Best Practices in Off-Site/Industrialized Construction: Current and Future State

JUSTIN SCHWAIGER: Hello and welcome. We're going to talk today about Best Practices in Industrialized Construction. Got my friend John Fay. And we will be sharing about KOPE. We'll be sharing about Lada Cube. And we'll be sharing around why we are where we are today in the construction space and, particularly, around industrialized construction and productization and construction. So brief intro. Go ahead, John.

JOHN FAY: Yeah. So my name is John Fay. Thank you, Justin. I'm the CEO and Founder of a company called Lada Cube. And primarily what we do is, I oversee a lot of the vision of our product development, how we're scaling and growing worldwide. Previously, I was actually a school counselor, which is an interesting story. And then we're really hyper focused on manufacturing for the built environment and, really, those interfaces of physical products to the digital world, and then looking at circularity.

JUSTIN SCHWAIGER: It's cool stuff. And I'm Justin Schwaiger. I am the General Manager for the US at KOPE. And KOPE is a software platform leading the way for industrialized construction and productization in construction. My past is, I had a structural engineering background, was with Thornton Tomasetti. I had a stint at Katerra, and then was at an offsite production execution software company called Manufactum. So I've been living in this offsite construction space for quite some time. And really what I'm here for is, I want to build buildings more efficiently.

I think we have a huge opportunity to build more efficiently and lower the cost of construction. And I think technology and industrialization is our key to do that. So what we'll cover today is, we're going to cover three things. What are the current best practices in industrialized construction? Who are the-- what are the best-in-class solutions today? What are some new novel tools and products in the industrialized construction space, and what could you do with them?

And then, what is an industrialized future look like, particularly, around various roles and different personas in the construction space. What's it look like to be an architect in this space, or a building owner or a developer, as well as future state, what can we do in an industrialized world.

JOHN FAY: Yeah. So first thing we want to do is break down the understanding of best practices. And so what should we be doing and how to understand the layout, the lay of the land for industrial construction, productization and standardization. So with that, we're going to look at the macro and then dive into the micro. And so when we look at best practices, one of the early things to understand is the concept of industrialization of construction.

And so what that essentially means is, the understanding of modern methods of construction, which we sometimes refer to as MMC, but really understanding scalable approaches to really harness efficiencies in manufacturing, and really translate those efficiencies into the built environment. And so that typically happens through design, manufacturing, and then understanding predictability and certainty within what is actually being built.

And so secondarily, one of the ways that we really dive into the next level of the microscope of looking at this category is understanding standardization. So standardization really leads us into the opportunity of understanding the components that we're building with and how they interact and affect each other. What that allows us to do is, basically, take configurations and really reduce them to standardized parts or components.

So the beauty in this is we go from highly customized projects, or products, and then, really, we go into more standardization, which allows us to basically create more certainty in the built environment. And so these efficiencies are then realized through these standardization of these components. And so what you get left with is a collection of these assets that have long-term viability that then allow us to build with more certainty over time.

And so the last category, if we're really going to the micro is this newer category, called productization of construction. Some of the benefits of productization is really like highly-defined components that we're building with now that are actually manufacturable. And so bringing these efficiencies as actual buildable products, leveraging the prefabricated nature of building these components, whereas before, they were more customized, as I mentioned before.

And then understanding what these premade assemblies are in these kits, and how they play in the ecosystem of the built environment. And so overall, that will allow us for designers, architects, engineers to, basically, have a better comprehensive knowledge and understanding of how these products interface with what's being designed.

And so lastly, if we were to compare old model to new model, traditionally, in the kind of our old model approach, we were taking a test of designs that were customized, and really trying to fit those in to situations where we were losing efficiencies. And so that traditional construction model, includes tons of uniqueness in those interfaces and lack of efficiencies.

And so really, the new models are really looking at actual products that are manufacturable. So designed and actually manufactured to be able to fit into these building systems. What that equates to is more predictable outcomes, which equates to less waste and, also, more circularity within those models reusability. And ultimately, those reduce cost and streamline processes, create basically a higher return of investment in the products that are being built and the processes to get there.

And so sometimes when people think of these future-forward processes, especially, around manufacturing, sometimes the mistake is to look at that from the perspective of things need to be highly automated. And automation can mean manufacturing automization through robotics. But really, there's so many other efficiencies and lower bar thresholds to getting to that automization and efficiencies. It can include robots, but it's not always about robotics.

But really what it's about is the predictability of the industrialized manufacturing process and design that then allows for more standardization of automation that can be as small as repeatable parts that get produced, all the way up to highly robotic handling situations or manufacturing. And so it's also looking at efficiencies. So I guess-- sorry, move forward here. So embedded knowledge is also a key component of that.

And so you have your physical environment, manufacturing, and then embedded knowledge. The best thing about embedded knowledge is that it's almost like king. Because what it does is, it allows us to take knowledge that we're learned over every building that we build and design and, basically, make refinements and improvements in the way that we are designing and building these buildings. So it's really like that retain knowledge over time.

And so it's a new vision for the industry through a new set of eyes, understanding the new rules, and leaning into them to avoid customization to carry out those efficiencies in the process. It's digital assets that are connected that are easy to use and driven by logic. So embedding the expectations of the manufacturer. So it's actually a component that can be built and-- or manufactured and then built. And then, it's not just random data which Justin will go into. It's data with intent and purpose for longevity of projects and understanding of how to build more efficiently.

JUSTIN SCHWAIGER: Great. Thanks, John. So we're going to do a little detour here and talk about, what are the things that are stopping us at this point, or what are the hurdles that industrialized models are overcoming and need to continue to overcome. And we'll go into a few categories here. So one is this concept of a single-use mindset. We do a lot of design on projects. And talk to any architect, or if you are an architect, the same theme emerges at the end of every project, which is, we love the design, but we wish we could have fleshed out that really cool, entry space in more detail.

We wish we could have refined the design. So this concept of enough but not well, we design to the ability that we can to continue doing enough work, doing it well enough for the project to be successful. But there's always this limitation of how much the consulting fees, design fees for architects and engineers can contribute to a project. That's also coupled with this idea of, we need to reinvent the wheel on every project.

You've got a new site, new developer, new design team, new construction team, and new building systems and typologies that results in, essentially, a very boutique, one-off building that gets designed uniquely. And then buildings are really, at this point, seen as single-use products, for the most part. So there's no concept of what happens to a building at the end of life, what gets damaged, what gets thrown away, what gets recycled.

And so we're wasting a lot of time doing all these things, reinventing the wheel. And so one of the things industrialization and productization need to overcome is this single-use mindset. And we'll talk a bit more about what personas and roles, for example, what an architect and a designer becomes in this world of an industrialized model. We'll get to that at the end. Another thing that's stopping us at this point, or is a hurdle for construction to industrialize is, right now, construction is incredibly wasteful. It's that way for a reason. We have a very fragmented industry.

We've got a lot of different players from designer to detailer, to manufacturer, to installer. And the obvious side effect of so many different hands and traditional methods is, we generate a lot of waste. Material waste is the most visible piece of waste. How many dumpsters you have on a project is so clearly visible. But we're also wasting time. So if we think back to that one-off building model where we're designing one-off projects in a boutique way, we're wasting a ton of time reinventing the wheel on projects to projects.

And that just-- that means time waste, which means higher construction fees for consultants, which means higher costs for projects. So one of the things we're going to be thinking about here is, how can industrialization look at elements that are repetitive, as John mentioned. And then what can we do to predict how much waste will be generated on a project, and then minimize that through this concept of industrialization. Complexity is also a challenge. Buildings are far more complicated today than they were 20 years ago, and it's way more complicated than they were a hundred years ago.

We have more building systems. We have more coordination. We also can't expect architects and designers to know everything about every system. That's just impossible to know everything about every system. So that's a hurdle for industrialization and design for manufacturing. So we need to think about, as a space, how do we surface the right insights to architects and designers so they can make the right decisions, even if they don't know all the complexities of system configurations. Another is this concept of prefabrication equals means and methods.

So the way that the contractor builds it is out of the scope of the architect and engineer. That thinking is starting to change. We're going to talk more about more integrated construction models and why they're driving toward more integrated methods. But this concept is also something that we are overcoming. And then, again, no design for manufacturing or assembly feedback from the offsite systems that are getting specified back to the design team. So challenges to overcome, but they're surmountable, as we'll get into later in this deck.

So what's stopping us today? Current design tools are really built for design coordination, particularly, platforms like Revit, really great at design coordination between disciplines. Not so great at having to make decisions about manufacturing or install impacts on those configurations. And so one of the constraints we have right now is, are these systems and how we approach design, thinking in terms of traditional methods of coordination versus thinking in terms of an interdisciplinary product mindset.

So we'll get into a bit more detail here, as well, on our relative approaches between Lada Cube and KOPE, as well as some ways we see the industry moving holistically. And then finally, there's this concept of digital junk. And everybody's encountered it, which is, we've got all these-- we've got so much data. And none of these companies, in particular, or these websites, or these platforms are particularly calling out. But the idea is we just have so much data here.

And so what's challenging is, we have these catalogs, we have these parts. When we think of products at this point, we think of individual purchased parts. And the shift in thinking toward an industrialized or productized mindset is that products are actually a configurable subassembly. They're actually a systematic piece that's very integrated with their use in a building. And so providing context on how these parts get integrated and used and configured into buildings is critical.

And helping designers who are swamped with overwhelming amounts of data sift through and find what they need to find. So merging the complexity and wastefulness of the current traditional construction processes, and leveraging tools and platforms that can recommend the right digital assets, really focusing on informing design with insights and context. So we're going to focus on how we're thinking systematically to solve these problems.

JOHN FAY: Yeah. So now, we get into some of the exciting portions of just really showcasing how KOPE and Lada Cube are really addressing these problems in a practical manner that has real-time results, too, where we can go moving forward as systems and as companies. So with that, we're going to talk about Lada Cube. So Lada Cube, basically, addresses this as a digital building product. And so what we've done is, we manufacture seven sizes of wall cassettes.

And those cassettes are truly optimized to be able to build out virtually any floor plan currently linearly. And so it's amazing what you can do with seven core sizes, and how many floor plans you can actually build out to almost exact original design intent with just the efficiencies of these sizes of cassettes. And so we sometimes refer to these as LEGO-like walls. And the beauty in it is, we're able to basically mass produce these cassettes, and these sizes, and remove a ton of customization out of the supply chain.

So with that, a couple of things you'll see. So you'll see an actual example right here of some of our products. And you can see those sizes actually pulling out of a build out or a floor plan. And then now, we're going to flow into the next slide, which is going to show an actual video of a floor plan being built out. And so what we see, even as KOPE and Lada Cube combine their efforts, as we start to optimize these floor plans and overlay them with existing design floor plans, we see a 90% plus optimization.

So it's like a design score. So we see that, even with the efficiencies of these manufactured parts. We're able to take these floor plans and match them to 90 plus original design intent, and we call that a compatibility score. So then, yeah, over time what you see with the product is just how we're rethinking construction products, how we can build in a way that we call the three R's. So reusability, reconfiguration, or resell sellable.

So meaning that that allows you to take a product, design with it, implement it into a project, but then start looking at the future usability of that product versus the temporal use. So the asset has value beyond its initial application. You're seeing standardization of these products, which then equates to affordability over time, and then really removing barriers to building. So these products do have those properties in that they can be built similarly to Lego's.

So you can bring in skilled labor, unskilled labor, and allow them to actually build structure that normally you would require a tremendous amount of skill set. And so, really, the way we do that is, we really are hyper focused on designing products that are actually buildable and manufacturable, like we mentioned before. And so the nice thing about it is, even though you're removing a lot of the customization, what you'll find in most building types is that customization, a lot of it is unnecessary.

Because over time when you build a 10 foot wall, it's always going to be a 10 foot section of wall. And so you're always going to have. Well, the way we see it from productization, you're going to see two 4 foot cassettes and a 2 foot cassette. And so being able to compartmentalize and really flush out the products in every build. And so yeah, so some of the features of systems like ours are different accessories we call them, or advantages of products that can be added or subtracted from a building perspective.

And so anything from a wet wall cassette, which is a specialized 24 inch cassette that allows you to basically plumb that cavity, and interlocks with all the other cassettes, or third party integration of doors and windows systems. So allowing creativity and other products to integrate with these standardized products, plug-and-play electrical systems and/or bringing in traditional electrical or electricians to wire those structures, so the optionality.

And then digital blocking that allows you to hang a tremendous amount of weight from structures. And so a lot of these accessories or features, they're actually what we call reverse compatible, meaning, that you can add those accessories to a wall product, a cassette product, or you can actually relocate them within the product, or you actually can pull them out and inventory them or sell them. So then, we're just kind of flow through the uniqueness of how you can finish these types of products.

So for ours, this is an example of polycarbonate walls that give a semi-translucent, semi-transparent look. You can see all the cassettes there in that situation. And then, yeah, thanks, Justin, sorry. And then secondarily on this next slide, you'll be able to see the integration of what we call FRTW, so fire rated, fire treated MDF, plus polycarbonate. So the number of materials is just endless in terms of how you can finish these structures. So the next slide.

Here, you're seeing the FRTW MDF in a retail build out. So looking very much like a traditional wall. You wouldn't know that this was modular. You wouldn't know the data science that goes into this. And then a Wilsonart on the smaller applications with fully removable skins. And then, yeah, and then modular drywall. So being able to even use traditional materials, but just in a unique manner that allows for reusability over time.

And so, yeah, so I love that because you can just see a lot of the varieties of how you can build these structures. So here's another structure that was built in Northern California, 11,000 square foot build out, third party door and window systems chosen by the customer. And then maple skins, apex melamine, and then actually clip in baseboards, as well.

JUSTIN SCHWAIGER: Great. Thanks, John. Now, we'll dive into a bit of what KOPE is all about. So KOPE is not a manufacturer. KOPE is a software platform. And the idea behind KOPE is to make it easier to specify and design in these prefabricated, or these offsite industrialized building systems, into any project. So there are a few hurdles that we've gone through, one of which was, it's hard for designers to know about all the offsite systems, how to configure them. It's hard for manufacturers, man hour wise, to configure their own systems into projects.

So what KOPE does is, it makes it easy to configure offsite systems into buildings. We do this with two different sides of our platform. The first, think of as the yellow pages for offsite construction. It's a hub of suppliers and a hub of products. So instead of going to Google and finding all the offsite manufacturers of various building systems in your area, the idea behind KOPE market is to just come to one place.

You can see a map, you can search by building segment type, you can search by product specs, you can search by building product type wall panels versus precast versus whatever, and find the suppliers that you're looking for. The second side of KOPE is this product configurator. This is just next generation computational design put into a platform that you can subscribe to.

And the idea is, take any project as an input, and then take any prefabricated system as something that we can configure, and then we can configure in one or multiple offsite building systems automatically into any project. So this just takes out the design and detailing time to generate believable manufacturable layouts of building systems instantly. So load a project, apply your panels, and then get all your outputs out of KOPE. The way this works in practice is, you load a project into KOPE.

We look through the model and we find where your systems could go. So if you're configuring internal commercial wall panels, like Lada Cube, or if you're configuring wood framed wall panels, or precast concrete, or mass timber systems, or flooring systems, or roofing systems, we'll go and find where in those models your prefab systems need to go. And then KOPE automatically optimizes and configures those systems into that project. So again, taking a base model, you can get two system configurations in a matter of minutes.

And then KOPE allows you to optimize around various outputs that you're looking for. So if you wanted to optimize around building more of the same size wall panel so you can get some economies of scale in your manufacturing, or if you wanted to optimize around fewest panels so you can get for a low cost. Or say, you're a contractor and you've got a job site where you're not going to have a crane. You want to optimize for lots of small panel. So you can reconfigure in KOPE in lots of different ways, and take those outputs, those geometry, all that takeoff data, and understand your system in detail.

And then you can leverage KOPE's drawings, geometry, data downstream, back to your design coordination model, down to your downstream, to your factory production process, back to your project design teams. So what we're doing together here is KOPE and Lada Cube are striving to, again, leverage all these best practices that we've highlighted, and leverage the advanced manufacturing and productization. That's work that's been done at Lada Cube.

And then the computational capabilities at KOPE to really push forward the shared vision for construction, where it's more automated, more productized, more industrialized. So formalizing what we've said before about best practices and then applying it to KOPE and Lada Cube, what we do is, we start with this foundational layer of knowledge. These are system configuration design requirements, these are manufacturing limitations and tolerances. These are job site and transit limitations for panel sizes.

All that knowledge gets embedded into the KOPE platform. And then what we do is, we take all those inputs around product delivery models, resource efficiency, standardized processes, limited variations, and all the things that John mentioned around Lada Cube product, in particular, and we bake those in as configuration rules and computationally compute optimal layouts of building systems in code. So what that allows us to do is push productization into the real world in a way that's easy to use.

So take any project, which I'll show you in the next slide, configure any building system, prefab system, into it. This allows-- again, it makes it easier to design in prefab systems. It also allows companies who have approaches of catalogs of kit of parts to be able to actually leverage those kits of parts and apply them very quickly to lots of different building typologies, so they can go and test their products into lots of different projects without all the time spent to manually configure. And then looking at product innovation.

So what's the next panel size that Lada Cube should develop, if any. KOPE can go and help compute optimal sizes for what's next. And all of that is automated based on design standards and giving the user instant feedback. So here's what it looks like in practice. So starting with the top, pull in any architectural model, any architectural file, and select the walls you want to configure. And then in KOPE, we automatically configure. So here you can see we took many of the internal partition walls in this project and we configured Lada Cube walls into it.

This places panels in a way that fits in terms of cost reduction and job site installation requirements on the Lada Cube side. It also looks at things like bracing. All those yellow lines on top of those panels are where bracing is needed, and how tall it is to the ceiling based on the model that we were generating this from. And it allows us to do a lot of things. So first of all, we're getting insights based on the embedded knowledge within KOPE, where should the panels go. Will they fit? How much does it cost? Those things surface automatically.

We give predictability and limit variations. So every time we apply a product to a project, we're doing it exactly the same way. We're following a systematic set of rules. So we're placing the right panels in the right space-- in the right spots and in the right way. We can leverage entire catalogs of design parts of different products, and be able to optimize the layouts there. So what we can do, and we'll show you in a bit, is using KOPE's generative design platform to actually optimize a couple variants of Lada Cube layouts.

So we're giving companies, like Lada Cube, optionality and insight into what different configurations might look like in a matter of seconds. One last slide here before I hand it back, John, is productization at scale. So thinking small. How do these products go together is really helpful as you think of how the system should be configured. But once the system and design logic is in KOPE, we can scale this up to any level.

So, for example, this project here in the middle, this is tens of thousands of wall panels configured into a commercial office building. This would take the company who's featured here at least a week of full time design time just to figure out whether their panels could fit, let alone trying to go optimize the layout and find a best fit solution for various-- their various building products. So at KOPE, we can do this at scale and really launch this productized approach into the real world.

JOHN FAY: Yeah. Thanks, Justin. So one of the benefits of a company like Lada Cube and our products being integrated into the KOPE ecosystem is, really, our products are really centered around circular approaches to reusability. And so what it does when we're in the KOPE computational environment, it basically allows us to take those data sets and make those data sets more useful to future applications for our customers.

So instead of having all these products that they don't know what to do with moving down the road in terms of circularity and reusability, we now can go back into the data sets and, basically, pull out all of the information, and recomputate it as assets into new classes or new build-outs of structure. And so that's the Lada Cube approach where we are-- our products are 100% reusable. Typically, when a consumer or customer uses our product, the second time that they actually use that product, they see about a 80% savings on cost to build.

So if you had $1 million project initially using the product, the second case use of reconstituting that in a similar sized project, you'd be looking at roughly $200,000 costing to build out that new project. And a lot of that is centered around architectural fees, installation, engineering. And so it's just that circularity approach that we have. The walls are assemble, disassemble, even though they look like traditional stick built walls when they're finally built.

It's actually quite a bit of a different system to build. You get about a 75% faster build time per project, which is hugely valuable. And the ways the walls are assembled is they have internal cam locks. So you're basically using an Allen wrench to lock those walls or cassettes together. And then we talked a little bit about that digital reconfiguration through using KOPE's platform, which is massively valuable.

And then just lower carbon footprint of-- those deliveries for our products come in as a single delivery versus multiple deliveries. The reduction of construction time reduces a ton of carbon footprint on even transportation back and forth to projects. And then what we're seeing, too, with some of these new models of productization is new financing models that banks are willing to look at because they see the products as actual assets that can be used and reused over time.

So, yeah, so this is where, basically, the KOPE world and Lada Cube worlds really come together in this really sweet spot that has not existed, relatively speaking, until, I think, this digital and software world and digital physical product world have really started to collide now. And so we're actually now able to design buildings that are actually manufacturable. Yeah, like we said, we're moving the customization out of that process.

We have the beauty of design, manufacture, build, rebuild, being able to take those data sets and pull the information out, like, costing, bill of materials, shop orders, deliverables. So that's really what that digital KOPE platform allows us to do. The pricing transparency is just incredibly valuable. So as you're building a project or designing it, you can actually see the effects of the cost of that project and what it's going to look like to actually build it.

And then speed. We're able to take 200 man hour jobs of designing projects using Lada Cube and now computating it with KOPE. And now, we're seeing a reduction all the way to three to four seconds to take the same data sets that took 200 man hours. Now, we're seeing it pumping out in a few seconds. So the efficiencies even on that end are astronomical. And then reducing the rework, lowering costs, boosting project quality and deliverables goes into everything that we're discussing here.

And what I say is, it is truly informed design. So as the architects, engineers, designers are actually building and designing these systems, it's like they can know with confidence, wow, this is actually a buildable structure.

JUSTIN SCHWAIGER: All right. So let's show you how it actually works. So this is going to be the KOPE actually configuring the Lada Cube product in real time. So you can see here, we're going to select a project in KOPE. This, again, could be any 3D model of any project. We're just looking for architectural walls modeled. And these walls that are modeled are just typical low level of detail architectural walls. So in this case, the walls are just generic internal walls modeled in Revit. And what we're doing next is, we're going to apply the Lada Cube product.

So again, KOPE can configure lots and lots of different prefab systems into any project. In this case, we're saying, hey, apply the Lada Cube walls and apply them to internal walls only in this project. So again, thinking about the productization approach, this is pulling on the whole Lada Cube catalog, and it's letting the designer here pick a few variants of how the system should be laid out, which wall panels to select, which wall panel heights in this case, and then be able to go and configure this quickly.

So taking all of the knowledge about how these systems are configured, designed, manufactured, installed, and then wrap baking that into how the systems get laid out. So where the panel should go, will they fit? How much does it cost? All that is known up front in real time here as we're configuring. So what you're seeing on the screen here is an actual Lada Cube wall panel system. We have something like 540 panels that we just placed, and we're surfacing all the metrics on the right of how many panels, how many posts, what's our design standardization score.

Which, what we mean by that is, how exactly do we match the architecture underlying? So in this case, it's a 97.5% solution where we're matching, placing 540 panels with 11 types. And what we did here, actually, behind the scenes is, we actually shifted window and door openings just slightly to fit. So within a couple inches to be able to fit with the Lada Cube cassette widths. So we do those minor shifts to increase the optimization scores, and that allows the Lada Cube system to fit.

So we can design without shifts, we can design with shifts, and we can give Lada Cube the ability to go back to the architect and say, hey, you can use our project, your product, and you can use it as is. Or, hey, if you shift your doors two inches, we can actually match your design exactly. What we're showing in this next video is, we're going to actually go rerun that same model with a different configuration of Lada Cube walls, and then be able to see a comparison between laying out the system with Lada Cube's corner posts and laying out the system without the corner posts.

So we change a couple of toggles and a couple of boxes, and KOPE's actually going to go recompute an entirely unique and entirely new design layout based on those rules. And then we're going to be able to compare the two. So again, thinking about optionality in general terms is one thing. But actually producing optionality that can be computed and actually designed to and manufactured to is a whole other level here. So what we're showing you here is computational design at its finest to be able to actually design and configure these systems in.

And it gives companies like Lada Cube a ton of control over what they give back to their architects, or the builders, that are hiring them, and also, be able to optimize solutions and be able to provide design feedback, to be able to leverage the Lada Cube system in the best way. So here, you're seeing two different comparisons of two different design options. And we can compare lots and lots of solutions like this.

JOHN FAY: Yeah. So in summarizing that Lada Cube, KOPE partnership and the outcomes of that, I think, we start with the foundation-- let's go to the next slide. So we start with the foundation of industrialized construction, which we believe is the future of construction. And then we're able to take a deep dive into looking at privatization, and then how those products can then be cataloged in a way that automate the entire processes.

And so I think as Justin and I were walking through how that works, some things that you saw that we're able to deliver projects with more regular and predictable processes, leveraging commonalities for reduced resource needs. So really, we see that on site on projects with Lada Cube where the waste is just drastically minimal. It's almost a zero on site, which is really an encouraging experience when you're on one of those project sites, just having flexible product capabilities within the known ranges.

So it still gives some level of freedom, of creativity, but within the construct of something that can actually has a range and can be manufactured. And then more time and cost insights due to upfront design and fabrication. So that clarity of transparency of understanding what is being built and what the cost is of building that product or building. And then when we break it down into the productization category.

So innovative product solutions delivering many scenarios from a few options. So as Justin showed you in that configurator, being able to take any floor plan, pump it into there, and really showcase how the products can be used in different capabilities or scenarios or layouts. And then predetermining some of it through choice of what those interfaces look like, and how you want those options to look in terms of intersections, walls, in terms of larger sizes of cassettes in the design choices.

And then, really, it's that catalog of parts. So when you go back to the Lada Cube kit of parts, it's the set kit that helps you wrap your mind around what the catalog is and how you can interface with it to design. And so lastly, on the automation side, using computational design to merge the worlds together, the products and the software to achieve certain specifications, removing repetitive work. So you see the speed to design, which is pretty outstanding.

And then lastly, gaining instant feedback. And that feedback really is going to equate to a lot of informed design, as we talked about before, where designers, engineers, architects, and building owners can start to make informed decisions on what products they're using and what the benefits are of those products from a carbon footprint output, efficiencies, costings, et cetera.

And so, yeah, so putting this all together, all this knowledge together, really puts it at the fingertips of the designers, the decision makers, and it really leads to improved project outcomes. And so I think that's really where it starts to get exciting in terms of where these efficiencies can start to lead us to, which I think then equates to more affordable building solutions over time.

JUSTIN SCHWAIGER: OK. So now we'll do a little bit of speculating on what's next in the space of industrialized construction. And to set the stage for that, just a few comments here around why construction is industrializing. I think it's important to know what's driving-- what are the forces driving where we are so we can all align to them going forward. We know what's plausible, what's realistic. So what we know is job site labor shortages are getting worse. That is happening. We know that digital technologies are getting better.

So we have more tools at our disposal. More and more people are using CAD, more people are using 3D modeling, more people are using really advanced computational tools, parametric design. So these digital tools are getting better, generative design, et cetera. We also know that project delivery methods are changing, again, like I mentioned, toward more integrated approaches. So some examples, more design build, more integrated project delivery.

We're seeing companies, like, large building owners, the companies that are building their own data centers or hospital networks. We're seeing them pull in construction management and general contracting functions in-house. They're doing more self-management of design and construction holistically. They're integrating. We're seeing a tighter, more managed supply chains who we're procuring from, which country they are, how many stops something makes, where the value add work is happening. All that is getting managed more tightly today than it was five years ago.

We're seeing companies do more direct material procurement. Not only do they know what's going in their buildings, they're actually procuring it themselves. We're seeing more self-perform by general contractors, and we're seeing a lot more in-house prefabrication done by specialty contractors and trade contractors. The result of all of that is that we're seeing a much more focus on standardized, productized, subassembly-based and building system based approaches, which is essentially industrialization.

So what is that world of standardized, productized, subassemblies and systems look like for the various personas in industry? So here's what we think. So for architects, designers, we think more like-- they become more like product designers. So again, going back to my earlier point of architects and engineers just never have enough time to do the quality of design that they want to do. In this world of industrialized construction, they finally do. They develop integrated and interdisciplinary products that are configurable, that meet the demands of system constraints, and they get to design those to a higher level of detail.

And then we get to reuse that knowledge from project to project to project. And the architects and designers can go design the next product. We're seeing specialty trade contractors, again, prefabricating their own subassemblies. I think what we're going to start to see is a lot more of those subassemblies getting integrated with various building systems, what we call a product platform, or a chassis, building chassis, which I'll get to in a bit. We're going to see more and more of that prefabrication aligning with particular building systems.

This one's interesting, owners and developers and general contractors in the world of industrialized construction and more integrated approaches, they actually start to look similar in terms of their approaches. So what we're seeing is owners and developers, they're starting to pull in those design and construction services in-house, and they're starting to take on more of that project delivery risk in-house. So there are more integrated, comprehensive project delivery team. General contractors are doing the same thing. So in addition to their project management expertise, a lot of GCs are adding development and self-perform services, so they're taking on more project delivery risk.

They're actually starting to look a lot like an owner and a developer. So I think in this future state model, we're going to have more of these master builder type concepts where these owners, developers, and contractors essentially develop their own and manage their own projects. So they can control all of the pieces, the supply chain, the product type, the building typology, the use, and architectural program. All that stuff gets controlled in one house. Material suppliers, this is a huge, just stark change to the way things are done today.

But today, they need to get materials specified at the very end of the process by the trade contractors who are actually going to build their products. Looking back at general architectural specs and substituting the systems that they want and the actual building products they want at the very, very end of the process. In the world of industrialized productized construction, that decision of which material and product happens way, way up front in the process. So for material suppliers, this is just a stark change in their business model and who they coordinate with to get their building materials specified.

And then finally, the offsite prefab manufacturers are starting to develop these building system chassis, or what we call product platforms, which can integrate in to various subassemblies that get designed, particularly, for them. So if you think of auto manufacturing as an example, you've got your Ford F-150 chassis, and you've got a whole bunch of suppliers that are not Ford that are supplying all the various components that go into that truck-- the engine, the wheels, the seats, the trim, all those things get designed into that platform, or that chassis, not developed necessarily by Ford, but Ford has the chassis or the platform.

So we're seeing these models arise that companies are essentially becoming the hub that other prefabricated systems and subassemblies integrate into. OK. But where are we actually today? And I will say we need to take a little bit of a step back from that vision of where we're going, what we're going to be. Today, what prefabricated components need to do is, they need to flexibly configure into any traditionally designed building. So we're seeing a lot of work and a lot of progress on various subassembly-based prefab.

So things like MEP subassemblies, electrical systems, conduit racks, cable trays that get pre-manufactured in a shop, mechanical subassemblies, like, ducts that get pre-manufactured in a shop and then come into the building pre-built, to some degree, as subassemblies versus parts. We're seeing that today that relies on things like going and scanning the job sites and point cloud design tools that integrate as builts with these subassemblies. All that technology is there that enables this.