Partnering Pays Off in Trade Relations

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Consultant Scott Sedam played a major role in History Maker Homes' evolution into a fairly sophisticated practitioner of total quality management.

"We took all the employees through most of the quality training we do," Sedam says. "We gave them the basic training modules in quality processes and construction management. Then they went through our builder/supplier/trade alliance training. We trained all their people, and then we trained their suppliers and trades."

That training allows History Maker to form process improvement teams throughout the company. More than half of the firm's 55 employees serve on one team or another. The training also led to the development of the Trade Advisory Council, a 15-member commission that meets monthly to advance communication and cooperation among trades with or without History Maker's involvement.

Brent Barrow of Barrow Electric Supply Co., HMH's lighting supply vendor, is president of the council. "We are able to voice our concerns to every level of the organization, including senior management," he says.

But the most valuable role the council plays is to get trades communicating with each other. "We're putting together a brochure to try to get more trades involved," roofing contractor Molly Brown says. "We're going to have a luncheon at every subdivision opening so we can meet each other socially and celebrate our work.

"When you meet people face to face, it's a lot easier to have good relations and work problems out together. Rather than going to the super and talking about people, we can talk directly to each other. That keeps little problems from becoming big ones."

HMH got a big head start on strong relationships with its trade partners decades ago when patriarch O.N. Mitchell Jr., now 75, began paying trades and suppliers every Friday. "That's huge, for all the trades," says Lisa Richardson of Mow & Grow Landscaping. "They never expect me to be their bank, and I appreciate that. I get my invoice in on Friday and pick up the check the next Friday. I work for three other builders, and none of them are organized as well. Chasing them for money and worrying about whether they'll cover warranty work is a constant hassle."

History Maker surveys trade partners to track satisfaction levels using the TrueNorth/NRS TradePOINT annual survey developed by Sedam and Paul Cardis to allow the trades to evaluate builders in areas such as product specifications, paperwork and commitment to customer satisfaction. "We can benchmark our scores against a national average of other builders around the country," president Nelson Mitchell says. "We're far superior in most categories."

Innovations in construction management practices play a big role in keeping HMH's job sites functioning smoothly, another factor in trade happiness. The firm employs a unique "phase building" strategy in which a "front-half" builder takes the home from dirt through pre-drywall stage. Then a "back-half" builder takes it from drywall to closing. This allows each builder to specialize. "Our builders spend their time monitoring quality rather than correcting defects," Mitchell says.

When a house nears completion, the builder completes a "quality inspection" (Q.I.). The home is then walked by the new home orientation specialist, armed with a 300-item checklist, and scored. Q.I. scores are monitored and tracked for trend analysis. Defect items are logged into a database to target areas for improvement. The data are shared monthly with the Trade Advisory Council.

The innovation most responsible for the recent upswing in HMH's customer satisfaction scores probably is the development this year of the "45-day close process," which has been amended to 46 days to allow an extra day for correcting any defects that appear at the new home orientation. This innovation involves the pre-drywall orientation on which "front-half" and "back-half" builders walk the home with customers.

Once the inspection is complete, the office is notified and buyers are informed that their closing will be in 46 calendar days.

"We used to give buyers only 15 days or so of advance notification of the closing date," construction vice president Wally Sampson says. "Our buyers need more time than that. Most of them have to give 30-day notice to cancel their apartment leases. That was a source of customer dissatisfaction."

More recently, HMH has changed its construction start process as well. Vice president of administration Cindy Culpepper says the new process came out of recommendations from one of the process improvement teams.

"I was issuing the start pack as soon as the building permit came in," she says. "But then the builder would get the start pack in the field and bring it back to the office to go over it with the purchasing agent and get purchase orders printed. Now we get all of that done before we issue the start pack. What's the point of a start pack if you're not ready to start?"

After the 2001 Benchmark conference in Chicago, Nelson Mitchell returned with a new mandate for his trades: All job sites must be broom-swept and clean after each trade finishes work. "Customers see everything," he says, "and they equate cleanliness with quality."

The Trade Advisory Council grumbled at first but then came around. "They see how much better working conditions are for everyone," Sampson says.