Mark: Today on Power Tips Unscripted. We talk lean with Doug Howard, director of consulting services for modelers advantage. Doug is going to share how process improvements will send profits, customer satisfaction and employee morale through the roof. Plus, he’s got a free download for you. All that and more on today’s episode.
 
Victoria: Hi, this is Victoria Downing, president of Remodelers Advantage. And welcome to Power Tips Unscripted where we talk about tips, tactics and techniques to help you build a strong, profitable remodeling company. I’m here with my co-host, Mark Harari.
 
Mark: Yeah you are.
 
Victoria: And I’m really excited today because we get to talk to our Director of Consulting, Doug Howard, Doug’s and experience leader, entrepreneur, and small business consultant with over 25 years of success in leading organizations, starting new organizations, and assisting client companies as a startup or grow, Doug specializes in assisting business businesses develop plans that focus on improving their operational and financial performance, and executing effective strategies to implement those plans.
 
Victoria: Doug’s been with us for several months now. He’s still relatively new to the team and he’s brought tons of great stuff to the table. So welcome, Doug.
 
Doug: Thanks, Victoria. Glad to be here.
 
Victoria: So today we’re going to talk a little bit about lean and and process improvements. And I want to start out sort of broad. What does it what does process improvement really mean. What are you talking about.
 
Doug: Well I think in any business, you know, there’s lots and lots of processes that go on. And what we isolate a process and look at how we’re doing something, whether it’s how we build something or a sales process or hiring or whatever it is, we’re always looking to say, okay, well, how can we take that process and make it better?
 
Doug: Better for the customer, better for the employees, and better in terms of our profitability. And really successful companies do this on a continual basis. It’s really part of their corporate personality, where they’re continually working to identify processes and make them better.
 
Victoria: Now, so you’re talking today about a very specific method for doing that. Right, right.
 
Doug: Yeah. So lean is actually born out of the Toyota Production System that was developed in the 50s and 60s when Toyota was trying to become more competitive in the marketplace. So it has its founding in manufacturing, but really since probably the mid 80s, it’s really found its way into service businesses and government and health care. And what people are finding is that any process really can be dramatically improved by implementing lean.
 
Doug: And one of the things that’s really powerful about lean is it’s relatively easy to start implementing. You know, it takes a long time to really develop the skills, but it’s very much based on the person doing the work, having the best suggestions on how to improve things so it can be really engaging for an organization.
 
Victoria: So define lean itself okay. As you said, it started in manufacturing. It’s working its way into all these service businesses, which is wonderful. But what is it.
 
Doug: So lean is really looking at any process from beginning to end and looking how to eliminate the waste. So the idea comes from it was actually first coined in a book called Lean Thinking that was written in the 1990s. And if you think of a piece of meat, you know, a lean piece of meat, it really is with a fat has been cut away.
 
Doug: And so what it says is in any process, there are things that are value added and not value added, and that’s always in the eye of the customer. So if something’s value added to the customer, well that’s important. That’s something we want in the process. If it’s not value added, then it’s something we want to look at as waste and really look at how do we get it out of the process.
 
Doug: And statistics have shown that 95% of what’s done in most business processes is actually waste, which is staggering.
 
Victoria: No kidding.
 
Doug: It’s. Yes. Yes. So when you look at like for instance, think about going to an emergency room, you know, from the start to finish and going to an emergency room, you’re probably there on average for about 4.5 hours. So what parts of that are value added? Well, when you’re actually being treated, when you’re being prescribed something, when they’re running a test.
 
Doug: So in many cases that’s less than a half hour to 45 minutes of actual service against a much longer lead time of 4.5 hours to be there from start to finish. So everything else is done all the administrative work, the waiting. Anything like that that’s not value added for the customer is part of the waste. And those are the places you look to streamline, eliminate, reorder things to make the processes better.
 
Victoria: So how is this lean method different than other continuous improvement approaches?
 
Doug: Well, you know, for a long time people thought of process improvement as, you know, experts coming in with a clipboard, watching people work and telling them how they could do things better. The problem with that is most people know their own process is much better than that outside consultant. So what happens over time is sometimes when someone comes in in that mode, rather than facilitating a solution, people are expecting them to have a solution and their solutions start to look very similar, regardless of the needs of the organization.
 
Doug: Other methods like Six Sigma, which is another approach, is very statistically oriented. So it takes a considerable amount of time to ramp it up to put the measures in place and to be able to run a lot of analysis. But that’s a very top down approach. The thing with lean is it really allows for folks to be able to come in, and we can look at a very simple process.
 
Doug: Work with the folks that are actually doing that process. And we see this because when we’re doing training and things like that, you’ll see some process improvement the very first day you go through the process. Now there’ll be small changes. Certainly bigger changes take longer to incorporate and cultural change takes longer to go through the organization. But at the end of the day, it’s something that you can start, get some momentum on and start building that skill set to really become conditioned to be very good at it.
 
Victoria: Now you’ve been working with Lean Processes and doing this work for quite a while. How did you approach your learning about lean? How did you really get to understand it as well as you do?
 
Doug: Sure. So there’s lots of great literature out there. So there’s books like Lean Thinking and the Toyota Way and a whole host of others. But really, the best thing is to be involved in either some sort of engaging training. And I’ve been through that process in a couple of different iterations and really just doing it, working on processes with folks.
 
Doug: So I had the benefit of having people work with me on some of my processes when I had my own business. I’ve had the opportunity to help people facilitate changes in their businesses, did some work with service businesses and government, but then most recently, we’ve had some great opportunities to start going down that path, that remodeling world. And there’s tons of opportunity, I think, for applying this to the work that we’re modelers are doing out there, and they’re working very hard to do, but they’re doing it and having to get over the hurdle of processes that could be better, processes that are getting in the way of being as effective or efficient as they possibly
 
Doug: could.
 
Mark: Could you give our listeners a concrete example, one specific thing that you’ve seen or you’ve implemented somewhere that that had an impact?
 
Doug: Sure. Well, you know, one of the things that we see a lot of is when folks are setting up a job site and they’re getting ready for a project, and, you know, you guys have heard our own Tim Fowler talk about this many times, trips to the lumber yard, you know, going back and forth for supplies, whether it’s back to our warehouse, sort of to the lumber yard or wherever it might be, is one of the wastes.
 
Doug: It’s called motion. And so in going back and forth, there’s no value added to the customer. If I said to the customer, would you want to pay more? Because rather than doing this in two trips, I can do it in eight trips. The customer wouldn’t say, boy, that’s that’s better for me. So I’m willing to pay more for it.
 
Doug: So the cost of any additional transportation back and forth or motion that our folks have is simply cost that we’re adding, time that we’re adding, but it has nothing to getting the job done. And so when we’ve worked with folks and started talking about, well, how do we order where materials delivered, how are they handled? How do we know we have the right things?
 
Doug: Folks can look at that and say, boy, if I could simply go from four trips to the lumber yard a day down to two, with two still probably being too many, they would see a significant reduction in cost. They would see schedules improve and ultimately see customer satisfaction. And when you look at any process from the start of a project, from the sales process, all the way through that final punch list, we have lots and lots of little processes along the way.
 
Doug: And every one of them has the element of opportunity for getting some of the waste out of the way.
 
Victoria: Now, you talked about you made a mention just there about one of the forms of waste is motion. What are some of the other forms of ways?
 
Doug: Sure. So a lot of folks in the industry use an acronym called downtime. So the D stands for defects, just things that are not done correctly the first time. Oh is overproduction. So if I’m producing more than is really needed for a particular project, those things tend to be there. An inventory or in a waste waiting is probably the biggest one.
 
Doug: You know, we’re waiting for a sub to get scheduled. We’re waiting for an inspection. All of that is waste. The end is not employing talent. So when you have talent on board and you’re not utilizing to its fullest, that’s a waste. The T stands for transportation, which is really the movement of product back and forth. I is inventory whatever we have in inventory.
 
Doug: First of all, it can be translated relatively easily to cash. I mean, you need some inventory, but most places have more accumulation than they really need. The M is motion, which is the movement of people. And that could mean, you know, simply, where do I park my truck on the job site? How many times I walking back and forth?
 
Doug: How much time do I spend doing that? And he is extra work, extra steps in the process. And so that’s when we’re adding things in that really nobody’s asked us to. Nobody’s paying us to do, but we’re adding them as incremental steps that don’t really have any value. So when we look at those, we’re looking at a process from beginning to end and saying, okay, where are we waiting?
 
Doug: Where are we walking back and forth? Where do we have the accumulation of inventory? Every one of those places is an opportunity to say, well, can we eliminate it or can we lessen it? Or can we change the order up a little bit to be able to get through that process with fewer touchpoints or fewer issues where we’re accumulating things and then really reduce not only the costs, but at the time.
 
Doug: And in our business, time is really important. You know, staying on schedule is a huge part of good production, and it’s a huge part of things like cash flow and profitability.
 
Victoria: Do you find that there are some some of those areas, some types of waste that are more prevalent in the remodeling world than others?
 
Doug: Yeah, I mean, I think like anything else, there’s certain similarities. When you look at processes, weighting is a big one. You know, there’s a lot of things that go into keeping that job moving. And one of the biggest reasons why people start process improvement is we’ll hear that we simply just can’t get our production done on time. We’re not we’re not hitting the target dates that we set with customers.
 
Doug: Or we thought this job was going to be 12 weeks and it’s 14 weeks. And recognizing that because of overhead costs, all those delays costs money. So that’s really probably the biggest one. The other is really just a lot of extra steps. A lot of times we’ll see, you know, a piece of paper comes in and it goes from the project manager to an administrator to the bookkeeper, to the and a lot of these things that are floating around, we really need to ask ourselves, why is that person touching that part of the process?
 
Doug: Do they really need to be involved? Have we really already captured that information some other way, like maybe through our software? But a lot of times processes grow over time. You know, if I always gave it to the admin person, well then they may get it in their inbox whether they do anything with it or not. And it’s amazing how quickly you can find those steps and say, well, what if we just didn’t do that?
 
Doug: So we were just working on a project where someone was looking at their change order process, and the question was, you know, for change orders under a certain dollar amount, why do we have so many levels of approval and having to get back and forth and 2 or 3 different interactions with the customer, and they were able to go from ten steps in the process to five checkpoints in the process, and really shorten the amount of time to be able to process a change order, probably on average, from a week to really getting it down to the same day.
 
Mark: So, Doug, when someone hires you to come out and get them lean, get them fixed, get them straightened out. What what kind of process do you go through? Do you just walk around and interview the staff, or do you observe watch them work through a day? How does that even work for for you?
 
Doug: Sure. That’s a great question. So there’s really two approaches. One is really just basically training where people say I want to get some of these fundamental skills. So you take them through roughly a day of training, introduce them to the concepts, do some simulations with things that are not in the remodeling world, and then give them a takeaway project to say, okay, how are we going to start implementing things like cleaning up your workspace or looking at a process to improve?
 
Doug: The better approach really is if you have the ability to be on site for 2 or 3 days, you do the same kind of training, and then you actually look at a process and take it through what we call a kaizen event. And so really what that consists of is mapping out step by step with the current state is what the current process is.
 
Doug: Then having everybody brainstorm to look at that and say, okay, where are the wastes? What are we seeing there? What would it take to eliminate those wastes? So you kind of brainstorming lists, a list of wouldn’t it be great if we could do this, or would it, would it be possible to, you know, to do something else? And then from that list, you create kind of the low lying fruit and say, if something’s relatively easy to implement, we know it would make a big impact.
 
Doug: Let’s put that into the implementation strategy. And when we do now, what we do is we map the future state, which is a shortened version hopefully, of what you had originally. So we might look at the process and we want to see the actual people doing the actual work. And the folks in the training and in the process are all the folks that either do the work themselves or interact with that department.
 
Doug: So, for example, we might be looking at a production process, but we might want the company’s controller in there, we might want a sub in there, or we might want, you know, the sales department in there to be able to say, well, this is how we interact and this is where we end up waiting or this is where we end up getting something back.
 
Doug: That’s not correct. And then going through that process, what you’re doing is basically identifying these are the places where waste exists in the system. And it becomes really a group effort to say, well, what can we do to improve that process? And so a big part of it is having the right folks at the table, really getting them trained and engaged and then letting them brainstorm.
 
Doug: And really, you have to have the leadership buy in to say, I’m going to be willing to sit here and listen to some things that might be a little uncomfortable for me. You know, we’re all kind of protective of our own processes. We’re all somewhat proud of the things that we’ve built. So when someone comes along and says, why are we doing that?
 
Doug: Sometimes that can create a little bit of consternation. So it’s an interesting process to go through. But usually by the end of that first thing, you’re starting to see people get really motivated and really energized. And, you know, you got to think about from the employee standpoint, what we’re really saying is, how do we take the most frustrating parts of your job and eliminate them?
 
Doug: And that’s very powerful.
 
Victoria: That’s cool.
 
Mark: Yeah.
 
Victoria: That’s right, I like that. How does it impact the customer? I mean, there are some little bits and pieces we’ve picked up so far, but what does the customer see and how does it impact that end of the remodeling world?
 
Doug: Well, one thing is they’re going to see more projects on time and on budget. And that’s a big factor in the industry in terms of how people look at satisfaction. You know, they want their homes back. They want these things done on time and they want them done at the cost level they expected. So that’s part of it.
 
Doug: Part of it also is, is that the points of frustration for many customers are exactly some of the things that we’re talking about in these wastes. So when someone’s waiting, you know, that can be a very frustrating part for the customer. Anytime we can eliminate some of that, that can help tremendously. You know, defects. I mean, you know, when we go out and we, you know, you’ve heard to say this a lot, you know, we want to have a zero punch list, right?
 
Doug: Well, a big part of that is getting work done right the first time. We don’t want to be catching mistakes. We want to be not making it in the first place. So those are all points when you talk to a customer at the end of a remodeling project that says, you know, how well did this go? How did you like the process?
 
Doug: So that’s really the biggest part of how it impacts them.
 
Victoria: You know, I can also see that by putting these processes into place, eliminating that waste, you can shorten the time. Not only do you hit your deadlines, you can shorten the duration of the projects, which means that you can you will need fewer man hours, which means you can estimate a job to cost less, which means that you can still get your margin, but not and still be very competitive in the marketplace because you’re just more productive than your competitor.
 
Doug: No. Absolutely. And so, you know, one of the examples I like to think of as Southwest Airlines, one of the things very early on that they realized was the biggest asset they had hard asset that they had was an airplane. And one of the things they quickly understood was an airplane doesn’t make any money when it’s sitting on the ground.
 
Doug: And for years they focused every bit of their operational discussions and process improvement discussions around how do we turn that airplane quicker. And so they use a standard airplane. They use standard crew. If everything’s in the same place on different planes, procedures are the same. They don’t they didn’t waste a lot of time, money and resource on meals and uniforms and things like that.
 
Doug: Well, what it did was it gave them a simpler process, which meant a they could actually make more trips back and forth to some destinations. But be the cost of being in the air was actually much less because they have much less waste. And like you said, that either translates to I can be more competitive from a pricing standpoint, still make my margin, or, you know, I can maintain my pricing and just be more profitable.
 
Doug: But either way, it’s very, very powerful.
 
Victoria: No kidding. This is awesome.
 
Mark: Yeah. It’s great. And it’s that time. Doug. It’s time for the lightning round.
 
Doug: Okay.
 
Mark: Are you excited?
 
Doug: Always.
 
Mark: Let’s see how. Let’s see how lean you can be with these answers. All right. All right, let’s put 60s on the clock. Here we go. What’s your favorite business book and why?
 
Doug: Good to great. Because I think it’s very actionable.
 
Mark: If you weren’t director of consulting services for Modelers advantage, what would you be doing?
 
Doug: I’d probably be a high school history teacher.
 
Mark: What are you. Not very good at.
 
Doug: Anything that involves me using tools or anything that our clients are excellent at on a daily basis. And their construction work.
 
Mark: Your room, your desk or your car. Which do you clean first?
 
Doug: I guess my car.
 
Mark: How would you sell eggnog in the summer?
 
Doug: I think they ought to be a daily event, so I think it would just be testimonial.
 
Mark: Testimonial. What’s your least favorite holiday?
 
Doug: Columbus Day, because I think he was lost to making its way too much credit for having found something that was there already.
 
Victoria: That’s good. All right. Doug, this has been awesome. Thank you so much for introducing us to the concepts and giving us more information on how this is put into place. But before we go, I want you to share your five words of wisdom.
 
Doug: So my five words of wisdom today are going to relate specifically to the talk that we’ve talked about today. And they are relentless pursuit to eliminate waste.
 
Victoria: Oh, perfect. Wonderful. Does it have an acronym?
 
Doug: It does not.
 
Mark: Okay.
 
Victoria: Just seemed like it should, doesn’t it?
 
Victoria: I’m not sure what that would be.
 
Mark: So, Doug, how do we how do we find how do we find you? How do our listeners get more information on lean.
 
Doug: So they can go to LEAN remodeling? Com and there’ll be information there about all the things that we do, the things that we offer. We’ll also have information on there about our master classes for lean, which we’re hosting on April 20th and 21st. It’s a two day class on the fundamentals of lean and how to put it to work at a remodeling company.
 
Doug: And also we have a free download for our listeners, which is the process mapping template, which will allow folks to be able to look at one of their processes, get it down on paper, be able to look at their current state and start being able to look for waste opportunities.
 
Mark: Cool, cool. And that’s it. LEAN remodeling. Com as well right.
 
Doug: LEAN remodeling com. Yes.
 
Mark: Cool.
 
Victoria: Thanks very much. Doug this has been awesome. I’m excited to put some of these principles to work here at Remodels Advantage. I’ll talk to you again soon.
 
Doug: Thanks. Bye. Thanks.
 
Mark: See you buddy. So that was good.
 
Victoria: Oh my God. I just love that stuff. The idea of taking away waste and simplifying things. And that’s great stuff.
 
Mark: Yeah, well, just the whole excitement of. It’s almost like to me, it’s kind of like Sherlock Holmes. You going in there just trying to find the problem. See what we can fix. Like, you know, lean. I really like on me when you’re not strong.
 
Victoria: You know, I used.
 
Victoria: I used to sing that in choir, actually.
 
Mark: I don’t even see you in choir.
 
Victoria: Yeah, yeah, well, they weren’t too happy. I was, I’m sure. But, yes.
 
Mark: So LEAN. Remodeling.
 
Victoria: Yeah. Very exciting. Can’t wait in that master class is going to be. I want to sit through every bit of that.
 
Mark: Oh, yeah. Without question.
 
Victoria: Very cool. Well, another one in the can, my dear.
 
Mark: Yeah. Thank you for being here. I’m Mark Harari.
 
Victoria: And Victoria Downing, and we’ll see you next time.
 
Mark: See you next week.