Pipeline Workshops: Shattered Instincts and the Learning Curve of Production Management

Pipeline workshops™ are open events sponsored by Hanley Wood (Builder/Big Builder) and Continuum Advisory Group.  They are size-limited, intense, interactive, comprehensive immersions into the principles and disciplines of homebuilding production.

For the upcoming workshop, we have added case-based exercises, but most attendees and observers would still agree that the most compelling part of the workshop involves the Pipeline simulations:  teams of geographically-diverse builders that go through a progression of scenarios that are simulations of home building production management as well as business games.

The objective is to reinforce the production principles taught in the workshop, including:  (1) the effect of variation on a production system, (2) pull scheduling according to the capacity of a constrained resource, and (3) the importance of connecting decisions made on operating matters (like flow, capacity, duration, and work-in-process) to the critical business outcomes of profitability and return on assets.

With multiple teams playing every game with exactly the same rules and understanding, the results don’t lie.

Look at the results from a recent workshop.  In every category – from throughput (closings), to work-in-process levels, to inventory turns, to cycle time, to net income, to return on assets – the teams made remarkable progress, often exceeding expectations.

Until you have played the game and seen the measures, you won’t understand the metrics;  focus on the performance trends (y-axis) as the games in this workshop progressed (x-axis).

This was Revenue . . .

Pipeline Revenue (capture)

This was inventory turn . . .

Pipeline Inventory Turn (capture)

This was cycle time, expressed in days . . .

Pipeline Cycle Time (capture)

This was Net Income Margin . . .

Pipeline Net Income (capture)

This was Return on Assets, a reflection of its co-equal components:  Net Income Margin (margin) and inventory turn (velocity) . . .

Pipeline ROA (capture)

After the initial shock of shattered instincts, every metric was in precisely the direction you would expect, if the production principles are true and if progress is being made.  Clearly, builders attending this Pipeline workshop™ learned from their participation.

They learned the principles and disciplines of homebuilding production.

Pipeline simulations are board games that teach builders to “see” production;  they simulate the fast-paced, rapidly-changing, uncertain, risk-laden, variation-filled environment in which home building production decisions must be made.  It is learning based on experience and action, not words;  Pipeline games™ compress the learning curve, presenting production situations that are simple, fast, easy to see and understand, that can be modified and rerun, until the principles are understood.

In a Pipeline workshop™, the progression of the games mirrors the progression of the learning.  In the book that gave rise to the workshops (The Pipeline: A Picture of Homebuilding Production©), the games were described as follows:

“Change is a necessary condition to any improvement effort, but change is difficult, disruptive, time-consuming, and costly;  the effort can fail to produce the result.  Learning needs to occur without so much cost, disruption, and risk.  Managing production and improving operating and financial performance becomes intuitive and simple, but there is much to understand.  It is counter to what is taught, therefore, difficult to grasp;  it must be learned, and that is harsh when it occurs at the cost of real operating performance and actual business outcomes.”

 

The next Pipeline workshop™ will be held at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, on March 11-12, 2015.  Cost is $795.00.

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

Details:  www.buildervelocity.com