A big portion of SAI’s consulting work revolves around the principles and disciplines that govern home building production.
Whether it is with individual clients, at BUILDER’s Housing Leadership Summit, at a Builder 20 Club meeting, or at a Pipeline workshop, we try to be very clear about how difficult the material is, that it does not involve easy-to-implement solutions. We are emphatic in our statement that improving performance on the velocity side of Return on Assets is extraordinarily hard work, that it requires an extraordinary amount of resolve and persistence to do it. We describe how unsettled the solution is in home building, because of the unique attributes of production management in this industry.
We explain the big difference between understanding the general concept of increased velocity, and possessing the deep, instinctive understanding of velocity that enables home building firms to create sustainable competitive separation by implementing the principles within an enterprise-specific set of circumstances.
It requires wholesale changes in thinking about production and business management that needs to occur in the home building industry, a 180 degree reversal in perspective and understanding that recalls the paradigm shifts of the “Two Women” illustration the late Stephen Covey used in The 7 Habits of Highly Effective People.
What do you see? Yes, it’s a picture of a woman. But, is she a young woman, or is she an old woman? Which direction is she facing?
Or, the shape published by Louis Albert Necker, his so-called “Necker Cube”.
What do you see? Yes, it’s a cube. But, is the blue panel at the front of the cube, or is it at the back of the cube? Does the angle of the cube project upward to the left, or does it project downward to the right?
Learning how to thrive on the velocity side of Return on Assets presents these types of questions: What do you see? Do you understand what is involved? There is more to the situation than what you see, and you may not be seeing what is really there.
Learning to see requires a different perspective–a different set of mental models–regarding the same set of facts. You have to understand the principles and disciplines that apply to home building production–before you try to manage it, before you try to make changes, before you try to improve performance.
We say that a home building production system is a pipeline. How big is the pipe? What is its capacity? How long is it? What does it cost? We say that operating decisions drive business outcomes. How do you connect them? What connects them? What do the measures of operating performance and economic return hold in common?
Paradigms are cognitive frameworks containing basic assumptions, perceptions, beliefs, ways of thinking, methodologies that are commonly accepted by members of a group. What is the general paradigm home builders hold about size? About growth? About capacity? About productivity? About costs? About production balance?
Is even-flow a mechanism or is it an outcome?
In a particular production system, what is Necessary WIP–the amount of Inventory/WIP required to operate the system? What is Maximum WIP–an amount that is excessive? What is Minimum WIP–the amount that is insufficient?
When do you measure cycle time, and when do you calculate it? What do the two methods mean? What are their different uses?
When you schedule the system, do you start jobs at a pre-determined rate, or do you start jobs according to the condition of a pacesetting resource?
What do you see? Do you understand it?
We say home building production is a system. How do you improve the performance of a system? How do you determine its capacity? What restricts its capacity? What is the nature of the workflow? Is it process management? Is it project portfolio management? Regardless of what type of workflow it is, how do you schedule it? What do you schedule?
How does the system handle the conundrum posed by a predictable reaction to variation? What does variation really cost a homebuilding operation?
What do you see?
How do you reduce the duration of a job, and still protect its completion date? What is it about a job schedule that you actually manage? How do you deal with both task dependency and resource contention?
What do you see?
The next Pipeline workshop is March 11-12, 2015, at the Ponte Vedra Inn and Club, Ponte Vedra Beach, Florida, sponsored by Hanley Wood (BUILDER/Big Builder) and Continuum Advisory Group.
More information: www.buildervelocity.com