Pipeline Workshops™: Velocity Accelerators®

If you had to choose a single word to associate with a Pipeline Workshop™, it would be velocity – speed in a purposeful direction.  We want to elevate velocity to an equal standing with the other component of economic return, which is margin.  In each Pipeline workshop™, we select specific areas of production management for a deeper dive – more discussion, pointed and challenging exercises from the RB Builders: Lessons for the Pipeline© business case, etc.

We call these areas Velocity Accelerators®.

Velocity Accelerators® tend to be important areas that do not receive sufficient industry attention;  in fact, beyond a passing understanding, they are often the first meaningful exposure to those areas that builders attending a Pipeline workshop™ have experienced, making these sessions something of a mini-boot camp.

For the upcoming Pipeline Workshop™ (April 5-6, 2017, in Ponte Vedra Beach, Florida), we have four Velocity Accelerators®, up from three in the Fall 2016 workshop:

Epic Partnering™.  Builders attending Pipeline workshops™ consistently emphasize the need for stronger trade-partnering, better coordination, more cohesiveness, a more unified approach to managing the trade side of 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, and they are completely dependent and reliant on skilled construction resources that are in short supply;  they understand that they can no longer dictate the terms.

Developing the business relationships that unify a builder’s value stream is a program of milestones and features, and it is a transformative process;  a program and a process.

Epic Partnering™ has profound implications on the margin side and the velocity side of economic return.

Business Process Improvement (BPI).  The most basic, most fundamental proposition in the business of building homes is this:  the reason a builder exists is to make money;  the way a builder makes money is by delivering value to its homebuyers and other stakeholders;  that value can only be delivered through the work that the building enterprise performs;  that work has to be performed in some manner of workflow, most commonly performed in processes.

Make money . . . by delivering value . . . through the work a builder performs . . . in processes.

BPI is the front-end of a process of continuous improvement, one that fundamentally changes the perspective of workflow, and becomes the driving component of the operating model that forms a builder’s strategic value discipline.

As with Epic Partnering™, BPI improves both margin and velocity.

Critical Chain Project Management (CCPM).  Now more than sixty years old, the scheduling algorithm known as the Critical Path Method (CPM) was never intended to function in the environment of homebuilding production, which is project portfolio management with embedded and supporting processes;  CPM was never designed to function in environments in which velocity is important, where faster cycle time and higher inventory turns are critical drivers of business outcomes;  and, CPM is oblivious to the effect variation has on the scheduling of a production system.

CCPM is the leading edge – the future – of project scheduling for homebuilding;  it promises significant improvements in managing homebuilding production – faster cycle times, faster inventory turns;  enabling homebuilders to generate more Revenue, more Gross Income, with a planned, finite, and controlled amount of work-in-process and production capacity.

Unlike either Epic Partnering™ or Business Process Improvement,  Critical Chain is a pure velocity proposition.

Building Information Modeling (BIM).  To paraphrase and expand on fellow Pipeline workshop™ associate Clark Ellis’s description, BIM explores building design in a 3D model of the three spatial dimensions of width, height, and depth (some would say it goes beyond 3D to include the dimensions of time and cost), and links to multiple databases with information on costs, schedules, product specifications, engineering data, and more.

Much like Epic Partnering™ and BPI, Building Information Modeling has implications for both the margin side and the velocity side of Return on Assets:  better, more collaborative designs, with fewer design errors;  more accurate cost books, job bills of material, job budgets, purchase orders;  more dependable job schedules, shorter cycle times and faster inventory turns;  overall, a more satisfying homebuying experience, higher overall quality;  better, more accurate, more useful, easier to manage data.

Yet, for all its promise to transform the homebuilding industry, BIM has had a very shallow adoption curve to this point.  In part, that is because implementing BIM requires determination, resolve, a different mental model, and a willingness to abandon past practices.

Which is precisely where opportunity typically lies, in areas where few will dare go – and, in areas where few will go well.

The possibility of “making product 35% faster and 25% less costly to build”, as Clark points out, is a compelling outcome to pursue.

 

We like the balance between these four Velocity Accelerators®:  a blend of immediate, mid-term, and long-range initiatives that accelerate velocity, but also improve margins.

Come.  Participate.  Learn.

 

The next Pipeline workshop™ will be April 5-6, 2017, at the Ponte Vedra Inn and Club, in Ponte Vedra Beach, Florida.  Cost is $875.00.

Sponsored by BUILDER and BuilderMT.

Details:  www.buildervelocity.com