Get Lean: Insights from Scott Sedam

In a recent webinar titled Attainability Short Game: Production, Productivity & Profit, Scott Sedam reviewed the specific actions you can take today that will improve product, process and profit.

Below you will find insights from Scott including his recomendations on going Lean… 

Get Lean

Articles, blogs and web posts are nonstop these days on the application of manufacturing techniques to homebuilding that enable more efficient off-site construction — from components such as panels to full modular — to save time and labor. Scott Sedam, founder of TrueNorth, consults with the building industry to help clients find sustainable improvement. He’s a big believer in the future of innovative manufacturing in homebuilding, but says “right now that affects less than two percent of the industry. While you’re waiting for that to change the world, what will you do to bring down costs and make housing more attainable? All the research says our homes are overpriced in every single market segment.”

Sedam’s answer is the adoption of Lean Process, techniques long proven in other industries which his team has adapted to home building. TrueNorth’s LeanBuilding Blitz ™ 8.0, which involves a builder team working with 23 suppliers and trades, turns up, on average, nearly $15,000 per house in identified waste to be eliminated.  There are three primary categories builders must address:


Sedam says that sometimes a focus on net profit rather than ROI will lead builders astray. “You have one builder making a nine percent net that looks good, but it takes eight months to build a house. Another builder makes six percent net but only takes four months to build a house. Who ends up with more money? It’s the combination of net profit and cycle time to give you ROI that makes the difference.”

Sedam explains that few builders measure the true, total cost impact of cycle time and it’s always more costly than they estimate. “Builders cannot reduce cycle time on their own,” Sedam says. “Doing it right requires intense work with their suppliers and trades, and that requires strong, stable relationships developed over time.” Sedam is adamant, “In more than 30 years I’ve learned this absolute rule: The best builders are the best schedulers, and the best schedulers are the best builders. Period.” 


Builders tend to start simple, then over time features and options grow until system, processes and people cannot keep pace with the complexity. “Homebuilding is a daily war against complexity,” Sedam stresses, “Each day find something you can do to simplify product or process.”  But, he adds, “You can offer as many plans, elevations, and options as you like – if and only if – you have the systems, process, trained staff and capable trades to fulfill those offerings efficiently and profitably.”


Sedam classifies any unplanned cost that occurs after the start of a home as “variance” which will “inflate your schedule, damage relationships with suppliers and trades and eat away at profit – yours and theirs.” The only way to avoid this is prevention, demonstrated by an airtight “start package” which tells each supplier and trade exactly what goes into each house, with final plans, complete specifications, everything they need to get it right the first time. “Today, variance is a nationwide epidemic,” says Sedam, “far worse than prior to the big housing crash more than a decade ago.”

Sedam sums it up this way, “Inflated schedules, complexity (the opposite of simplification) and variance combine to make a toxic stew that bleeds profit from homebuilders. Solve these three closely related factors, and literally everything gets better. There’s nothing more important that a builder can do to improve product, process and profit.”

More About Scott

Scott Sedam
True North Development