ZenniHome looks to overcome supply chain hurdles
The orders are coming in, and ZenniHome anticipates doubling its workforce from about 60 to 120 employees in the coming months. The only thing holding the startup company back are the same supply chain issues that are affecting manufacturing all around the world.
“We have a pretty healthy stack of resumes. The only reason we’re not hiring immediately is the supply chain. We’re just waiting for supply chain to catch up, and then we’ll be fully ramping up,” Mark Cormier, ZenniHome’s vice president of operations, told the Lake Powell Chronicle last week.
“We have units right now that are partially finished on the floor waiting on things like cabinets, things that are hard to get right now. We’re beginning to see relief in supply chain. We have houses that are 70% built waiting on parts.”
The ZenniHome factory is located in a 65,000-square-foot building at the site of the old Navajo Generating Station on the Navajo Nation near Page. The company produces manufactured housing made of steel. Currently, the company has two models available: the 320-square-foot Denizen designed for one to two people, and the 640-square-foot Citizen designed for two to four people.
The units, which can be ordered online from the ZenniHome website, include in-unit washer and dryer, multimedia room, floor-to-ceiling glass, walk-out patio/balcony, and kitchen fully equipped with fridge, oven, range, microwave and dishwasher, among other amenities.
Cormier said ZenniHomes is excited about the concept of its homes, which have a greener, lower footprint and are “more of a minimalistic product than what a lot of American are used to.”
“We’re used to a certain amount of square footage in our homes. This is a little bit smaller product. However, we try to get the most use out of that space,” he said. “We have furniture that has dual purpose. In other words, the bedroom turns into a living room, you’re putting the bed away and now you have a couch under the bed. We get multiple uses out of the same square footage. That helps make the home a little bit more livable.”
Last month, ZenniHome celebrated two milestones: One milestone was the first anniversary of the day that Navajo Nation Division of Economic Development gave ZenniHome the keys to the warehouse at the former NGS site, which over the past year the company has transformed into its factory.
The second milestone was the shipping of the first two prototype model units down to Mesa, where ZenniHome will eventually supply 90 stackable units that will make up a five-story high-rise development called ZenCity.
“We dusted the building off and got the keys about a year ago. We started framing our first house probably nine months ago. So, we’re still in startup, figuring out the structural challenges of a new product,” Cormier said.
He said although other companies have manufactured housing out of shipping containers, what ZenniHome is doing has never been done before.
“What we’re building is a steel structure design frame that can be stacked into a high-rise. That’s never been done. The commercial building code for commercial high-rise is much different from residential buildings,” he said.
Cormier said the company is still in “learning mode,” consulting with architects on a daily basis to clean up little details of structure and design. With two prototypes already shipped to Mesa, they’re now working on 12 individual residential units that have already been ordered.
After those are finished, they’ll build the 90 units that will comprise the Mesa high-rise project, which they anticipate completing by late summer.
“We have a lot of challenges in front of us. That’s a high task based on we’re still in spin-up and we’re still tweaking the blueprints as we speak, which means there are certain things we cannot do until they give us the final stamp on the blueprints,” Cormier said.
The steel design of the units is one of the reasons ZenniHome decided to set up in the Page area: Page Steel offers a ready supply of material needed for the frames without the need to ship it from a long way away, which would add to the expense. Page Steel has also helped from the engineering standpoint with structural steel drawings.
Another attraction was the tax advantage offered by the Navajo Nation for companies that create new jobs. The lease on the factory building, which was going to be torn down, was also very reasonable. Part of the lease agreement was implementing a Navajo hiring preference.
“Out of the roughly 60 employees, over 50 are Navajo. We obviously hire talent as well. If we have an applicant that has a particular trade talent that we need, we’ll go ahead and bring them in no matter what the ethnicity is. But we’re probably 90% Navajo,” Cormier said.
Many of the Navajo employees formerly worked for Salt River Project, which ran NGS. Many of them had significant trade training as welders, pipe fitters and electricians, so they fit in very well at the ZenniHome factory.
“They are some of our top skill base here, and we’re using them as lead production people to help train our new people. They’ve become our upper staff here,” Cormier said.
Another attraction of Page is its geographic location between large markets in Salt Lake City, Phoenix, Las Vegas and parts of New Mexico. Even the stretch of roller-coaster pavement on Highway 89 between Page and Flagstaff was not a deterrent.
“There was a lot of discussion with the trucking company on how to properly secure the units” when they were transported down to Mesa, Cormier said.
“When they got down there, they were in expected condition. There was some drywall cracking, which is normal for anything you ship across the road. Other than that, they made it in pretty good shape. The tile, windows and cabinets were all in good condition when they got there. We were happy about that.”
For now, ZenniHome is limiting its sales territory to the Southwest. With an eye toward future expansion, it’s working on getting statewide approvals on its blueprints so that the units can be inspected in the factory by Arizona Department of Housing rather than upon arrival in each state. So far, such agreements have been made with about 40 states.
“Right now, we’re only shipping to the pre-approved states, and we’re only shipping to the Southwest region just because of logistics,” Cormier said.
“That’s plenty of work for us right now. We’re overwhelmed with those orders without even looking outside of that. We’ve got to build the 90 in front of the next order. We’re looking late into the year before we can begin to ship more individual orders.”