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Innovative Partnerships And Infrastructure: Keys to The Long Term Growth of Residential Steel Framing

Western Metal In Architecture - Jan/Feb, 1998
By Scott Shaddix

Scott Shaddix is President of Nicholas Lane Contractors, Inc. Shaddix is on the Board of Directors for Southern California based Team Steel and is a board member of the American Iron and Steel Institute's Cost Reduction Field Study program. Nicholas Lane Contractors currently frames 40% of the approximately 900 homes per year it builds using light-gauge steel framing materials.

To quote Maurice Maeterlink: "At every crossing on the road that leads to the future, each progressive spirit is opposed by a thousand appointed to guard the past."

Nicholas Lane Contractors framed more that 300 production homes using steel in 1997. It has been a struggle.

Establishing suppliers, getting materials delivered on time. Figuring Out the right tools to use and most importantly, developing the skills and efficiencies of our tradesmen, have all been time-consuming and extremely costly. But with 300 production homes under our belt, we have proved the viability of production steel framing.

I'm the framer. While my tradesmen and I are supposed to be the biggest hurdle in developing residential steel systems, I'm passionately convinced that steel is viable.

So, why are only 4 to 6% of all residential homes framed with light-gauge steel? In 1992, members of the steel industry gathered to set a goal of acquiring a 25% share of the residential framing market by 1997. They've settled at around 6% today, but aren't stepping forward to assert their goals.

25% of the nation's residential home building market represents an approximately $1.7 billion per year industry for steel manufacturers and roll formers. What are people waiting for?

If we want something, we have to go after it. Obviously the wood industry isn't going to hand over its market share to us.

What is it going to take to advance the position of the steel industry and allow builders to seriously consider light-gauge steel as a viable alternative to wood? The answer- a vision, a commitment to success, a plan of attack.

Lacking A Steel Infrastructure
The production wood framing industry sits on a tremendous infrastructure of suppliers and tradesmen. When I bid on a wood framing job, I know that I'll be able to order lumber and have it delivered the very next day, exactly to my specifications. I know I can go to my supplier and find the right nails and hardware. Every time. I know that I can took to a pool of thousands of highly skilled tradesmen from the Southern California labor market who will show up to work with the right tools, know exactly what to do when framing walls or stacking a roof. I also know the architect designing the plans understands the intricacies of framing requirements. I won't need to go back and rework the plans with the engineer, or my clock. I even know that the city inspector is going to show up and be able to quickly and efficiently make the proper assessments when he's on my clock.

None of these factors exist with steel. I know. Every aspect of the wood framing infrastructure that is lacking for steel has cost me dearly in labor expenses. And believe me, when I call my client to tell him that his project is going to be delayed a full week because I can't get my steel materials delivered on time, you know what happens, if you're a contractor.

Establishing An Environment of Certainty
Certainty is the goal of anybody working in the building industry. Developers, material suppliers, contractors, tradesmen and home buyers want assurances of cost, timeliness and quality. When I'm not certain materials will be delivered on time, I lose sleep. When a tradesman isn't certain he will have work, he wonders if the investment in his tool box is worthwhile and considers moving on to look elsewhere for work.

And if a developer isn't certain he can get a home built at a competitive price and on time, he looks for different building materials.

Developing certainty for production steel framing requires establishing an infrastructure. This requires an investment on the part of those who have a vested interest in steel. If the steel industry continues to depend on people like myself to make the major investments in developing the resources needed to build homes with steel, progress will come along but slowly.

Educating The Industry: 'Team Steel'
In February 1997, 1 began working closely with the president of Brookfield Homes, Jeff Prostor, to seek out and develop the resources we needed to build with light-gauge steel. We developed the concept of 'Team Steel' as a proactive organizational body that would facilitate the knowledge of steel building practices.

'Team Steel' was founded on the principle that new technologies were not the only answer to the growth of steel framing. The expansion of residential production steel framing will require a commitment to innovative relationships between builders, suppliers, contractors, tradesmen, tool manufacturers, architects, engineers and inspectors.

The knowledge, skills and proficiencies of everyone involved in steel framing must rise together. Every player must recognize that his investment in time, and educating himself, is necessary for the success of steel framing.

Whose investment?
Many people have asked Jeff Prostor and myself, "Why steel?" People ask us why we are spending so much time and energy on steel when the building market in Southern California is prospering. Wood prices are up, but there is still profit to be made with wood.

The tradesmen who work for Nicholas Lane Contractors , similarly ask me why they should invest in a $200 screw gun when they know they can use their $25 hammer at the wood construction site down the road.

When I speak to builders about working with steel, they ask me why they should change. There are a limited number of framing contractors in Southern California who can effectively build steel homes. How are they supposed to assure a competitive price on a framing bid when only one or two bids come through the door?

I even ask myself, when I look at how labor costs that come in over budget on some steel projects affected my bottom line in 1997, why not simply build with wood?

Competitiveness: The Driving Force
The obvious answer to all of these questions is competitiveness. The reason Jeff Prostor and I have embarked on this endeavor is that we think it will provide us with a competitive advantage in the marketplace. I firmly believe in the cost advantages of steel within a fluctuating wood market and the added value and structural benefits of using steel materials. Furthermore, I know that if I can develop the ability to reinvent the basis of competition within the industry I work in, I will be sitting on the next competitive advantage.

Nicholas Lane has invested a great deal of time, energy and cost into bringing tradesmen, suppliers, engineers and inspectors up to speed. We only go forward with steel because we believe that we have developed the efficiencies necessary to make steel framing profitable for us in 1998.

Commitment From The Entire Building industry
While there are still some uncertainties with respect to sup, pliers, tradesmen and technicians, the investments that Nicholas Lane has made over the past few years have helped in establishing a limited infrastructure for steel framing in California. We have confirmed that the steel manufacturers have produced a high quality building material viable for production framing use. Now, the entire building industry must come together and make a commitment to overcoming the lack of infrastructure that is holding back large scale usage of light-gauge steel.

In 1997, the American Iron and Steel Institute initiated a Cost Reduction Field Study. A research budget was allocated to develop methods of assembly and techniques for fastening and cutting at various stages of building (i.e. framing, drywall, plastering, finish carpentry, plumbing and electrical). The goal of the AISI program is to accelerate the growth of a steel infrastructure. Working to establish a skilled and efficient labor force is an important first step, but there must also be a concerted effort to include the entire chain of suppliers, subcontractors and technicians, who are all integral components for the establishment of a solid steel framing infrastructure.

The Cost Reduction Field Study is a positive sign that the industry is moving forward. But a long-term commitment needs to be clearly defined to convince the many who are still hesitant that certainty is just around the corner. When an average tradesman spends hundreds of dollars tooling up for steel, or a material supplier allocates 20% of his lumber yard and 20% of his shelf space to steel materials and fasteners, they must feel confident that they are investing in an industry that has the uncompromising support of the entire building industry.

How To Build An Infrastructure
In each of the next four issues of Western Metal In Architecture, I will share Nicholas Lane's experiences in building a small-scale steel infrastructure for itself. The lessons we've learned have been invaluable in helping us arrive at a position of efficiency and profitability. Hopefully, these lessons will be useful to the building industry as it assembles a steel foundation for tomorrow.

In the first of the series I will discuss the differences between doing takeoffs for steel and wood framing plans, and the problems associated with bidding a steel framing job accurately.

The second of the series will discuss the problems associated with cutting and fastening steel materials, the tools required, and the training to bring tradesmen up to speed. The third article in the series will discuss the steps we have had to go through in educating our suppliers, plan checkers, inspectors and engineers.

The final article of the series will present a daily log of a successful steel framing project. I will discuss the hurdles that Nicholas Lane had to overcome as we pushed a project forward to meet cost and time goals.