Shea Homes San Diego - 2006 NHQ Gold Award Winner

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Corporate Profile: Shea Homes San Diego (SHSD) is part of the J.F. Shea Co. Inc. family of companies. Established in 1881, Shea is one of the oldest and largest privately held operations in the United States. Started in 1968, Shea Homes builds homes and develops master-planned communities throughout California, Colorado, Arizona, North Carolina and Washington.

April 01, 2006

Best Practices:

Trade Relationships

Corporate Profile: Shea Homes San Diego (SHSD) is part of the J.F. Shea Co. Inc. family of companies. Established in 1881, Shea is one of the oldest and largest privately held operations in the United States. Started in 1968, Shea Homes builds homes and develops master-planned communities throughout California, Colorado, Arizona, North Carolina and Washington. With more than $2 billion in annual revenues and eight home building divisions, Shea Homes employs more than 1,400 associates.

Shea Homes launched its San Diego unit in 1985 which builds single family and multifamily attached homes in cities and municipalities throughout San Diego County. Currently, SHSD has 11 communities under construction, 10 in the design phase and five pending land acquisitions.

Mission: SHSD seeks to enhance people's lives as part of the core companywide vision at Shea Homes to be the most respected builder in the country.

Management Team: Paul Barnes, division president; Bryan Binney, vice president, operations; Michael Brekka, vice president, land acquisition and community development; Cindy Roush, vice president, sales; Teri Shusterman, vice president, marketing; Pete Gouvis, vice president, branch manager, Joe Anfuso, director of finance, business analyst; and Laura Vuolo, registered in-house counsel.

Strategic Goals: SHSD establishes firm goals for customer satisfaction, quality, trade partner satisfaction, associate commitment and business performance. Its entire senior management team conducts rigorous planning to set company goals for improved results around these drivers.

Building restrictions and environmental issues mean SHSD needs to continue to move away from traditional single-family detached housing in coming years, toward higher-density housing. The transition requires changes around SHSD's project and construction management functions and sales environment. SHSD recently hired a vice president of land acquisition and community development with extensive experience in high-density housing and has recently aligned to work closely with Shea Properties, its sister organization, to develop properties that mix commercial spaces with housing.

Judge's Comments: “SHSD's key processes are well defined using high performance approaches. Customer satisfaction is an integral part of the vision, mission and values of the company. Results of improvements relating to operational effectiveness, customer satisfaction and product quality are communicated to all levels of employees throughout the company. Partnerships with trade contractors and suppliers are an industry best practice with systematic integration addressing the goals and objectives of the organization.”

Shea Homes
Best Practices: Trade Relationships

Valuable partners. Performance minded. The San Diego division of Shea doesn't view its trade contractors as simply vendors, but as valuable contributors to the company which support its continuous improvement culture. All contractors -- SHSD currently works with nearly 155 contractors -- must adhere to the company's core values of honesty and integrity, respect, teamwork and competitive spirit.

Trade Partner Council: To ensure these principles, SHSD manages a Trade Partner Council that meets monthly with an eye toward project improvement to discuss industry practices, solve problems and distribute information. The Council consists of principals from eight primary contractors such as framers, carpentry, HVAC and plumbing firms, as well as several SHSD staff, including two construction managers, a purchasing manager and process improvement analyst. Contractor principals actively contribute to building better homes and the entire Council acts as a liaison for all SHSD contractors.

Scorecarding: One invaluable outgrowth of the Council was realized in 2004 in creating a performance management program to ensure trade partner accountability and quality as well as to objectively award contracts based on performance, not price. Now, SHSD draws from a variety of qualitative and quantitative sources, including site audits, customer satisfaction surveys, and its work scheduling system to derive periodic scorecards for each contractor based on their specialty. Performance metrics are determined by SHSD's five point system around quality, safety, schedule, financial and customer satisfaction. Monthly reports are generated for each partner coupled with an overall scored based upon each metric.

Partnerships in action: Full-year 2005 figures reveal marked improvement in customer satisfaction, customer service and quality levels at SHSD over the prior year, directly attributable to the monthly scorecarding system. During 2005, more than 50 percent of SHSD contractors exceeded the company's goals in each of these three areas.

SHSD operations staff, including its improvement analyst, regularly visit trade contractors in their offices, working closely with them to explain scorecard reports, work toward continuous improvement and address automation issues. SHSD also hosts quarterly trade breakfasts, open to all its contracts, to discuss workload planning, SHSD growth plans, financial and other issues, all of interest to contractors.

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