SMART BUILD SPOTLIGHT: M3 Components - Leading the way in industrialised construction

⏱️ 6 min read

Welcome to the latest SMART BUILD SPOTLIGHT where we pull back the curtain on smart businesses using innovation to gain an edge and realise the full potential of industrialised construction.

This time we are looking at how M3 Components (M3C) has grown from an internal innovation incubator into an emerging force in healthcare construction, moving into a 14x larger production facility and building a roadmap towards a US$400 million business within 10 years. We dig deeper into how this rapid growth is being driven by LEAN manufacturing, a continuous improvement culture and a Howick FRAMA™ 7600 at the centre of production.

To find out how they are doing it we spoke to Kent Ridgley, Vice President of Operations at M3 Components, Keely Calagos, Vice President of Growth and Strategy at Mark III Construction, and Jeimi Cuendulain, Virtual Design Lead at M3 Components.

Contents

• From an idea to an industry leading innovator
• Mark III Construction group structure
• The healthcare sweet spot, building 14% faster
• Moving into a factory the size of two football fields
• The final piece of the puzzle, Howick FRAMA™ 7600
• Nudging clients towards that ‘aha’ moment
• Continuous improvement and Team EPIC
• How to become a US$400 million business
  
  

From an idea to an industry leading innovator

Believe it or not, M3 Components did not exist five years ago. Back then it was just an idea in the mind of Dan Carlton, President of Mark III Construction, an MEP contractor in Sacramento, California. Dan saw construction had been static for over a century. He truly believed there were better ways to build, so he set up an innovation incubator to test his hypotheses.

Dan and his team focused six years of research and development, and more than half a century of construction experience on this one idea, that there was a better way to build.

This series of R&D projects was given a very James Bond-esque name, Project Mountain. The results of these test projects showed that they could consistently save customers in the medical industry 16-21 percent on their MEP (mechanical, electrical, plumbing) wall framing costs and decrease the construction schedule by 20 percent. Read more about the early years of M3C in this article we shared in 2023.

M3 Components was born of this single idea and the promising results of Project Mountain. Their innovation-first mindset has continued to steer the company five years on.

To understand M3 Components, it helps to understand the group around it:

• Mark III Construction is the parent company and where it all started
• M3 Components is its manufacturing arm, focused on prefabricated wall panels and volumetric pods for the healthcare industry
• Alongside them sit M3 MEP, a subcontractor for industrial and commercial sectors, and M3 Service, a single point of contact for maintenance, installation and repairs.

Together, the three entities (M3C, M3 MEP, M3 Service) can design, manufacture, construct and maintain full buildings across their entire lifecycle.

Mark III Construction group structure

Their structure and strategy are clearly working, M3C started its life in a 24,000 sq. ft (2,230 sq. m) manufacturing facility, but they have been so successful that they have recently upgraded to a purpose built, 340,000 sq. ft (31,587 sq. m) building. Keely says the group's growth has always been driven by one idea:

"We [Mark III Construction] are celebrating our 50 year anniversary this year, which is a very exciting milestone for us ... We started as an electrical contractor, fast forward today and we're doing everything ... it really has been with that idea that there is a better way to build."

The healthcare sweet spot, building 14% faster

M3C specialises in fully finished pod rooms for use in healthcare facilities, plus wall panels with pre-fabricated, code compliant electrical and plumbing. These eliminate rework, cut timelines significantly, reduce labour requirements and are accurate to within millimetres. They are also safer, often cheaper, and provide more certainty for clients.

Healthcare is their sweet spot, and a deliberate choice. Kent explains:

"In a lot of medical facilities, you have 75 exam rooms that are very similar or exactly the same. So, when you come in and build one building, they may build that building seven more times in the course of the next five years. They really see the value of that repetitive design process." 

High complexity, high MEP density, and highly repeatable spaces: these are exactly the conditions where industrialised construction adds the most value.

This is clearly shown in a test they ran early last year, proving that fully panelised walls assembled offsite was 14x faster onsite than traditional stick framing.

Moving into a factory the size of two football fields

When we talked to the M3C team they were still orientating themselves in their new facility. And fair enough too, Kent says the factory is roughly the size of two football fields, but it affords them a huge opportunity, all their materials and processes are now under one roof.

To design a 'dream factory' M3C brought in industrial engineers and LEAN manufacturing specialists. Every component gets a QR code and is tracked through the entire lifecycle process, from manufacturing to field installation.

The speed these systems unlock is significant. Once four wall panels and a roof panel arrive in the fabrication area it takes about 45 minutes to assemble a pod.

The final piece of the puzzle, Howick FRAMA™ 7600

At the centre of their new dream factory is a Howick FRAMA™ 7600. The decision to invest came after M3C had been purchasing cold-formed steel stud and track from an external supplier, but they really wanted to take control of their own supply chain. Kent decided to go and see for himself what else was out there:

"I kind of flew all over the country looking at who was producing what. I went and looked at a couple of factories from the big national producers and watched how they produced, what they produced."

He also did his homework closer to home. There was a business in Southern California with whom he had a good peer relationship, a company running four Howick machines. Kent went down to visit and asked them straight: if you could have your dream machine, which one would it be?

"He said the [Howick FRAMA™] 7600. And so when I got it, I sent him a picture of it and teased him a little bit!" 

That peer endorsement, combined with everything else he had seen, sealed their decision to invest in a Howick machine. The multi-profile capability, the customer service, the maintenance intervals, the long term return, it all stacked up. The FRAMA™ 7600 now runs multiple profiles and supports the full range of features M3C needs to handle whatever a healthcare project throws at it.

"Really it was a game changer for us that allowed us to take control of that quality and that entire supply chain."

Nudging clients towards that ‘aha’ moment

M3C's processes are non-traditional, and that means that convincing clients to trust them is part of the job. Risk-averse project managers and superintendents often worry that new methods will disrupt build schedules. The best way to change minds is to get them into the factory.

Kent recalls one superintendent on an early medical project was deeply resistant from the start. He did not believe in industrialised construction, did not want it on his project, and was convinced it would derail his schedule. He had allocated 30 days per zone. There were five zones to frame out.

M3C agreed to put 30 days on the first one, they installed it in eight.

"He was like, 'okay, maybe there's something to this'. And so he worked with us and repetitively we were able to stay within our projected timeframe. And by the end of the project, he was a champion for us. He believed in it. In fact, we ended up negotiating a second project ..."

That shift, from sceptic to champion, is something M3C actively works toward. Getting potential clients into the factory is one of the most powerful tools they have. Once people can physically see how the product is designed, how it is produced, and how it goes out to the field, the penny drops. Kent calls it the 'aha' moment.

Image courtesy M3C.

Keely adds that some of their best conversations happen during factory tours, standing on the floor, watching the process unfold in front of them, clients start making connections to their own upcoming projects. It gets people out of the meeting room and into a different way of thinking.

But the real opportunity, Keely explains, is getting involved before any of that happens. Before design has even begun:

"The most savings come from when we are brought in early and brought in at design. We will have clients come to us and say, 'we need to finish this project as fast as possible.' And there are ways we can do it. But the most value comes from the design stage." 

Jeimi adds that the tide is turning; industrialised construction has been in the conversation for many years, and technological advances are now accelerating adoption. People are catching on. M3C, having done the hard yards early, are well positioned to be an industry leader.

Continuous improvement and Team EPIC

To make the business run like a well-oiled machine, M3 Components cannot just rely on their efficient systems. They need skilled people and a conducive culture to execute their plans, and that culture has a name: Team EPIC.

• Teamwork
• Excellence
• Perseverance
• Integrity
• Continuous Improvement

Every hiring decision and business decision runs through those values. Keely explains:

"We make business decisions, people decisions, all based on those values. And one of the ones that's most important to me is that continuous improvement piece. The way we define that is improving ourselves, improving the folks on our team, and improving the industry." 

That means giving teams the freedom to try new ideas, even if they fail, even if they cost money. As Kent puts it:

"You don't fail until you quit."

It is perseverance and continuous improvement working in tandem, and it has built a culture with genuine buy-in on the factory floor, where each zone has a team lead with a daily target. If one team exceeds its goal, they figure out why and replicate it across the others. A continuous improvement loop.

Underpinning all of this is a culture of transparency, reinforced by the Entrepreneurial Operating System (EOS) M3C adopted two years ago. The EOS creates visible accountability at every level. Goals are set, monitored and owned, and everyone in the business can see the roadmap. With that in front of them people can have the honest conversations good teams do not shy away from.

Jeimi explains that you can have various skill levels, but if people are not willing to be part of the teamwork and embrace new ideas, it will not work long term.

Image courtesy M3C.

How to become a US$400 million business

Mark III Construction group aims to become a US$400 million business in 10 years. The 10-year target is not a number plucked from thin air, it is the destination of a documented roadmap. As Kent says:

"It's not just a vision to get there. We have a plan and it's in writing and it's documented and anybody can look at it." 

This lofty goal is not really about reaching an arbitrary number though. In Keely's terms, it is about leading the evolution of construction, bringing together like minded architects, engineers, owners and contractors who share a vision of a better way to build.

Image courtesy M3C.

With their ambitious vision for industrialised healthcare construction continuing to gain momentum, M3 Components is clearly a company to watch. We look forward to seeing how the next stage of their journey unfolds.

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