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Former Member
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There’s an old saying that says, “How are you going to keep them down on the farm?” However, these days an updated version might be, “How are you going to get them into their own place?”

What’s become almost cliché remains a big problem for young adults – as well as their parents. Highlighting the crisis is a 2017 report entitled “The Large Unmet Demand for Housing” from the Federal Reserve Bank of Kansas City. The conclusion of the report is that there is a significant shortage of housing and new affordable availabilities remain far below demand.

The report cited, “the limited supply of housing available for rent or sale” as the biggest reason for the U.S. housing crisis. Other factors included rising rent and new home prices and, “…construction of new apartments is centered disproportionately on luxury units too expensive for most young adults.”

That’s not good news for young people who can’t afford to move out. Although there are at times clear advantages to having the amenities that only mom can provide, many would like to leave their makeshift basement apartments and get their own digs.

However, despite the clear need for housing the report states, “Construction has not responded vigorously to increasing demand thus far.”

What’s the holdup? Well a few major challenges facing builders include a shortage of construction workers, difficulty financing land purchases and the technical logistics of new construction.

Enter Katerra

As bleak as that all may sound, young people may want to hold off on trying to convince their parents to get a pool table in the basement to augment their extended stay. A new construction company called Katerra recognized that the current housing crisis also presented opportunity, and they quickly set out to revolutionize the construction industry.

At Sapphire Now 2017, Ravi Naik, Senior Vice President for Technology at Katerra described how he believed Katerra’s unique approach, coupled with the latest in available technology, is transforming the way buildings and spaces come to life.

The company has factories spread around the globe where they produce their own materials. They also manage the global logistics for the entire construction industry, own their supply chain, and manage design right through to construction.

In addition to producing their own materials from their factories around the world, Katerra is also managing global logistics for the entire construction industry. For example, the company is applying systems approaches to remove unnecessary time and costs from building development, design and construction.

Technology at Work

Naik believes the unique approach is already yielding results, stating, “Efficiency no longer needs to come at the expense of quality or sustainability. Our goal is to build buildings very rapidly at a significantly reduced cost, which would in turn bring great value to the citizens of this country and then globally.”

This should be good news for tech savvy young people who would appreciate both the transformative way new spaces are coming to life - as well as the new technology that is driving the progress.

Naik said that the company first needed to have the right technology in place before could getting more people into new housing.

“We went live with SAP S/4HANA and for the first time we have a truly integrated end-to-end business process in place – right from procurement to logistics to finances and revenue recognition.”

Naik added that the SAP S/4HANA upgrade was integrated and went live in a very short time with minimal disruption. Katerra can now track inventory and knows when deliveries are expected. Additionally, their business intelligence platform now ties to the IoT network, allowing for tracking labor and managing productivity.

This level of technology has already made an impact. Naik described how Katerra finished the construction of an entire first floor of a multi-unit residential building in just six hours. “We were able to do that because now we have technology, tools and software actually designing the building right to the last nail.”

With Katerra seemingly cracking the code on new affordable housing construction, those with young people colonizing their basement can take heart knowing a solution could soon be at hand.