Real Estate Waste Reduction Consulting
Real Estate Time Management Consulting - Real Estate Lean Consultant
Waste is one of the worst plagues afflicting the real estate industry today.
There's a reason more and more deals & assets are consolidating in the hands of fewer & fewer moguls and top producers.
That reason is waste.
From Real Estate Agents to Property & Facilities Managers to Real Estate Investors to Mortgage Lenders, waste is running rampant.
Streamlining, automation, and systematization are the solutions that will solve it.
Investing into periodic or ongoing Waste Reduction Consulting Sessions is one of the best ways to consistently accomplish this.
During each Consulting Session, a REVAS Consultant will be your call to accountability, with an expert approach & proven process to ensure you're proactively managing and eliminating the 7 - 8 main sources of waste in your business.
A Personal Trainer For Your Business:
Trim Fat, Improve Fitness, And Learn New Ideas.
Real Estate Waste Reduction Consulting is like having a Personal Trainer for your business who will help you get more lean, reduce excess, and modify your approach to accomplish more with less.
Streamlining and reducing waste is all about building a stronger, faster, more efficient business.
To do so, your Consultant will work closely with you & your team to systematically find ways to free more time, save more money, and expend less effort all while maintaining or improving output.
How is this possible?
Our systematic approach to reducing waste is nothing new. We focus on applying the classic Toyota Production System Lean Kaizen methodology, with some slight tweaks to better serve the real estate industry.
Specifically, using the Lean paradigm, we focus on studying & reducing the 7 Wastes of Lean from your real estate business.
Reducing The 7 Wastes of Lean in Your Real Estate Business
If you imagine your REVAS Consultant as a Personal Trainer, here to help reduce waste so you can do more with less, the 7 Wastes of Lean could be viewed as the 7 biggest challenges to your company's ongoing health & fitness.
In each Waste Reduction Consulting Session, we will be focusing on one or several of the following types of waste, identifying the most pernicious forms of each in your business, and helping you devise a step-by-step action plan to reduce waste & drive continuous improvement.
Waste 1: Waiting.
Also manifested as delays, Waiting as a form of waste occurs whenever people, assets, or capacities are sitting idle.
In essence, for some reason the preceding activity didn't complete on time (like permits, printing, appraisals, and loan pre-approvals), causing idle time & delays for all those involved in the next activities down the line (like contractors, marketers, loan brokers, and real estate agents).
The most common forms of Waiting Waste in the real estate industry include scenarios like:
- Properties inadequately marketed or letting buyer leads go stale, causing listings to sit on the market longer than necessary.
- Arriving to property showings on-time (or early) while the potential buyer or tenant arrives late or flakes out entirely.
- Contractors unsynchronized, causing a chain reaction of delays for an entire construction project.
- Leaving rental units vacant too long, resulting in sub-optimal turn times & occupancy rates.
A Real Estate Waste Reduction Consulting Session focusing on reducing Waiting will be especially useful to identify ways you & your team are waiting around that you might not even notice, recognize, or measure right now.
"That which gets measured, gets managed."
This mantra (often attributed to Peter Drucker) is why your Consultant will help figure out ways to track and optimize the activities that might be leading to Waiting Waste in your business.
Your Consultant will also help connect you with tools & standardization ideas that you can implement right away to help smooth out and streamline your operations.
Waste 2: Motion.
Unnecessary Motion Waste is any movement of people that doesn't contribute toward productive work.
Whenever employees or contractors in your work flow add extra steps to accommodate inefficient process layout, defects, reprocessing, overproduction or excess inventory, they are adding wasted Motion.
Motion takes time and adds no value to the product or service.
To move and add value is called work. To move and not add value is called motion.
Some of the most common examples of Motion Waste in the real estate industry include:
- Tools, locations, documents, or training / instructions / manuals not found easily, creating a consistent drag on time spent searching through & sorting the disorganized chaos.
- Extra trips to visit your properties, PO boxes, listings, banks, contractors, and clients that could be consolidated & streamlined into fewer outings following more efficient routes.
- Inefficient & unstandardized processes causing frequent repetition of common tasks in an ad hoc, unsystematic way with no procedure to follow and no tracked metrics to monitor, streamline, or optimize.*
A Waste Reduction Consulting Session focusing on reducing wasted Motion is a natural pairing to reducing Waiting & Transportation Waste (below), because all 3 ultimately result in wasted time in the forms of both lost sales & unproductive work.
When targeting Motion Waste, our Waste Reduction Consultant will help identify ways your people are moving around that can be reduced or eliminated to help realize almost instant savings & productivity boosts.
*Note: This is the exact reason we don't even allow new Clients to hire a Virtual Assistant until they've submitted a detailed, step-by-step Standard Operating Procedure (SOP) for each task they plan to delegate. This is the only way to ensure minimal waste & predictable, manageable results.
Waste 3: Transportation.
Wasted Transportation is the movement of material (raw materials, Work In Progress, and completed goods) that doesn't directly support immediate productive work.
While real estate itself doesn't move, and much of the business is People-based not Material-based, Transportation Waste is still closely linked to Movement Waste in the real estate business. For example, many of the common scenarios outlined below will likely create both forms of waste simultaneously:
- Driving around with marketing materials or closing docs that need to be mailed / delivered / signed somewhere other than where you're immediately headed.
- Taking too many trips to the store for building materials or construction supplies.
- Transporting building materials, tools, construction supplies, or marketing collateral from job site to job site. This is not only wasted Transportation, but also risks creating Defects due to the added unnecessary handling risk.
- Forgetting materials at one location when they're needed at another, creating extra trips & likely Waiting Waste as well.
A Real Estate Waste Reduction Consulting Session focusing on reducing wasted Transportation, as mentioned above, is a great pairing to sessions focused on Motion and Waiting Wastes.
Similar to a session focused on reducing Motion Waste, reducing Transportation Waste is first & foremost about implementing systems to track and measure when & where the waste occurs.
Once you have a step-by-step action plan to implement systematic tracking measures on your Transportation activities & expenses, the next step is working with your Consultant to identify opportunities to reduce the waste and build a more streamlined approach to moving goods and people.
Waste 4: Overproduction.
Overproduction waste occurs whenever you're working or producing more than is needed, faster than needed, or before it is needed.
This is a result of running your business on a "Push" model where you do work & produce output before it is demanded by a customer. That would be the opposite of a "Pull" based fulfillment where you only work on-demand, and produce your results just in time. Using a Push model, and creating Overproduction Waste, is also closely linked to (and often results in) Inventory Waste, discussed below.
This might sound like a type of waste you'd find in a factory much more than in a real estate business, but it is actually a big issue in most sectors of the real estate industry. Some of the most common scenarios that might be causing Overproduction Waste in your business include:
- Investing too much in lead generation, without the sales processes & staff to actually convert those leads to sales.
- Using construction materials & styles that are too upscale for a property.
- Over extending your capital (buying too many properties at once).
- Under-leveraging your investments (putting up too much for down payments & borrowing at too low LTV ratios).
A Real Estate Waste Reduction Consulting Session focusing on reducing Overproduction Waste will be custom tailored to your situation, since the types of Overproduction Waste vary greatly depending on what types of real estate business activities in which you're involved.
Therefore, the first goal of your reducing Overproduction waste will be working with your Consultant to identify exactly where & how you are vulnerable to this type of waste.
From this detailed inspection process, you'll recognize that just knowing where you're vulnerable is half the battle.
Once we have a good idea of the potential types of Overproduction waste to which you're vulnerable, your Consultant will work with you and your team to plan ways to systematically track, organize, and standardize your production processes in ways to reduce the very potential for waste, preventing the problem before it ever occurs.
Waste 5: Inventory.
Closely related to Overproduction Waste is Inventory Waste.
This type of waste occurs whenever you have materials, work-in-progess and finished goods that are not yet ready for sale, but are already tying up your capital & resources.
Though not all inventory is waste, excess inventory can quickly build up your costs, reduce your flexibility, and tie you to unproductive activities. All Inventory requires additional handling, energy, space, and/or costs. The less inventory you can keep in stock, getting everything sold quickly & efficiently, and minimizing turnaround times, the more profitable every sale will be.
Again, similar to Overproduction Waste, Inventory Waste might seem to be more in the fields of manufacturing, wholesaling, or retailing of physical products. However, it's a very common form of waste in the real estate industry across all sectors, and includes all-too-common scenarios like:
- Finishing construction & renovation projects... with too much material left over.
- Owning more Fix & Flip properties than you can work on at a time.
- Buying more rental properties than you can manage at a time (without investing in a professional manager or service).
- Taking on more Listings than you can comfortably get marketed & sold in a timely fashion.
- Having many projects or deals in processing, but none complete.
A Real Estate Waste Reduction Consulting Session focusing on reducing Inventory Waste will naturally pair with a focus on Overproduction Waste. That's because both result directly from a mis-management of resources under your direct control, like your time, your staff's time, your work materials, and your available cash & credit.
Similar to Overproduction waste, the most important first step in reducing Inventory Waste is identifying exactly where & how it might be occurring in your business.
The biggest challenge with reducing Overproduction Waste in the real estate industry is that you usually already realize your own mistake without the help of an outside Consultant.
Rather, the reason most real estate professionals require a Consultant to help reduce Inventory Waste is simply to act as your Personal Trainer: holding you accountable, acting as a sounding board, and helping you accept your potential mistakes that led to the Inventory Waste we can work together to begin making step-by-step, manageable corrections.
Waste 6: Defects.
In the real estate business, waste due to Defects are some of the most disastrous.
These are products, materials or services that do not meet expectation or conform to specification.
Defects include any work not done correctly the first time that ends up needing to be re-done, repaired, re-sorted, or re-made, including any wasted materials that must be scrapped in the process.
When on the scale of construction projects & real estate transactions, it's easy to see why Defects are such a big deal. They can lead directly to lost deals, lost reputation, lost clients, repeated work, extra material costs, and even lawsuits & licenses revoked!
These are all pretty obvious & terrible, so you've probably already thought of the following most common types of Defect Waste in real estate, like:
- Transactional paperwork mistakes or missed steps that lead to Waiting Waste, lost deals, or worse.
- Marketing materials or campaigns with errors, wrong numbers, a bad sales funnel, or inadequate follow up.
- Construction or renovation work that is not up to spec or is of poor quality, requiring repairs or a do-over.
- Badly handled sales presentations or listings that result in lost sales or lost clients.
- Broken websites, lead capture forms, voicemails, phone systems, and other technologies.
A Real Estate Waste Reduction Consulting Session focusing on reducing Defects can be one of the most important, highest priorities for your Consultant.
Think of this type of Consulting Session as a type of insurance:
Insurance from an expert set of fresh, outside eyes, following a proven system to seek out & identify possible causes of Defect Waste in your business.
Similar to many other forms of waste, Defects and their sources must first be identified before they can be reduced, standardized, and systematically measured & tracked for continuous improvement.
Your Consultant will help dig into the components of your business that have the potential to lead to Defects, and start planning the processes & activities that need better SOPs so you'll be able to monitor these risk areas and ensure the Defects never arise (or at least continually become fewer & far between over time).
Waste 7: Over-Processing.
Over-Processing is one of the most common forms of waste in the real estate industry.
To put it simply: Over-Processing is work that adds no value.
This term refers to unnecessary steps in operations, such as reprocessing, double-handling, added communication, and double-checking, often inserted into a process as a result of dealing with Defect, Overproduction or Inventory Wastes.
This type of waste usually is a result of other types of waste, often occurring due to a lack of standardization.
Unmeasured, unsystematic processes lead to unknown amounts of Overproduction, Inventory, and Defect Wastes, leading to added work to correct the earlier mistakes that seems like just part of the process but is unnecessary and adding no value!
Some of the most common types of Over-Processing you'll find all around you in the real estate industry include:
- Using over-priced and over-qualified staff & contractors for tasks that could be handled with less.
- Following un-standardized processes with extra steps, unknown steps, or lacking measured & tracked metrics.
- Repeated communications, phone tag, missed & rescheduled meetings, too many meetings, etc.
- Doing things manually that could be automated.
A Real Estate Waste Reduction Consulting Session focusing on reducing Over-Processing will basically be woven into any Waste Reduction conversation.
That's because this type of waste is so common in the real estate industry that you'll likely find it intimately related to nearly every other type of waste!
This also leads to a piece of good news about this type of waste:
You can often reduce it indirectly by reducing other forms of waste, especially Overproduction, Inventory, and Defects.
Getting To Work: Waste Reduction Consulting
The ultimate solution to all these forms of waste can be summarized simply:
Standardize, track, measure, and keep making small improvements.
Do more with less.
Every single Waste Reduction Consulting Session will focus 100% on this goal, and will help chip away at sources of waste in your business consistently, for the long haul.
It makes sense to consider these types of Consulting Sessions as periodic checkups, at least quarterly, if not monthly. This will ensure you regularly have an outside expert, following a systematic and neutral approach to planning, monitoring, and evaluating your Waste Reduction progress, opportunities, and potential risk exposure.
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