Volumetric Building Companies founder and CEO Vaughan Buckley characterizes his 12-year-old organization as a “construction and manufacturing company that’s embracing technology.”
“‘Embracing’” may be an understatement. Philadelphia-based Volumetric leaves behind a small SAP Business One system and several other ERP systems, instead building out an enterprise-wide RISE with SAP installation to run its business. SAP S/4HANA, hosted on AWS EC2 servers, is expected to help Volumetric—founded to build modular, multi-family housing—better understand and manage its volatile costs, material availability, and other supply chain dynamics as it grows, diversifies, and serves customers globally.
Volumetric’s first plant is set to cut fully over this month, following four months of rapid design, planning, and testing phrases. The company’s CIO, Dave Elmer, said that plans call for a sequenced implementation. A second plant is expected to take eight weeks, followed by the next two sites and a global rollout in late fall.
“‘Simplification, Scalability, and Speed’”
This relatively fast pace tackles what Volumetric leaders need and want from the system: “business process simplification, scalability, and speed,” Elmer said.
Volumetric’s growth is in part organic, as the demand for mid-market and low-income housing, in cities of all sizes, continues to outpace supply. A horizontally and vertically integrated business, the company’s 500 employees provide design, component manufacturing, and on-site construction services.
Growth prospects intensified in 2021 as Volumetric acquired Katerra Inc., including its plant in Tracy, CA, to spur West Coast expansion. In addition, Volumetric recently announced a merger with Polcom Group, which crafts furniture and builds steel structures for the hospitality industry across multiple continents. Between the already existing strong housing market demand, the completed acquisition, and the forthcoming finalized merger, the industry places Volumetric’s business pipeline as moving toward the $1B mark.
Industry 4.0 Considerations
Business and technology drivers, and what arrived with the Katerra acquisition, made RISE with SAP and SAP S/4HANA top priorities for Elmer and his team.
“We acquired a factory in Tracy that was fully automated, and we basically needed to bolt all these things together and make them work on a global scale. We wanted to simplify the financial and manufacturing processes as we scale. And then add in the ability and the automation for Industry 4.0. That was our going[-]in position,” he explained.
The SAP S/4HANA adoption strategy shifted from the initial brownfield plan to a greenfield approach “because the way the factory operated was totally different” than originally expected, Elmer added. The factory went from many automated component lines to an automated modular line that required different SAP systems and modules.
Volumetric used agile methods to achieve project milestones, in what Elmer described as success with a “plant-driven and people acceptance” philosophy. Without project or consulting partner assistance for any part of the initiative, the project process kept stakeholders and everyone else involved out of “conference rooms” and involved in hands-on SAP learning, focused on first-phase “small wins” followed by iterations, he said.
“I’m a huge believer in that [functional users] have to be on the system, to visualize what the system will look like,” Elmer explained. “We had people who had never seen SAP before or who understood what to do. So, I had them do virtual projects over and over and over, people in job functions such as supply chain, production, warehousing finance. They’d complete the end-to-end process.”
Elmer also said that Volumetric leveraged the RISE with SAP best practices portfolio and has deployed 37 processes thus far. “SAP [has] built 80,000 customers. They’ve already figured out how to make a purchase order. We don’t need to do that, I think,” Elmer quipped.
Reflecting on the RISE with SAP initiative so far, Elmer noted two key lessons, approaches that closely aligned with Volumetric key values, including “Improve Everyday” and “Own Everything You Touch.”
“Embrace change and learning—if you’re not learning, you won’t embrace it, and if you won’t embrace it, you’ll never learn,” he said. “And hit the basics. Don’t get caught in all the fancy things; hit the basic milestones all the way through with the core system, [and] then you can advance it into Industry 4.0.”