Archive for July, 2018

Pipeline workshops™ are a size-limited, intense, interactive, comprehensive immersion into the principles and disciplines that drive homebuilding production.

Now in their fifth year, we have made a lot of additions and changes to improve these events.  For example, we have added the RB Builders: Lessons from the Pipeline© business case with its challenging set of problem-solving exercises, many of which deal with another component we have added, what we call the Velocity Accelerators®.

Still, most attendees and observers would tell you that the most compelling part of a Pipeline workshop™ is the Pipeline game™, in which teams of geographically-diverse builders go through a progression of production scenarios with business outcomes;  a simultaneous simulation that covers both the home building business and the business of building homes.

It is the same Pipeline game™ we have used at Housing Leadership Summits. at CertainTeed Builder Advisory Groups, at Builder 20 Groups, at Pipeline workshops™ held privately for large builders, and at Builder Technology Summits.

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.

The results never lie.

Look at the results from a previous workshop.  In every category – from Revenue, to Work-in-Process levels, to Inventory Turns, to Cycle Time, to Net Income, to Return on Assets – the teams made remarkable progress towards targeted performance, often exceeding expectations.  Look at the results, and you will see something else:  they rarely started out that way.

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

This was Revenue . . .

This was inventory turn . . .

This was cycle time, expressed in days . . .

This was Net Income Margin . . .

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

After the initial shock of shattered instincts, every metric was in precisely the direction you would want, precisely the direction you would expect, if the underlying production principles are true, and if real progress is being made.

Clearly, the builders attending this Pipeline workshop™ learned from their participation.  They learned the principles and disciplines of homebuilding production.

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

Pipeline games™ compress the learning curve.

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, Second Edition©), this is how they were described:

“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 desired – the intended – 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.”

Come.  Participate.  Learn.

 

The next Pipeline workshop™ will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on September 26-27, 2018  The cost is $895.00 per person;  for team pricing, ask flgroves@saiconsulting.com

Delivered by SAI Consulting and Continuum Advisory Group.

Sponsored by BUILDER, BuilderMT, and Specitup.

Details:  www.buildervelocity.com

 

Pipeline Workshops™: Improvements to the Game™

Posted July 21, 2018 By Fletcher Groves

“Pipeline games™ 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 games™ are a very innovative way to demonstrate the critical nature and relationship between cycle time, inventory turn, margin, and return on assets.”  (Vishaal Gupta, President, Park Square Homes, Orlando, FL)

Simulating production principles is a big part of every Pipeline workshop™.  We hear, over-and-over, that the opportunity to simulate production in a progressive series of scenarios is what enables builders to actually “see” production, to see production principles in action.  Because it is both a production simulator and a business game, the Pipeline game™ is what makes Pipeline workshops™ so intense, so interactive, and so competitive.

The Pipeline game™ has always been a tremendous tool for teaching both production and business principles, but we are never content.  We constantly improve it, introducing significant changes over the past five years that make it even more effective.

One of the earlier changes was to shorten the game, so that we could run more production scenarios in the same amount of time, and so that each operating decision became more consequential.  Another change, designed to make the game more realistic, was to have it depict the outsourced nature of homebuilding production as it is universally and currently performed.

That later change begs a deeper dive.

In the earliest version of the game, the resources that did the work reflected both capacity and the cost of that capacity;  the problem was, that arrangement more reflected a manufacturing operation than a homebuilding operation.  In order to realistically depict the current, outsourced nature of homebuilding production, capacity has to be separated from cost.

Why?  Because, the external resources that determine production capacity are a part of Cost of Sales (making them a direct, variable cost);  Cost of Sales is a measure of product cost, not capacity cost;  Operating Expense (the indirect, non-variable cost of internal resources) is what determines capacity cost.

Using the resources to reflect both capacity and cost required us to essentially disregard Revenue and Cost of Sales, and treat Throughput  (i.e., Gross Income) as Revenue.  In the improved version of the Pipeline game™, we restored Revenue and Cost of Sales to the picture, making Throughput (i.e., Gross Income) the residual;  in effect, we now account for the margin side of Return on Assets.

Because they do the work (not simply manage it), the external resources in a Pipeline game™ now define the production system’s capacity, and the cost of those resources is reflected in Cost of Sales, stipulated as a percentage of Revenue;  as it relates to Revenue, they are a direct, variable cost associated with the construction of a home.  Operating Expense is now an imposed cost, reflecting the budgeted cost of the internal capacity required to manage work-in-process;  that makes Operating Expense an indirect, non-variable cost, as it relates to Revenue, and the completions and closings that produce it.

This represents a significant stride in reconciling Revenue, Cost of Sales, Throughput, and Gross Income, making operating decisions easier to connect to financial outcomes.  The result is a production simulator and business game that is vastly more reflective of a homebuilding operation, with lessons that are now much easier for builders to understand.

This change continues to pay-off;  the Pipeline games™ keep getting better and better.

Being introduced at the upcoming Pipeline workshop™, one of the Pipeline games™ will compare the current, accepted growth and operations strategy (a completely outsourced building model) to a radically different growth and operations strategy (a completely integrated building model), in order to explore the difference between a strategy based on a broader, shallower footprint and one based on a narrower, deeper footprint.

 

Come.  Participate.  Learn.

The next Pipeline workshop™ will be held September 26-27, 2018, at the Ponte Vedra Inn and Club, in Ponte Vedra Beach, Florida.  Cost is $895.00;  for team pricing, inquire here:  flgroves@saiconsulting.com

Delivered by SAI Consulting and Continuum Advisory Group.

Sponsored by BUILDER, BuilderMT, and Specitup.

Details:  www.buildervelocity.com

 

Pipeline Workshops™: Disruptive Learning

Posted July 14, 2018 By Fletcher Groves

“The concept of production building being a ‘pipeline’, along with the simple and straight-forward concepts discussed in this seminar, made this one of the most eye-opening experiences I have ever had when it comes to learning about production building.”  (Patrick Bukszar, Dir. Construction Services, Essex Homes, Lexington, SC)

“The Pipeline workshop™ was an eye opening experience.  I took away invaluable insight on what it takes to operate a profitable homebuilding company.”   (Daniel Hopkins, Director of Purchasing/Estimating, Jeff Benton Homes, Huntsville, AL)

“It was quite intense, challenging, and not for the intellectually lazy”. (Scott Sedam, President, TrueNorth Development, South Lyon, MI)

In relentlessly improving Pipeline workshops™, our intent – simply, plainly – is to open the eyes of the builders that attend, open them wider than they have ever been opened, and to make the learning as disruptive as possible to conventional, long-accepted ways of thinking.

We don’t want to just inform attendees’ thinking;  we want to reform and re-form it.  We want to change their thinking about homebuilding production, and, in so doing, rebuild it as a new understanding of homebuilding production.

To that end, we use two terrific tools:

Both a production simulator and a business game, Pipeline games™ are what make Pipeline workshops™ so intense, so interactive, so competitive, and so worthwhile.  Already the best production sim in the business, we have made the Pipeline game™ even better over the years, shortening its duration and making the operating statement look exactly like a homebuilding operation.

Developed specifically for Pipeline workshops™, the RB Builders: Lessons from the Pipeline© business case is a business case that presents a set of problems related to a very realistic homebuilding operation, problems that attendees are required to solve;  it is a test that challenges their knowledge and understanding of production principles.

The use of Pipeline games™ and the RB Builders: Lessons from the Pipeline© business case makes a Pipeline workshop™ – already known for its unique, engaging format – a much sharper learning experience.

Pipeline workshops™:  creating a visual image of homebuilding production;  making the connection between operating decisions and the business outcomes those decisions drive;  ushering in a new way of systems-oriented thinking – a paradigm shift – towards solving core problems, managing constrained capacity, dealing with variation and uncertainty, and managing homebuilding production as the type and mix of workflow that it actually is;  emphasizing the actions that enable builders to thrive on the velocity side of Return on Assets.

 

Come.  Participate.  Learn.

The next Pipeline workshop™ will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on September 26-27, 2018.  The cost is $895.00 per person;  for team pricing, inquire here (flgroves@saiconsulting.com).

Delivered by SAI Consulting and Continuum Advisory Group

Sponsored by BUILDER, BuilderMT, and Specitup.

For more details:  www.buildervelocity.com

 

Pipeline Workshops™: More of What Builders Say About It

Posted July 7, 2018 By Fletcher Groves

In their own words, more comments from builders who have attended a Pipeline workshop™:

“The Pipeline Workshop™ and associated business case study was an excellent way to help me shift my production paradigms, from growing capacity to maximizing my current capacity.”  (Chris Harrison, Vice President, Field Operations and Land Development, Dorn Homes)

“The concept of production building being in a “Pipeline”, along with the simple and straight-forward concepts discussed in this seminar made this one of the most eye-opening experiences I have ever had when it comes to learning about production building.  I would definitely recommend this seminar to any building company looking to gain a competitive advantage and to learn ways to do more with less.  The hands-on learning approach and interaction with other builders from around the country was invaluable.”   (Patrick Bukszar, Director of Construction Services, Essex Homes, Lexington, SC)

“The exercises and processes opened my eyes to immediate steps I had to take to become a better builder.”  (Lusant Ordonez, CEO, Zenodro Homes, Altamonte Springs, FL)

“[In many] classes, you get a lot of great ideas, but never act on them.  The impact [of] this class resonated in many ways, and has spurred us to take two immediate actions:  (1) hiring the design center manager that we did not think we could afford;  and (2) beginning the implementation to Critical Chain Project Management.  It was very clear;  we have been penny-wise and pound-foolish in not hiring a strong manager for our design center, and the impact of Critical Chain will be huge on the way we conduct business.”  (Karl Haslinger, CEO, Essex Homes, Lexington, SC)

“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, Huntsville, AL)

“The workshop was really effective in showing how operational decisions affect business outcomes and how risky a ‘more for more’ approach to growing a home building company really is.  The Pipeline games™ were not only fun, but they were super-effective in showing how unbalancing the production system, managing the constraint resource, and managing the right amount of WIP creates predictable operational results and maximizes financial outcomes.

“At the end of the day, running a successful business is about how much money you make on the amount of money you invest.  The Pipeline workshop™ helped me understand this better than any workshop or seminar I’ve ever attended.  I highly recommend it.

“This workshop was really eye-opening!”  (Charles Roberts, Vice President – Operations, Providence Homes, Jacksonville, FL)

“I thoroughly enjoyed the [Pipeline workshop™] and all its learning components!  It does a great job of creating a visual image of homebuilding production, while connecting operating performance to business outcomes.  The workshop is a must for anyone at any level within a homebuilding organization, and goes well-beyond what you get out of [reading The Pipeline: A Picture of Homebuilding Production©].”  (Val Snider, Construction Manager, Lennar SE Florida)

“If [teammates] can utilize this information correctly and make good business decisions, owners are free to consult and finance rather than hand-hold.  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, CFO, Inland Homebuilding Group, Tampa, FL)

“I highly recommend the Pipeline Workshop™.  The concepts learned have directly affected my building process in a positive way.  Implementation [of these principles] will guarantee a ‘more-for-less’ mentality in any home building operation.”  (Sebastian Alvarez, Member, Alvarez Construction, Baton Rouge, LA)

“The Pipeline Workshop™ really opened my eyes to how a company’s operating performance truly impacts business outcome.  These are things that I already knew, but the workshop caused me to start thinking about it in a different way.  For example, some companies’ motto, including ours, is to put out as many starts as we can, then sort it out in the field. After attending the workshop, I realized how counterproductive this way of thinking is;  releasing more starts than our ‘pipeline’ can support is actually going to cause us to perform worse.”  (Darek Burns, Purchasing and Estimating Manager, Essex Homes, Charlotte, NC)

“[Pipeline workshop™] 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], our team 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, Durham, NC)

“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 “Velocity 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, Lexington, SC)

“This [Pipeline Workshop™] is one of the best I have ever attended in my 30 years in the homebuilding Industry.  The way [the Pipeline game™ is incorporated] into the learning is fantastic!  This course should be attended by all construction staff of any company.”  (Reed Williams, President, Central Florida Region, Inland Homebuilding Group)

“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, Vice President – Operations, Stylecraft Homes, College Station, TX)

“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)

“[The Pipeline Workshop™] allowed me to step outside of my department and see the industry on a wider scale.  The Pipeline Game™ was a great visual tool that emphasized the importance that velocity plays in home building.  It has allowed me to begin thinking creatively about the ways I can improve my department to ultimately improve our companies velocity overall.”  (Alexa Drees, Design Consultant, Drees Homes, Jacksonville, FL)

“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, Durham, NC)

“If you are looking for a way to remove status quo from your operations, you need to attend the Pipeline Workshop™.”  (Marisa Clark, Regional Sales Manager, Constellation HB Systems)

[The Pipeline workshop™ was] “eye-opening and thought-provoking.  The topics outlined functional business tools and methods for the current business environment.”  (Ken Colen, President, ON TOP OF THE WORLD Communities, Orlando FL)

 

Come.  Participate.  Learn.

The next Pipeline workshop™ will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on September 26-27, 2018.  The cost is $895.00 per person;  for team pricing, contact: (flgroves@saiconsulting.com).

Delivered by SAI Consulting and Continuum Advisory Group

Sponsored by BUILDER, BuilderMT, and Specitup.

For more details:  www.buildervelocity.com