In a new study on Six Sigma the savings to cost ratio ranged from 2.6 : 1 through to 2 : 1. As for cost savings as a percentage of revenues, the average was 1.7%. This study showed clearly the impact of Six Sigma and its ROI.
As a rule of thumb a company with $100 million in sales could expect $1.5 million of direct savings per year of implementation.
(Costs and Savings of Six Sigma Programs: An Empirical Study, Quality Management Journal,...
Where to start with trying to address improvement. Here is a high level approach.
Richard Dugas, the CEO of PulteGroup, did not want to throw cold water on the party, but he deserves credit for at least pointing out that housing still faces a number of regulatory and financial obstacles as the market recovery begins to get traction. Such was the tidal wave of positive energy and good news at a recent housing investor conference that even a slight note of caution, from Dugas (whose firm just delivered very positive quarterly results), stood in sharp contrast to other...
We all know that teamwork is an important ingredient in building great homes and great relationships with our customers. This importance is substantiated by Woodland, O'Brien & Scott studies showing that a builder's teamwork rating is a good predictor of future referral sales. Given the importance of teamwork, particularly as we head into a busier year end construction and closing season, the following teamwork fable may be helpful.
In the days before civilization, out on the...
For the last several years Scott Sedam and I have been spreading the word about Lean design. Lean design is based on creating home designs that maximize marketability and profit while reducing construction waste. This is done through a collaborative design approach that involves the builder and the building team (including sales) as well as the builder’s trades and suppliers. It is a design approach that focuses on cost reduction while increasing aesthetics and overall amenities.
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It is amazing how quickly we can create a negative impression in the most of simple ways. The danger can be not having perspective, doing what has always been done or falling into the act of ‘processing a customer’ especially if we are busy or running out of time.
Here are some things to avoid, yet are so common and make the customer feel you are not prepared or professional and therefore equate the experience to that they will encounter if they build a home with your...
As an editor of one of the nation’s largest business publications covering home building, I’m frequently asked about the state of the housing market. Everyone from regional builders and product manufacturers to consultants and architects will ask: “What are you hearing from builders?” “Are we officially in a housing recovery?” “When will the market get back to peak levels?”
Instead of citing the latest Case-Shiller index or new-home sales numbers from the Census Bureau, I almost...
An ambassador for your company! Just because you don’t close that sale doesn’t mean that you should disengage with that potential customer. All the effort you have put into selling them on your homes, educating them on the process, your company and what it offers is still all valid. Just because they walk out the door not signing, doesn’t mean they won’t come back, next week, month, year or even after they have lived in a home they now go buy from your competitor. If they don’t...
If you were ever fortunate enough to have had a pair of parachute pants, checkered Vans or a headband then you probably remember the super sweet 80’s. In this era fads quickly flared up and just as quickly burned out. It was during this time that the English Tudor style became incredibly popular. It only took a quick...
How are you listening to the Voice Of your Customer? A survey finds that 52% of organizations use 3 to 4 methods to gather VOC data and 22% as many as 7 methods! Only 5% rely on one source of VOC.
The most common VOC data sources (in order of use) were:
