The evolution of quality management in home building

This too is an expensive approach to ensuring quality and drives the back-end “make the customers happy after we honked them off” remedies. The most blatant example I have witnessed was a large builder in Texas that hired and trained a crew of inspectors to conduct phase inspections and customer orientations. These inspectors did their job and turned out voluminous repair and service orders, a result of poor design, a messy option process, late changes, broken processes, and terrible supplier/trade relationships. The obvious solution was to fix the processes and get upstream to eliminate the sources of rework. Instead, they purchased a veritable fleet of shiny black, full-size vans, painted them with huge “customer care team” logos, stocked them with repair material, and sent them across the city, driven by crisply uniformed punch-out guys. That company was one of the first to go under during the housing crash.

Phase 3: Quality by Prevention

On the surface, everyone agrees that prevention is a far superior approach to quality, yet there is one monumental obstacle. When a company spends all of its resources dealing with the 10-times costs of inspection-based quality and the 100-times costs of field failure, it is very hard to spend even a small amount of time figuring out how to prevent problems. One builder had a $350,000 annual service problem with leaks in bathroom tubs and showers. The fix totaled $100,000. A no-brainer, right? Not so fast. The new system required plan changes, working with both suppliers and trades, and educating the city inspectors on a system they had never seen before. All of that takes time, and already short-staffed, implementation was delayed for a year and $250,000 was left on the table. Characteristics of prevention-based quality include:

1. A culture, driven from the top, where every member of the team understands the needs of their internal and external customers and takes responsibility for doing it “right the first time”
2. Exceptional relationships with suppliers and trades who participate in prevention activities
3. Scopes of work are two-way, allowing suppliers and trades to establish what they need to perform at the highest level.
4. Every scope contains a clear definition of what represents a 100-percent-complete job.
5. Scheduling is like religion — gospel-like in importance and practiced every day
6. Feedback loops for all inspection data and field failure are built in, providing essential information for corrective action now and elimination of problems in the future.
7. Clean jobsites are a hallmark of the prevention-oriented companies.
8. Training in Lean and Six Sigma concepts, even if that terminology is not used per se, is broadly dispersed in the company to where people sweat even the smallest details of quality.

That will get you started, and we will cover more on prevention in the next article, with input from industry-leading builders on what it takes to get there. Yet, perhaps the greatest lesson in recent years is that prevention is not the end of the journey. There is one more level: Phase 4: Quality by Design. We have learned that if the design, including all plans and specifications, is 100 percent right from the onset using detailed input from the key suppliers and trades, at least 50 percent of all quality and process problems that occur downstream are eliminated. The savings in cost, time, and frustration far exceeds the grand sum of every price concession demanded by builders from suppliers and trades over the past five years of the housing recession.

As you are driving around during the next month in that fine vehicle that is safe, efficient, cradles you in comfort, and takes no more of your paycheck than your Dad’s Bonneville did, remember that even the best inspection process cannot create quality in a poorly-designed product. Double the amount of inspectors of a 1980 Fairmont from 21 to 42 and it still would have been a Ford Fairmont. Consider the implications of that while you ponder your own stage in the evolution of quality management and resolve to take the next step forward.

Scott Sedam, former home-building executive, well-known writer, and frequent speaker, is president and founder of TrueNorth Development. He welcomes your feedback at scott@truen.com.