President

Scott Sedam, president of TrueNorth Development (www.truen.com), spends most of his time working in the trenches with builders, suppliers and trade contractors. His Lean Builder blog appears weekly at HousingZone.com. He welcomes your feedback at scott@truen.com.

The accompanying picture was used recently with what was an otherwise good article on how to create profitable design. That article is much bigger in scope than simply the design of the house itself but still, the irony is palpable. What’s your first impression? Give it a good examination before you go on, in fact, gather some of your people around the monitor or print it out and ask if this is an intelligent, cost-effective design? Looks pretty good? Not if you have spent the past 5 years or perhaps just the past 5 weeks really dissecting plans and elevations from a Lean perspective.

Recently I was asked to present to a group of purchasing managers for a Top 20 builder, led by a Corporate VP who truly gets it when it comes to Lean. That is encouraging in itself, because what I see from so many of the Top 20 is either more of the same old “beat the snot out of the suppliers and trades” or misguided strategies under the name of Supply Chain Management and regrettably, even Lean. This VP and the Directors of Purchasing had no stars in their eyes, but were resolved to keep an open mind and find good ideas whatever the source.

Henry Ford was a genius and if not father of the automobile per se, he was arguably father of the automotive industry. As usually accompanies genius, Ford was a little wacky in some regards and some of his beliefs about ethnic groups and how to control the behavior of workers not just on, but off the job, certainly give one pause.

In the past month I have had the opportunity to present to and spend time with two different groups of 25 successful, independent lumber & material dealers. These suppliers have weathered the storm and although bruised and battered are still alive. In each one of their markets, significant competitors have been fed through the proverbial chipper and are no more. These survivors are smart, savvy business people. I was impressed by their dedication and knowledge, both of their operations and about how builders work.

Both my grandfathers were self-made men who did well during the Great Depression and retired quite comfortably, if not wealthy by today’s standards. Each began with an 8th grade education and nothing backing them up but grit and determination, and each feeling graced by having survived serious crashes on Indian motorcycles. My mother’s dad started as a packing boy at General Electric in Youngstown, Ohio at age 15 and retired at age 65 as plant general superintendent. Fifty years of service with one company. Just imagine. He had a lot of plaques on the wall thanking “E.

You know that phenomenon where you hear a reasonable sounding, logical guy armed with facts that presents an convincing analysis of a problem and his solution and you think, “You know, he’s right” … and then you hear another logical guy armed with facts that presents a totally contrary analysis of the identical problem and a completely different solution and you think, “Whoa, wait a minute … HE is right … I think … maybe.” So now you don’t know who to believe and then it occurs to you that had you heard just ONE of these two guys, you’d be in his camp, probably quoting him to your friends,

Lean savings that go direct to the trades don’t reduce the builder’s costs, right?

If this is your belief, there is no greater obstacle to becoming truly Lean. I once heard a purchasing manager say in regard to the many extra trips the lumber company was making on the builder’s behalf, “So what? Those are his costs and they don’t count for us.” If you are hoping to crack the code on Lean, you have to acknowledge that a dollar is a dollar is a dollar, and no matter where it falls, it is important and it counts.

Probably the simultaneously most understandable yet least valid excuse for not launching a Lean implementation is that your staff is overloaded and has no time. I hear it constantly so let's just say it, "No one has enough time or people today!" That's the nature of a housing recession. It’s a given.

As a dedicated practitioner of Lean process and methods, one of the more aggravating things I sometimes hear is a builder bragging about how they are obviously “Lean” because they have gone through three, five, or seven rounds of rebids. Everyone had to do rebids during the past five years of the housing recession. After all, customers have in effect rebid the builders continually. Because foreclosures and short-sales still make up a significant part of the market, that means that the rebidding from the consumer end continues.

Todd Hallett and I are working with a fantastic smaller builder in California this week. They really “get it” and are very open to input from all of their suppliers and trades. They build very good looking homes at affordable prices and are highly sensitive to anything that would “dumb down the house” or hurt the visual appeal in any way.

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