2010 07-15 rbeem nahbrc quality management

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  • Often invest more on correcting failures Quality companies invest More on preventing and appraising quality Less on correcting defects Prevention is inexpensive compared to repairs or replacement
  • Companies that “get” quality are rewarded not just in improved quality of their products and services, but in their business results
  • Economics of quality specifically for builders - Do builders see a need for improvements? Can we expect similar results for builders who implement effective quality management practices?
  • Note: this is a compilation of data from award winners but each statistical result only represents those companies for which data was available. Judging on Leadership, Strategic Planning, Performance Management, Customer Satisfaction, Human Resources, Construction Management, Trade Partnerships, Business Results
  • Warranty costs as a % of gross sales/revenue Warranty cost per home Warranty costs per year per home sold
  • 100% homes Green Built Home certified and ENERGY STAR labeled and over 50% of construction waste recycled
  • material variance (difference between ordered and required quantities)
  • Design and Specification Prerequisites Details Jobsite conditions Assumed order of work SOW Inspection checklists (Job ready, phase, and final)
  • Inspection Process - Will vary from some degree based on the type of remodeler and remodeling activities - Will be further developed based on the BA remodeling target audience and experience gained from greater work with remodelers and existing homes
  • Inspecting specifically for that hotspot on every job Documenting
  • Panelized walls with gasketed SIS panels providing an additional R-5.5, WRB, and external air barrier
  • Panelized walls with gasketed SIS panels providing an additional R-5.5, WRB, and external air barrier
  • Biggest challenge – implementation
  • 2010 07-15 rbeem nahbrc quality management

    1. 1. Quality Systems Research for New and Existing Homes NAHB Research CenterResidential Building Energy Efficiency Meeting July 2010
    2. 2. Building America Quality ProcessGoal:Make widely available tobuilders/remodelers processes, tools, andmethods to build and retrofit highperformance homes on a repeatable scale Economics of Quality HPH Scopes of Work Hotspot Inspection Process HPH Quality Management System p. 2
    3. 3. Economics of Quality Goals:  Quantify benefits of implementing quality practices  Validate performance improvements achieved through quality practices p. 3
    4. 4. Hypothetical Cost of Quality (Cokins, 2006) PC=prevention cost  IFC=internal failure cost AC=appraisal cost  EFC=external failure cost p. 4
    5. 5. Malcolm Baldrige National Quality (MBNQ) Award Winners Over 8 Year Study (Wrolstad & Krueger, 2001) Matched, Non-Winning MBNQA Winners Companies, 1988-1996 1988-1996 Return on equity +18.73% -5.91% Return on assets +10.28% -5.5% Operating profit margin +46.77% +2.69% Operating margin +1.12 -1.71 +16.2% Return on investment +18.1% (S&P500 Index, +13%) p. 5
    6. 6. Opportunities for Builders (Professional Builder Magazine, May 2009)Do Builders See a Need for Improvement? Operational Efficiencies  60% Better Product Marketing & Services  29% p. 6
    7. 7. National Housing Quality Award (NHQA) Results 1993-2009 NHQA Winning BuilderCategory Benefit from QualityProfits (Gross Margins) 12-20%Revenue 15-100% increase/yrConstruction Costs vs. Budget +/- 1%Customer Satisfaction 93-97%Referral Rates 29% (Sales made through referral)Cycle Time Reductions 15-50%Zero Defects at Closing 98%Defect Reductions 11-75%Employee Satisfaction 94%Trade Satisfaction 95%Customer Endorsements/ Thank You Letters 73%Warranty Requests 1 per every 15.5 homes p. 7
    8. 8. How to Measure Quality? Performance Metrics Construction schedules On-time delivery Energy performance Cost Training Satisfaction Referral Productivity Warranty/Defects p. 8
    9. 9. Challenges of Performance Metrics Comparing “apples to apples” Defining them so all builders can use them as benchmarks p. 9
    10. 10. Quality Impacts at Veridian Homes Construction Costs  -/+1% Budget vs. Actual Customer Satisfaction  95% + Veridian Homebuyers  76% only looked at Veridian Zero Defects  90% of homes at home orientation HERS Index  58-61 p. 10
    11. 11. Veridian Results  Reduced Defects  50% in 1 yr  Cut inspections in half  Reduced Warranty Costs & Defects  30% - 75%  Reduced Construction Cycle Time  18 days  Reduced Material Variance  20% lumber, 24% siding, & 38% trim  Their Secret?  Commitment to quality management  Use of tools, principles and resources, including a HPH quality management system p. 11
    12. 12. Economics of Quality Existing Homes  Define remodeling industry quality management needs  Create industry-specific quality tools & techniques  Identify industry role model remodelers with QMS to create case studies p. 12
    13. 13. Economics of Quality for Existing Homes Next Steps Determine type of remodeling contractor(s) Research quality management impact data for remodeling Prioritize performance issues in the remodeling industry Define remodeling performance metrics p. 13
    14. 14. High Performance Homes (HPH) Scopes of Work (SOW) Completed New Home Construction HVAC Framing Foundations Vented & Unvented Crawlspaces Excavation Grading Vinyl Siding WRB Rigid Insulating Sheathing p. 14
    15. 15. Planned New HPH SOW  Envelope sealing  Ventilation  Insulation (wall, ceiling, and floor)  PV roof installation  Window Installation  Door installation p. 15
    16. 16. HPH Remodeling SOW ConsiderationsNew Home Elements Proposed Remodel2) Design and Specification 2) Re-design, Specifications, Prerequisites & Statement of job limits3) Details 3) Details4) Jobsite conditions 4) Jobsite conditions5) Order of work 5) Order of work6) SOW Contract language 6) SOW Contract language7) SOW QA Inspection 7) SOW QA Inspection/ checklists (Job ready, Assessment checklists phase, and final) p. 16
    17. 17. HPH Remodeling SOW Considerations Customizing SOW for Remodeling (every time?) Other considerations for remodeling  Health and safety  Demolition, crew type, materials, etc  Quality performance criteria for remodeling Remodeling SOW Quality Assurance (QA) Process  Need to define types of QA  QA timing  QA criteria  QA documentation p. 17
    18. 18. High Performance Home Hotspot ProcessA Hotspot is a Problem that is: Current Widespread or recurring A significantly important challenge p. 18
    19. 19. Why Do Hotspots Work?Hotspots work because they are: Focused on a prioritized topic Well-trained to all workers Inspected and tracked for all jobsWhich educates workers and creates accountability p. 19
    20. 20. Hotspot Process p. 20
    21. 21. Hotspot ExamplesJobsite Installation or Personnel Or Company Office OperationsSupply CultureHigh air infiltration Too many backordered items Culture of finger-pointingPoor performing Difficulty locating records or Lack of accountabilityducts documentsSqueaky floors Errors on take-offs High employee turnoverLate or incomplete Not responding in a timely Lack of pridedeliveries manner to customer requests p. 21
    22. 22. Choose Hotspot Using Data HOTSPOT/INSPECTION LOG Builder/Lot Inspection Items from Job Complete Forms Hotspot Item Item 1 Item 2 Item 3 Item 4 Item 5 Item 6 Item 7 Item 8 Smith Building 2 Elders 23 1 1 Elders 24 1 Elders 25 1 1 Elders 26 The Meadows 12 The Meadows 13 The Meadows 14 1 The Meadows 15 The Meadows 16 1 The Meadows 17 1R&R Custom Homes 1002 Peaceful Way 1 1 1004 Peaceful Way 1 1006 Peaceful Way 1 1 1008 Peaceful Way 1 Total 3 1 5 1 0 1 0 1 1 p. 22
    23. 23. Determine The Root Cause p. 23
    24. 24. Develop Hotspot Training SheetInstall mechanical dampers on supply-air duct lines off the plenum Instale válvulas mecánicas en las líneas de conducción de aire del pleno p. 24
    25. 25. Sign Hotspot Training LogAll crew members and all crew leaders must attend session.•Lead man explains the problem and the proposed solution.•Everyone examines both pictures and all notes.•Lead man answers any questions.•All crew members and crew leaders sign below.•Lead man signs and dates bottom of page.TIME MEETING STARTED: __________________a.m./p.m.______ATTENDEES:_____(PRINT NAME)________ _________(SIGNATURE)_________________________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ ____________________________________ p. 25
    26. 26. Conduct Hotspot Training p. 26
    27. 27. Inspect Hotspot On All Jobs Subdivision: Lot: Date of initial inspection:Builder:Builder Supervisor Name: Crew Leader Name: Instructions: Check box if OK, circle box if correction is needed. Note specific correction action required. When corrected, then check box. Trade Trade Explain Needed Corrections Builder Foreman Super List Date Corrected OK OK OK/NA Lap and tapeDescribe Current Hotspot:   all horizontal house wrap seams The house wrap is installed continuously with no1. tears or rips, or all rips or tears are properly    repaired. [BCQC-23]2. The house wrap is lapped as specified. [BCQC-23]    The house wrap is fastened with manufacturer’s3. specified fasteners.    The house wrap joints are taped with4. manufacturer’s specified product. [BCQC-16]    The house wrap covers the sill plate, rim joist, and5. top plates.    p. 27
    28. 28. Evaluate Inspection Data HOTSPOT/INSPECTION LOG Builder/Lot Inspection Items from Job Complete Forms Hotspot Item Item 1 Item 2 Item 3 Item 4 Item 5 Item 6 Item 7 Item 8 Smith Building 2 Elders 23 1 1 Elders 24 1 Elders 25 1 1 Elders 26 The Meadows 12 The Meadows 13 The Meadows 14 1 The Meadows 15 The Meadows 16 1 The Meadows 17 1R&R Custom Homes 1002 Peaceful Way 1 1 1004 Peaceful Way 1 1006 Peaceful Way 1 1 1008 Peaceful Way 1 Total 3 1 5 1 0 1 0 1 1 p. 28
    29. 29. Repeat the Process, If Needed If hotspot is not successful  Return to the root cause analysis stage  Reevaluate other possible causes  Repeat the process with the next most probably cause Courtesy of www.khov.com p. 29
    30. 30. Complete And Celebrate A Hotspot If hotspot is successful, close-out the hotspot and recognize the contributors Remove / demote successful hotspot items on inspection forms Repeat process with new hotspot p. 30
    31. 31. Quality Research & Next Steps Develop & implement HPH Quality Management Systems and tools for  Existing Homes  New Homes p. 31
    32. 32. Questions? Amber WoodProgram Manager, Energy Efficiency NAHB Research Center 301-430-6309 awood@nahbrc.com p. 32

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