The Mission Objective

To lower the cost of home construction by providing modular home elements that could be mass produced.

The Mission Profile

A startup company developed a proprietary method of fabricating residential homes in modules in a factory and delivering custom home “kits” to construction sites.  The target market was starter houses and, eventually, for markets in developing companies.

The Flight

Finding construction materials at affordable prices led the owners to look overseas for wall materials. There is a popular belief that having materials fabricated offshore and having them delivered in container-loads significantly reduces costs.

Most municipalities have adopted building codes that mirror the Uniform Building Code that has been a standard of construction since 1927. These codes cover most safety and durability standards for residential and commercial structures. Building materials fabricated in the Unites States have labels, markings or some form of identification of the safety standards that they meet.

Competent contractors will ensure that all building materials used on a project have the appropriate safety testing marks and certifications before installing them. When local building departments conduct their compliance inspections, use of approved materials is among the items verified, along with workmanship and safety requirements.

Houston, We Have a Problem!

The container full of wall materials appeared to have the appropriate safety labeling. When they began using the material, it was clearly of inferior quality and testing confirmed that it would not meet “code” in most municipalities. An international lawsuit ensued and the owners discovered they had no recourse. The entire shipment had to be scrapped. Schedules could not be met and the company eventually went bankrupt.

Think Outside the Globe

There are many offshore companies that accept contracts to build products that meet industry and safety standards. Unfortunately, too many claim to build compliant products, but, in fact, produce substandard and dangerous products. By the time the products reach the USA, they have been handled by brokers and warehouses and the chain of custody back to who actually fabricated the products is deliberately obscured. There is little recourse to enforce contractual requirements when most of the companies are outside the jurisdiction of the American legal system.

The myth that having products manufactured in Asia or in Central America is a viable solution to achieving competitive advantage is, just that, a myth. Having products that you sell manufactured offshore is a liability risk that, many times, is not worth the money saved.