Quadrant: Lean Manufacturing and House Essay

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informs
Vol. 34, No. 6, November–December 2004, pp. 442–450 issn 0092-2102 eissn 1526-551X 04 3406 0442

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doi 10.1287/inte.1040.0108
© 2004 INFORMS

Quadrant Homes Applies Lean Concepts in a
Project Environment
Karen A. Brown

University of Washington Bothell, Campus Box 358533, 18115 Campus Way NE, Bothell, Washington 98011-8246, kab@u.washington.edu Thomas G. Schmitt

School of Business, University of Washington Seattle, Campus Box 353225, Seattle, Washington 98195, glennsch@u.washington.edu Richard J. Schonberger

Schonberger & Associates, Inc., 177 107th Avenue NE, #2101, Bellevue, Washington 98004, sainc17@qwest.net Stephen Dennis

Dennis and Associates, 1314 Lake Sammamish Parkway NE, Bellevue, Washington 98008, stephen.dennis@comcast.net Quadrant Homes, a subsidiary of Weyerhaeuser Corporation, provides transferable lessons for applying lean-manufacturing concepts in project environments. The company has obtained impressive market and financial results, using an even-flow, predictable scheduling model in which it starts six houses per day and finishes each one in exactly 54 days. Quadrant follows recognized lean principles, including (1) designing its value stream around customer needs, (2) balancing work so all stages flow evenly, (3) operating on the basis of customer pull, and (4) continuously improving. Quadrant makes the lean principles work in a project environment by (1) knowing what can be standardized and what must be customized, (2) carefully setting and consistently managing customer expectations, (3) aligning goals of all stakeholders, and (4) recognizing that variances will occur, and designing routines to handle them when they do.
Key words: industries: real estate; production: scheduling, applications.
History: This paper was refereed.

L

ean enterprise concepts have revolutionized performance in scores of organizations. Highly publicized success stories from Toyota, Harley Davidson,
Hewlett Packard, Dell, Dana, Eaton, and others provide examples in manufacturing contexts. Increasingly, these concepts are being applied in services— hospitals, fast food, insurance-claim processing, engineering change orders, and so forth (Ordonez 2000,
Swank 2003). Many individuals who have studied operations management and management science point out that lean concepts are not new, in spite of the recent hype. About 100 years ago, Henry Ford borrowed lean process-flow ideas from the meat packing industry and enhanced them with principles from
Frederick Taylor. In the 1950s, Eiji Toyoda gained insights from Ford’s assembly lines, as well as the stock replenishment systems at A&P supermarkets, turning them into the mother of all lean systems at
Toyota. Along the way, foundational management science concepts, such as queuing theory, inventory theory, system dynamics, theory of constraints, six sigma,

and simulation have helped organizations to fine-tune their lean systems.
During the past five years, we have followed the lean evolution of a project-driven company, Quadrant
Homes, a subsidiary of Weyerhaeuser Corporation, a Fortune 500 company. Through multiple site visits and interviews, coupled with access to company data, we compiled a history of the process and its outcomes. Quadrant contracts, starts, and closes six houses every day, following a 54-day mass customization approach. Balanced loads at every stage in the system are synchronized at the pace of six per day.
Strong performance data testify to the success of the model. Lean Principles
Womack et al. (1990) coined the term lean in The
Machine that Changed the World and embellished it in Lean Thinking (Womack and Jones 2003). Their message codifies some of the just in time (JIT) concepts previously described by Shingo (1981),
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Brown et al.: Quadrant Homes Applies Lean Concepts

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Interfaces 34(6), pp. 442–450, © 2004 INFORMS

Schonberger (1982, 1987), Hall (1983), Monden…