Archive for December, 2013

Final Vision

Posted December 26, 2013 By Fletcher Groves

In recent years, these words of Oswald Chambers have become the final post of the year on Escape from Averageness, the encouragement and assurance we wish to share with our clients, colleagues, and friends, for the year ahead.

 

December 31, 2013

The Final Vision of the Exalted Lord

Matthew 28: 16-20

 

By His Ascension, our Lord raises Himself to glory, He becomes omnipotent, omniscient, and omnipresent.

All the splendid power, so circumscribed in His earthly life, becomes omnipotence;  all the wisdom and insight, so precious but so limited during His life on earth, becomes omniscience;  all the unspeakable comfort of the presence of Jesus, so confined to a few in His earthly life, becomes omnipresence, He is with us all the days.

What kind of Lord Jesus have we?  Is He the All-powerful God in our present circumstances, in our present setting?  Is he the All-wise God of our thinking and our planning?  Is He the Ever-present God, “closer than breathing, nearer than hands or feet”?

If He is, we know what it means to “abide under the shadow of the Almighty”.

 

Still Higher for His Highest, Oswald Chambers (compiled by D.W. Lambert, 1970)

 

“God with Us”

Posted December 16, 2013 By Fletcher Groves

(an updated version of this entry appears on Escape from Averageness every year, at Christmas)

 

The intrepid, results-based consultant reclined in the desk chair, put her feet on the desk, and smiled at the young man crawling across the oriental rug towards her.  Quite a difference one year had made in the life of her young and growing family.  Looking around the home office, she thought about the changes that came from rarely being on the road anymore;  about being able to work most days in whatever she worked out in;  about needing to engineer a separation between personal and work life, where before, it had naturally existed.

Her cell phone rang.  It was an old business friend.  “Where are you?”, he asked.

“Home.”

Home.  Simply, home.  The last week of meaningful work for the year.  She was looking forward to a well-deserved break with her family – her now-larger family – and friends.

They talked about families, about well-being, and then about business.  “How was 2013?”, he finally asked.  “And – how are you doing?  There have been a lot of life-changes.”

“It’s different, I have to admit”, she said.  “I work so much from home now.  And – I’ve got this great little guy that needs me.  Some things that do need to change never seem to change;  the seventh year of six-figure declines from personal peak consulting income has been almost as much fun as the first six.”

She laughed as she said it, but it was a tired joke, told too many times, for too many years.  She thought about the duration and the cost, and shook her head.  It seemed like a lost decade.  She was grateful she could still find the humor in it, but it was a heavier lift;  she had to count the years on her fingers to make sure the number of years was right.

“But, I finished The Pipeline and published it.  Builders buy it, and seem agree that the production principles and disciplines have been missing and are necessary.  And, it has lead towards what we want to become a series of public sponsored workshops.  The first event is in March, and – since it’s here – I won’t have to travel;  another advantage of choosing to work where I live.  And, professionally, that’s where I want to be;  as it comes back, I want to turn more of the road work over to the other consultants.

“In every way that really matters, I am doing very well.”

“In that case, Merry Christmas”, he said.

“Same to you.”

Her mind turned away from work.  She thought about the birth of her own first-born child, the hope and apprehension, the joy and inevitable challenges, the changes to their lives, the newness it had brought.  Her thoughts turned to Christmas, the one almost here and each previous one.

And, she thought about the first Christmas.

She wondered what the tiny town of Bethlehem must have been like, so long ago.  She thought about another young mother and father, who had made their trip with few resources, facing an uncertain future.  She thought about their own soon-to-be-born son.  To almost everyone else, he was just another faceless child, born in an insignificant city, into a world under the control of the Roman Empire.

She considered the character, the attributes of the Creator of the universe, the Author of all that is good.  She thought about His grace and mercy.  She thought about the words of the apostle Paul, buried deep in his first letter to the small group of believers in Corinth, describing faith, hope, and love, the principles of the grace she now pondered.

She leaned further back into her chair and closed her eyes.  “Thank you”, she prayed, softly.

“Thank you for giving me a faith that looks back into history and trusts that the claims this child would one day make about Himself are true, and that every moment of time and event of history either points towards, or proceeds from, that truth.

“Thank you also for giving me a hope that understands eternity means never-ending, not just somewhere-down-the-road;  thank you for giving me a hope that looks forward from the perspective of the eternal life I have right now, but also understands that, one day, this world – with its share of both joy and pain, and varying degrees of fulfillment – will end, and I will live, constantly and eternally, in Your presence.”

The intrepid, results-based consultant thought about a final point of gratitude, considering how everyone else viewed her as such a practical, in-the-moment realist.

“And, yes, thank you for giving me a love that will sustain me, motivate me, and give me purpose and perspective, until either Christ returns, or until You call me home.”

The intrepid, results-based consultant thought about the events of that night, so long ago.  There was a birth.  Later, there would be a death and a resurrection.  In between, there would be an earthly life.

“In Him was life, and the life was the light of men.”  (John 1:4).  Her thoughts were about newness and life.

“And you shall call His name Immanuel.”  (Is. 7:14)

“God with us.”

 

“What is it about the job schedule that you manage?”

Posted December 8, 2013 By Fletcher Groves

(excerpted from The Pipeline)

 

“Let me ask you a question”, said the intrepid, results-based consultant, directing it to the superintendents and VP of Construction.  “As it now stands, what is it that you would say you actually ‘manage’ in the RB Builders’ production system?”

“We manage our jobs”, replied a superintendent.  “We manage the jobsite.  We manage the job schedule.  We manage the job quality.  We manage the job budgets.”

“Fair enough”, she said.  “That was too broad.  Let me rephrase it.  Among your other job-related tasks, you say you manage the job schedule.  What is it about the job schedule that you currently manage?”

“We manage the tasks”, replied the superintendent.  “We manage the tasks according to the job schedule, which means we get the tasks started as soon as we can, and we try to get the tasks finished on-time.  Somewhere in all of that, the resource conflicts you were describing get worked out, not always to everyone’s satisfaction.”

“Since you manage the tasks on each job”, she continued, “then I presume you also know the completion date of each task, the start date of the next task, the completion date of the job, and whether or not the job will finish on-time.

“Am I right?”

“I’m sure we think we do, but we really don’t know completion dates, not with any level of confidence”, said the VP of Construction, glowering at the cluster of superintendents.  “She’s right, and you guys know it.  We have already admitted that we don’t come close to meeting our completion dates, even though we all agree that our job schedules provide significantly more time than we need to build a house.”

“The problem is, every time a task finishes late or is delayed, the job schedule moves the job completion date out.  The revisions to the job schedules are constant.  But, we still don’t know whether the job is going to be completed within even the new time.  There is variation and uncertainty in every job, and it extends all the way through it.

“Regardless of whether the first 10 tasks finish early, on-time, or late, there is no way to see where we really are in terms of overall completion, because the next 10 tasks could be a completely different outcome.  The padded duration of each individual task only protects that task – not very well, I might add – and does nothing to protect or insure the on-time performance of the job/project.

“Clearly, there are problems.  We know that.”

 

(The Pipeline: A Picture of Homebuilding Production is available on the publisher website (virtualbookworm.com), through the author website (thepipelinebook.com), as well as amazon.com, barnesandnoble.com, and booksamillion.com)

 

Pipeline Workshops: Think you know this stuff? Take the quiz.

Posted December 1, 2013 By Fletcher Groves

“In fact, [asset] turnover is just as important as profit margin.”  Barron’s Accounting Handbook (Siegel, Shim), 1990, 1997, p. 150.

The fundamental understanding that emerges from the DuPont identity:  Remove the financial leverage (equity multiplier) from the equation, and economic return becomes a function of profitability (Return on Sales) and operating efficiency (Asset Turnover).  Economic return is margin x velocity;  a builder’s Return on Assets is always equally dependent upon those two components.

Nevertheless, in the homebuilding industry, interest and action on the velocity side of Return on Assets takes a backseat to interest and action on the margin side of ROA.  As a result of this short-sightedness, whatever operating efficiency ever existed in this industry is constantly being atrophied by disinterest and inaction.

Is margin proficiency necessary?  Yes.  Is it sufficient?  No.  Does it hold-forth the possibility of ever achieving sustainable competitive separation?  No.

Pipeline workshops are aimed at changing that paradigm, changing that illusion.  But, the motivation to attend a Pipeline workshop starts with a willingness to acknowledge and remedy what is a profound lack of knowledge regarding production principles and disciplines.

Think you know this stuff?  There’s one way to find out.  Take a short production quiz (answers are at the bottom).

  1. The best image of a production system is a pipeline.  What is the measure of the pipeline’s size?  What is the measure of its capacity?  What is the measure of its length?  What is the measure of its cost?
  2. True or False:  Even-flow production is an outcome, not a mechanism.
  3. From an operational perspective, there are only three activities that answer the question:  “What happens to money?”  The terms for those activities can be used to fully express – and, therefore, link – the equations for productivity, cycle time, and inventory turn, to the equations for Net Income, and Return on Assets.  What are those terms?
  4. True or False:  A production system with balanced capacity across all resources will do a better job of optimizing the utilization of a system’s capacity than one where capacity is not balanced across all resources.
  5. In what three ways will any production system buffer (protect) itself from variation?
  6. True or False:  In job scheduling, the Critical Path Method (CPM) considers task dependency, but not resource contention.
  7. Calculating the duration (cycle time) of any production process requires the knowledge of two operational measures.  What are they?
  8. True or False:  Task durations (for example, the phases in a job schedule) should have enough safety to insure a high certainty of on-time completion.
  9. Lean Production views homebuilding as a build-to-order process.  Which resource does Lean recommend using to set the pace of production?
  10. True or False:  CCPM (Critical Chain Project Management) does not adjust the job schedule according to when phases finish, whether early or late.
  11. What three human behavioral tendencies tend to waste the time safety built into a schedule?
  12. As a matter of standard deviation, increasing the probability that a task will finish on-time, from 50% probability to a “highly certain” 95% probability, will cause the anticipated duration of the task to increase by a factor of how much?

Like any quiz, these questions represent but a very small portion of the production and business knowledge required to effectively manage homebuilding production, increase operating performance, generate higher Net Income, and improve Return on Assets.

Ultimately, every homebuilding company has to determine how it will manage production within a specific context, within the parameters that comprise its market, its product mix, its choice of an information/management technology system, its financial situation.

But, the ability to manage production starts – it starts – with an understanding of the underlying principles and disciplines.

It starts with what you learn in a Pipeline workshop.

 

(The first Pipeline workshop will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on March 12-13, 2014.  Cost is $750.00.  Early registration (through December 10, 2013) is $600.00)

Delivered by SAI Consulting.  Sponsored by BuilderMT and Big Builder (Hanley Wood).

For more details:  www.buildervelocity.com

 

Answers:  (1) size is a reflection of the amount of work-in-process, capacity is the rate of output produced with a planned, finite, and controlled amount of work-in-process, length is cycle time, cost is all of the indirect, non-variable expenses associated with overhead;  (2) True;  (3) money generated through sales is called Throughput, money invested in whatever will be turned into Throughput is known as Inventory or Investment, and money spent turning Inventory into Throughput is called Operating Expense;  (4) False;  (5) higher work-in-process, longer duration, or excess capacity;  (6) True;  (7) work-in-process and throughput, expressed in units;  (8) False;  (9) the most capacity-constrained resource;  (10) True;  (11) Student Syndrome (wait to start until too late), Parkinson Law (expand to time allowed), and multi-tasking (dividing work between multiple jobs);  (12) factor of 1.64, reciprocal of .61; four out of every 10 days in the schedule are safety to assure on-time completion.