Part II: "In the Lean World . . . Homebuilding is essentially a Build-to-Order Process."

(excerpted from The Pipeline)

“As you just noted, the pace of production is what gives the production system its rhythm”, said the intrepid, results-based consultant.  “At least, pace should give production its rhythm;  we have seen the consequences of RB Builders’ failure to achieve even-flow production.  What did you call it, a tsunami? 

“Speaking of which, a term related to “pace” is what we call “flow”.”  

On the board, she wrote:

CONTINUOUS FLOW AND BUILD-TO-ORDER PROCESSES

“In the Lean World, there are different types of flow.  The production mantra in Lean says, “flow where you can, pull where you must”.  It is very much a continuous, or single-piece, flow proposition, with a recognition that continuous flow is not always possible.  Lean Production will support either flow or build-to-order processes, but it encourages continuous, single-piece flow as its picture of perfection, and has tended, in the past, to look at production management in a factory or manufacturing environment. 

“Homebuilding is essentially a build-to-order proposition”, she said.  “Build-to-order lies somewhere in the middle of the flow continuum, nothing resembling old-fashioned, batch-and-queue, mass production, but also not the continuous, single-piece flow that Lean Production would prefer.  But, since Lean will accommodate build-to-order processes, it should be able to work in a homebuilding environment.

“For a build-to-order process, Lean recommends maintaining a FIFO, or First-In, First-Out, sequence, regulating the amount of inventory or work-in-process, and making the bottleneck resource function as the pacemaker.  Since continuous flow and build-to-order processes are both pull-type production systems, the distinction lies in where you put the pacemaker in the process.  

“In continuous, single-piece flow, Lean puts the pacemaker as close to the end of the process, as close to the customer, as it possibly can”, she said.  “Everything upstream from the pacemaker can be pulled — replenished – from small amounts of inventory, at the demand of each downstream activity, and then everything downstream from the pacemaker is continuous flow.  

“In build-to-order processes, Lean puts the pacemaker earlier — upstream – in the process, at the point from which FIFO sequencing begins”, she continued.  “That applies directly to homebuilding, because — in addition to being a build-to-order process — homebuilding should use FIFO sequencing.  Lean also recommends making the most constrained resource the pacemaker in a build-to-order process, all of which makes it possible to consider pacemaker placement based on parameters and requirements other than customer demand and continuous flow.”