Archive for July, 2015

Pipeline workshops™ are open events sponsored by BUILDER and Continuum Advisory Group.  They are size-limited, intense, interactive, comprehensive immersions into the principles and disciplines of homebuilding production.

In recent workshops, we have added the Lessons from the Pipeline© business case study and a robust set of problem-solving exercises built around the velocity accelerators, but most attendees and observers would still agree that the most compelling part of the Pipeline workshop™ is the Pipeline game™:  teams of geographically-diverse builders that are required to go through a progression of scenarios that is both a simulation of home building production and a business game.

It is the same Pipeline game™ we have used in recent years at the Housing Leadership Summit.

The objective of the Pipeline game™ is to reinforce the production principles taught in the Pipeline workshop™, including:  (1) the effect of variation on a production system, (2) pull scheduling according to the capacity of a constrained resource, and (3) the importance of connecting decisions made on operating matters (like flow, capacity, duration, and work-in-process) to the critical business outcomes of profitability and return on assets.

With multiple teams playing every game with exactly the same rules and understanding, the results never lie.

Look at the results from a recent workshop.  In every category – from throughput (closings), to work-in-process levels, to inventory turns, to cycle time, to net income, to return on assets – the teams made remarkable progress, often exceeding expectations.

You have to play the Pipeline game™, see the measures, and calculate the results for yourself, in order to fully understand what the metrics mean;  instead, focus on the performance trends (y-axis), as the games in this workshop progressed (x-axis).

This was Revenue . . .

Pipeline Revenue (capture)

This was inventory turn . . .

Pipeline Inventory Turn (capture)

This was cycle time, expressed in days . . .

Pipeline Cycle Time (capture)

This was Net Income Margin . . .

Pipeline Net Income (capture)

This was Return on Assets, a reflection of its co-equal components:  Net Income Margin (margin) and inventory turn (velocity) . . .

Pipeline ROA (capture)

After the initial shock of shattered instincts, every metric was in precisely the direction you would expect, if the production principles are true and if progress is being made.  Clearly, builders attending this Pipeline workshop™ learned from their participation.

They learned the principles and disciplines of homebuilding production.

Pipeline games™ are board games that teach builders to “see” production;  they simulate the fast-paced, rapidly-changing, uncertain, risk-laden, variation-filled environment in which homebuilding production decisions must be made.  It is learning based on experience and action, not words.

Pipeline games™ compress the learning curve, presenting production situations that are simple, fast, easy to see and understand, that can be modified and rerun, until the principles are understood.

In a Pipeline workshop™, the progression of the games mirrors the progression of the learning.  In the book that gave rise to the workshops (The Pipeline: A Picture of Homebuilding Production©), the games were described as follows:

“Change is a necessary condition to any improvement effort, but change is difficult, disruptive, time-consuming, and costly;  the effort can fail to produce the result.  Learning needs to occur without so much cost, disruption, and risk.  Managing production and improving operating and financial performance becomes intuitive and simple, but there is much to understand.  It is counter to what is taught, therefore, difficult to grasp;  it must be learned, and that is harsh when it occurs at the cost of real operating performance and actual business outcomes.”

 

The next Pipeline workshop™ is at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on October 14-15, 2015.  Cost is $795.00.  Early registration, open through July 31, 2015, is $645.00.

Sponsored by BUILDER and Continuum Advisory Group.

Details:  www.buildervelocity.com

 

Pipeline Workshops: Disruptive Learning

Posted July 19, 2015 By Fletcher Groves

Our goal is to continuously improve the Pipeline workshop™ experience.

The Pipeline game™ – which is both a production simulator and a business game, and what makes Pipeline workshops™ so intense, so interactive, so competitive, and so worthwhile – was already the best in the business;  this past year, we made it better, by shortening the duration and making the operating statement exactly like a homebuilding operation.  As a result, every operating decision that a team makes is now more consequential, the outcomes now easier to comprehend.

Clark Ellis and Brandon Hart of Continuum Advisory Group continue in their presentation and facilitation roles, bringing added heft:  CAG extends the legacy of FMI Corporation in the residential construction vertical space.

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Already known for its unique, engaging format, a Pipeline workshop™ is now even edgier in that regard;  almost all of the learning now occurs in production simulations and in business cases that mirror homebuilding operations.  Attendees are required to solve problems that challenge their knowledge and understanding of production principles.

The learning is decidedly disruptive to conventional, long-accepted ways of thinking;  Scott Sedam has aptly described a Pipeline workshop™ as being “intense, challenging, and not for the intellectually lazy”.

Creating a visual image of homebuilding production.  Making the connection between operating decisions and business outcomes.  Building a new way of thinking systemically – building a paradigm shift – towards solving core problems, managing limited capacity, dealing with variation, managing homebuilding production as the type of workflow that it truly is.  Placing an emphasis on the actions that accelerate velocity.

Join us.

 

The next Pipeline workshop™ is at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on October 14-15, 2015.  Cost is $795.00.  Early registration, open through July 31, 2015, is $645.00.

Sponsored by BUILDER and Continuum Advisory Group.

For more details:  www.buildervelocity.com

 

Pipeline Workshops: Right for you?

Posted July 12, 2015 By Fletcher Groves

Homebuilding production has to be managed as a system;  that system must first be understood, and without that understanding, production cannot be managed well.  Unfortunately, that type of ordered, process-centric, capacity-focused thinking is not the homebuilding industry’s natural tendency;  it clashes with the deal-driven, product-centric, margin-focused mentality that dominates the industry.

That understanding is going to be critical, because in the industry that has survived the worst economic and housing recession in three-quarters of a century, it’s not going to be a choice between higher margin or higher velocity;  it’s going to be the necessity of producing higher margins at higher velocities.

It is all about creating sustainable competitive separation.

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Pipeline workshops™ are a two-day immersion into the production physics – into the principles and disciplines – that enable homebuilders to thrive on the velocity side of economic return, on the velocity side of Return on Assets.

The understanding and expertise delivered in a Pipeline workshop™ pulls extensively from The Pipeline: A Picture of Homebuilding Production©, but it also relies on the depth of knowledge and experience that resides with Continuum Advisory Group and SAI Consulting, Inc.

Pipeline workshops™ are designed to transfer in-depth knowledge and create an intuitive, instinctive understanding of production principles and disciplines, focused specifically on homebuilding production management.  Pipeline workshops™ are not a lecture series;  the material is comprehensive, the learning is intense, and the format is interactive and competitive;  attendance is capped at 40 attendees.

Pipeline workshops™ use a progressive series of production scenarios that simulate homebuilding production in the real business world, in an environment of variation and uncertainty, where operating decisions produce economic results – sometimes good, oft-times bad, occasionally meeting or exceeding the budgeted performance, oft-times not.

Those results – good or bad, sufficient or deficient – are diagnosed at the conclusion of each game, so that the connection between operating decisions and business outcomes is clarified, and the principles and disciplines explained in the workshop sessions are reinforced.

What you acquire at a Pipeline workshop™:

  • a strong, visual image of a homebuilding production system – its purpose, size, cost, and capacity.
  • an elegant understanding of how operating decisions drive business outcomes, and how the measures of operating performance connect to the business outcome measures of profitability and economic return.
  • A set of mental models – an ordered manner of thinking – about the relationship and interaction of the dependent parts that comprise a homebuilding production system, providing a systemic approach to solving production problems and managing finite production capacity, and a blended approach to process and project portfolio management that addresses the unique attributes and parameters of homebuilding production.
  • a set of velocity accelerators – the Pipeline tactics, techniques, and practices dealing with partnering, scheduling, business processes, plan portfolios, and buyer expectations in a way that significantly produces shorter schedules, reduces build/cycle times, increases production throughput, and controls construction work-in-process.

Is a Pipeline workshop™ right for you? 

Pipeline workshops™ are not about job titles, operational scope, or company size.  They are intended for anyone charged with the critical responsibility of managing – or managing the interaction with – homebuilding production as a system at some level of a homebuilding enterprise.

Pipeline workshops™ are for those who must understand and manage homebuilding production, and drive results, including:

  • C-Level Executives – Presidents, CEOs, CFO’s
  • Division and Regional Managers
  • Vice Presidents of Operations and Construction
  • Vice Presidents of Sales
  • Production Managers
  • Construction Managers

Pipeline workshops are also a good experience for the equivalent positions with building trade partners – for the manufacturers, distributors, suppliers, and subcontractors who must interact with builders in the value stream.

 

The next Pipeline workshop™ will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on October 14-15, 2015.  Cost is $795.00.  Early registration, open through July 31, 2015, is $645.00.

Sponsored by BUILDER and Continuum Advisory Group.

For more details:  www.buildervelocity.com

 

Pipeline Workshops: What Builders Say About It

Posted July 5, 2015 By Fletcher Groves

In their own words:  comments from builders (and others) who have attended a Pipeline workshop™:

“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)

“All of our construction guys came back from the conference with a lot of new info.”  (Doug French, Vice President, Stylecraft Builders, Inc., College Station, TX)

“I participated in the 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.”  (Scott Sedam, President, TrueNorth Development, South Lyon, MI, excerpted from the April, 2014 issue of Professional Builder, “Taming the Chaos”)

“My clients can all benefit from the Pipeline workshop and simulation.  A powerful case for builders to pay attention not only to how much money they make on each home, but how fast they can turn their inventory.  In today’s market, when pricing power is limited by external forces and construction cost pressure is increasing, velocity is the most reliable lever for driving enterprise value.”  (Clark Ellis, Partner, Continuum Advisory Group, Raleigh, NC)

“[the] Pipeline workshop was by far the most engaging workshop I have attended to date.  The principles shared relate to home building companies of all shapes and sizes.  The two day program kept me engaged the entire time with a mix of lecture, open discussions and simulations of practical application.  I have already applied some of what I learned to my business and I’m looking forward to fantastic results.”  (Mark Refosco, President, Marcus Allen Homes, Arthur Rutenberg Homes franchisee, Jacksonville, FL)

“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)

“The simulations at [the] Pipeline workshop [were] a very innovative way to demonstrate the critical nature and relationship between cycle time, inventory turn, margin, and return on assets.  Both days were filled with learning, engagement, and inquiry that proved to be invaluable.”  (Vishaal Gupta, President, Park Square Homes, Orlando, FL)

“It is going to help our business refocus on what all of us already know, but lose focus of, in the haste to make money and sell as many homes as possible.  What we have learned will benefit [our] business and margins, if we become disciplined, [and] stick to the principles of the pipeline.”  (Sean Ward, Field Manager, Eagle Construction of Virginia, Richmond, VA)

“Think the same way, and you stay in the same place as everyone else;  challenge yourself with the new theories and strategies, and [you] become more effective in your company[y’s] achievement with your team.  You get to take these theories and teachings and immediately apply them in a simulation of the real world to test your skills against others, and that’s what this business is all about:  finding the right mix of everything to be the best.”  (Justin Parry, President, Parry Custom Homes, Irwin, PA)

“The value of [the] Pipeline [workshop] is you can leave a two-day workshop equipped with the necessary tools and knowledge to have an immediate impact on your company’s profitability, regardless of your role within the organization.”  (Brandon Hart. Senior Consultant, Continuum Advisory Group, Raleigh, NC)

“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)

“ROA is not discussed much in the building industry;  the focus has always been on margins per house.  Through the Pipeline workshop, you will learn that your company ROA is just as important to know as margins per house.”  (Mark Ivey, Owner, Ivey Residential, LLC, Evans, GA)

“I think the concept of ROA or inventory turn can be THE differentiator between success and failure in a production type environment.  It requires thought one level past the “P&L”, but will allow the manager that can recognize [its] impact and implement it, a major competitive advantage.”  (Wade Jurney, Wade Jurney Homes, Greensboro, NC)

“The Pipeline workshop provides full insight into the application of universal principles of production.  It provides clear and convincing proof that improving velocity will yield not only faster profits but greater profits.  I look forward to attend it again with some of my key staff.”  (Carlos Alvarez, President, Alvarez Construction)

“The Pipeline workshop was a great chance for my team to learn some excellent fundamentals for a better business in a very straightforward manner.  The instructors were superb, and the overall atmosphere was one of education, fun, and comradery.”  (David Savicki, Purchasing Manager, Cimarron Homes)

“It proved to be a great opportunity to enlighten our entire management team with a ‘higher level understanding’ of how our business works.”  (Craig Morrison, CEO, Cimarron Homes)

“The Pipeline workshop was an eye opening experience.  Not being an owner of the company, sometimes you don’t realize the impact day-to-day business decisions have on the true desired bottom line results of the company.  Playing the Pipeline game gave me that ‘ah-ha’ moment, seeing first-hand how those decisions can influence your bottom line.  I took away invaluable insight on what it takes to operate a profitable homebuilding company.”   (Daniel Hopkins, Director of Purchasing/Estimating, Jeff Benton Homes)

“As an owner of a home building company, intimately understanding the importance of home building production principles, as taught in the Pipeline workshop and book, and effectively implementing them in our building processes, will be critically important to becoming a best-of-breed builder in our competitive market.  Running our company using these home building production principles will not only allow us to weather the next downturn intact, but grow in a healthy way.”  (Josh Lysen, Principal, Merit Homes)

“The Pipeline workshop really took a different focus and approach than I was used to.  I enjoyed the group workshop forum that was very interactive.  It’s information that will long term and continually be thought about and digested in my day-to-day work.  It presented an interesting balance concerning the importance of cycle time in regards to the financial and operation spectrum.  It was challenging and thought-provoking.  The group games really brought the concepts to life.  I appreciated the “Accelerators” discussion that touched on some of the best practices and implementation.  The workshop challenged me to be a better leader in regards to velocity and its importance, as my Team and I will be looking for the best ways to apply the concepts to our business model.”  (Jeremy Tesimale, Production/Construction Manager, Essex Homes)

“The Pipeline is a concept that we, as a team, were aware of before coming to the seminar.  That said, being aware of it and being able to understand and implement are two very different things.  After going through the case study and the [simulations], we as a group went home better prepared to implement it in our company.  We feel that it will be a long-term building block for us going forward.”  (Justin Morrison, Vice President, Cimarron Homes)

“The Pipeline workshop conducted by SAI Consulting and Continuum Advisory Group was a straight-forward introduction to what matters most in the homebuilding industry…. Velocity!  Although many of the concepts reviewed are not new to most managers, the manner in which they were highlighted was eye-opening.  The case study, simulations, and discussion with the instructors made it crystal clear as to how to go back to my operation and implement immediate improvements.  The interaction amongst the diverse group of attendees was also invaluable.  How often do we get the opportunity to discuss best practices with others in our field?  The workshop was time and money well spent, and I’m already getting a return on my investment!”  (Mike Cancilla, General Manager, Essex Homes, SE)

 

The next Pipeline workshop™ will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on October 14-15, 2015.  Cost is $795.00.  Early registration, open through July 31, 2015, is $645.00.

Sponsored by BUILDER and Continuum Advisory Group.

For more details:  www.builderevelocity.com