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 senior research fellow at Harvard University’s Joint Center for Housing Studies. Kent W. Colton is president of The Colton Housing Group and 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.

• 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

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. -- Dan Fulton, President and CEO of Weyerhaeuser Company This book is filled with descriptive institutional detail and analytical insight. It looks at the industry from a range of perspectives, and it is ultimately positive in its outlook. It is hard to find this kind of balance today. -- Karl E. Case, Professor of Economics Emeritus at Wellesley College The implosion in home building is a wakeup call to modernize this important industry. The authors make a persuasive case that home builders have much to learn from other industries that have successfully balanced innovation and scale leading to greater efficiencies. -- Nicolas P. Retsinas, Senior Lecturer in Real Estate at the Harvard Business School and former Assistant Secretary for Housing-Federal Housing Commissioner at the United States Department of Housing and Urban Development Scale offers significant opportunities in the homebuilding business. However, as in any business, execution is the key. Bigger Isn't Necessarily Better provides a thorough analysis of where home builders have been able to leverage their competitive advantages, where they have not, and therefore how they can become more efficient as market conditions dictate. This is a landmark study of the industry on an important topic. -- Eric S. Belsky, Managing Director of the Joint Center for Housing Studies of Harvard University Bigger Isn't Necessarily Better: Lessons Learned from the Harvard Home Builder Study analyzes the eponymous study of the practices of big (more than 50,000 houses/year) home builders that came into being through consolidation and acquisition of smaller companies...As the book cover illustrates, the authors hit the nail on the head with their analysis. The study and its presentation flow nicely and avoid the propensity of this type of tome to sink into the gravity of its material. The authors deliver on the promise in their book's title: through a lucid, well-ordered presentation of graphics and prose, they discern, explain, and share the lessons learned from the workings of the large home builders during of the last housing boom. Now it's our turn-to study and apply these lessons so that we can do our share within the building industry to contribute to softer landings for all during future market downturns. ReadInform.com Today I had the chance to sit in on a conference call with the authors of Bigger Isn't Necessarily Better (Lexington Books, November 30, 2011) a book based on the Harvard Builder Study comparing the performance and operations of mid- to large US homebuilders during the great building boom of the early 2000s. The book examines the operational side of the industry instead of financial performance, and provides a revealing look at how little progress mid- to large homebuilders made in improving their jobsite coordination and control, despite the rise of hugely profitable national companies, the kind you would expect to implement the most advanced operational systems, like automakers and large retailers have. To facilitate useful comparisons the authors narrowed their analysis to entry-level home divisions, avoiding comparisons between various price points. FineHomebuilding.com You can feel the touch of four different hands in the presentation of the material through nuances of style and emphasis. This is a good thing for this work, as the four different kinds of expertise are unified into one theory: it adds texture and personality to the narrative. The authors also offer a generous spread of graphic materials to help the reader grasp the large amount of data presented in the book. ... As the book cover illustrates, the authors hit the nail on the head with their analysis. The study and its presentation flow nicely and avoid the propensity of this type of tome to sink into the gravity of its material. The authors deliver on the promise in their book's title: through a lucid, well-ordered presentation of graphics and prose, they discern, explain, and share the lessons learned from the workings of the large home builders during of the last housing boom. Now it's our turn-to study and apply these lessons so that we can do our share within the building industry to contribute to softer landings for all during future market downturns. Inform Explores industry trends in residential construction during the late 1990s and early 2000s and their relationship to the housing boom and bust, based on data from the Harvard Home Builder Survey. Journal of Economic Literature