2017 Means More Buyers, More Selections: How to Manage Customization

A Builderonline article, Your Biggest Competition isn't Other Builders, highlights advantages to purchasing a new home when compared with an existing home sale.  The author, Myers Barnes, highlights 7 key selling advantages.

The second key advantage is customization and that asks a basic but key question:  who wouldn't want input on design and product selections?  The article suggests reminding home shoppers that a new home will reflect their personal style -- not someone else's taste.

FieldCollaborate: Improve customization processes

And, a reminder: Millennials -- expected to be a key 2017 buyer profile -- are very keen on customization and personal style!

Some of you might be thinking, "Oh, customization; tried that.  It adds time to our schedule and it's tough to keep track of all the selections, changes, re-selections. Not even sure they're profitable."

But...customization is a key selling advantage for new homes.  How can a builder's current process be better managed to efficiently offer something that home shoppers really like?

Previous Blogs mentioned the need for simplification and process analysis.  Scott Sedum's 25 Essential Scheduling Practices article in ProBuilder offers several steps to consider:

(1) Provide only the number of options customers will pay for and can be kept 100% current - revisit annually.  Do you know how many times each option is selected?  If every sale has a particular option, wouldn't it improve operations to make it a standard feature?

Ask accounting to provide an "options ordered" list and review with sales.  It's a great selling advantage to have an extensive list; take the time to analyze that all your costs are included and the scope isn't so extensive to unduly burden the team refreshing the list at the beginning of each year.

(2) Coordinate cut-off dates with sales for option selections and changes -- and help manage everyone's expectations. Sedum mentions, "It takes skilled salespeople, a focused management team and a company-wide commitment to maintain this discipline." Not maintaining such an approach impacts schedules and costs and can create negatives in home buyer perceptions, as well.  No one wants to hear the neighbor was able to add the granite counter top after cutoff when they couldn't!

We'll suggest a third:

(3) Take advantage of technology so your team knows when options are added or deleted -- and can easily browse all appropriate documentation including drawings.  CPS' FieldCollaborate offers scheduling software tools and provides field managers 24/7 data access necessary to keep up with options activity.  They're able to see what has been ordered on Lot 12 -- and when.  It's possible to view drawings -- all from their smartphone and tablet!

Customization is a powerful selling advantage; make sure that your operations are nimble enough to manage the necessary processes. CPS can help you determine what processes will best help you -- CPS•CRM manages option selections including cut-offs and FieldCollaborate provides critical 24/7 access to selections, schedules and drawings.

Home Builder Scheduling: More on the "Small Ball" Approach

There's quite a lot going on in the new home market these days: momentum is positive, more homes are being built and sold.  Low interest rates are still to be found,  household formation is growing, millennials finally seem interested in home ownership and...there are ongoing labor shortages in certain, key industries and markets making the construction part of the business ever challenging.

There's also growing interest in maximizing the concept of job scheduling in the effort to "bring order from chaos" in new home construction.

There's no doubt about it: new home construction is unlike many other production processes. However, Scott Sedum, in a ProBuilder article suggests there is one inviolate rule: The best builders are the best schedulers. Every builder recognizes that, as Fletcher Groves notes in Practice Makes Process:  "the reason an enterprise exists is to make money and... that value is delivered through the work that the enterprise performs and the work has to be performed in some manner of workflow."

Getting Down to the Basics

There can be a tendency to say (or mutter): "I already schedule -- and haven't really noticed much difference in the chaos!"

That's where "starting at the beginning" will pay off.  The art of scheduling needs to be much more than creating a list of tasks to be done today. Taking the time to review, analyze and enhance organizational processes will pay off -- as that review process will highlight areas needing attention leading to better scheduling.

And, as much as it might hurt, it pays off to start at the beginning. Remember KISS?  Regardless of whether you're building single-or multifamily homes, production or custom, in Alaska or the desert -- make an effort, as Sedum suggests, to reduce extra steps, paperwork, trips, calls.  That's what, Groves points out, allows you to complete more work, at a lower cost, with fewer resources. End result: increased efficiency resulting in better margins.

OK; where to start?  Remember our mentioning taking a SF Giants "small ball" approach? Details matter; we'll suggest 3 detail points that will help improve your scheduling process:

• Make simplification a daily objective -- throughout the organization. Finding out where you can simplify things (whether paperwork, approvals, or phone calls) is the first step in increasing efficiency -- and should be a part of schedule review process.
• Create a complete "start to finish" checklist -- nothing is more painful (for the organization and the pocketbook) than discovering a grading mistake when the slab is about to be poured. This list should be your start document -- and will generate one or more tasks in the schedule. 
• Absolutely include "BUYER" items in the schedule --  Touchpoints are today's mantra. And, they don't  start or finish in the sales office. The pre-construction meeting, walk through and home orientation are not only critical to your relationship -- they take time.  Make sure to include them in your schedule -- both because they're tasks and to highlight their importance.

Groves mentions process review needs to be much more than documenting today's workflow -- it is the front end of an improvement methodology.  We'll look at more key points in upcoming Blogs!

Scheduling: An anchor point for today's home builder

Are you building homes with paper & pencil, fax machine and a mobile phone to call your subcontractors and let them know when to show up?

If that's the case, you're probably wasting not only time but money.  And, not doing your vendors or home buyers any favors.  They're late, you're late... everything can feel as if it is in a state of chaos.

Let's talk about a pivot in homebuilding processes

Today's home building environment isn't that of 10 years ago.  Back in the day, many suggest that production (or, operations) was, as Scott Sedum mentions in ProBuilder, an afterthought when compared to finance, sales and land development. Now, Sedum suggests, homebuilders need to be great builders of product.

Clark Ellis uses a baseball analogy in a recent Builderonline article suggesting we're seeing a switch from "long ball" to the SF Giants style "small ball" playing with a focus on operational details.

Sedum suggests visiting Dr. W. Edwards Deming's carefully crafted statement, "Uncontrolled variation is the enemy of quality." to which he suggests adding "and profit."

Of course, some might argue variation is at the very heart of new home construction.  There are different size lots, different elevations, options, upgrades... the variations seem endless.

How is it possible to manage all of this variability and deliver the desired result -- a well-constructed home, on time, within budget? How to manage all these variables in addition to weather, labor shortages, mistakes and rework?

The key, suggested by Sedum and many others, is schedule.  A good schedule means that you've adequately addressed critical issues so that your schedule becomes the anchor in your operations. Getting to the endpoint of a "good" schedule suggests that the builder has addressed what Fletcher Groves identifies, in Builderonline, as process mapping and workflow.

We're going to be talking about many of these "critical issues" in the hopes of addressing how to develop and maximize the effective use of a construction schedule.  Stay tuned!