At Clayton Homes, America’s largest homebuilder, innovation isn’t the responsibility of corporate, it’s driven by everyone in the business.
After the NAHB Building Systems Summit, we took a bunch of Alliance members and partners on a Tennessee road trip read more here. The second stop on our tour was Clayton Homes’ Appalachia plant, where we caught up with Colt Davis, Matt Belcher and Tom Hale.
Here’s what we learned.
ABOUT CLAYTON
- VOLUME – They build roughly 50,000 homes a year. 45,000 are built in factories as manufactured homes (40K; $80-$125K price point) or customizable modular homes (5K) in one of 40 plants they
operate nationwide. The other 5,000+ homes are delivered by the site-built production homebuilders they’ve acquired, including Goodall Homes in Tennessee and Oakwood Homes in Colorado. The Appalachia plant alone serves 17 states. It has a three-day building process, completes five homes per day, and delivers 1,300 homes per year.
- SUPPLY CHAIN – Clayton Supply is a multi-billion-dollar business that manufactures and supplies 40-60% of the product within each Clayton home. Different facilities manufacture materials like vinyl, insulated windows, gypsum wallboard, trusses, cabinets, moldings and more. Clayton Properties, their site-building group, is not a current customer of Clayton Supply, but could be in the future.
- ACQUISITIONS – Clayton selects site-based builders who have a strong, family-focused culture and a penchant for continuous improvement but allows the leadership to remain in place and for the businesses to operate, to a large extent, independently.
KEY TAKEAWAYS
PEOPLE ARE #1
“You can’t have a good customer experience without a good team experience,” says Matt Belcher, Production Manager for Clayton’s Appalachia plant.
Clayton recently raised team member wages to more than $20 per hour and run their plants on a single shift. Each new employee goes through a 6-month training process. One aspect of the program is job shadowing. Right when the employee starts, a senior person within the production team is assigned to their job and they simply follow along for a period of time, like you would as a new server in a restaurant, learning how the job should be done and asking questions. They get one-on-one training as long as is needed to get it right.
The level of confidence and comradery that the program builds has allowed Clayton to reduce turnover from 60% to 28%. “When each person who leaves costs us roughly $4,000, that can really add up,” says Matt. “Training is definitely worth the investment.”
On the factory floor, communication and safety are top priorities. Throughout the complex, they have communications centers like the one pictured right, where they share information on production levels, quality management, top repeat items, safety, employee benefits, employee stats (absenteeism, work anniversaries, etc.) and more.
INNOVATION IS INCREMENTAL
“We’re focused on base hits rather than home runs,” says Colt Davis, VP of Operations for Clayton Supply. The company has an incremental improvement focus in which all employees take responsibility for moving the ball forward.
When they encounter a barrier to their success, they tackle it head on. One of the biggest challenges they have faced, as many other off-site manufacturers do, is getting their finished product out to their customers. So, they recently started their own trucking business to take control of the issue.
The University of Tennessee is currently auditing Clayton’s processes to see if there are any improvements they can suggest as a third party.
THOUGHTFUL FLOW + PROCESS GOES A LONG WAY.
When you walk around their factories, there are a lot of people still in play with standard tools like circular saws and nail guns. While you won’t see any robots, Clayton has done a lot more than just move the build indoors.
They have:
- Gone Digital – Clayton employs BIM to drive production. In addition to the television dashboards, documentation is all shared on iPad to ensure people have the latest specs for the home they are working on.
- Adapted Flow to Maximize Quality + Productivity – Clayton has reorganized their factories to create what they call “surge zones.” If one assembly falls behind in the production process for whatever reason, the others can continue moving forward. Roofs and floor systems are elevated during production to allow for easier application of ceiling texture and higher quality installation of mechanical systems respectively. Cabinets and fixtures are installed in bathrooms before the walls are placed around them.
- Limited Waste – Waste is minimal, and all scraps other than drywall are recycled.
We just got back yesterday, so stay tuned for more great nuggets from the shop floor.
In the meantime, thanks again to the Clayton Homes team for your hospitality!