Delaware Manufacturing Extension Partnership
Beracah Homes Boosts Productivity with Lean
Beracah Homes Inc. manufactures modular homes and is a pioneer of an off-site, stick-built construction process. Founded in 2003, family-owned Beracah Homes has grown rapidly since acquiring Nanticoke Homes, establishing itself as a premier modular builder in the Delmarva, Delaware region, teaming with preferred builders throughout the region who set up the homes on the owners’ sites. The company employs 53 people at its facility in Greenwood, Delaware.
Beracah Homes had experienced a housing boom in 2006; however, profit margins were thin and getting thinner. In a competitive market, Beracah had not raised prices for four years, absorbing higher costs for shingles, siding and other petroleum-based materials. Beracah’s Vice President, Roger Collison, said, “I started reading about Lean manufacturing ‘eliminating waste and improving the value stream’, and I got very excited about bringing that concept to our company. Our business had so much potential and we did not want to squander that through wasting labor and materials. But it wasn’t until times got tough that we had the impetus to start a plan.” Beracah Homes contacted the Delaware Manufacturing Extension Partnership (DEMEP), a NIST MEP network affiliate, to provide strategies for minimizing lag time and boosting productivity and customer service.
Beracah Homes was introduced to Lean enterprise concepts through professional development and training workshops organized by DEMEP and financed in part by the Delaware Economic Development Office (DEDO). DEMEP visited the plant and analyzed processes and flow, mapping a value stream. Instead of beginning on the factory floor, DEMEP started with the point of sale, a cumbersome procedure that included the design of customized homes from start to finish. The mapping process provided the solution to reorganize the order into a two-phase process. First, the buyers would make such fundamental choices as the room size and floor plan of the home. That enabled workers to start framing the house while the buyers wrestled with the more time-consuming choices in phase two, such as what kind of carpet to install in a child’s bedroom or where to place the lighting fixture in the dining room. That process was further refined by developing a spreadsheet to record the customer’s choices, instead of handwritten orders that were passed from the salesperson to the office, where they were reentered. This process reduced the potential for human error in decisions that previously were open to interpretation, such as differentiating whether a paint chip is beige or brown. The improvement was immediate, reducing the sales and engineering process from three weeks to one week, a plus for both Beracah and its customers. Turnaround for revisions to the designs went from one week to three days. On the factory floor, additional improvements were needed as four assembly lines choked the work flow. There wasn’t room on the lines for larger materials, such as roof trusses and siding. It took four weeks for each home to inch through the line, tying up $500,000 in inventory. After developing a Value Stream Map, a decision was made to trim the assembly lines from four to two, creating enough space to keep materials close at hand. As a result, employees saved time and energy because they no longer had to transport materials from remote storage areas to the line.
- Reduced labor costs by 5 percent.
- Reduced sales and engineering process from 3 weeks to 1 week.
- Reduced turnaround time from 1 week to 3 days.
“It was wonderful to have experts in manufacturing who we could turn to for advice. They [Delaware MEP] showed us a whole new efficient way of looking at things. We don’t have people walking 15 minutes to get something any more. Everything they need is at hand.”
Roger Collison, Vice President