There is no question that Lance Armstrong has one of the most unique comeback and sporting histories of all time. He was a little known triathlete, cancer survivor, turned seven time Tour de France winner, and founder of an extremely successful non-profit foundation, before dramatically falling from public grace by virtue of the U.S Anti-Doping Association (USADA). As a fellow cyclist and racer, I held Lance’s accomplishments in very high regard, adorning my office with Lance posters and a picture from our meeting after his 7th tour victory.The first lesson that I learn
My December column just came out on HousingZone.com and you can read it here: http://www.housingzone.com/scott-sedam-how-do-you-lead-leader or in the Professional Builder magazine.
It is critical to know what our customers think of living in the homes we build for them and what it was like to be involved in the design and construction process with us. In the case of survey results, this is a lagging indicator but still a track record of how we have done and it is powerful data. The more accurate the data and the faster we gather and act upon this data the more quickly we can listen, evaluate, correct anything that went wrong, prevent it happening again and seek further opportunities to improve.
A recent research study on quality in construction projects established the following Quality Problem Factors as the sources of quality defects. Quality Problem Factors Managerial/Stakeholder
It is clear that a housing recovery ground swell is underway. In 2013 we will be looking past survival and finally able to focus on business growth. That is why IBS 2013 is going to be phenomenal! The country’s best builders are already focusing on Lean as a platform to optimize their profits and maximize the marketability of their homes – here is your chance to do the same. There are two major programs being offered that will help you get started:
Come January 2013, we’re taking HousingZone’s already stellar coverage of residential design to a new level. Look for weekly blog posts from yours truly … a new monthly e-newsletter, “Design Innovation” … contributed articles from the best in the business … and much more.
In a recent study rework costs (including labor, materials, equipment and subcontractors) can run from 2% to 20% of a project's total contract amount according to the Construction Industry Institute. These costs are of course eventually passed on to the customer as profitability shrinks. The questions raised by this are: What is your cost of rework? and What quality tools are you using to reduce those costs?
Some things to consider when evaluating your trade partners and creating a scorecard include the following:
In a recent study the following quality tools were found to be the most commonly and successfully used: Identification and leverage of core competencies Process improvement Strategic planning Balanced scorecards Benchmarking Customer relationship management Of course using and linking all of these together in a coordinated manner creates the greatest leverage.
This study provides further evidence that that integrating quality tools and methods into green building creates greater leverage! In this study they found specifically that using the Baldrige Criteria helped to manage the LEED projects better. The National Housing Quality Award (NHQA) is aligned with the Baldrige Criteria.
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, October, 2012)
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 commentary that day.
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 prairie, lived four oxen: Randy, Todd, Scott and Chuck.