Archive for April, 2014

Pipeline Workshops: What Others Are Saying

Posted April 28, 2014 By Fletcher Groves

The first-ever open Pipeline workshop, sponsored by BuilderMT and Hanley Wood, was held last month, at the Ponte Vedra Inn and Club in Ponte Vedra Beach, Florida.  Some of the comments offered by attendees:

 

“The simulations were a brilliant way to demonstrate and drive home the significance of cycle time improvements and improving trade partner efficiencies on ROA and Net Income.”

— Keith Porterfield, COO, Goodall Homes, Gallatin, TN

“Pipeline workshops, through hands-on simulations and classroom instruction, provide excellent learning experiences to see WIP turns at different velocities, and the effects on Return on Assets.  The principles and disciplines, if applied in the field by you as a builder, will increase your ROA.”

— Scott Jagoe, President, Jagoe Homes, Owensboro, KY

“Last month, I participated in Fletcher Groves’ first-ever [BuilderVelocity] workshop, spending two days exploring the ins-and-outs of production, inventory, and scheduling.  It was quite intense, challenging, and not for the intellectually lazy.  We played repeated rounds of a building simulation game, and the students saw clearly that scheduling requires careful thought and planning;  otherwise, things quickly spin out of control, and chaos ensues.”

— Scott Sedam, President, TrueNorth Development, South Lyon, MI, excerpted from the April, 2014 issue of Professional Builder, “Taming the Chaos”

“The Pipeline Workshop is an extremely effective insight to production, for homebuilders of all sizes.  Whether your company builds 5, 50, 500 or 5000 units annually, you will leave this event with a deeper understanding of your company’s production capacity, and where you need to focus your attention, to perform at an optimal level.”

— Adam Roller, President/COO, IH First Coast, LLC, St. Augustine, FL;  an Inland Homes® Builder

“The Pipeline workshop quickly and clearly helped me realize our company’s mismanagement of the amount of work-in-process and job starts.  I believe our new thinking on those principles, along with the techniques we learned, will reduce our cycle times substantially.”

— Bob Anderson, Construction Manager, Stylecraft Homes, College Station, TX

“If [teammates] can utilize this information correctly and make good business decisions, owners are free to consult and finance rather than handhold.  I also thought that the interactive games really showed how everyday decisions can make-or-break your production pipeline.  If a start or a closing is delayed, the whole rhythm of the pipeline is off;  you can’t correct that disruption, since it is a function of time.  A [lost] start can never be made up.”

— Sara Flint, Controller, Homebuilder Solutions, LLC, Tampa, FL

 

Note:  a new condensed version of the production principles and simulations taught at Pipeline workshops will be presented in one of the breakout sessions at the Housing Leadership Summit in mid-May in Laguna Nigel, CA;  to register for HLS:  http://housingleadershipsummit.com/;  for information on future Pipeline workshops, periodically check the Pipeline workshop website:  http://buildervelocity.com/.

 

Architecture: Elegance and Allusion

Posted April 21, 2014 By Fletcher Groves

(first posted on Escape from Averageness in June, 2012)

After I was a commercial banker – and before I was a management consultant – I was a homebuilder.  There was a stint with Arthur Rutenberg Corporation, but the majority of my time in homebuilding coincided with my role as an in-fill residential developer.  The driving force – the focus of my energy and interest – was always residential architecture;  residential architecture, broadly and generally, but, particularly and specifically, the residential architecture of my native state of Florida and of the South.

An energy and interest in architecture is not enough to be a homebuilder or run a homebuilding company;  it is necessary (at least, desirable), but it is not sufficient.  I realize that, and I am fine with it;  my avocation does not need to be my vocation.  I like the consulting work that I do, I like that my clients are largely homebuilding companies, and – after all – I can build my own house anytime that I need to satisfy the tangible expression of my creative drive (everyone warned my wife, Devany, when we were married thirty-five years ago, that I would sell every home we ever had out from underneath her).

One of the qualities, or attributes, that I sought in the homes that my companies offered were designs that were hallmarks of elegance:  design and finish that was refined, dignified, and tasteful;  more to the point, design and finish that was simple, suitable to its purpose, easily-built, enduring, and appropriate;  plans that recalled the accuracy and practicality of master builders;  plans where fenestration, for example, made sense – worked – from a design standpoint.

The other attribute I sought was allusion:  an indirect reference and meaningful interpretation of historical design;  plans and materials that were native, indigenous, particular, familiar, informal, plainly simple;  designs that were re-collective, what is termed vernacular.

Ron Haase (Prof. Emer., University of Florida School of Architecture), on the matter of allusion, in his book Classic Cracker: Florida’s Wood-Frame Vernacular Architecture:

“ . . . architecture requires that we understand the potential in historic allusion, and how this idea differs significantly from that of historic illusion.  Illusion, after all, is mere copy, often shallow and only skin deep.  As such, it presents itself at a mockery of its historic precedent.  Historic allusion, on the other hand, digs deeper into the essential meaning of the precedent.  It is more critical in its response and more open-ended in its interpretation.  It takes the form of a metaphor heightening our awareness of its relationship to the original.  By doing so, we link history to the present and build a bridge of community across time.”

Elegance and Allusion:  two complementary design terms that are largely absent from the description and reality of the plan portfolios of most homebuilding companies.

Excuse from this discussion, homes built for individuals who can afford to build anything they want;  they have the right to do that, even if those custom, one-off designs are little more than indulgent expressions of personal net worth and affluence, and statements of their own perceived significance.

Excuse from this discussion, also, builders – like Art Rutenberg – who single-handedly defined their own style of architecture (even if that style has now edged into luxury and illusion).

Instead, focus on what remains, on what is the vast production-to-semi-custom span of the builder spectrum.

In that group, I see little of the design thinking that I have described.  Instead, I see complicated designs with impractical layouts and difficult dimensions.  I see plans with purposeless space, both size and volume.  I see plans with design elements that make no sense.  I see plans with no coherent scale.  I see fenestration without a working purpose.  I see a thoughtless confusion of style, with no connection to geography or history.  I see plans that offer a shallow illusion of architectural style, not a meaningful, interpretive allusion.

The point is not a strict typological adherence.  The point is that there is benefit in preserving the logic and order of the design elements found in various styles, be it formal, or vernacular, or regional.  The point is that there is benefit in reflecting the indigenous materials of a region.  There were, after all, practical reasons homes were built in this manner;  today, Lean design shares the same practical interests, in simplified roof designs, common dimensions, single plate heights, multiple floors sharing smaller footprints and roof areas.

There is no distinctiveness in shallow illusion.  Rather, allusion helps, particularly if it promotes regional distinctness.  And – distinctiveness resonates;  therefore, it sells.

Finally, there is a difference between inspiration and old-fashioned;  plans need to live for today, but harken to the past.

That elegance and allusion is still there, if we take the time to look for it;  it is still there, if we make the effort to create it.

 

Architectural Treasures of Early America Series is a ten-volume series (The National Historical Society, 1987) from material originally published in 1930 as The White Pine Series of Architectural Monographs.

American Vernacular (J. Kemp, Viking Penguin, 1987)

A Field Guide to American Architecture (C. Rifkind, Bonanza, 1980)

The Houses of St. Augustine (D. Nolan, Pineapple Press, 1995)

The American Builders Companion (A. Benjamin, Dover, 1827 orig., 1969)

Legacy from the Past (Colonial Williamsburg Foundation, 1971)

Charleston: Homes and Gardens (E. Davis, J. Iseley, Legacy, PSOC, 1975)

Historic Savannah (M. Bell, J. Iseley, Historic Savannah Foundation, 1982)

Plantations of the Low Country (Wm. Baldwin, A. Baldwin, J. Iseley, Legacy, 1985)

Caribbean Style (S. Slesin, S. Cliff, et al, Clarkson Potter, 1985)

Classic Cracker: Florida’s Wood-Frame Vernacular Architecture (R. Haase, Pineapple Press, 1992)

 

“Risen”

Posted April 18, 2014 By Fletcher Groves

(this entry is posted on “Escape from Averageness” every year, at Easter)

The intrepid, results-based consultant reclined into the natural seat, at the back edge of one of the dry-eddy pools, where the beach resumed its slope more steeply upward, toward the dunes.  She dug her bare feet into still-wet sand, and felt the remnant of last night’s high tide through her jeans and shirt.

It felt good, she thought, as she rested her arms on her knees, gazed eastward, and studied the movement of sea and sky.  She searched for the morning sun, only moments above the horizon, but still obscured on what was a surprisingly cool and overcast mid-April morning in northeast Florida.

She was comfortable in her element.  A seventh-generation Floridian, she loved the waters and land of her native state.  She wished she could have seen for herself the remnant of the Cracker Florida her dad liked to tell her about – the mid-twentieth century Florida of his youth, as he would describe it:  Florida before air conditioning, interstate highways, and theme parks.

This was her routine, every year, on Easter morning.

Her thoughts went back to the pre-dawn darkness of the first Easter morning, to what the disillusioned friends and followers of the one they called Jesus of Nazareth must have been thinking, as they hid in fear.  By every rational explanation and every shred of evidence, this man of so much promise, in whom they had placed so much hope, was dead.  They had been eyewitnesses to that unquestionable death, and the effects of the torture that preceded it.  She reminded herself that the term excruciating came from the Latin ex crucis, literally, “out of the cross”;  Roman crucifixions left nothing to the imagination.

They had been witnesses to his burial, and the intense security of his tomb.

For them, this was certainly more than the physical death of one man;  for them, it was the death of all faith and hope.

Her thoughts moved to a time, not far removed, at all, from the darkness of the days immediately following the death of Jesus, as Peter and others publicly asserted that they were the subsequent eyewitnesses to the effect of His resurrection and the actuality of His ascension, and that, far from abandoning their faith in fear for their own lives and succumbing to hopelessness, they were willing to live their lives – to give their lives – for the lives of others, and for the faith and the hope that His crucifixion, death and resurrection gave all of them.

So it has been, that decision, she thought, for every Christian, ever since.  So it was for her.

She smiled, and whispered.

“Risen”.

 

Cycle Time: Measured or Calculated?

Posted April 14, 2014 By Fletcher Groves

It is the most basic, most fundamental proposition of business:  the reason an enterprise exists is to make money;  the way it makes that money is through the value it delivers to customers and other stakeholders;  that value is delivered by the work the enterprise performs, and that work is performed in end-to-end sets of activities called processes.

The fact that the work performed in these processes is also what consumes an enterprises’ resources and occupies its capital, means that we need to pay attention to process workflow.  In particular, we need to pay attention to the duration of that workflow, what we call cycle time.

In a homebuilding company, the core-critical process – the aorta of value creation – is the process known as start-to-completion.  We all know that the cycle time of the start-to-completion process is the length of time required to build a house, expressed in days.

There are, however, two distinct methods for determining cycle time;  duration can be measured, or it can be calculated.

When it is measured, cycle time reveals the average duration – the statistical mean – of a specified group (range) of houses that were built.  When cycle time is calculated, it expresses the relationship between two important operating measures – the rate of closings and the amount of work-in-process – over a specified time period.

The measured and calculated versions of cycle time provide very different, but important, management perspectives.  One is about managing production as a system;  the other is about uncovering the forensics of problems, in order to prevent the further recurrence of errors and waste.

In your respective building companies, how do you treat cycle time?  Do you measure it?  Do you calculate it?

How do you use it?

 

Epic Partnering: Unifying the Value Stream

Posted April 6, 2014 By Fletcher Groves

One of the important takeaways from last month’s Pipeline workshop was the conclusion, drawn by a number of building company executives in attendance, that – in order for homebuilding production to be managed as a system – a notoriously fragmented value stream needs to be unified.

In their landmark 1996 book, Lean Thinking, Jim Womack and Dan Jones defined a value stream as “the set of all the specific actions required to bring a specific product (whether a good, a service, or, increasingly, a combination of the two) through the three critical management tasks of any business.”  They went on to describe a set of processes (that they termed tasks):  a problem-solving task, an information management task, and a physical transformation task.

By definition, a value stream does not belong to an industry;  a value stream is enterprise-specific;  each value stream belongs to its enterprise.

That fact notwithstanding, I challenge you to cite an industry vertical, in which the sequence of tasks in the most common versions of that industry’s core-critical process (start-to-completion, the physical transformation task) are performed by so many separate entities, as is commonly seen – and accepted – in the homebuilding industry.  Look at the value stream of any homebuilding enterprise, and you will find a myriad combination of independent, separately-owned, non-proprietary, non-exclusive, unaffiliated businesses with different goals.

In some of her final comments to the team at RB Builders (The Pipeline: A Picture of Homebuilding Production), the intrepid, results-based consultant reviews the components of RB Builders’ production management system, the RB-IPS, and has this to say about the final component:

“It is a production management system that specifies the means by which RB Builders fosters epic relationships of mutual interest with its building partners and supply partners.  The RB-IPS provides both the process and the program for progressively transforming subcontractors and suppliers into true partners, into trusted allies, joined by shared, mutual interests.”

Repeatedly, builders attending the Pipeline workshop stated – emphasized – the need for more partnering, more coordination, more cohesiveness, a more unified approach in managing their production.  These builders understood that they could not perform, with their own resources, “the set of all the specific actions” required to bring houses through the start-to-completion process;  they also understood that they could not command that it be done, or create competitive separation by attempting to do so.

They acknowledged the current shortage of skilled construction resources.

Set aside, for now, discussion about whether vertical integration has a strategic role going forward in the homebuilding industry (an area we explored in “The Road That Lies Ahead: The Giants’ Perspective on Growth Strategies, Consolidation and Other Issues” in the July, 2000 issue of Professional Builder).

Even if vertical integration never resonates in the homebuilding industry, success in unifying the effort of the existing value stream has profound ramifications, on both the margin component and the velocity component of Return on Assets;  and success in unifying the value stream has profound implications for creating competitive separation.

It will require Epic Partnering®.