Archive for November, 2018

Pipeline Workshop™ No. 11: Save the Date

Posted November 26, 2018 By Fletcher Groves

The next in the series of production management workshops in the open, sponsored Pipeline channel, Pipeline Workshop™ No. 11 will be held March 20-21, 2019, at the Ponte Vedra Inn and Club in Ponte Vedra Beach, Florida.

“This is my second attendance to the Pipeline Workshops™.  All I can simply say is WOW!  Fletcher and his team strive to improve the workshops and make [them] even more relevant.  I especially enjoyed playing the Pipeline Game™ again  and learning about [the] Velocity Accelerators®.  I look forward to attending in the future!”  (Carlos Alvarez, President, Alvarez Homes, Baton Rouge, LA)

“The Pipeline 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.”  (Charles Roberts, VP – Operations, Providence Homes, Jacksonville, Florida)

Welcome to the most intense, demanding, interactive, and challenging homebuilding production management learning experience on the planet.

And – it just keeps getting better.

In recent workshops, we have trended toward doing more with the Velocity Accelerators®;  for Pipeline Workshop™ No. 11, we are narrowing the focus, reducing the number of deeper-dives from five to just three – Business Process Improvement, Critical Chain Project Management, and Epic Partnering™ – and touching on the remainder.  The emphasis will now be more on what is immediately-available, while still casting a vision toward the future.

Doing fewer Velocity Accelerators® will allow us to do more scenarios with the production simulator and business game famously known as the Pipeline game™.  Over the course of the Pipeline workshops™, now in their sixth year, we have:  (1) shortened the game, made it faster and easier to understand;  (2) introduced an operating statement format that mirrors the attributes of homebuilding operations;  (3) found ways to transfer the learning – make the connection between operating decisions and business outcomes – faster;  and (4) started to examine areas of disruptive innovation.

Pipeline workshops™ are unlike any other homebuilding conference.

The learning split is 70% simulation/business case, only 30% lecture;  the format is intense, interactive and competitive;  the Pipeline game™ production simulations and the RB Builders: Lessons from the Pipeline© business case test attendees’ understanding of production management and challenge their ability to solve production problems.

Pipeline workshops™ build an intuitive, instinctive understanding of production principles and disciplines, and they draw the subtle-yet-crucial distinction between being in the homebuilding business and being in the business of building homes.

And – we somehow make it all incredibly fun:  the Ponte Vedra Inn and Club is a terrific AAA Five Diamond oceanfront golf and tennis resort venue;  there is a relaxing and enjoyable reception at the end of the first day;  recommendations on outstanding local dining;  plenty of opportunity for networking.

Creating a visual image of homebuilding production;  establishing the connection between operating decisions and business outcomes;  building a new way of thinking systemically towards solving core problems and managing constraints;  managing limited capacity and resources, doing more with less;  dealing with variation;  managing homebuilding production for what it is – workflow that is multi-project with surrounding, supporting, and embedded processes;  placing the emphasis on the actions that accelerate production velocity, that do more with less.

The fundamental proposition of a Pipeline workshop™ is this:  thriving on the velocity side of economic return – thriving on the velocity side of Return on Assets – is the best way to create sustainable competitive separation.

Registration for Pipeline Workshop™ No. 11 opens December 3, 2018.

Come.  Participate.  Learn.

 

Here is the permanent link to the website:  www.buildervelocity.com  As soon as early registration opens, all of the information, including the agenda and schedule, will be updated, along with the event registration and hotel reservation links.

The site also provides information about the workshop, provides reviews from builders who have attended previous workshops, and provides a downloadable Adobe PDF file with detailed information about the venue, agenda, and schedule.

The cost is $895.00 per person;  the cost during early registration (opens December 3, 2018, runs through January 3, 2019) is $750.00;  for team pricing, inquire here (flgroves@saiconsulting.com).

Sponsored by MiTek Industries and Specitup.

 

“Our production system is a ‘pull’ system, but that wasn’t always the case”, the CEO said.  “The current system – which is new – replaced a ‘push’ system.  Like the current system, the old system had a start matrix, too, but it controlled both the rate and order of starts in a community.

“The starts slotted into the start matrix were regarded as untouchable – once they were scheduled, starts were not supposed to be missed under any circumstance.

©Mark Eaton, Dreamstime.com

“It was noted that the entire building process is protected by a buffer of available starts, which protects the start matrix from fluctuation in sales with an ‘inventory’ of starts.  That’s what we call the start buffer, and it actually sits in front of the start-to-completion process.

“Every other homebuilder proudly calls this their ‘sales backlog’, as if having a six-month backlog of contracts that they can’t start is something they actually want.  Under the old system, we looked at the backlog that way, too – the longer the backlog, the better.  We would sell a house in April, with no intention of starting it until October.  Now, we take a different approach.

“If our controls will allow the start, we certainly don’t want to miss it, but – over time – we concluded that a start buffer with a 60-day backlog provides sufficient protection for the start matrix, and corresponds to the current length of the contract-to-start process.  Any lengthier backlog – a start buffer that’s any larger – is muda; too much to manage, too much that can change.  Our homebuyers hate the wait, and it really is counter-productive.

“Under our old system, the matrix did a good job of producing starts at an even rate, and gave needed order to what was previously a totally chaotic process, but pushing starts into the system without regard to the throughput – the rate of closings – resulted in higher levels of work-in-process.  Absent any increase in either productivity or production capacity, RB Builders’ cycle times would lengthen, to the point of sometimes reducing the rate of closings.”

The intrepid, results-based consultant picked up where the CEO left off.

“That’s a good explanation”, she said.  “For most of us, once we’ve had a chance to think about it, ‘pull’ makes immediate sense, because it is linked to the demand that justifies the production.  But, the issue of capacity – whether it should be balanced or unbalanced – is less intuitive.

“It is a paradox.  It is a paradox that a production system with balanced capacity cannot achieve an even rate of production.  The term ‘balanced capacity’ means a production system that has its capacity distributed evenly throughout the system”, she explained.  “It means a production system designed with the same capacity at every resource.

“A production system with the same production capacity at every resource – in other words, a system that purposely levels its capacity across all of its resources – cannot have even-flow production.  Intuitively, we believe the opposite, that a ‘balanced’ system – one in which resources have the same capacity – produces balanced results.  However, in a production system with balanced capacity, variation and uncertainty anywhere in the system will affect production everywhere in the system, making it impossible to control or predict.

“Moreover, production systems with balanced capacity tend to be very rigid and difficult to manage.  They are not the adaptable, agile, easily-managed system we want RB Builders’ production system to be.

“Even-flow production – which we want – is an outcome, not a mechanism.  In order to have an even rate of production, we have to purposely unbalance the system that produces it, and create production ‘pull’ instead of production ‘push’.  We have to live with some amount of excess or reserve capacity on the non-constraint, on the non-pacemaker resources.”

“Doesn’t this fly in the face of Lean and TPS?”, asked the VP of Construction.  “If we want to embrace Lean Homebuilding, don’t we have to do heijunka – don’t we have to do production leveling?”

“In a controlled manufacturing environment with continuous flow, production leveling works”, said the intrepid, results-based consultant.  “The plant can move equipment, cross-train workers to do other workers’ jobs, shift production cells, change product mixes, adjust production runs, etc.  Problems can be solved much more rapidly in that environment.

“However, in an environment like homebuilding, heijunka is exponentially more difficult to achieve.  Homebuilding is not a controlled manufacturing environment.  It is the equivalent of building cars in people’s driveways.  Instead of teammates, we have trade partners that are independent sub-contractors and suppliers, who also work for our competition.  We deliver materials to hundreds of jobsites.  The more inherent variation and uncertainty is to a process, the more difficult it becomes to level production.

“Moreover, homebuilding is not the continuous, single-piece flow process that Lean prefers.  It is a build-to-order process”, she said, motioning for the SR Chorus to keep their seats.  “Lean gives you its first clue about the feasibility of production leveling in a build-to-order process, by recommending that the most constrained resource – the bottleneck – become the pacemaker.  If the capacity and production rate of every resource is leveled to the capacity and production rate of the constraint, then, theoretically, there is no constraint.  And – theoretically – you would have unlimited capacity.

“Yet, we know systems do not have unlimited capacity.  There is always a constraint.  There is always a weakest link in the chain.  We are far better served purposefully placing the constraint and subordinating everything else to it, than we are fighting for a system with balanced capacity.”

 

(excerpted from The Pipeline: A Picture of Homebuilding Production, Second Edition©,  published in Escape from Averageness® in March 2012 under the title Lean Homebuilding:  “Even-flow is an outcome, not a mechanism.”)