Archive for June, 2020

Pipeline Workshops™: Come. Participate. Learn.

Posted June 28, 2020 By Fletcher Groves

In the weeks leading up to a Pipeline workshop™, we explain to attendees what they are about to experience.  We describe the tools that they will have to learn to use, the facts of the business case they will have to confront.  We forecast the take-aways, the knowledge, the enhanced capabilities.

We explain the challenging, disruptive, competitive nature of the learning they will experience – the degree of interaction, the level of intensity.

At a Pipeline workshop™, it is learn-by-doing, applying production principles and disciplines to production simulation, and measuring the resulting operating performance and economic return.  We communicate our expectation that builders come prepared to learn that way, that there is no place to hide, that they need to check their sense of entitlement at the door.

Despite all of this, most attendees admit afterward they should have studied more, prepared harder, in advance of the workshop.

We make no apologies for the extraordinarily demanding nature of a Pipeline workshop™.  It is intended to not just inform your thinking, but also to reform – and to re-form – that thinking.  It is designed to challenge your beliefs, to change the way you see production.

Pipeline workshops™ are intended to test your understanding of how homebuilding production systems work and how daily operating decisions drive business outcomes.

We constantly remind builders: there is a big difference – a big difference – between being in the home building business, and being in the business of building homes.

You have to come to a Pipeline workshop™ prepared for what is going to be thrown at you.

Here are examples of what we are talking about:  the RB Builders: Lessons from the Pipeline© business case, which is revised every year, requires the use of financial tools like Breakeven Analysis (using a variable costing approach, using Cost-Volume-Profit Analysis), the DuPont identity (for determining ROA), and the Cost of Variation.  It requires an understanding of production physics, including Little’s Law* and the Law of Variability Buffering.  It requires the application of a combination of improvement methodologies (Theory of Constraints, Lean Production, Six Sigma).

You can read the book.  The Pipeline: A Picture of Homebuilding Production, Second Edition© is always carried in stock on amazon.com;  it is also available (print-on-demand) directly from the publisher’s bookstore (virtualbookworm.com).

If you want it all handed to you, don’t bother to attend.  If all you care about is binder material you can underline and put on your bookshelf, don’t waste your time.  If you aren’t willing to own what you take away from it, a Pipeline workshop™ is not for you.  If you believe improving the margin side of Return on Assets is the only game in town, a Pipeline workshop™ is about a different game.

On the other hand, if you are determined to create sustainable competitive separation, by learning to thrive on the velocity side of Return on Assets®, by learning to excel at a discipline that other builders find too difficult, too rigorous, too daunting, then a Pipeline workshop™ is precisely the right place for you to be.

Come.  Participate.  Learn.

 

Pipeline workshop™ No. 14 will be held October 21-22, 2020, at the Ponte Vedra Inn and Club, in Ponte Vedra Beach, Florida.  The cost is $895.00;  the cost during early registration, open July 1, 2020 through August 31, 2020, is $750.00;  for team pricing, ask (flgroves@saiconsulting.com).

Sponsored by Specitup and Simpson Strong-Tie.

For more details:  www.buildervelocity.com

*We will entice you a bit with Little’s Law.  Consider this scenario:  C/T=120 days;  WIP=80;  Closings=240.  Little’s Law says:  CT = (WIP ÷ C) x 360;  WIP = (CT x C) ÷ 360;  C = (WIP ÷ CT) x 360.  Therefore:  CT = (80 ÷ 240) x 360 = 120 days;  WIP = (120 x 240) ÷ 360 = 80 units;  C = (80 ÷ 120) x 360 = 240 closings.

 

Pipeline Workshop™ No. 14: Save the Date

Posted June 22, 2020 By Fletcher Groves

Pipeline Workshop™ No. 14, the latest in the series of production management workshops in the open, sponsored Pipeline channel, will be held October 21-22, 2020, at the Ponte Vedra Inn and Club in Ponte Vedra Beach, Florida.

It is sponsored, again, by Simpson Strong-Tie and Specitup.

We know full-well the ongoing impact of the COVID-19 pandemic and its evolving nature, because, like you, we have experienced it.  We want you to know that the Ponte Vedra Inn and Club) has adjusted its operations to provide additional safety for guests and functions, and we have extended the early registration deadline for the workshop, in order to help with decision-making.

Challenges notwithstanding, we want to welcome you to the most intense, demanding, interactive, and challenging homebuilding production management learning experience on the planet.

“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)

“The Pipeline Workshop™ completely changed my approach to meeting my company’s productivity and profitability goals.  I came away with several actionable items that I was able to implement right away.  Any homebuilder with an open mind, who is willing to challenge the traditional ways of thinking that our industry has grown comfortable with, will benefit greatly by attending.”   (Ryan Band, Unbridled Homes, Louisville, KY)

We work constantly to enhance and improve this workshop.

Previously, we had been trending toward doing more with the Velocity Accelerators®, running as many as five of these in-depth sessions in each workshop.  Last year, beginning with Pipeline Workshop™ No. 11, we decided to narrow the focus, reducing the number from five to just three – Business Process Improvement, Critical Chain Project Management, and Epic Partnering™.

To one degree or another, we still cover all five, but the emphasis is now being placed on improvement techniques and approaches that are more immediate, while continuing to cast a vision toward the future.  Pipeline Workshop™ No. 14 continues this approach, but replaces Epic Partnering™ with Open-Book Management and Team-Based Performance Compensation.

Doing fewer in-depth Velocity Accelerators® allows us to do more production scenarios with the Pipeline game™, which is still the best production simulator and business game in the industry.

Pipeline workshops™ are now completing their seventh year.  During that time, we have:  (1) shortened the game, made it faster to play, easier to understand;  (2) early on, introduced an operating statement format that mirrors the particular characteristics of homebuilding operations;  (3) found ways to transfer the learning faster, to make the connection between operating decisions and business outcomes quicker;  and (4) begun to examine areas of disruptive innovation (for example, looking at what happens – what has to happen – when an outsourced building model becomes an integrated building model).

Pipeline workshops™ are completely unlike any other homebuilding conference.

The learning split is 70% simulation/business case, 30% lecture;  the format is intense, interactive, and competitive;  the Pipeline game™ production simulations and the RB Builders: Lessons from the Pipeline© business case rigorously 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 always find a way to make the experience incredibly fun:  the Ponte Vedra Inn and Club is a terrific AAA Five Diamond oceanfront golf and tennis resort;  we provide a relaxing and enjoyable reception on the Historic Inn’s putting green at the end of the first day;  we offer recommendations on outstanding local dining;  there are plenty of opportunities 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 without more, hopefully doing more with less;  dealing with variation;  managing homebuilding production as the type of workflow that it really is – multi-project management with surrounding, supporting, and embedded-processes;  placing the emphasis on actions that accelerate production velocity.

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. 14 opens July 1, 2020.

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 (open July 1, 2020 through August 31, 2020) is $750.00;  for team pricing, inquire here:  (flgroves@saiconsulting.com).

 

 

(initially published as a post on Escape from Averageness® in December 2014, under the title “Pipeline Workshops™: Learning Beyond The Builder 20 Club Level”, updated, slightly abridged, and republished here, on the challenging nature of thriving on the velocity side of economic return)

Does the world really need any more average homebuilding companies?

In order to achieve sustainable, enduring competitive separation, a builder has to thrive on both the margin and velocity side of Return on Assets;  make more on every house;  build more houses without increasing inventory and overhead.  As we have noted on countless consulting engagements, margin and velocity are essential components of ROA.

State it this way:  Viewed as extremities, do you really expect to win the fight with one hand tied behind your back?

SAI Consulting has benefited from its long involvement in the homebuilding industry, so we make a point of giving back.  For many years, we have been presenters at IBS and the Housing Leadership Summit (now the BUILDER 100);  when we have been asked to speak at NAHB Builder 20 Club meetings, our policy is always to waive the fee portion of our work.

In 2014, I was asked to make an eight-hour presentation on how to improve cycle time at one of the Builder 20 Club Fall meetings.  Since cycle time improvement is not really an eight-hour topic at this level of detail, I thought it would benefit this B-20 Team’s members more if I presented a contextual view of cycle time, using the production principles and disciplines we teach in Pipeline workshops™, which would also allow us to include the production simulations and business games we use in the workshop.

Following the presentation, I told John Lingerfelt (the then-NAHB networking groups facilitator for this Builder 20 Club) that, in retrospect, B-20 Club Team gatherings were not well-suited for an eight-hour presentation on this kind of topic, if the same learning objectives used in a Pipeline workshop™ are applied.

Among other things, I told him the meeting agenda was distractingly full.  I told him it is not possible to craft material that will apply uniformly to each or every club member’s circumstances, business environment, or operating model.

I told him, that if I had been aware of the B-20 mindset concerning learning objectives – that members preferred to receive information they can take home and quickly implement in their businesses – I would have been clearer to the group at the beginning of the session about how difficult and challenging the material is, that they can dismiss the notion that they are going back to their shops with a few easy-to-implement solutions.

I would have told the group, more emphatically, that improving performance on the velocity side of Return on Assets is extraordinarily hard work, that it requires an extraordinary amount of resolve and persistence to do it.  I would have told them how unsettled the solution is in homebuilding, given the unique attributes of production in this industry.

Several club members approached me afterward to share what they felt they had learned, what they thought had been worthwhile about the presentation;  there was agreement on the importance, the relevance, of the material.  It was just not what members wanted – they said the discussion was “a bit too focused on the academic concept and not focused on its practical usage”.  And, one of the club members said, “Our members understood the general concept of increased velocity and how it can improve the bottom line.”

Fine.  I think those are honest observations.  I can deal with it.  In subsequent B-20 Club meetings I have conducted, I have bulleted easy-action items and made it a three-hour presentation.  It was not a waste of time to make this particular presentation, but it does point to the need for production workshops dedicated to deeper learning.

To both points, I would say (1) before something can be utilized, it must be understood, and (2) the mere comprehension of a general concept is not sufficient.  There is a big gap between understanding the general concept of increased velocity, and possessing the deep, instinctive understanding of velocity that enables you to create sustainable competitive separation by implementing the principles within an enterprise-specific set of circumstances.

Pipeline workshops™ propose significant changes in the thinking about production and business management that needs to occur in the homebuilding industry, constituting a 180° change in perspective and understanding.  Escherian is not the right term, but these changes represent paradigm shifts of a scale that bring to mind the “Two Women” illustration (above) that the late Stephen Covey used in The 7 Habits of Highly Effective People.

What do you see?  Yes, it’s a picture of a woman.  Is she a young woman?  Is she an old woman?  Which direction is she facing?    

Or, the shape published by Louis Albert Necker, his so-called “Necker Cube”.   

What do you see?  Is the blue panel at the front of the cube, or is it at the back of the cube?  Does the angle of the cube project upward to the left, or does it project downward to the right?

Learning how to thrive on the velocity side of Return on Assets presents these questions:  What do you see?  Do you understand what you are seeing?  The implication is that there is more to it than what you see, and you may not be seeing what is really there.

Learning to see requires a different perspective – a different set of mental models – regarding the same set of facts.  You have to understand the principles and disciplines that apply to homebuilding production before anything else;  before you try to manage it, before you try to make changes, before you try to improve performance.

We say that a homebuilding production system is a pipeline.  How big is the pipe?  What is its capacity?  How long is it?  What does it cost?  We say that operating decisions drive business outcomes.  How do you connect them?  What connects them?  What do the measures of operating performance and economic return hold in common?

Paradigms are cognitive frameworks containing basic assumptions, perceptions, beliefs, ways of thinking, methodologies that are commonly accepted by members of a group.  What’s the general paradigm builders hold about size?  About growth?  About capacity?  About productivity?  About costs?  About production balance?

Is even-flow a mechanism or is it an outcome?

In a particular production system, what is its Necessary WIP – the range of Inventory/WIP required to efficiently and effectively operate the system?  What is its Maximum WIP – the amount above which is excessive?  What is its Minimum WIP – the amount below which is insufficient?

When do you choose to measure cycle time, and when do you choose to calculate it?  What do the two methods mean?  What are their different uses?

When you schedule the system, do you start jobs at a pre-determined rate, or do you start jobs according to the condition of a pacesetting resource?

What do you see?  Do you understand it?

We say homebuilding production is a system.  How do you improve the performance of that system?  How do you determine its capacity?  What restricts its capacity?  What is the nature of the workflow?  Is it process management?  Is it project portfolio management?  Regardless of what type of workflow it is, how do you schedule it?  What do you schedule?

How does the system handle the conundrum posed by a predictable reaction to variation?  What does variation really cost a homebuilding operation?

What do you see?

How do you reduce the duration of a job, and still protect its completion date?  What is it about a job schedule that you actually manage?  How do you deal with both task dependency and resource contention?

What do you see?