automation pioneered by the automobile and other manufacturing industries.

Take Katerra. It has a 200,000-sq-ft factory in Phoenix where it manufactures whole walls, including all the windows, insulation, electrical wiring and plumbing. Katerra uses an integrated CAD/CAM system that tells all the factory’s automated saws and routers how to produce all the buildings’ components. The same system connects to job-site cranes that lift and place the finished panels. Katerra ships the walls to construction sites, where they’re snapped together like Lego bricks. The company’s goal is to build 7 more factories in 2 years, each intended to serve a different geographic area.

Katerra is responsible for its buildings from design to final construction, which allows it to further cut costs. In consumer electronics, “design for manufacturability”—the reconfiguring of a device’s shape and function to make it cheaper to build—is standard. Another thing Katerra borrows from that industry: buying goods in bulk, direct from suppliers.

Classroom discussion questions:
1. What is design for manufacturability? Give an example.

2. Of what type of layout is this an example (see Ch. 9)?

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2 Comments leave one →
  1. Richard Hercher permalink
    July 14, 2017 3:25 pm

    Students may be interested to know that at one time you could order an entire pre-fab house from the Sears catalog. There was one across the street from us in our old neighborhood. This was long long before the internet-and personal computers-and even answering machines! Maybe Amazon will start selling them on Prime? :>)

  2. July 14, 2017 5:48 pm

    As my favorite singer, Meatloaf, would say: “It was long ago and it was far away..” Not just students, Richard, most young professors as well.

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