By Larry Barrett  |  Posted 2002-08-09 Print this article Print

Cavalier Homes vastly increased its efficiency with factory software. Too bad it had to leave the project half-finished, like a builder whose funds have run out.

-Home Bust">

Manufactured-Home Bust

These improvements have all come during what Wilson calls "a free fall" in the manufactured home industry. Just 193,000 homes were sold in 2001, compared to the 372,000 new manufactured homes that were sold in the boom days of 1998. The market continues to drag; analysts expect just 180,000 new manufactured home sales in 2002.

"Crappy is the word for it," says Rob Marshall, an analyst at Wachovia Securities. "There was a ton of loose credit in the mid-'90s. Now that the lending standards have tightened, sales have fallen and the economy has only gotten worse. Everyone is still paying for the sins of past years."

With its SAP project suspended, Cavalier finds itself in the not-uncommon position of knowing the technology can improve efficiency and profits, but not being able to fully deploy it.

Only three of Cavalier's 14 manufacturing sites are fully integrated with the planned manufacturing, order-processing and materials management applications from SAP. In part, the issue is one of people resources:

In the last year Cavalier's technology staff has been cut in half, from 16 to eight, putting the project more than a year behind the ambitious rollout schedule Cavalier settled on before the market turned sour.

"We've been through a lot," Wilson says. "We did a gut check with our CEO and told him we needed to expand our IT budget, despite the state of our industry and our company, to install this software in other plants. He had the courage to say that we were going to change the company."

And it's not clear whether Cavalier would have canceled the SAP plan altogether even if it foresaw the market downturn that was coming—though it may have planned to take it slower from the start.

"This installation turned our company upside down in the past two years," says Scotty Pickle, currently controller of the Addison facility but formerly the SAP installation project manager. "It also came at maybe the worst time possible for us as a company. Some may have asked how we could afford to make this type of investment but looking back at it now, I'm not sure we could have afforded not to do this."

Senior Writer
Larry, of San Carlos, Calif., was a senior writer and editor at CNet, writing analysis, breaking news and opinion stories. He was technology reporter at the San Jose Business Journal from 1996-1997. He graduated with a B.A. from San Jose State University where he was also executive editor of the daily student newspaper.

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