The Lean Building Forum - with Scott Sedam, February 2010

 

	About the host          Scott Sedam hosts the Lean Building Forum where each month he interviews those who are implementing the principles of Lean operations in home building. Sedam is president of TrueNorth Development in Northville, Mich. He can be reached via email at scott@truen.com [1].  For the complete transcript and audio of the Lean Building Forum interviews, visit www.HousingZone.com/Lean [2]
	This month's guests         Jagoe Homes’ co-owners Bill and Scott Jagoe recently discovered that their great-grandfather built his first house in their hometown of Owensboro, Ky., in 1911. Nearly 100 years later, the Jagoes [3] have just completed their most profitable year since 2003, building 244 homes in 2009, and are planning for 43 percent growth this year (to 349 homes). The Jagoes credit their adoption of Lean as a key driver for their remarkable success during the most severe housing recession since the 1930s. Although Scott was out of town for this interview, we caught up with Bill and his nephew Brad Jagoe, director of operations, for an in-depth conversation on Lean.

This is the complete transcript of an interview for the Lean Building Forum in the February 2010 issue of Professional Builder magazine. Check out the condensed version of this interview and the complete audio transcript (5 MB MP3 file). We welcome your comments and feedback at scott@truen.com [1] or dbarista@reedbusiness.com [4].

Hello and welcome to the LeanBuilding Forum on HousingZone.com/Lean.  I’m your host Scott Sedam. You may know me as a building industry author and conference speaker but most of my time is spent as president of TrueNorth Development [5] where our primary focus is helping builders, suppliers and trade contractors implement Lean thinking, process and methods. As such we meet a wide variety of interesting and dedicated people who are pioneering the adoption of Lean principles in home building.  
Through the Lean Building Forum each month we bring you their stories and advice with the goal of helping all of us lead the industry forward to a new era of profitability and customer delight. There are many definitions of Lean but the simplest for our purposes is this: Lean is the relentless pursuit, identification and removal of waste in all forms of product and process.  Getting rid of the waste applies to every department and every level. Lean requires tools and techniques but mostly it requires the will to confront our wasteful practices and long held beliefs and the discipline to make the changes stick.

The Lean Building Forum features those who are leading the way.  Today we’re talking to Jagoe Homes [3] and we have with us two of the three primary Jagoes; Bill Jagoe, co-owner with his brother Scott who could not be with us today, and Brad Jagoe, Bill & Scott’s nephew and Director of Operations. I have to tell the audience upfront that when I met these guys after a NAHB IBS session that I did a few years ago, I immediately knew I was talking to some people who really got it, as they say. I was very excited at the prospect of getting to know them and they have never disappointed me and I can’t say that about too many people.  So Bill and Brad welcome to the show.

Bill Jagoe:  Good morning.

Brad Jagoe:  Good Morning and thank you Scott.

Scott Sedam:  And they are talking with us today from Owensboro Kentucky which is the home base of Jagoe Homes.  So first I’d ask each of you to tell us just a little about your background, how you came into this homebuilding business. 

Bill:  Well actually I kind of use the terminology that I was born on a P.O.  I’m a fourth generation builder actually and started in the building industry at the age of 12 digging footings and have been an owner of a company since 1982. 

Scott:  And you say fourth generation, you can actually trace this back to – how far back?

Bill:  It’s really funny because 1911 was when the first house was built by a Jagoe in Owensboro.  We had always thought that we were third generations but a couple of weeks ago I ran into a gentleman and confirmed that we were fourth generations because he did the research on a home and found out that my great-grandfather built it.

Scott:  That’s something.  We’ll make a contest out of that – see if anybody can beat that record.  I know some people whose families started in the 20’s but 1911 is the furthest back I’ve heard.  That’s pretty neat.  And Bill, you are as I recall, I think your title, is it President?

Bill:  Well, I just call myself owner.  (My brother) Scott and I both own the company and we just take on kind of different roles whether operations, finance, marketing.  I’m more towards operations.

Scott:  All right.  And Brad, tell us a little bit about how you got involved with the company.

Brad: Okay, I’ve been in this industry since the mid-eighties when I got out of college, spending the first 7 or 8 in the regional lumber industry and since then with a custom builder for a short time and then Jagoe Homes after that.  Currently in charge of operations, estimating, construction, purchasing, service and warranty.

Scott:  If I could mention a little story about Brad here, that my first visit down to Jagoe in Owensboro, Brad had to take care of something so he left me alone in his office for a few minutes and I always like to see what’s on people’s bookshelves. There are a lot of people that have pretty impressive arrays of books and I looked at Brad’s and he had every book on Lean that I think I had ever seen published. I always wonder if the owner has read any of them.  So I grabbed the first one off the shelf and opened it up and it’s all full of highlights and dog ears and then I opened another one and it’s full of highlights and dog ears and I was thinking “Oh my God we actually have someone who’s studied this stuff!”.  Usually going into a builder it’s pretty new stuff for them but Brad had obviously been studying Lean for quite a long time before I got to know them.

So, let’s if you would, it helps everyone to know where you’re building and what type of product for what type of market? 

Bill:  We build in western Kentucky in the towns of Owensboro and Henderson and also out on scattered lots.  We also build in southern Indiana - Evansville, Newburg area.  We build in south central Kentucky - Bowling Green.  We build in the Louisville Kentucky area of Jefferson County, Oldham County and Shelby County. Our primary focus for years has been starter homes but we actually have a division that does whitepaper custom homes as well now.  So we build from move- up to move-down to anything that the market is asking for as well as some attached product that’s condos.

Scott:  Before we started the recording here today Bill told me that they had a good year last year and things look like they are going well for this coming year.  Just tell us a little bit about that, what your experience has been and what you are looking at doing for 2010.

Bill:  Since 2003, I was looking at some numbers just the other day and this was actually our best profit year since 2003.  Sales actually exceeded plan, margins are up and things have gone well.  We closed 244 homes last year and this year we’re looking at 349 homes.

Scott:  That’s fantastic.  Now what was the peak number that Jagoe did in the best year previously?

Bill:  365 units was the peak year.

Scott:  So you are going to be right up there close to your peak and I can tell you, our guys travel the whole country and we stay pretty well informed. You are in pretty rare company there. There are probably not a handful of builders that could match that. So that’s fantastic.  It’s great to hear. Let me ask how did you get introduced to Lean and when did you start your journey?

Brad:  Probably 4 or 5 years ago I started reading some books and articles on Japanese companies, Toyota in particular, and found it extremely interesting and the Lean process and what it was about.  And from that just sort of continued to study and then a couple of years ago Scott (Jagoe) and I attended a seminar actually by you in Orlando.  So that sort of piqued his interest a little bit and from there we contacted you where we came in and started the builder blitz – the LeanBlitz [6].

Scott: I can tell you that when I got to Owensboro I was quite impressed that we had a group of people that what I was talking about was not brand new stuff.  It was things that you had been working on.  When you look at your experiences in getting into Lean implementation are there any particular mentors or people that come to your mind that you learned from?  People that you met or people that you just read from in particular that helped push you along the way?

Brad: I would say more it’s through web sites and books and so forth.  James Womack and the Lean Institute have a lot of good resources that we have relied on. From an industry specific perspective, with you and TrueNorth when we started our LeanBlitz with our trade partners, and then TrueNorth helped us further with our LeanCompany effort.

Scott:  Let’s talk about the trade partners because it’s kind of amazing to me that we still frequently encounter builders around the country who don’t seem to think that there’s a whole lot more that can be gotten by working with their trades and their suppliers.  They’ve gotten most of anything they can get so now it’s simply a matter of a low price.   You guys clearly look at that world differently and have the results to prove it.  Was it always that way at Jagoe?  Is this something that’s been going on for years and years or was that an evolution in your thinking?

Bill:  I think there’s a couple of things because I think for years this industry liked using the word trade partner and really what a trade partner meant that it was a win situation for the builder. You had good times together and everybody is good as long as they don’t back charge you for anything.  You’re giving them a lot of work and you’re having little functions for them and everybody is happy and not fighting but it’s really not getting down to the root of what a real trade partner is. I think that our industry really just took the word trade partners as a buzz word instead of calling them subs or subcontractors.  I think through time we have really looked for mechanisms to improve process and scheduling and looked for that feedback.  But until we really got into Lean thinking, it was always still, “Okay, how can we win on this.” Until we really looked at the Lean thinking process and having all of our people begin to think Lean mattered, we really didn’t start establishing that strong trade partner.  Do you agree Brad? 

Brad:  Yes and our philosophy with our trades is we want a small number of extremely capable ones.  We don’t want high turnover.  Each time you go out and get a new one you have to start again back at square one almost.  But with the long term relationship they have to make money and we have to make money and they have to be extremely competitive. Lean gives us a lot of the tools and them the tools to help achieve the cost savings and eliminate the waste so that we can maintain that competitive position and be profitable along with them.

Scott:  As you went through the conversion of your own company to more Lean thinking how difficult was it to bring the trades along with you?  Did they adapt pretty quickly?  Were some of them you had to turnover because they just couldn’t keep up with the change in thinking?  What was that experience?

Bill:  I think that 25% of them get excited about it really quick, wouldn’t you say Brad?

Brad:  I would say so.

Bill:  And then there’s a group that are hesitant and then there’s a group that’s a little more hesitant but eventually begins to understand it.  You really get into a small number that are just so stubborn in  thinking that you are really trying to rebid them, that something is somebody else’s fault and let’s just solve a problem real quick instead of really getting to the root cause of that problem that they do never come along and you replace them. 

Brad:  Specifically with Lean, we have never replaced anybody because of that.  Now, we hold them to extremely high standards through Lean and continuous improvement and let’s get to the root issue, the root cause of something so we can identify those solutions or countermeasures to implement so we don’t repeat it and we let them know we are going to be demanding and challenging but at the same time that’s the only way that we’re going to all get better.

Scott:  The readers really enjoy hearing of specific examples.  Can you give us an example or two, a story about working with a particular trade or supplier where you had an issue and you worked and got to the root cause of something and made a change that made it better for everyone or possibly even the customer as well?

Brad:  We’re actually in the middle of something we’re working on right now going to the root cause analysis.  We had an issue with a particular plumber where the supply lines to faucets had blown off a couple times and it was costing him a considerable amount of money and potentially he was going to lose his insurance.  As we started really looking at the root cause of how he did things versus how the other plumbers we had did things we were able to see that the product he was using was 30 or 40 cents compared to the product the other ones were using were 3 or 4 bucks.  But at the same time, if you really look at the total cost to him when he’s using the 30 to 40 cent product it was much more and we’re going through right now where he’s getting ready to switch that.  But at the end of the day he is saving a considerable amount of money.  Spending a little bit of money upfront is going to create better value, and he’s going to save thousands of dollars in the end.

Scott:  Well that’s a classic example because when I see what an awful lot of the builders out there think Lean is, they say. “Oh yeah we’ve done Lean,” and they think that means they’ve rebid everyone, they’ve gone through and slashed a product or found any way to take cost out anywhere they can. Here’s an example where a guy was reducing cost at the front end and it’s actually costing himself 10 times or probably in this case 100 times more on the back end.  So it really demonstrates that Lean can only be understood through a total cost perspective not that initial price.

Bill:  We had another interesting one with a major US cabinet manufacturer and the problem was that the crown molding wasn’t matching the piece next to it close enough to satisfy the customer.  And they had gotten in the habit of just sending out extra crown molding so you could just keep trying to match it in the field.  So you were creating a lot of waste. 

Scott:  Let me see if I understand Bill, they were sending out extra moldings so you could solve the problem of matching it in the field because they couldn’t in the factory?

Bill:  Maybe not even on the initial job. Some of the initial jobs they were giving it to us – they were doing as well.  When it came down to it and this is a very Lean cabinet company with a lot of Lean initiatives going on.  But this was happening to that company all over the country and they didn’t realize it.  But because of the Lean culture that’s been created in Jagoe Homes, they actually have brought all their top operations people to work on solving this problem with us and it was costing, we’re thinking $40,000 a year this problem was costing – just to one builder!

Brad:  Right

Bill:  Just for our 250 houses last year.  Well not even that many.  And we’re talking about a company that does millions and millions and millions of dollars worth of cabinets.

Brad:  I think another big thing with Lean though, Scott, is since we’ve really done this and have been able to reduce a lot of the waste, the specs in our houses have actually increased.  We have not decreased the features or benefits within the homes one bit.  Which a lot of the other builders around the country and who we compete with have done that.  But by eliminating waste and wasted trips and non-value added items we’ve been able to increase the things that customers value. 

Scott:  That’s good to hear.  We always make the statement that when you do Lean it’s never about “dumbing down your houses.”  And it scares the pants off of sales people and sales managers because they are afraid that’s what we’re going to do.  You guys are a great testimonial to the fact that your houses have actually, from amenities and features, gotten better during this process and you’ve saved money and you’ve been profitable.

Scott:  You just mentioned something Brad that’s a real obstacle that we run into out there all the time, getting people to really embrace. And that is the cost of wasted trips to the building site and to officially recognize them, admit when they’re there and decide that we can do something about it. So much of the wasted trips are just accepted as, “Well, that’s part of building homes.”  We had a guy recently that was in Tennessee, a painter, and I was talking to him and I said “how many, what’s your average number of trips per site to do your finish paint job”?  And he said “Well, it averages better than five”.  I said, “Well, okay, if everything went absolutely perfectly how many would there be?”  He said “you might be able to argue two but let’s say on a practical basis we should be able to do it in three.  A prime, a finish and then one touch up trip and we should have it done.”  And I said “what’s happening with those two extra trips?” and he said “Well, it just comes right out of my checkbook – it’s killing me.” So I asked what could be done about it and he replied, “Frankly, I don’t know. I suppose if we could get the electricians to quit marring up stuff when they put on the plates and hang the fixtures and if we can get the carpet company to quit banging the walls and baseboards when they are kicking in the carpet, and the appliance guys quit hitting the walls” and he named a long list and said then “Maybe we could get it down to three trips, but I just don’t ever see it happening”. So I know at Jagoe you all have worked a lot on this so tell us some us about some of your experiences what you’ve been able to do, what you haven’t been able to do and what the impact has been.

Bill:  One way that we sort of go about that is we have a weekly meeting, one of them is with the superintendents and sort of the production staff, on another week it’s some of those same people along with people from sales and so forth. But we have divided out where we see issues or Lean initiatives, we have a champion, which could be a superintendent, could be myself, could be somebody in estimating, or whoever it might be that will sort of lead that.  And with that we have steps in that process to lead us through that, through problem definition, root cause analysis, potential solutions or countermeasures, selecting one implementation plan.  Then coming back later on and checking on it to make sure it is working, which could be the next week, it could be another six months, to make sure we have that in place.  It’s that continuous focus everyday on trying to get better, continuous improvement, and where do we stand on each one of those initiatives.  How do we get it in place to set that new higher standard?

Scott:  I’ll put you on the spot here Brad.  Do you know how many trips your finish painter is making?   How many would you say?  Do you know?  Are you tracking?

Brad:  Well actually Scott, that’s a Lean initiative that I’m in charge of.  (laughs)  That’s one that we’re still working on because our painters are still making trips and has damage to his work and actually I’ve been gathering now for six months trying to establish a root cause because that poor guy gets something from everyone.  It’s not just the trips back but it’s just what happens to his work and what work he’s had to do that he shouldn’t have to be doing, whether it’s a splintered door or it’s an over-nailed piece of trim or its dust that’s gotten into his work on the jobsite to a carpet installer that’s scratched the drywall. We think that’s about $1000 a house between his return trips and his over labor that he’s had to do. But we don’t have that solved yet.

Scott:  It’s the fact though that you’re tracking it, you’re measuring it and you’re working on it.  I don’t think I’ve ever met anyone else who’s put that kind of attention in to it.  We had one of our LeanBlitz processes here in Michigan.  We had a painter come and say, propose something very radical. This guy was very frustrated.  He was averaging more like six or seven trips and he said that what he wanted to do was be the last guy in the house except for cleaning and that he would mask off every fixture, the counters, the cabinets, the hard surfaces.  That he would cover the carpet – everything – and be the last guy in and he would give the builder 500 bucks a house off his price!  We all just sat there kind of dumbfounded.  I mean I’ve been around the industry a long time and never heard anybody propose this.  And they are trying it.  When I’ve mentioned this to other builders they kind of shook their head like that sounds insane but that’s how much buried extra work these guys deal with that he was willing to do something that radical to try to change it.

Brad:  I’m glad to hear that one. 

Scott:  Well, if you decide to try it let us know how it goes and we’ll report back on it.  But we do see people who get some real out of the box thinking here and that is part of Lean. About your own people, our previous interview last month was with Jim Deitch at Southern Crafted Homes [7] down in the Tampa area.  He said the biggest problem that he faced was getting his own people to come around.  He did have some turnover ultimately with his own people, there were some that couldn’t seem to adapt.   What’s been your experience with your own folks and how have you brought them in to this way of Lean thinking?

Bill:  I honestly don’t think we don’t have a person in our company right now, and that’s whether it’s a laborer that puts in footings, the salespeople or the architects, that’s not thinking about a Lean initiative that could be started.  It’s been a while since you’ve been here and we’ve accomplished several million dollars worth of savings and we ask, it’s now in our conversation, does that add value to the customer or not?  And that’s where our focus comes in building our product.  So, I think that, maybe I’m fooled, but I don’t think there’s anybody, that there’s not a person in our company that doesn’t  support it, who isn’t 100% behind it.  The danger of that is that you have so many initiatives starting and going, is monitoring and having the time to evaluate everything that comes at you.  What are your thoughts Brad?

Brad:  No, I agree.  I think everybody is behind it.  I think that we’re still sort of in the infancy of our development there.  I think that as we continue to go through it, everybody’s going to develop those skills to identify waste, be better problem solvers, and learn how to implement the solutions better.  That’s one of the big focuses on how we’re trying to do things now, get from firefighting to what do we need to put in place to prevent this from ever happening again.  When we have an issue, in changing that mindset of superintendents or laborers out in the field or whoever it might be within the organization.

Scott:  Do you have any practical example or two of something you’ve changed through your people in the process, something you do differently than you did a couple of years ago, that saved time, money.  It can be a big one or a small one, anything come to mind that would be interesting?

Brad: One thing internally that we’ve done is - people were getting e-mails that they didn’t need to get, that didn’t pertain to them, so there is time spent opening that, closing it, deleting it, just taking time from the task that they should be doing.  So we put in some things so that the right people get the right information hopefully at the right time.  People who don’t need it do not get that.  At the same time if we are spending time printing out reports that we are not using, maybe they were used years ago once or twice, eliminating that which is freeing up time and changing for the people. 

Bill: Well, it’s anything from location of supplies in the office to who’s making more trips to the copy machine so are the printers more productive. We’ve had about $700,000 worth of productivity of staff projects that we’re working on.  I would have to pull up the list to know them all, I hate to say this but the list is so long.

Brad:  You know Scott it’s where the people that have been through this, take for example change orders that come in here, custom option requests, the people in estimating have sort of taken that on as a Lean initiative on how do I make that more efficient?  The information coming in, the time I have to spend to get this information back out to the salesperson and the customer, so it’s small little incremental steps that they are implemented to save some time there which really does two things.  We’re getting information back to the salespeople and the customer quicker, which they like, and it’s saving time internally so that our productivity is going up, so we need less people to do more work.

Scott:  So you are you growing to, I think I heard, 340 or 350 units this year, and a couple of years ago I seem to recall you were under 200.  Tell us about some of those numbers and what’s happened with staff.   Are you able to build more with fewer people?

Bill:  Yes, we’re able to build more with fewer people.  Actually what we’ve done with staff though is we’ve changed staff around because our staff is actually up this year.  We were fortunate enough to be able to hire people but it’s actually to go in and offer more product line and be in to the custom and all of the new communities that we’re entering.  But, if we could go back and look at when we were at 365 units, our counts are probably down about 20% on people.  The difference is we feel like we can go to 700 with this staff.  We’ve always had a pretty Lean number anyway, but we do feel like we’re able to take more market share without adding the staff to the organization.

Scott:  Well that would be pretty impressive.  You are already showing you are doing close to that number you were a few years ago with 80% of the staff you formerly had.  If you could double it from there then that would have a tremendous impact.  People ask me about implementation, they’ll say well we’re going to go through this LeanBlitz process.  How much and what percentage will we implement?  Of course I have to explain to them that that depends primarily on the commitment of the management team and how much the company decides to go after it.  But I always cite Jagoe as an example as one of the best implementers that I have seen.  You guys came up with all your ideas when you went through a LeanBlitz process and you guys implemented very effectively, far faster and more than the norm.  How do you do that?  Of course you guys don’t work for other builders so it’s hard to compare yourselves, but what do you think enabled you guys to be stronger implementers than what we usually see?

Bill:  I think it comes down to the day in and day out focus on it, and I mean if it’s Lean initiatives or sales initiatives or whatever it is, it’s setting that goal out there, that target, and then putting in the plans that you are going to meet that.  Along the way there’s going to be some bumps in the road and you are going to have to adjust course and what do you need to get back on course.  We’re demanding about meeting any of the goals, if it’s a Lean goal or if it’s cycle times or if it’s quality goals or sales goals or whatever it might be. 

Scott:  If you could go back a couple, two or three years, is there anything that you would have done differently?

Brad:  It’s kind of funny because we went through process management, cycle time quality.  There’s always something missing.  It would have been nice to start Lean in 1982.  Really it would have been.  The industry is way behind on it.  Because we were always very project instead of process oriented, then we became a very process oriented company but it was so much effort. The thing with Lean is it just grows, once it gets imbedded it just starts growing organically.  So it takes over itself within the culture.  It’s funny because I look back at all the homes I’ve built and think why wasn’t I doing this then, what opportunity did I miss because of that?  That’s probably what I would have done different, if I’d known to do different I would have been doing this in the 80s.

Scott:  Let me just throw a couple of final questions at you.  This one’s for both of you, if we have someone listening today that decides we’re going to get in to this Lean, we’re going to learn about it and we’re going to take off and really try to implement it and emulate companies like Jagoe Homes, what key piece of advice would you give anyone who calls you and says they want to get started.

Brad:  I think first of all I would say don’t wait.  A lot of guys want to clean things up before they do this, and they see all these other problems.  There’s a lot of easy money out there to be gotten.  If guys are building any houses they are almost foolish not to do this.  The other thing would be that you’ve got to get all of your people involved in it.  When we did our first LeanBlitz we had 12 people and that was good for the quick fix, let’s save a million dollars and it was.  But then it’s like then the air comes out a little bit, I think that you really have to set your company up and dedicate the time to it and then you’ll just reap the benefits for, I guess till the next new best bar of soap comes out, I don’t know.  It’s almost so simple that people make it difficult.  Does that make sense Scott?

Scott:  We struggle with it all the time, that at least on the surface, to explain it and the basic concept of it is incredibly simple.  Things can get a little tougher sometimes in the details but people tend to make it more complex than they need to and I think that’s often a route to trying to find a shortcut, saying, well,  we don’t have to get all our people involved or we can do this just with the construction people.  I was talking to some friends, an old client, yesterday to give you an example about we’re now in the process of getting very heavily into what we call Lean design, and my friend, a guy I’ve known for years said “oh yeah, we do that, we do that.”   “Well how do you do that?”   “Well, we take our plans and we run them by a group of architects and then we run them by a group of our own people, purchasing, construction, so we really cover that pretty well.”  And I just kind of stared at him, I said “And do you run them by your suppliers and trades?”  And he said “well we do the framers and HVAC guys”.  I said “well that’s about 10% of what you need to run them by”.  So it’s very simple to say we need to get all of our suppliers and trades, or the great majority of them, to really look at and analyze and do a work-up on these plans before we start going building them.  It’s simple for me to describe that and I’ll be at NAHB next week describing that in a couple of presentations.  But then the actual doing of it can get more involved and more complicated, but if you can keep your eye on that ball and keeping it simple and not getting away from that, I agree with you it’s not complex, not difficult.

Brad:  And I also think that having a coach is important.  I’m in a Builder 20 group, Jagoe Homes is, and I’ve told these guys over and over that they need a coach.  A coach kind of gets them over that threshold of understanding the process of doing it, otherwise getting that next sale, getting that next product out, getting this or that out is going to be more important and they are never going to find this revenue stream.  Cause it’s a big faucet of revenue, I mean it really is.

Scott:  So have members of your Builder 20 group, I’m setting up a common phenomenon we’re seeing here, are members of your Builder 20 group, having seen your success which is really inarguable, you look at your growth, your profit, there’s few companies in the country that can match you guys, so are they all pursuing Lean?

Brad:  Well, I think that what people necessarily think is Lean is not Lean.  You know, it’s the rebid, it’s the value engineering, it’s stripping down the product, and I don’t think those guys are pursuing Lean in the way that we pursued Lean.  I haven’t seen them since October so I could be wrong.

Scott:  This is something that we see on a continual basis, that lack of understanding, people are doing things, doing initiatives but they don’t truly understand what Lean is and what Lean isn’t.  Let me ask you this to sum up here. How do you keep it going?  What are your plans?  Where do you see yourself in the next few years?  Where do you hope to take this, both the company and your evolution and Lean? 

Brad:  I think we’re still in the beginning stages of it.  I mean there’s so much to do, within this industry you can look around and there’s just so much waste out there.  I mean through the supply chain and the construction process and I think the ones who can master this are going to free up the resources and create better value for the consumer at the end of the day where they’re the ones that are going to get the market share.

Scott:  Anything to add to that Bill?

Bill:  I think Brad pretty well summed it up there.  It’s really been interesting during this, I guess the worst year of housing since 1937, we’ve seen a significant increase in market share, we’re still building, we haven’t had a bank tell us to slow down and it’s because of these initiatives.  We’ve increased products and added millions of dollars back into product, while taking millions of dollars of waste out of the product and the processes and the timing.  It’s just been phenomenal.  We decided we weren’t going to participate in a recession and we didn’t.  And I say a lot of it’s because of our Lean initiatives that it’s happened.  Now going forward its put us in a position to where we’re expanding, we’re not picking up 100 units, a third more, or 50% more almost, just by building more in the same communities.  Our economies still are in recessions and we still are having job losses but this has actually given us an opportunity that I haven’t had in the last 15 years. 

Scott:  It’s exciting and I can tell you and tell the audience, when I go to Jagoe Homes what I encounter is a bunch of people who are truly excited to be in the home building business and passionate about it.  Where a lot of places I go, understandably, a lot of people are down and having a rough time and having a hard time picking themselves up every day and saying OK we’re going to try it again today.  But it’s very different what I encounter in Owensboro and I’m always happy to go down there and go get myself over- stuffed at the famous Moonlight Bar-BQ Inn [8], a local institution.  So I want to thank both of you, you did a good job as always, gave us a lot of good information, a lot to think about and we’ll catch up with you down the road and see if you’ve continued to progress.  So thanks very much.