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.
I am finishing up my September column for Professional Builder based on a list of the 10 biggest myths of Lean Building, and I just wrote about one of the most aggravating — the idea that Lean process savings don’t count like saving in sticks and bricks.
As I write this week’s blog on a plane from Detroit to Vegas, I happened upon an article in the Delta in-flight magazine about healthy eating and guess what? All the things we know about eating eggs and egg yolks, common knowledge learned during the 80’s and 90’s that persists to this day – are flat out wrong. Eggs do NOT raise your cholesterol. They are, in fact, a virtually perfect food, full of protein and raising HDL (good cholesterol) reducing LDL (bad cholesterol) and helping keep a steady blood glucose level.
If you knew that were losing at least $5K per unit due to one single item of waste in your houses, would you do anything about it? How about $10K? The money is there, inarguable and undeniable, and we have the proof, yet a tiny percentage of builders understand it, let alone try to correct it. Even worse than that, most are afraid to confront it.
A discussion erupted this month on the LeanBuilding Group on Linked In about how do you define value to the customer? One of our members was assailing builders who go cheap, installing ubiquitous “builder grade” products. I replied that there are fine lines sometimes. One person's better value can be another's substandard. Not so long ago, vinyl siding was considered almost universally a cheap product. That is rarely the case now though.
Twenty years ago, there was a project in Denver where the foundations began moving, to the point that several new homes had to be taken completely down. In the milder cases, the builder had to sink caissons next to the foundation as deep as 40 feet to stabilize them. The problem was expansive soils.
It’s hard to say who has taken the “a la carte” mentality to the most absurd level, the airlines or the rental car companies. Pay for food, pay for sodas, pay for bags, and one of the discount airlines is now charging for both checked bags and overhead storage. This is beyond the pale. If you show up at the gate with your briefcase or backpack and a roll-a-board, you are paying $45 to take it on with you, but “only” $40 if you check it. Add that $80 - $90 round trip to the cheaper fare and the deal becomes no deal.