Applying Lean Production in Factory Homebuilding

This article serves as a resource to factory home builders seeking to use lean thinking to slash waste from their production operations. Lean refers both to a general way of thinking and to specific practices that emphasize using less of everything (time, money, materials, and so forth) to satisfy the customer by delivering the highest quality product at the lowest cost in the shortest time. While providing an overview of lean production, this article focuses on two fundamental lean tools: Value Stream Mapping (VSM) and Rapid Process Improvement (RPI) events. This research follows a case study approach to document the application and benefits of lean production in the factory homebuilding industry. The target population for these case studies was a group of nine manufactured and modular homebuilding plants that initiated lean production efforts in 2006. VSM was used to identify waste and to target specific portions of the production process for improvement. RPI events were then conducted in targeted areas. The results were dramatic. Labor efficiencies were increased by 10 percent to more than 100 percent. Defects in finished drywall were reduced by 85 percent. Taken as a whole, lean production activities were shown to increase the efficiency and quality of building operations, boost worker morale, and improve communication between management and workers. Cityscape: A Journal of Policy Development and Research • Volume 11, Number 1 • 2009 Cityscape 81 U.S. Department of Housing and Urban Development • Office of Policy Development and Research Dentz, Nahmens, and Mullens Introduction In 2007, approximately 11 percent of all newly built single-family homes in the United States were factory built (U.S. Census Bureau, 2007). Although factory-based home construction approaches relocate many of the field operations to a more controlled factory environment, the construction techniques share many similarities with those employed in traditional site building. Although automotive, electronics, and many other manufacturing industries have reported dramatic improvements in production efficiency with the introduction of lean techniques, examples of such improvements in factory homebuilding are only beginning to emerge. One of the first of these lean efforts in factory homebuilding was conducted by the Manufactured Housing Research Alli­ ance (MHRA) with sponsorship from the U.S. Department of Housing and Urban Development’s (HUD’s) Partnership for Advancing Technology in Housing program, the New York State Energy Research and Development Authority, and the factory-built housing industry. The goal of this ef­ fort was to transform the way homes are manufactured, thus reducing housing cost and improving quality, safety, productivity, and design flexibility. The strategy was to reduce waste through the implementation of lean production tools and techniques. This article showcases the use of these techniques in three of the nine plants studied and demonstrates their value to the factory-built housing industry. Lean Production Overview Koskela (1993) first applied lean production principles to construction, emphasizing production process flow and the conversion of inputs into finished products. Picchi and Granja (2004) presented five lean principles used in the construction industry: value, value stream, flow, pull, and perfection. Value is value as perceived by the homebuyer; value stream refers to mapping of materials and information; flow refers to creating continuous flow; pull refers to pulling services, components, and materials only when necessary; and perfection refers to high-quality systems designed for immediate detection of problems. Salem and Zimmer (2005) identified five major lean principles applicable in the housing industry: customer focus, culture/people, workplace standard­ ization, waste elimination, and continuous improvement/built-in quality. Waste is any activity that consumes resources but creates no value for the customer. Lean production, which began with the Toyota Production System (Ohno, 1988), was the result of decades of development by automobile manufacturers, who reduced average labor hours per ve­ hicle by more than one-half with one-third the defects (Caldeira, 1999). Other industries followed the automobile industry’s lead, achieving similar results (Womack and Jones, 1996). Lean produc­ tion is based on five fundamental principles: (1) identify what the customer values; (2) identify the value stream and challenge all wasted steps; (3) produce the product when the customer wants it and, once started, keep the product flowing continuously through the value stream; (4) introduce pull between all steps where continuous flow is impossible; and (5) manage toward perfection (Womack and Jones, 1996). The goal of lean production is to satisfy the customer by delivering the highest quality at the lowest cost in the shortest time. This goal is accomplished by continuously eliminating muda, or waste.