The Lean Builder

The Lean Builder

The NAHB in conjunction with Professional Builder Magazine launched the National Housing Quality Award (NHQA) in 1993 to encourage and recognize best practices and best builders in the continual improvement of product and process. Modeled after the Malcolm Baldrige National Quality Award, over time the NHQA has become the gold standard of awards in homebuilding.

Our business picked up in late 2011, started the New Year off well, and we were deluged at the IBS show, beginning with a standing-room-only presentation on Lean Design. Our first quarter is strong and 2nd quarter looks even better. Builders seem to now have sufficient confidence that they want to get their processes “Leaned-up” to meet current and projected growth. We have a long list of clients who are reporting sales being up way above the  national average of 8% reported for January and on into February. Yet the question persists … is this recovery for real?

There is nothing in homebuilding that makes less sense than purchasing by the square foot and it is a big obstacle in Lean implementation. Other than the fact that it makes things easy I suppose, there is very little to be said for it. It damn sure makes purchasing inaccurate and confusing, at best. Not much of a tradeoff. Imagine, for a moment, buying an automobile by the pound. Do you think you could do any meaningful price/value comparisons?

With the February edition of Professional Builder, I begin a series on the evolution of quality management. Here is a more detailed version of an excerpt from that article to come. Be sure to read that.

In the past year, during our LeanPlan Workout process, we had the dubious honor of “working on” plans from 3 of the biggest name, most expensive architectural firms in the country (among others.)

Michael J. Fox and I have something in common (besides the obvious – talent, good looks, irreverence, witty repartee, etc.)  We both have an incurable “condition.” Fox has Parkinson’s disease, a well-known affliction that continues to ravage his body despite an astounding amount of medical research dedicated to discovering a cure.  My condition is a rare one called Alport’s Syndrome, a genetic fluke that resulted in total kidney failure nearly 12 years ago.

Last weekend was the annual Christmas sojourn to my wife’s relatives in Chicago. On the obligatory trip downtown to Marshall Field’s to see the Christmas decorations, visions of credit card slips danced in my head as my wife and daughter pursued something precious that surely could not be found elsewhere. As they searched, my mind naturally turned to thoughts of Lean, rather how much waste I could find in the store’s products and processes. Yes, it is an obsession. Then my eyes fell upon this plaque, something that Marshall Field himself wrote in the 1800’s.  I took this snapshot.

One of the requirements in Lean Operations is harnessing the “Voice of the Process.” Your processes can teach you so much and hence save you a lot of cash … IF you know how to get them to talk to you. How do you do that? Metrics, of course, but usually not the old tired ones that don’t provide much illumination. You have to dig a little deeper. Here is a great example. How many of you have ever looked at the ratio of how much business you do under VPO (Variance Purchase Order) vs.

Yesterday after presenting an orientation for our LeanPlan Workout process to a group of suppliers & trades in Texas, a contractor named Mike walked up to me and two of the senior managers from the builder. Strong-looking guy, with very alert eyes, about 50 years old with that kind of rugged Texas good looks from a life spent working outdoors that you see a lot down there. He had been very attentive during the presentation, and took a lot of notes.

I am frequently asked, what is the right way to buy labor and materials? Should you use turnkey suppliers and trades or should you purchase and negotiate labor and material separately. Let me be 100% clear about this. I have the answer. I am now into my third decade of looking hard at this issue and have watched more than 200 builders up close and personal and unequivocally conclude based on the evidence that the clear answer is to buy labor and materials separately – except when the best way to purchase is turnkey. Got it?


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