Bigger Isn't Necessarily Better

Frederick Abernathy is Gordon McKay Research Professor of Mechanical Engineering and Abbott and James Lawrence Research Professor of Engineering in Harvard University’s School of Engineering and Applied Sciences. Kermit Baker is a Senior Research Fellow at Harvard University’s Joint Center for Housing Studies. Kent W. Colton is President of The Colton Housing Group and is a Senior Fellow at Harvard University’s Joint Center for Housing Studies. David Weil is Professor of Economics and Everett W. Lord Distinguished Faculty Scholar at Boston University School of Management.

In these challenging times, in order to be successful, a home builder needs to excel at land assembly, marketing, on-site operations and customer satisfaction. The Harvard home builder study lays out very clearly what national builders have done well, and where they could benefit from improvements. This book provides a roadmap to improve competitiveness in today’s demanding economic environment while increasing productivity as the market recovers.

• PrefaceChapter 1: Home Building—Is Bigger Better? The Home Building Boom The Seeds of Consolidation The Growing Dominance of Big Builders Conventional Wisdom about Scale The Virtuous Circle Hypothesis Organization of the Book Chapter 2: Studying the Home Building Industry Building the Machine for Living Focus on Entry-Level Homes Measuring Local Market Competition Survey Coverage and Content Structure of the Survey Chapter 3: Big Builders at the Corporate Level Builder Performance during the Boom Securing Capital for Expansion Land Assembly Strategies Corporate Branding and Customer Satisfaction Conclusion Chapter 4: Labor and Subcontracting Practices The Construction Manager Model Benefits and Costs of Improved Coordination Coordinating On-Site Activities Performance at the Construction Site ConclusionChapter 5: Advanced Operational Practices Emergence of the Third Supply Channel Shifting Builder Priorities Implementation of Advanced Practices The Role of Local Market Conditions Market Characteristics and Builder Performance Conclusion Chapter 6: Information and Communication Technology ICT Background Communicating with Customers Home Builders and Technology Use in the Back Office Home Builders and Technology Use on the Site Using Technology to Estimate Costs Using Technology to Coordinate with Subcontractors and Suppliers The Importance of Sharing Factors Discouraging Greater Use of Technology Conclusion Chapter 7: Lessons about Builder Scale and Performance Challenges of Improving Operational Performance The Importance of Local Markets Revisited Disentangling the Effects of Size and Location Can Bigger Get Better? Chapter 8: Gaining Advantage from Scale Improve Subcontractor Coordination and Workforce Quality Increase Standardization and Preassembly of Components Leverage the Power of Information Technology Streamline Supply Chain Management and Logistics Managing Risk in the Twenty-First Century Appendix A Joint Center Advisory Panel for the Harvard Home Builder Study Appendix B Survey Responses to ICT Questions References Index