Call the story of Payne Family Homes addition by reduction.
The St. Louis home builder is on a tear, breaking ground every business day on at least one new home and earning a spot on St. Louis’ 25 Fastest Growing Companies three years running. Today the company is ranked as the region’s #2 home builder. All this from a company just over 10 years old.
The picture wasn’t always this rosy.
Just ask the company’s vice president of construction operations, Eva Fryar. She quickly recalls the early days of her tenure in September 2009.
“You know where the economy was back then. We sold about 30 homes that year and ran the company on spreadsheets. A lot of things were handwritten. We didn’t have an operations system,” Fryar recalls. Something had to give.
A warming housing marketplace certainly helped. However, the economic uptick only exposed the shortcomings of home-grown operations. Fryar knew from past experience the only sustainable answer was a processed-based operational strategy. The decision to proceed with this strategy back in 2011 would ultimately define, differentiate and, fuel the company’s spectacular rise.
How spectacular? It’s reflected best by these efficiency benchmarks:
- Cycle Time: cut by 2 weeks on all starts, saving an estimated $560,000 a year
- Employees/Start: 1 for every 4 starts in 2018 (vs. 1 for every 3 starts in 2016)
- Construction Waste: near zero with just-in-time material delivery schedules to ensure no jobsite storage exposure
- Purchase Orders: printed or digitally distributed in trade-specific formats with work schedule
- Profit Margins: formulated at contract, protected throughout and realized at closing
- Purchasing/Estimating Staff: 3 estimators, 2 purchasing agents (supporting a projected 300 2019 deliveries)
What makes this score card all the more remarkable are the immense range of home buyer options Payne offers on homes typically priced in the upper $300s. “We’re definitely above the curve on that. Our system offers tens of thousands of options. It’s really easy to know our cost, sale prices, and margins upfront,” says Fryar.
As you might guess, offsite construction factors into the Payne Family Homes performance story. Process-based operation technology enables Fryar’s team ability to form a seamless, error-free partnership with their truss manufacturing company. “They’re basically designing and building our trusses well before we’re actually using them,” says Fryar. “Because we use the same software, we can go in and double-check to make sure everything is correct long before truss manufacture and assembly.”
The common thread that runs through the Payne operations system is workflow and process management software from MiTek. Today more than 1,000 home builders have purchased MiTek’s BuilderMT Workflow Management System.
Fryar is a big fan. “MiTek has gone above and beyond to support us. They’ve really stepped up to the plate and helped us design the best product to come to market with,” Fryar explains.
The echoes of 2009 are still plainly felt by the Payne team, which in part explains their relentless pursuit of efficiency. “We still operate like a small company. We all pull together and wear numerous hats,” observes Fryar. Call it addition by reduction.
For a comprehensive look at Payne Family Homes and how their experience can benefit home builders delivering at least 50 homes a year, visit https://www.mitek-us.com/stories/Payne/