Quadrant Homes Applies Lean Concepts in a Project Environment

Case: Quadrant Homes Applies Lean Concepts in a Project Environment

1. Consider the three value disciplines described by Treacy and Wiersema. Create a two-by-three table in which you name and describe the three value disciplines in the left column. In the right column, describe what Quadrant does to support each one. Below the table, write a few sentences in which you take a position regarding which value discipline best describes Quadrant’s highest priority. Defend your reasoning.

Value Disciplines Quadrant

Operational Excellence  Redesign of internal processes and home designs to move from build-to-stock to build-to-order based on customer preferences from buyer survey and real estate sales data.

 Focus was to reduce cost, reduce waste, improve product quality and increase delivery speed.

 Load balancing of staffing and resources to avoid feast-or-famine dynamics; improving the flow of value-creating stages.

 Backward integration with sales forecasting to prevent expensive land inventory build up; block-style purchase of 90-100 lots in areas of similar price competition for used homes.

 Move away from single, unique community center managers to community teams with standardized 40-point standard procedures list; balanced load for community teams to allow completion of one community before starting another.

 Standardized buyer process of layout and feature selection followed by a vertically-integrated loan provider.

 Minimal core staffing with high outsourcing with closely-coupled contractors; systems are shared to expedite information and financial flows.

Customer Intimacy  Buyer surveys and real estate sales analysis led to the unfilled customer niche for homes with 1) large space, 2) more feature choices, and 3) good value.

 Offering more home customization choices to the consumer than before with previous business model.

Product Leadership  Seeking advice from subcontractors and suppliers regarding ways to improve quality of homes and offering more options flexibility while also increasing product quality and lowering costs.

 Never sacrificing quality for speed; contractors are always subject to dismissal for sub-standard quality.

Clearly, Quadrant chooses Operational Excellence as its chosen Value Discipline while maintaining acceptable levels of Customer Intimacy and Product Leadership. Quadrant’s strategic focus and internal realignment was all based around lean-processing that streamlines operations, reduces costs and wastes, improves efficiencies and delivery times and increases end product quality.

2. Describe the critical elements of Quadrant’s value delivery system. What specific operations and supply chain practices contribute to the company’s success? Select the five that you think are most important and explain how they contribute.

The top five elements of Quadrant’s value delivery system that contribute most to the company’s success are the following:

A) Load balancing of demand, supply, materials, resources, scheduling and construction. This allows the company to create a steady-state, predictable operating environment with higher standardization, higher efficiency and lower costs.

B) Mutually-beneficial relationships and systems integration with suppliers and contractors that allow the delivery of predictable, high quality products and services at lower costs with minimal core staffing to Quadrant.

C) Effective vertical integration both internally, by coupling sales forecasting with construction to smooth demand and supply, and externally, through partnership with a banking institution to offer home loans to customers through Quadrant directly.

D) Re-engineering its home layouts