CertainTeed Pipeline Seminar™: CertainTeed Gypsum Invests in its Builders’ Operational Capabilities

Last month, SAI Consulting, together with Continuum Advisory Group, conducted a one-day Pipeline Seminar™ on behalf of Hanley Wood Media, for selected builders that are customers of CertainTeed Gypsum, as the inaugural event for CertainTeed Gypsum’s Builder Advisory Council.

CertainTeed BAC Logo

It was a “first” in other ways, too:  (1) it was the first one-day event we had done (Pipeline workshops™ are two-day events, Pipeline seminars™ are on-day events);  (2) it was also the first event in the channel of private Pipeline workshops™ and seminars™ sponsored by manufacturers, distributors, and suppliers for the benefit of their builder customers (historically, Pipeline workshops™ have been open events sponsored by the likes of BUILDER, or private events in the channel of builders large enough to have them conducted on a regional, divisional, or MSA basis).

In order to fit the agenda/schedule into one day, and still deliver a sufficiently broad and deep range of learning on production principles, we reduced the number Pipeline games™ from six to three, and limited the RB Builders: Lessons from the Pipeline© business case exercises to three (in a Pipeline workshop™, there are up to seven business case exercises).

Did the shorter format work?  A good gauge of the effectiveness of the learning – what we “prefer to refer” to as reformed thinking – that occurs in a Pipeline event are the pattern of results in the Pipeline games™.  Sometimes, it is about progressively better results;  sometimes, it is about lessons learned;  sometimes, it is a combination of improvement and learning.  In the Pipeline seminar™ conducted for CertainTeed Gypsum’s builder clients, there was some of both.

This is Revenue . . .

CT Pipeline 1 Revenue (capture)

This is Inventory Turn . . .

CT Pipeline 1 Inv Turn (capture)

This is Cycle Time (in days) . . .

CT Pipeline 1 Cycle Time (capture)

This is Net Income Margin . . .

CT Pipeline 1 NI Margin (capture)

This is Return on Invested Assets . . .

CT Pipeline 1 ROIA (capture)

As a function of margin and velocity, Return on Invested Assets is the truest measure of economic return;  the teams did not meet the expectations for ROIA in any of the three Pipeline games™, but they progressively closed the gap on expectations.

The teams often exceeded expectations for top-line Revenue, and they frequently met expectations for Net Income Margin (NI Margin is the margin side of ROIA).  The problem was on the velocity side of ROIA;  you need to look no further than Cycle Time and Inventory Turn (reciprocal measures of each other on the velocity side of ROIA) to see where the teams struggled.

Yet, there was significant improvement – significant progress made – in each of these measures, over the course of the games, both in absolute terms and in terms of expectations.  Consider this:  Team 1 progressively cut its Cycle Time in half, from 300 days to under 150 days;  they progressively doubled their Inventory Turn;  both teams learned that they did not require nearly as much work-in-process as they thought they did, in order to meet budgeted closings.

We threw a variety of challenges at the teams, with known expectations.  In the end, it is performance in relation to expectations that counts.

 

“I appreciate, very much, how much effort everyone put into the summit.  I found it very enlightening and we are anxious to put into effect many of the suggestions that we learned and came to appreciate in your presentations.”  (Ryan Gardner, Lexar Homes)

“You guys did an excellent job!”  (Ian Lavelle, CertainTeed Gypsum)

“I learned a lot and sensed that customers appreciated the event overall.  Like you, I am constantly searching for ways to improve and provide the best possible interactions with customers.  The game really put the concepts into context and made for a collaborative experience.  I appreciate what you and the team brought to the event.”  (Dawn Decker, CertainTeed Gypsum)

Come.  Participate.  Learn.

 

There is a one-day Pipeline seminar™ on the front-end of the Builder Technology Summit, October 3, 2016, at the Talking Stick Resort, in Scottsdale Arizona:

http://buildermt.com/index.php/company/builder-technology-summit/#pipeline

The next Pipeline workshop™ is October 26-27, 2016, at the Ponte Vedra Inn and Club, in Ponte Vedra Beach, Florida:

http://buildervelocity.com/