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.
Costs buried in your suppliers and trades overhead are part of the bid, even if you don’t see them directly. If you change your process to eliminate wasted trips for a supplier or trade, for example, you will get the benefit in time, often faster than you expect. We hear many variations of another refrain that is just as fallacious, “The framer bid that by the square foot, so changing the design saved him a lot of labor, but doesn’t save us anything.”
First, we have to get away from blanket per-square-foot bidding where everyone is just guessing. If those 4 huge eyebrows, 6 unneeded corners and excess rake you just took out of the plan to make it both more efficient and more attractive were identified by unit cost, getting the savings back would be easy. Even with per-square-foot bidding, a ‘leaned’ plan should be bid less than your ‘today’ plan. If your framer is unwilling to work with you on this, you need a new framer. Most likely though, he has simply never had the opportunity to bid this way. He may not even know how. So help him. It will benefit both of you.
Note: This is just one of the 10 Lean myths featured in my article for the September issue of Professional Builder. Click here to read it.