Home-Grown Quality

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Twelve years ago, when 'Quality was Job 1' at Ford Motor Co. and many other Fortune 500 firms, only a handful of home builders were on the total quality management bandwagon.

October 01, 2002
NHQ Silver

Customer Satisfaction and Continuous Improvement

Measuring Improvement



Twelve years ago, when "Quality was Job 1" at Ford Motor Co. and many other Fortune 500 firms, only a handful of home builders were on the total quality management bandwagon.

 

Some of Pulte Minnesota's biggest management challenges have been successfully met by its trade council. Since 1990 the group's initiatives have reduced cycle times, enhanced construction quality, and lowered costs for the company and its trade partners. Construction vice president Gary Grant (gesturing) formed the group to get input on how to increase production.

Gary Grant, vice president of construction for Pulte Homes of Minnesota, wasn't one of them. Implementing a quality assurance program wasn't his goal solving an immediate, daunting challenge was. The best way to get to a solution was to turn to the company's trade partners for help. That first collaboration with his trades launched Pulte Minnesota on a quality path that led to a 2003 National Housing Quality Silver Award.

In 1990, Pulte Homes Inc. purchased Marv Anderson Homes as its base to launch a division in Minneapolis-St. Paul. It fell to Grant, a construction executive with Anderson since the late 1960s, to develop a plan for ramping up production to one house per day, or 365 homes a year, significantly higher than Anderson's traditional 35 closings. Getting the trades' initial buy-in along with their collaboration on a rigorous growth plan was a natural first step, says Grant.

"I never liked the feeling of someone ramming things down my throat, telling me do this, do that," he says. "I wanted a council to sit in on key decisions and address key problems about how to get to that kind of growth. I wanted them to come up with policies and philosophies. I wanted to benefit from their expertise and knowledge."

The trades responded enthusiastically, Grant says, because "it offered them the chance to grow, too."

 

Copies of individual customer survey responses are made available to the entire team that deals with customers. Field supervisors (from left) George Sell, Dan Larson and Bran Van Roy use the data to make improvements.

By 1993, Pulte Minnesota had hit its closings target, and in a more controlled and profitable manner than it would have without its 12-member trade council, says division president Tom Standke. Standke set the initial one-house-a-day goal and has presided over 12 years of growth so solid that the company expects to close 812 homes this year.

"The benefits to us of forming a trade council are huge," says Standke. "We don't build a single home. We are managers. We create schedules. We obtain the materials, locations, plans, etc., but we don't build a thing. We deal with contractors, many of whom have been in business a long time. They have experience that we don't."

One of the council's first actions was to meticulously re-examine the time each trade needed to perform its function on each home site. The council then revamped the production schedule and recommended a refined, shorter cycle time that also better met each trade's particular needs.

Before this evaluation, a plumbing crew got three days for rough installations and two days for finish installations. Pulte construction manager Marty Gergen says the crew actually needed more time on finish work and less time on rough work. A new, shorter schedule accommodated such changes, much to the benefit of many Pulte trades.

Developing Structures, Systems

Two years into its life, the council began to formalize its structure and became more refined in its approach to addressing the issues the council and Pulte faced. A council president was elected. The size of the group was set at 12. A regular meeting day, the first Wednesday of every other month, was set. An annual goal-setting process that dictates the council's work took shape. And goals were channeled into smaller working groups or subcommittees that researched issues and solved problems.

 

Consistently Satisfied

Pulte Minnesota leads all Pulte divisions in the corporation's customer satisfaction measurement survey. Detailed versions of this data are shared with the trade council and help shape its agenda.
 
1998
1999
2000
2001
Overall Purchase Price
88%
89%
90%
89%
Mortgage and Closing Process
-
84%
85
80%
Construction Process
88%
88%
91%
91%
Customer Care
86%
88%
90%
90%
Overall Experience
86%
87%
90%
88%
Source: Pulte Homes of Minnesota Corp.

Then two years ago, council members and a number of Pulte's area construction managers agreed that some construction problems being uncovered in various walk-throughs were related in part to disparities between written specifications and the instructions trades were given in the field. So the council formed a committee to meet one by one with each trade partner and to rewrite all specifications and scopes of work. The trade council and area managers rewrote each specification for about 80 trades. Gergen says the four-month process required meetings of as little as 90 minutes for some contractors and as long as five hours for others.

"It was a huge, huge commitment of time," says Gergen. "But we were very aggressive about it. The trades bought into the fact that it was going to be a big commitment for them, and they really stuck to their guns."

Refining Plans and Product

When Pulte Minnesota moves forward with a new house plan, trade contractors get a set of plans printed on yellow paper to let them know the home they are bidding is a prototype and likely to change. They also know they will help determine if redlines will be made before the plan is published in its final, white-paper version.

After the prototype is built, key trades join Gergen, warranty manager Jerry Zick, someone from the design department and the area construction manager to walk the house and make redline changes to the plan. The redlines are incorporated into the drawings, and white plans are circulated so that the trades know that the house has been walked and there should be no further changes.

But even before the yellow lines are drawn and a prototype is built, the trade council reviews the initial plan to look for ways to value-engineer it and spot potential problems. To Dave Pahl, president of Bloomington Linoleum & Carpet and a member of the trade council since its inception, this is the most important work the council does, particularly because Pulte has shown it will act on the council's advice.

"If I tell them that on hardwood floors they should be spanning it 2 feet to avoid any deflection, they will pull in all the joists where the hardwood goes," says Pahl. "They are not afraid to spend the money to put a better product in to make it better.

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