Epic Partnering: Unifying the Value Stream

At a Pipeline workshop™, one of the most important takeaways, drawn by many of the building company executives in attendance, is that a notoriously fragmented value stream has to be unified, if production is ever to be managed as a system.

In their landmark 1996 book, Lean Thinking, Jim Womack and Dan Jones defined a value stream as “the set of all the specific actions required to bring a specific product through the three critical management tasks of any business.”  They went on to describe a set of processes, which they termed tasks:  a problem-solving task, an information management task, and a physical transformation task.

By definition, a value stream does not belong to an industry;  it is enterprise-specific;  each value stream belongs to its enterprise.

Nevertheless, it would be a challenge to cite another industry, in which the sequence of tasks in the most common versions of that industry’s core-critical process (start-to-completion, i.e., the physical transformation task) is performed by so many separate entities, as is commonly seen and accepted in the homebuilding industry.  Look at the value stream of almost any homebuilding enterprise, and you will find a combination of independent, separately-owned, non-proprietary, non-exclusive, unaffiliated businesses with different goals.

In some of her final comments to the team at RB Builders (The Pipeline: A Picture of Homebuilding Production©), the intrepid, results-based consultant reviews the components of RB Builders’ production management system, the RB-IPS, and has this to say about the final component:

“It is a production management system that specifies the means by which RB Builders fosters epic relationships of mutual interest with its building partners and supply partners.  The RB-IPS provides both the process and the program for progressively transforming subcontractors and suppliers into true partners, into trusted allies, joined by shared, mutual interests.”

Builders attending Pipeline workshops™ have consistently emphasized the need for stronger trade-partnering, better coordination, more cohesiveness, a more unified approach in managing production.

They acknowledge the obvious:  they do not have the internal resources necessary to perform “the set of all specific actions” required to bring houses through the start-to-completion process;  they also understand they cannot dictate that it be done, or create competitive separation by attempting to do so.

They acknowledge the current shortage of skilled construction resources.

Whether or not vertical integration has a strategic role to play going forward in the homebuilding industry (a matter which we explored in “The Road That Lies Ahead: The Giants’ Perspective on Growth Strategies, Consolidation and Other Issues” in the July, 2000 issue of Professional Builder) remains to be seen.  But, even if vertical integration never resonates in the homebuilding industry, success in unifying the effort of the existing value stream has profound ramifications, on both the margin component and the velocity component of Return on Assets;  and success in unifying the value stream has profound implications for creating competitive separation.

It will require Epic Partnering®.

 

Epic Partnering® is one of four velocity accelerators that will be analyzed during the next Pipeline workshop™, March 11-12, 2015, at the Ponte Vedra Inn and Club, in Ponte Vedra Beach, Florida;  the cost is $795.00.

Delivered by SAI Consulting.  Sponsored by Big Builder (Hanley Wood) and Continuum Advisory Group.

Details:  www.buildervelocity.com

 

One Comment

  1. Comment by Hoyt Lowder:

    Neat concept. We are engaged in a similar initiative with the Utility industry known as Damage Prevention Partnering Process (D3P)..

    Hoyt