MiTek Insights

How to Find Money: Implement Lean Principles

In today’s market of cash-strapped buyers and builders, negotiating new home prices has become a complicated, multivariable equation with one question at its center: how slim can your margin go?


Builders hate even being asked that question. Labor has never been more expensive, and although buyers are slowly re-entering the market, their needs are more specialized than they were before the Recession, and it can be a balancing act to provide a product buyers want, at prices you can afford.


As Scott Sedam writes for Pro Builder, builders might benefit from changing the way they do business to give them more control over every step of the construction cycle. Other industries can provide a model. As he says, the construction industry simply “hasn’t been subject to the same level of scrutiny as other industries over the years for the application of lean principles and effort to reduce waste in product and process.”


It’s time for that to change. According to Sedam, there are five or six “buckets” you can clean up in your budgets to make your margins a little rounder.


Your supplier is your secret weapon when it comes to managing your budget, and the more open lines of communication remain between your business and theirs, the more problems can be avoided down the line, resulting in a smoother transaction on both sides—and a lean competitive advantage for you.

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