Tag Archives: Integrated Process Management

The Housing Recovery: 5 Lessons We Learned

August means school is back in session, and it’s got us at Contrado thinking about what we’ve learned since the downturn. Although it was a time of struggle for everyone in the home-building industry, there was a silver lining — learning a whole lot about survival. Apart from learning how to embrace efficiency the downturn taught us how to adapt and how to use the proper tools that were key to our survival. We’ve compiled a list of the lessons we learned (with an inspirational flair) to help guide your post-downturn learning strategy, even if you aren’t going back to school this year!

 

1.  To Be an Industry Leader We Must Always Keep Learning and Improving.

Start with honing in on your company’s successes and failures, and educating yourself on current products/services in the industry that could make you the leader of the pack. Investing in the right product or service, like Virtual Option Sales, could be the difference between selling a home or not — putting you either ahead of or behind your competition.
“Leadership and learning are indispensable to each other.” JFK.

2.  Don’t Ignore the Signs.

Be aware of market conditions and USE THEM TO YOUR ADVANTAGE. It’s hard to accept losses and to embrace a dark cloud — but always look for the silver lining. With learning comes a bit of vulnerability, but don’t let that stop you! There is room in every mind (and company) to learn something new that you will thank yourself for later.
“Being ignorant is not so much a shame, as being unwilling to learn.” Benjamin Franklin

3.  Use Survival of the Fittest to Your Advantage.

Take a tip from Darwin and recognize that if you cannot adapt and evolve to what is currently happening in the home-building industry, your company could eventually become extinct — but in this economy it could happen in the blink of an eye! Learning how to adapt, evolve, and change to be more successful is an ongoing, never-ending process that will lead you beyond survival, and hopefully to the top of the food chain.
“Education is the kindling of a flame, not the filling of a vessel.” Socrates

4.  Learning Something New Will Benefit you Professionally and Personally.

It goes without saying that learning a new skill will widen your horizons, and learning in any situation is almost always personally rewarding. Happier employees, happier company.
“Live as if you were to die tomorrow. Learn as if you were to live forever.” Gandhi

5.  Take a Risk.

A calculated risk, that is. It might be the last thing on your mind when you are in panic-mode, but taking risks is a big part of survival. Simply reacting to your surroundings won’t get you very far in most cases. Getting to the top will require a balance of defense and offense.
“I am always doing that which I cannot do, in order that I may learn how to do it.” Picasso

So now is the perfect time to ask yourself: WHAT DO I WANT TO LEARN?

Most likely you have always had something that you wanted to learn – after all, curiosity is human nature! If you are drawing a blank, a few common ideas and skills that would also potentially benefit your career are learning how to:

o   Speak a new language (whether it be Spanish, Sign Language, or HTML code!)
o   Network within your industry
o   “Let go” of things and embrace positivity
o   Integrate your business operations to increase efficiency
o   Strengthen your leadership skills
o   Create a research study to discover what your ideal customer really wants
o   Find a creative new hobby
o   Stay current on market trends
o   Tell jokes
o   Explore technology (especially if it will enhance your business!)  

We at Contrado have taken it upon ourselves to learn and embrace efficiency – which for us has included learning the cutting-edge technologies in the home-building industry today, Call us to hear more about what got us through the downturn!

 

Imagine Integration

Speed to Market

How to Achieve the Results You Want, The Way You Want.

Picture This. The smell of coffee fills the air, you grab a seat in a room full of energized people talking excitedly among themselves…

  • To the left is your team — your departments of:
  • Architecture
  • Purchasing
  • Marketing
  • Sales
  • Who are sitting down & communicating with your:
  • Architectural Designers
  • Structural Engineers
  • Mechanical Engineers
  • Framing
  • Plumbing
  • Electrical
  • Energy Experts

Their main objective? Your Success. All these people are assembled here to help you complete your project faster than ever before, while at the same time lowering costs and improving accuracy.

This is Integration, at its finest. But is this even an option? YES. Not only is it possible, the Home Building Industry is finally catching on to this prosperous way of doing business and completing projects. It is called Integrated Project Delivery, or IPD. Coined in 2007 by the AIA California Council http://en.wikipedia.org/wiki/Integrated_project_delivery

IPD, is a results-driven collaboration between all people, processes, and technology. It increases velocity, reduces waste, and maximizes efficiency — the goal is achieving overall project SUCCESS. The people in this meeting make up your IPD dream-team.

They will take you through all of the phases of design, documentation, and final construction.

The results you can expect:

  1. INCREASED VELOCITY: Working collaboratively over the next several months, they will shave weeks/months off of your time-to-market schedule (refer to image).
  2. LOWER COSTS: Your IPD team will substantially reduce costs and improve efficacy by evaluating and perfecting the product development and delivery.
  3. IMPROVED QUALITY: Working together during all stages will ensure an end-product that is higher in quality & accuracy — a product with hardly any error.

So why is IPD important, and what are we currently doing wrong? For the past 50 years, most builders have adopted an ‘a la carte’ method to their home building process —choosing several different companies to complete the different processes, creating a hodge-podge team of different vendors instead of one team (IPD) that works on everything together. What results is a plethora of errors — multiple points of contact and a continuous back-and-forth of communication. Think of the game “telephone” — somehow the message always seems to get messed up. The costs increase, the deadlines change, and a good flow of overall efficiency is lost. Quality and accuracy is on the way out the door, too. And ultimately, the worst potential outcome is a poorly executed product and an unsatisfied home buyer.

Here is an example of an agenda for an IPD-managed project:

  1. Develop Project Agenda
  2. Set Main Project Goals
  3. Set Desired Project Targets
  4. Outline Project Milestones
  5. Create Project Checklists

Just imagine this integration taking place in your company, with your team, right now. This is the quiet revolution that is taking place in the Home Building Industry today, and yes, we at The Contrado Group are at the forefront. 20 years of industry experience has taught us how to embrace the process of integration to achieve the results that our builders want, when they want them.

Declare Independence from Tradition!

Embracing 21st Century Technology in our 20th Century Industry
(Or, why we do things differently at Contrado)

Thomas Jefferson once said that he liked “the dreams of the future better than the history of the past.” He knew what they needed: independence from traditional political, economic, and religious oppression. By writing the Declaration of Independence and the US Constitution, he was expressing the convictions that were in the hearts of the American people – the need for change.

1.  Understand that People Are Afraid of Change. When was the last time you changed the course that you were on? “Change” is a broad word that we can apply to many different things… a birth, a loss, a move, a new opinion, a new job. But ultimately it is a departure from tradition – which leads to a new way of doing things. For example, the change our nation went through during the 1700’s, despite being fought by many, led to a whole new world of possibilities and fresh starts. Regardless, change usually freaks us out. Whether it’s Good Change or Bad Change, we as humans are naturally afraid of the unknown. We fear failure. We feel doubtful about the possible outcomes. But we have to remember we always have options, and we can always CHANGE the outcomes. You don’t have to settle. “Open your arms to change, but don’t let go of your values.” – Dalai Lama

2.  Understand the Technology. If we think of change as a software upgrade, what software are you in need of, right now? Do you need better online engagement with prospects, for example? Do you need to build more homes with limited resources? Do you need better software to help you meet your customer’s exact needs? If you don’t know, evaluate what isn’t working. Then inform yourself!  You can start by asking the question, what are the best tools out there for what I need right now? If you go beyond word-of-mouth and previous methods into the world of uncovering the new, you will find services, systems, software, companies, and tools that you have never even heard of (like Contrado’s new HTML5 Interactive Floor Plan system!). What are today’s game-changers? Incorporating iPad technology into their homes? Making it easier for you to do your job? Building homes in half the time? You will be surprised at how much newness is flooding the industry.

3.  Understand that nothing will change unless you Try Something New. Times they are a-changin’! We are living in an exciting time where technology seems to be accelerating at the speed of light, and we will be left in the dark if we don’t try to keep up. In other words: have you ever heard someone say that the definition of insanity is ‘doing the same thing over and over again, and expecting different results’? Trying new things can be scary folks, but how can you improve without even a little bit of change? Traditional tactics in the Revolutionary War ultimately failed the British; the revolutionaries were outnumbered, so they developed guerilla warfare to outmaneuver their red-coated opponents. They were forced to innovate the way they battled – thinking differently, operating more efficiently, using what they had and just going with it – which led them to victory.

You have the right to life, liberty, and the pursuit of happiness.  So if after all of this you don’t do it for you, do it for our Founding Fathers!

Bounty Towels & Building Homes

What can we learn from the retail industry and apply to building homes?

What’s in a bar code?

We may not wonder any more why bar codes are on packaging as we shop at a store, but in reality this way of information tracking is relatively new.  In June of 1974, the first U.P.C. scanner was installed at a Marsh’s supermarket in Troy, Ohio. The first product to have a bar code included was a packet of Wrigley’s gum.

The process is relatively simple, in that an optical reader device scans an item and the associative data is then pass onto the logistical parties in order to keep the store shelves filled. However, having proper formatting of data and agreed upon industry standards took some 20+ years. What retailers soon discovered, is that the more integrated their supply chains were with information, the less errors were experienced, quicker fulfillment times of orders occurred, and less man-hours incurred per dollar of revenue was achieved. In other words, they developed a very highly efficient supply chain model with a single pull-through triggering mechanism, that being the bar code.

 

Single Trigger Event Pull-Through Model for Retailers

Consolidation of Retailers In The 1980′s

As we entered the second decade of bar code scanning and single trigger envent tracking, Walmart had revenues of 1 billion, and 276 outlets in 11 states. Today, Walmart has sales of $421 billion and 8,970 locations worldwide. This type of unprecidented growth came from geographical expansion, and at the expense of smaller retailers that were not able to track their sales as efficiently. Mass retailers such as Walgreens and Target, realized the power of information tracking and automating their processes with Electronic Data Exchanges (EDI) in order to conduct more transactions with less resources.  In fact, the reality is that we are able to sustain a standard of living much higher than pre-1980′s due to a highly mechanized means of delivering products to market.

Measuring Productivity of the Construction Industry*

The productivity of the construction industry, as measured by constant contract dollars of new construction work per hourly work hour, has gradually declined (with some modest exceptions) over the past 40 years at an average compound rate of -0.59%/year (see Figure 1). This is particularly alarming when compared to the increasing labor productivity in all non-farm industries, which have experienced an increasing productivity of 1.77%/year over the same time period. Over the past decade, this trend has slightly improved but the decline in construction labor productivity relative to the rest of the industry has continued.

This is a serious problem which indicates that over the past 40 years, construction projects have required significantly more field work hours per dollar of contract. In other words, the construction industry seriously lags other industries in developing and applying labor saving ideas and in finding ways to substitute equipment for labor. While there are a number of construction tasks that have been made more productive through the use of labor saving equipment, it is clear that, looking at the whole industry, there is a significant productivity problem. Why is this the case and what can be done about it? First, let’s review the productivity data shown in Figure 1.   (read more)

Figure 1. Labor productivity index for US construction industry and all non-farm industries from 1964 through 2003.

*From: Labor Productivity Declines in the Construction Industry: Causes and Remedies, Paul Teicholz, Ph.D. Professor (Research) Emeritus, Dept. of Civil and Environmental Engineering, Stanford University

Where is The Single Trigger Event (Bar Codes) for Home Building?

Now, the next question is where is my bar code for building the home? If that’s your question, then we’re beginning to make great strides into the next evolution of building homes. This would not have been possible if it were not for the advent of just a few key ingrediants:

  • Internet
  • Building Information Modeling (BIM)
  • Application Programming Interface (API)
  • Web Based Store Front

The model is relatively simple, in that all information for building the home must be linked to any and all retail areas for a home builder. This means that data that is incurred in the design process must be associated with the builder’s marketing materials on the web (ie store front). Think of it if you will, the home builder’s web site is their retail store and that any purchasing activities will need to be done in their store. Once a customer buys the product, then the needed data is then exported through API’s into the appropriate areas to fulfill the transaction.

This model does not mean that builders are  going to do away with sales agents, models, and other traditional areas of home building. What is does mean, is that the information that is developed from Building Information Modeling (BIM), can now be linked to web-based interfaces such as floor plan options, Sales CRM, builders suppliers, and others. The single trigger event pull-through strategy (ie bar code), allows for all transactions to be interconnected with each other only if the event occurs. So in doing so, information flows according to Figure 2.

Figure 2 – Purchase of a home and affiliated options triggered by customer, allows for pulling through of labor and materials with information created up stream in the design stage with BIM through the supply chain network.

In summary, we are in the midst of the most exciting times for home building in the  history of the United States. We are being confronted with razor thin profit margins in a time that productivity is at rock bottom. In order to deal with single digit profit margins and high Sales General and Administration (S G & A) costs, we must automate our processes. This can be done with coordination of both design and material specifications through BIM. Once the data is formatted, it can then be passed to a builder’s admin system for both material and labor pricing and scheduling to construct a home. Of course, this transaction gets triggered by the online selection process by a home owner either with a designer and/or sales agent. Once we begin to emulate other industry’s ways to improve productivity, then we’ll see better profit margins in the future of home building. The future is bright!

 

 

 

 

 

 

 

What’s Your Collaboration Quotient?

Collaboration is key
Hiring a key staff member with an impressive IQ is undoubtedly a benefit to achieving your company’s goals, and even better if they possess a high EQ/Emotional Quotient to help manage team members effectively.  But, what is your company’s CQ/Collaboration Quotient?

Many business leaders today are increasing their quotient level by identifying the tremendous opportunities available to them through enterprise collaborations – all parties working towards a common goal.  Before you jump on board; however, you’ll want to assess the types of problems your business wants to solve.  Here are a few examples of how multi-party collaborations can help solve a business problem, address an immediate crisis or set loftier milestones:

  • Draw more innovation opportunities
  • Advance effectiveness & efficiencies
  • Decrease time-to-market cycle
  • Joint  ”strategy focus” and desire for same end result
  • Avoid duplication of efforts
  • Streamline the information flow which decreases errors
  • Reduce overhead, improve profits
Clearly, we’ve all conducted in-house collaborations with project teams for years.  Adopting multi-party collaborations adds that next level by integrating your in-house team with outside specialists who possess the necessary tools and technologies for bringing about the improvements essential to reaching your goals.  The biggest roadblock to teaming with outside experts can be the push-back from your current in-house team.  To build confidence, it’s important that they understand how the tools and share of information processes can best be integrated, the value the partners bring to your company’s bottom line, and how the integration process will ultimately make your company increasingly more competitive.  The overall collaboration effort brings everyone onboard and driving for the defined common goal of the company, which drastically raises your CQ/Collaboration Quotient.

Shifting Gears in 2012


Stewart-Shifting Gears

Performance-Driven Approach through Integrated Process Management (IPM)

Shifting gears is second nature to NASCAR driver, Tony Stewart.  It’s critical to gaining the results needed to maintain his lead and charge beyond the checkered flag in first place.

For years, home builders were somewhat content with the minor shifts necessary to conduct their businesses.  They found there were manageable corners to take.  Today, however, there are many new variables as a result of a culture-shift effecting the purchasing habits, expectations, desires, and vast amount of products available to homeowners.  So, how do you respond and position your company in order to remain a leader?

Industry experts note that looking to technology alone won’t solve the issue of efficiencies, time-to-market issues, costs, and more.  What you, as a builder need to wrap your arms around is a “performance-driven team philosophy” where through people, processes and technology combined, you will experience the most profound changes to your bottom line, improved accuracies and faster time-to-market products.  This optimized approach recognizes the key drivers and integrates the right results for home builders.  The shift is gaining momentum through an innovative solution by our experts at The Contrado Group tabbed,“Integrated Process Management (IPM)”.  Now in its second year, IPM has been refined in 2011 and is proving highly effective for valued clients such as Maracay Homes, Scottsdale, Arizona who improved their time-to-market results by 60%.  How does translate in dollars? Well, a big bundle comes to mind!

Staying in the race in 2012 will mean making major shifts, according to industry professionals.  Improving efficiencies have driven builders to advocate an integrated approach by steering clear of their outdated, convoluted, building-in-isolation process into a results-driven project delivery model.  An IPM program by The Contrado Group will provide you with a steady and single-source of information/technology starting as early as the conceptual drawings , into structural design/drafting (BIM), to project management, to sales options, and then to the all-important marketing/sales solutions.  Our BIM (Building Information Modeling) affiliate, AmeriCAD (http://www.constructech.com/news/articles/article.aspx?article_id=7929) , sets the core technology standard for the Integrated Process Management platform and allows the reduction of risk through better information throughout the process.

It is reported by home builders currently working in a BIM environment (http://bookstore.ashrae.biz/journal/journal_s_article.php?articleID=827) , that they are not only gaining efficiencies via clash detection, coordination, scheduling, etc., they are also reducing risk of exposure for schedule and budget overruns, claims, and more.  Looking at the current climate, owners that would put down big dollars to purchase land and start a community may be reluctant. So what will help convince them otherwise? Understanding that there is a much better risk scenario out there and that is what BIM and Integrated Process Management (IPM) is delivering to the industry.

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