As a consultant, I literally spend 30 hours a week on the phone with builder owners, CEO’s and senior level staff of Home builder’s, Real Estate Brokers and Land Developers. My approach on every call is to build a relationship and determine the pain points that keeps these executives up at night.
The latest numbers from the Census Bureau confirms what we've all been seeing: more people are doubling-up. Whether it's getting a roommate or recent grads staying with their parents, more people are living together than in the past. Some 30 percent of households are doubling up, up from 27.7 percent in 2007.
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.
We all have our eye opening moments in life. When I was 17 my dad would often remind me to keep checking the oil in my 72 Bonneville. I did check the oil frequently (in my mind anyway) for a while. It was only after the old workhorse left me stranded on the expressway with a thrown rod that it dawned on me that running out of gas (an activity I participated in much too often) was quite a bit different than running out of oil. During the struggle to get to school, work and figure out how to pay for another car was when the lesson really sank in.
What are the risks for your business. Where are your weak points? Obviously safety is a key issue, but what about warranty, defects and other issues? Specific risk sources in construction projects include:
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.
It seems hard to believe now, but when the iPad was introduced last year, there was a lot of question about whether or not Apple had finally made a mistake — would people pay $500 or more for a tablet when all others had failed to catch on in a major way?Well, we all know the answer to that question. The iPad has been a raging success, with some 25 million sold as of this summer. The even bigger surprise has been the use of the iPad as a business tool, even in the usually tech-averse remodeling industry.
From the year 1999 to 2001 I led the enterprise wide SAP conversion for a top ten builder. Up until that time, very little was ever seen of a fully integrated software system for the builder. Software companies claimed to be fully integrated, but when you tested the product, it fell short of expectations. SAP was to be the shining knight on the white horse for Home building, offering a system that would revolutionize the industry. Well simply stated, it was developed by software developer’s not home builders and failed miserably.
BIM is technology which can be of enormous help. It can of course be a great tool to help us integrate for example design and estimating. It should also become a critical tool for communication with the client, engineering consultants and trade partners and in this way help to create an integrated project. BUT let us not forget the construction team! If the construction team is not involved then the critical opportunity to better connect Design – Construction or rather Design-Build is lost.
Check yourself before you wreck yourself. This delightful saying comes from a rap song by Ice Cube. Mr. Cube’s message urges us all to make use of a verification system (the balance of his message is not quite suitable for this blog). A simple method of ensuring your design specifications are consistent from home to home is to use a checklist.
So often I hear builders say that quality may work in manufacturing plants, but not out here building homes. Well of course it does work, but hearing that from a successful builder is ideal. Here is a link to a short video featuring Gary Zajicek, VP of Construction and Customer Relations at Veridian Homes in Madison WI. Gary talks about the impact of using Quality Management Systems, in this case the NAHB Research Centers, National Housing Quality Certification program for Builders and Trades which is based on ISO9001.
One of the many harsh realities we’ve grown accustomed to during this economic downturn is the turbulent nature of stock market indices, especially the Dow Jones Industrial Average. Since the beginning of 2008, the DJIA has experienced historic or near-historic daily drops on 14 occasions — each time sending both Wall Street and Main Street into panic mode.
In speaking to many builders and re-modelers weekly, it has been interesting to take note that the classic performance appraisal has fallen by the wayside since the economic downturn. Many tell me that this process became a non- value added activity when all the layoffs began in 2006 and since that time no-one in their organization has really seem to care.
For several years I led 600 real estate agents across multiple markets. About 20% of my business involved the Homebuilder. Here’s what I learned that can be very helpful to the homebuilder when the real estate agent is marketing your new construction.
While dining at a restaurant recently I was asked by the waiter how my meal was and if there was anything that could be improved. The meal and service were wonderful and I had only one minor suggestion. But I did end by thanking them for asking! When was the last time you were asked by a business how they could improve?
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.
Have you ever heard a framer say, “I just make it look like the picture”? I have — far too often. They are referring to a lack of elevation detail on the construction drawings. For some reason this is relatively common. Many drawings I have reviewed show that there was a good deal of effort expended making sure the floor plans are dimensioned and detailed accurately. The elevation drawings, however, not so much. What’s up with that? A little elevation humor: up, elevate… get it? Don’t fret, I’m not quitting my day job anytime soon.
Now is the time for 100% customer satisfaction and operational improvement: Your trades as true expert partners
While all builders are trying to become leaner, more innovative and customer focused to impact the bottom line, we should not forget about reaching out to our trades. Our partners are crucial and remember they are the experts in their specific area of the business.
Measure twice and cut once. I think that is probably the first thing I ever learnt in construction and I learnt it as a kid listening to my Dad and Uncle while they reviewed plans in the evening and worked on site each day. You can’t get a more fundamental quality management concept than that and it’s a phrase we use so often in the industry. The concept of course applies to all aspects of design and construction. We can consider it when drafting a home plan, estimating, material storage, construction and customer service.
In the wake of Steve Jobs retirement announcement as CEO, Apple shares fell by 5%. For most people Apple is Steve Jobs, so that’s not a surprise. He is staying on in a leadership role, can you imagine the fall if he had stepped away entirely? Jobs created, then saved and kept Apple as one of the world’s most valuable and innovative organizations. But it wasn’t just vision and inspiration. He created new and must have products during a recession!