Don't dive into this technology until you have first cleaned up your processes.
“Great acts are made up of small deeds.” Lao Tzu
“Great things are done by a series of small things brought together.” Vincent Van Gogh
Over the past decade, one after another ambitious home building team has bravely declared, “we are going to do BIM”! After investing significant time, money and effort virtually all of them failed. Why? It's my contention that they didn't lay the proper groundwork. BIM can only be successfully implemented in a business that has been made ready for it.
BIM is the industry's greatest potential source of operational innovation. I say potential because penetration is exceedingly low. In our consulting practice at Continuum Advisory Group, which includes time spent with BIM software and service providers as well as with product manufacturers, home builders and their trade partners we find just small percentage of firms actively using this technology. In fact, I would be shocked if the adoption rate among North American home builders is more than 10%. Compare that with commercial construction where, according to a 2012 McGraw Hill study, 70% of North American contractors are using BIM in their businesses.
The small things include:
- Identifying what new products you will need in the next 24 months and how they will likely impact your business.
- Calculating how much revenue your best-selling product will likely generate over the next 24 months. This includes an analysis of how revenue and profit are driven by various elevations and options–not just those in your most popular base plans.
- Analyzing how you are using and managing materials on your jobs. You're not doing this already? Then I hope that you're OK with 2-6% per year in potential profit just kinda oozing and sliding its way out the door.
The things that you need to bring together are perspectives from various team members.
Begin with an internal dialogue between your company's various departments: general management, architecture, land acquisition and development, finance, purchasing, estimating design center, construction, sales, marketing, quality assurance, warranty and material management. Focus the discussions on how to make your products better serve customers, cost less time and money to build, and achieve best in the world quality. Use this input to create a document with specific objectives, as well as statements on how you will achieve those objectives.
Next, seek feedback from your architectural and engineering service providers on how they can help improve your products. For instance, if your discussions reveal that customers don't put much value on those decorative bump-outs that are driving framing costs up 3-5% per house, the architect may have thoughts on how to create the same effect for less money.
Finally, ask key material suppliers and subcontractors how they could help implement these ideas in the most cost-effective manner.
If you have worked through the preceding lists, you will have accomplished three important prerequisites to BIM implementation.
First, documenting your existing best sellers and new product needs and their impact on your business plan over the next 24 months focuses your efforts where they will have the greatest impact.
Second, the internal cross-departmental dialogue helps your team understand what they want BIM to solve for, such as delivering lot-specific 3D plans with the customer in the sales center and making that product 35% faster and 25% less costly to build. Outcomes like these are a lot better than a questionable “we achieved BIM” statement.
Third, by including service providers and materials suppliers in the discussions you get their perspective on how to make the initiative successful, while gaining insight into whether their capabilities will support it. For example, if your architecture and engineering providers don't currently operate in a BIM environment, you may have to bring them up to speed or find other providers.
The above steps should uncover ways to improve sales, save money and increase velocity. For example, the focus on material management should identify the waste that's contributing to profit loss and the root causes of that waste, whether inefficient material usage, shipping errors, inaccurate purchase orders or poor scheduling of trade partners. Your conversations with design professionals and material suppliers may yield ideas on how to eliminate wasteful engineering, streamline architectural elements, and substitute less costly materials without sacrificing quality.
Do all the above and you will have completed several important pre-requisites for a successful BIM implementation!
One reason so few home builders go through with this process is that in today’s culture nobody wants to wait for anything. Google provides instant search results, Amazon Prime delivers toothpaste to your front door in less than 24 hours, and homeowners want immediate answers to their questions. It's no surprise that many companies are looking for a “BIM pill” or a “BIM shot” that will “BIM” their business overnight.
It doesn't work that way. BIM is like any other business process in that the more thoroughly the organization prepares for the implementation the higher the chance of success. The work outlined above should take the average company 3 to 6 months to complete and will yield cost savings, higher velocity and a better experience for your customers, while engaging your staff and third party partners more effectively. Even if you decide not to go ahead with BIM, you will have created significant measurable benefits for your company.
On the other hand, if you get through this process and still want to move forward with BIM implementation, you will know what product to start with, who will play the key roles in the process and what ROI the initiative will likely have over the next 24 months. If most change initiatives started with these advantages, success rates would be close to 100%. Stay tuned for insights on the next steps of successful BIM implementation in the following months!
What is BIM? A building information model is a 3D model of a home that can link to one or more underlying databases with information on costs, schedules, product specifications, engineering data and more. It lets the designer build the home on the computer in three dimensions and in great detail, and to see structural and mechanical systems in isolation or in relation to one another. This helps the designer spot potential conflicts and make the needed changes before work starts. The underlying data can also immediately display the price and schedule implications of any changes and options. Used effectively, the builder will enjoy lower design costs, more accurate estimates, fewer change orders and easier sales.