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.

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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

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.

 

It is amazing how quickly we can create a negative impression in the most of simple ways. The danger can be not having perspective, doing what has always been done or falling into the act of ‘processing a customer’ especially if we are busy or running out of time.

Here are some things to avoid, yet are so common and make the customer feel you are not prepared or professional and therefore equate the experience to that they will encounter if they build a home with your company.

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September 2016

This Month in Professional Builder

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