Even Lean is local

April 17, 2013

It has been long been said that “homebuilding is a local business” and as much as I’d like to think that Lean always transcends locality, that is not always the case. Last week during one of our LeanWeek events in Austin, the head of a drywall installation company asked about using 54” width drywall—aka “stretch board”—in lieu of standard 48” widths for 9’ ceilings. Nine foot ceilings are rampant in Austin and so many other markets these days—unless of course they are 10’. He described how, when taping and finishing the extra joint with 9’ ceilings and standard board, you have to use a non-machine-edge either on the wall at 8’or at the intersection of the ceiling and wall. So not only do you get an extra seam around the entire room, you have one that is tricky and takes more time to float out. That means extra cost for zero value-added and that is not Lean.  

On this particular large single-story unit of just over 3,100 square feet, there was just under 1,200 linear feet of 9’ wall. What’s the big deal? Aren’t the guys already there and working? What’s one more seam? Imagine taping a single joint, 8 to 9 feet in the air, the length of 4 football fields, or almost a quarter mile! And remember, one edge is machine-finish and one is not, making it more time consuming. Kind of puts that in perspective, doesn’t it? This is not a big deal…it’s a huge deal. So what about the cost to the builder?

In Austin, the quote came back at just $25/1,000 square feet more for 54” board. That’s more than $400 for that unit, a large house with a lot of rooms.  So it’s probably no more than $200 per house for a more typical, open-plan, 2,300 square footer, but that is at the $25/1,000 premium. This just felt high to me. I know there is the issue of stacking board two-wide on trucks, but still…

So I emailed some clients and asked what they pay in their market. It was literally all over the map. One other builder was at $25/1,000, another $20/1,000, one at $16, two at $10, two at $6, several at zero premium and one where stretch board was slightly less. This builder was particularly interested. He talked to his drywall labor supplier who said he would give him a break for using 54” board, plus he would save on material.

So is 54” board Lean?  At $25/1,000 it could be a tough call, but I’d sure open the conversation. Anything less than that, I’d say probably so and if more builders used it, the price would drop everywhere. Most builders wouldn’t give this a thought and since drywall is virtually always paid by the square foot for labor, the response is often “we won’t get it back,” so it does not count. But that is not Lean-thinking. You do enough to help your suppliers and trades save and it does come back to you. Besides that, you get a better product and here’s another bonus, less waste. Did you figure into your equation what it costs to haul it away and bury the very stuff you paid for?

I know this from our experience with more than 100 Lean implementations, if you following the old practice of ordering 4’ x 12’ sheets in bulk because that’s how you get the best price, you are generating extra cost in labor, material and waste removal that outweigh your great price. With the cost of drywall up substantially this year, running this analysis should be a priority. Our 54” example is just a piece of the Lean approach which is to design the rooms to appropriate sizes in the first place, then order and stock board sized to each area to get your yield up, labor down and waste minimized. Yes, Lean is sometimes local but measure all the costs and Lean thinking always wins.

President

Scott Sedam is president of TrueNorth Development, a consulting and training firm that works with builders to improve products, process, and profits. A senior contributing editor to Professional Builder, Scott has written award-winning commentary on all aspects of the business of home building and won the 2015 Jesse H. Neal Award, business journalism's most prestigious prize, for his commentary in Pro Builder. Scott invites you to join TrueNorth's LeanBuilding Group at linkedin.com and welcomes your feedback at scott@truen.com or 248.446.1275.

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