The right platform for production homebuilders

Homebuilders have been in a boom period and are now facing a market downturn. Now is the most important time for businesses to look at where their operations are inefficient and find tools to improve their margins, fast. Revit has been an industry-standard tool for systematizing design and drafting, but it fails to meet the real needs of production home builders as its benefits stop at design. Higharc is the first tech platform that centralizes the control of a home builder's data and automates key workflows from design, sales, and purchasing through construction. The impact is a drastic reduction in material cost and variance enabling builders to increase margins at a critical time for the industry.

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The state of affairs for production homebuilding

Until recently, in many areas of the country, builders could not keep up with housing demand. While operations teams worked at a frenzied pace to create more homes, it was harder to hide the lack of infrastructure and automation tools to support their processes.

For homebuilders to remain competitive now as we leave boomtown and get back to reality, they need to take a hard look at how they manage the core processes of their business to maximize margins and use of capital. Can design and drafting tools improve the business, or does a builder need to embrace an entirely new, automated way of
operating?

Below is a comparison of two software solutions and their potential impacts: Revit, the architecture industry standard for design and drafting, and Higharc, a new home building automation platform for optimizing design-through-build residential construction processes.

Where Revit fails production builders

Many home builders may consider Revit as a solution for standardizing their home plans. In full disclosure, your author is the former CEO of Revit. I helped build the business with brilliant founders, a dedicated team and ultimately sold the product and company to Autodesk where I worked for one year. I fondly remember the afternoon I spent at Autodesk in Manchester, New Hampshire – we sat around a conference table and white board with Autodesk AEC leadership brainstorming about strategy. We invented the term BIM as an all-encompassing vision to try to define all the key information of a building model. Unfortunately, Revit never quite realized the BIM vision. At its heart Revit is a geometry tool for designers to document their designs and automate production drafting.

Revit’s technology applies parameters to various geometries to define simple relationships between lines and arcs for easier change management. These relationships can be rolled up to families of components, but that is where “intelligence” halts. Revit was developed over 25 years ago and its data structures and underlying technology are not rich or comprehensive enough to capture most of the complex relationships in a building. It is a point solution for design drafting; its ability to manage complex change is limited and does not scale. Meaning, Revit does not generate assets like permit-ready drawing sets, key building measures and customized sales brochures that are critical for taking a building concept from plan through construction.

The reasons why Revit is failing to meet the real needs of production home building comes down to four major areas crucial to a home builder’s success:

1. ‍The core ability of the product to create relationships is limited to parametrics, without the ability to represent complex rules between components, rooms and options, resulting in a high cost of initial implementation and exponential growth in the cost of change management. This is compounded by intersecting options that drive the massive proliferation of families and separate models that have to be created over and over to try to accommodate configurations that must be drafted manually.
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2. There is no concept of a comprehensive central data model, resulting in limited capability for the creation and management of standard, reusable building components and options. The management of
   Revit families and files rapidly becomes a nightmare. This limitation strikes at the core of what production builders must manage to control cost and boost efficiency.
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3. Due to the limitations listed above, software implementation is arduous, never ending, and requires a level of expertise to drive and manage that does not scale to the needs of production builders. The amount and cost of resources required balloons just to manage, maintain and update projects and the Revit system itself.
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4. Revit supports design and drafting only. Community planning, pricing, packaging, sales processes, and procurement require a builder to source and manage separate technologies, cumbersome plugins leading to gaps and out of date information that often sit in out of date PDF files across departments which compounds change management issues and expensive variance across the business.

A personal, painful scenario

I recently purchased a home in a new community in Naples, Florida. The builder was one of the top five in the country yet every step of the process was a lesson in dysfunction. In the showroom, the salesperson was unsure which options were currently available with the model I selected. After several frustrating hours, I left with a marked up standard brochure with scribbled notes and question marks in margins covering what the salesperson needed to follow up on. After construction started there were needlessly long delays caused by the wrong materials being ordered. Next, the trusses in the roof were not installed to code and had to be removed and redone after inspection by the town. Ultimately we found out that the drawing set was incorrect, not buildable and the main foreman was on vacation. In his absence, without the tribal knowledge of the main foreman, the crew onsite followed the plans as described and my home was delivered seven months late. No doubt, the builder’s already razor thin margins were greatly reduced.

The all too common missteps described in the above could have been avoided with Higharc.

Higharc – The First Intelligent Homebuilding Platform

The reason I am personally so excited about this industry again is from my recent time advising the team at Higharc, where I am watching many of the visions our Revit team dreamed of over two decades ago now being realized. I feel confident in saying: where Revit ends is where Higharc begins.

Higharc, founded in 2018 by veterans from Autodesk, advanced manufacturing, 3D printing and enterprise software companies, provides builders with a centralized data model containing every element of information that comprises a residential community. Think of it as a control center for home builders – a single source of truth with a powerful system of user-defined settings to represent a builder’s standards.

Higharc centralizes catalogs of components and systems, building elements, rooms and blocks of rooms, options, materials, building styles, and more. A sophisticated inheritance mechanism dynamically controls which pieces are active in a builder’s plans at any time, without manual intervention. Each of these pieces are defined by a rich set of parameters that create relationships between them. With Higharc the entire building plan becomes a comprehensive, parameterized intelligent model that handles changes across any number of plans quickly and easily. For the Revit junkies, think of it as a family of families on steroids.

In the Higharc product called Studio, planners and designers use the parametric building blocks to quickly build new plans, control permit specifications across regions, and make massive changes across sets of plans instantly. Each plan represents an intelligent building model that may contain countless variations of a single building. All of the options in the building relate to one another the way we would expect in the completed building. For example, if the wraparound porch option is made available, all the associated walls, front door, foundation, and facades know inherently how to adjust to create a new, accurate, version of the plan. If the laundry room option is added and sits adjacent to the back of the garage, the garage will automatically morph to the correct configuration to accommodate for the loss of space. Ask an expert Revit user to make these kinds of changes and you will see despair as they realize the amount of manual work you have just put on their plate and how implausible it will be to maintain effectively.

Higharc is not just about the design of intelligent home plans. Planners and operations teams use Higharc’s Config product to unify pricing and packaging with what will be offered to buyers by plan, lot types and communities. Once again, a single source of truth for running the builder’s business from a main control center. Downstream teams are no longer confused by what is offered and available, dramatically reducing the cost of variance from inevitable mistakes.

Higharc has invented the first platform for “universal plan management” to build, manage and control plans, options and every possible configuration in a scalable way. Imagine that there is a maintenance issue discovered in the field that is costing the company warranty dollars every month, or a purchasing team has sourced a more cost-effective product solution; planners easily call in a new setting and every related process and output is automatically updated. Often builders avoid many changes they should make because of the daunting mess of trying to carry those changes throughout the massive number of plan sets and drawings. With Higharc, changes become a manageable opportunity for improving the business.

Automating sales, construction and purchasing processes

Using Higharc as a builder’s main control center, intelligent building models help integrate each department into one seamless operation.

Sales teams using Higharc’s Showroom collaborate with the home buyer to configure live in the showroom or on the web the full set of options that are available. By working with a real time 3D configurator, the home buyer develops ownership in the process by participating in the creation of real time configurations and seeing and understanding the options they are purchasing. The home comes to life with the actual elevations, 3D renderings, pricing and on demand, accurate brochures that represent exactly what they are buying. Home margins go up because it is easy to upsell the options the home buyers want, and sales cycles are shortened by having all the information and 3D visualization the consumer needs to make their decision in the moment rather than going down the street to look at another community.

Because plans are controlled by a centralized data model, the builder is assured that what they sell is what they will build. The complete and accurate permit-ready drawing set is available for procurement and construction teams with one click the moment the ink is dry. If a plan change does occur later, the drawing set is immediately updated without the chance of errors from manual intervention. This means permits can be applied for and received without delay and construction can begin on time, shortening time to closings and dramatically improving cash flow and margin.

And we cannot build homes without materials, so Higharc Procure automates the estimating process by providing purchasing teams an immediate set of key building measures that includes, by lot, the accurate quantity and list of the materials put out to bid and ordered. Procure helps ensure that contractors are not waiting around for the right materials when supply chains are already backed up. Higharc key building measures can be used to compare past bids and collaborate with suppliers with accurate information of what is truly needed for each home. Purchasing managers can eliminate variance by ensuring the right amount of material is ordered or that variance is not built into bloated bids that have too much cushion and create lost dollars in wasted materials.

Additionally, the platform enables the holy grail of unitized purchasing. Products can be acquired at the unit level based on real demand. When ready, purchasing managers can take greater control of the bid process and will not need to be asking the supplier how much product is needed or how much they want to sell us. Procure displays the amount of material required for each home sold, empowering purchasing executives to plan material requirements by lots, communities and regions, leveraging their full buying power to dramatically lower material cost and improve lead times which ultimately increases precious margin per home.

Higharc vs Revit, head-to-head

The differences between the two systems are stark. Frankly, it is really just Higharc Studio (building plan development product) which should be compared to Revit, but the following chart summarizes key differences between the totality of Higharc and helps to illustrate the stark differences between a building automation platform and a point solution for automated design and drafting.

The opportunity is real

Most major industries from automotive to computer electronics have learned the importance of centralized data models for their business. Today we can configure cars and computers online quickly and accurately, and these industries have made enormous strides developing standard configurations that maximize efficiency of their entire operation from sales through manufacturing.

The production home building industry (and build-to-rent and spec home builders as well), now can migrate to centralized data, universal plan management, and automated processes with a single, integrated platform. Revit has been a useful tool for the past two decades but mostly for bespoke architectural design and drafting. The production homebuilding business is about production, which means its core needs are based in standardization and automation. The opportunity for better margins, improved customer experience and greater efficiencies are too compelling to shy away from change. A downturn in the market is the right time to regroup and automate so that improved margins and efficiencies can carry the company to better days. I predict that it is only a matter of time before all home builders will adopt Higharc as their standard way of doing business. And, as with all technology adoption cycles, many will be left racing to catch up to the earliest adopters of this change.