Posted by: JC Gatlin | June 30, 2010

An auto manufacturer, a home builder, and a lean sensei walk into a bar…

What exactly is Lean?
 Based on on the science of Henry T. Ford’s original assembly line production, and vastly improved by Taichi Ohno’s Toyota Production System, lean is a way of operating that can be pared down to two basic principles: respect for people, and elimination of waste. Jeffrey Liker spent 20 years studying Toyota’s lean approach and in his 2004 book “The Toyota Way” describes lean as four interdependent components required for long term success.
    • Philosophy: Make decisions based on long-term thinking, even at the expense of the short-term
    • Process: Standardize processes wherever possible, and eliminate waste (delays, rework, etc.)
    • People & Partners: Respect, challenge, and grow them
    • Problem-Solving: Commit to continuous improvement, learning and eliminating recurring problems

Putting these four components in place, it seems obvious that any company in any industry would benefit from Lean. Every company must set a solid foundation of doing things the right way the first time, have defined processes in place that free employees to do their job efficiently with minimum confusion and error, build a team of people & partners that continually improve and raise the bar, and foster a culture of relentless problem-solving.

So what the {BLEEP} does auto manufacturing have to do with home building anyway?

It’s not always easy to see how some of the technical tools of the Toyota Production System apply to home building, but it’s the overall approach to running an organization that is key.

With homebuilding, there is a need to constantly perfect and evolve the building process. The new home industry in particular is a race to build faster with less construction costs while offering home buyers more value and higher quality for a lower home price. This objective is blocked at every turn through a constant barrage of problems: building defects, scheduling delays, cost increases, material shortages, code changes, ever-changing customer demands… The list goes on and on.

That’s why a lean builder never stops experimenting and learning more about the building process and how its Building Partners do their job. This is how they successfully overcome all those road blocks and the constant barrage of problems. Lean Homebuilders do not encourage or admire workarounds, firefighting,  or the employee who swoops in to save the day. They want to understand and solve problems, not put up with them.

It would be impossible to exaggerate how important this is.

You must unlearn what you have learned

Many organizations have tried and failed to implement the lean principles or “The Toyota Way.” There’s a lot of reasons for these failures; some are habits we still struggle to break even today: misguided leadership, relying on workarounds, overemphasis on cost reduction rather than waste elimination, lack of discipline to follow standards.

While many companies are familiar with the tools of the Toyota Production System, very few seem to understand why Toyota was able to apply them so effectively. It all comes down to the culture created by The Toyota Way; described in the book as a consistent way of thinking, an environment of teamwork and adherence to standards, and a never ending search for a better way. The Toyota Way always keeps the focus on customer satisfaction.

The homebuilder who gets THAT can leap out ahead of its competition, chased but never caught, building at faster cycle times with lower costs, offering a higher value at a lower price, responding more quickly to the changing market, with fewer people, fewer resources, and fewer building defects and mistakes.

© June 2010 Homebuilding Partners, Inc.   twitter-logo


  1. Great post JC!

  2. […] on direction from a fellow home building company and the advice of our Lean Consultant, we broke our construction schedule into two halves, allowing each meeting to “zoom […]

  3. All new construction is built to Energy Star standards which include energy-efficient building techniques and features such as more effective insulation, high-performance windows, tight construction, more efficient heating and cooling equipment, and Energy Star rated lighting fixtures and appliances

  4. […] days to the construction schedule is the easy, quick answer. But in Lean Homebuilding, our goal is to methodically reduce our build time, not increase it. And once a day is inserted […]

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