Business Excellence Consulting LLC
President

Denis Leonard has a degree in construction engineering an M.B.A. and a Ph.D. in quality management. Denis is a Fellow of the American Society for Quality, a Certified Quality Manager, Auditor and Six Sigma Black Belt. He has been an Examiner for the Baldrige National Quality Award Board of Examiners a Judge on the International Team Excellence Competition and a Lead Judge on the National Housing Quality Award. A former Professor of Quality at the University of Wisconsin, he has experience as a quality manager in the homebuilding industry as well as construction engineer, site manager and in training, auditing and consulting with expertise in strategic and operational quality improvement initiatives. His work has achieved national quality, environmental and safety management awards for clients.

Denis is co-author of 'The Executive Guide to Understanding and Implementing the Baldrige Criteria: Improve Revenue and Create Organizational Excellence'.

http://www.BusinessExcellenceConsulting.net

DenisLeonard@BusinessExcellenceConsulting.net

Full listing of blogs http://www.housingzone.com/author/denis-leonard

Quality Management System Impact on High Performance Home Builders

The impact of quality management on home builders is dramatic. For example of builders that used the National Housing Quality Award criteria to help drive their business performance and went on to win NHQA recognition, 94% are still in business despite the recession.

The use of Quality Management Systems (QMS) has also shown significant impact. A study conducted by Duncan Prahl of IBACOS, Serge Ogranovitch of The Potomack Group and Denis Leonard of Business Excellence Consulting, focused on the impact of QMS and its impact.

For more industry studies and data visit IBACOS at www.IBACOS.com

From the total population of 59 NHQA winning builders (from 1993-2008) a sample of 14 builders or 36% were studied.

Two builder groups were compared.

  • 14 Energy Star/Green Standard ‘High Performing’ Builders
  • 7 Non Energy Star/Non Green ‘Traditional’ Builders

The builders performance was evaluated using NHQA scoring results from in-depth expert desk and site visit reviews. 19 of the builders in the study had won NHQA Gold, Silver or Honorable Mention. The other 2 (one in each group) were considered future winners if they reapplied. The builders were a mix of small, medium and large builders.

14 Energy Star/Green Standard ‘High Performance’ Builders

 

  • 9 were certified to NAHBRC 3rd party audited QMS
  • 1 had a 2nd party implemented QMS
  • 4 had no QMS

7 Non Energy Star/Non Green ‘Traditional’ Builders

  • 3 were certified to NAHBRC 3rd party audited QMS
  • 1 had its corporate office certified to ISO9001 3rd party audited
  • 2 had no QMS

The study found that organizational size had no impact in the results. In both HP and Traditional groups the lowest performing builders were those that did not have a certified QMS.

The 2 builders with a 2nd party (not independently) audited QMS (not certified) also performed poorly.

Those builders that had a 3rd party independently audited and certified QMS had the best performance.

The Traditional Uncertified Builders were weakest in

  • Construction Quality
  • Trade Relationships
  • Business Results

The HP Uncertified Builders were also weaker in those areas BUT had two additional low performing areas

  • Performance Management
  • Human Resources

The HP Uncertified Builders were specifically weakest in

  • Performance Management
    • How you develop, manage, measure and improve your key processes
  • Human Resources
    • How you support superior work performance
    • How you ensure organizational alignment
  • Construction Quality
    • Education and reinforcement of quality standards
  • Trade Relationships
    • Integration of trades in building a better company
  • Business Results
    • Business Operating Results
    • Employee satisfaction and turnover rates
    • Supplier and Trade satisfaction

It was found that performance levels significantly drop when builders without a certified QMS move from building traditional homes to HP homes

The additional design and construction complexity in High Performance Homes highlights their weakness in

  • Process management
  • Work performance
  • Organizational alignment
  • Reinforcement of quality standards
  • Integration of trades
  • Measures and metrics

This resulted in poorer business results.

Summary

This study shows that the use of a Certified QMS will improve performance and make High Performance Home building easier since the focus of a Certified QMS are the following:

  • Process management
  • Work performance
  • Organizational alignment
  • Reinforcement of quality standards
  • Integration of trades
  • Measures and metrics

http://www.theresearchalliance.org/quality-mgmt-bps-recap.aspx

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