Modular homes are becoming more common in the U.S. They’re built in a factory and the pieces are shipped out to a home site, where they’re bolted together and to a foundation. Some view these homes as desirable because they’re often more affordable than homes built on site.
Companies such as McKinstry are using the same prefab concept to make other products. Dale Silha is the senior vice president for McKinstry in Spokane.
“We’re building out a truly integrated type delivery model, being able to not only prefabricate and build components, but then preassemble them, take them out in the field, and then install them on site," said Dale Silha, senior vice president for McKinstry in Spokane.
"The benefits is that you can eliminate a lot of job site labor that's difficult, that may not be in the best of environments, move that into a manufacturing facility, and be able to do it safely, more efficiently, more cost-effective, and then move that or ship that out to the job sites.”
To illustrate his point, Silha points to a white, rectangular structure that’s suspended from the ceiling.
This interview is lightly edited for clarity and length.
Dale Silha: The Overcast Cloud is a prefabricated, modular ceiling component that would have lighting, heating, ventilating, air conditioning, fire protection, occupancy sensors, even audio-visual. But everything can be designed and prefabricated, shipped to a job site, and then lifted up and hung in place, rather than having up to 13 different trades working in the same ceiling space in the same area. So this particular product is now being manufactured in Spokane and shipped out to different job sites around the country and it can be installed in retrofit buildings for new construction.
But it also creates kind of an open architecture in terms of ceiling space, where you can see more visually the ceiling, the surrounding spaces, especially if you have a building with some nice natural attributes. So cross-laminated timber or some nice stone, it's visible and definitely creates a very appealing environment.
Doug Nadvornick: Is it a more efficient way to put infrastructure in a new building?
DS: Absolutely. You're able to take, in a manufacturing environment, the ability to schedule, procure, fabricate parts in a streamlined, safe environment. The install time on a job site goes down dramatically, because now we're making connections in the field as opposed to installing and fabricating. Eliminating the need for multiple trades to be up in the ceiling space working saves a lot of time and energy.
The other key is around supply chain logistics, eliminating many of the middlemen and multiple markups through the process enables that particular product to be built, manufactured, and then sold to either a general contractor or even direct to an owner in some cases. And so the cost efficiency and the savings can be considerable.
DN: The prefab idea is going to modular houses now in terms of building homes and factories and that sort of thing. Are there other places where the prefab has become more common?
DS: Absolutely. I think the construction industry has had very little productivity gain in the last 60 years compared to manufacturing and other products people are familiar with. But today, getting prefab in terms of fabricating components or kitting those components in a way that we can build them on site in a factory and then be able to ship them out to job sites is definitely a wave of the future. So we're seeing that in the mechanical, electrical, fire protection spaces in addition to the modular buildings you're talking about.
DN: Is there growth potential in this industry? Is it one that's going to continue to grow and allow you to expand your factory here in Spokane?
DS: Oh, phenomenal. Right now, maybe I'll pivot briefly to what we're calling off-site manufacturing. And that's the idea of a product versus a project. We're building manufactured systems and in particular right now, the data center boom and AI is creating a significant need for data center growth, the repurposing of data centers, moving towards water-based cooling systems. And we're building those right here in Spokane. These are large 50-ton type systems that are built, pre-manufactured, put on skids, and shipped to different parts around the country.
We started a 150,000-square-foot manufacturing facility earlier this year that is now full. And it is to the point where just trying to keep up with client demand will create another 100,000 square feet of manufacturing space. We have 100 skilled laborers right now. That will probably increase by 50% to 100% over the next year, just to keep up with demand. And this is Spokane manufacturing at the front edge of construction industry manufacturing, and then being able to ship products around the country to different locations for those products to be consumed.
DN: So I'll just step back. The components that you make, what are the function of those components? What are they meant to do?
DS: Most of those relate to piping systems, plumbing systems, in-building, heating, ventilating, air conditioning systems, and it could be air or water-based systems. But those components are generally fabricated in the field. Now we're building them in a shop and taking them out to the job site and doing final assembly on the site instead of trying to fabricate and do assembly on site. We've also got a whole series of kitting functions, which save tremendous amount of time and energy. So if you could imagine having hundreds of parts out on a job site and then having to go out and find them in a bin or in a truck, bring them onto the site, now we're pre-kitting them, packaging them together, delivering them to the site.
Nobody has to go look for a part or a piece. It's right there. Definitely streamlines the ability to install and construct out in the field.
DN: You talked about the people who would have to come in from outside. Is Spokane doing a better job of training a lot of these skilled sort of people? I know there's a lot of effort to try to improve that pipeline, so to speak.
DS: Yeah, one of the key things for us in thinking about how to start up manufacturing facilities is access to skilled labor. Spokane happens to have very good skilled labor. I think we're finding that between us and the industry's growth, we're consuming most of that skilled labor. So ongoing workforce development's a really big topic right now.
We need more skilled labor. And so thinking about how, through the trades, through the community colleges, through some of the tech hubs within the school districts, building that pipeline of skilled workforce is just absolutely critical.
We also have a unique community in Spokane with a lot of different business partnerships, from utility to our local government, higher education, workforce development. And that partnership makes it easier to develop skilled labor over a longer period of time. We know that's going to be an ongoing pressure for us. We know it's significant. And I think having partnerships like that in town that tend to work in a very collaborative way makes life just a little bit easier.
DN: As you step back to the 10,000-foot level, how would you view Spokane's manufacturing situation right now? Is it growing? Is it in better shape than you can remember in past years? How would you evaluate that?
DS: I think it's growing significantly right now. And I think we're in a phase of advanced manufacturing, newer technologies, more efficient ways, and higher productivity is becoming more commonplace in Spokane. Certainly been a focus for us in terms of economic development and areas to put our efforts into. But when you look around at the different numbers of manufacturers, pharmaceutical manufacturers, equipment manufacturers, and now construction manufacturing, it's booming right now in Spokane. And even the idea of sub-suppliers and second tier suppliers feeding into the supply chain, piping supply houses right now have co-located very close and it makes it pretty efficient for both of us. So we do see that trend continuing and would expect that that's an ongoing focus for Spokane over the next several years.
