Randy Luther's Product Evaluation Tip Sheet

Dallas-based behemoth Centex Homes — ranked No. 4 on PB’s most recent tally of housing’s Giants, with 2002 revenue of $5.64 billion — counts on vice president/construction technology Randy Luther to keep its far-flung operations up to date on the latest product innovations and building systems breakthroughs that might affect quality perceptions and the durability of its houses. To the good fortune of our readers, Luther agreed to share with us his modus operandi for shopping the exhibit floor at the International Builders’ Show, including a cheat sheet on what questions to ask at the booths.

Centex will have 200 employees at the show, but in the new product evaluation process in the office and in the exhibits, Luther leads the charge. When he hits the show floor, Luther carries a five-page technical evaluation form he uses as a guide to asking the right questions of product manufacturers in their booths. We’ve boiled it down to the basics of the smaller version shown on page 135.

“The form really works for me at the show,” Luther says. “A lot of the products wash out almost immediately if there’s no clear-cut improvement over current practices or if the cost is prohibitive. But it really shines when I find a product that just might work but needs a lot more investigation. The form guides me through a logical sequence of information gathering.

“The core issue is: What benefit does the customer derive? And a second is: What are the possible liability issues?”

As Centex’s big hitter, Luther has his booth visits planned well in advance, but one of the attractions of IBS is that an unexpected innovation always comes out of left field, unannounced. When that happens, Luther is no different than the average small builder.

Looking for Luther
If you want to catch Luther in action this year, prowl the booths offering ventilation equipment.

“I’ll be looking at a lot of that stuff because I know the 62.2 code is coming in a couple of years,” Luther says. “It’s already approved by ASHRAE [American Society of Heating, Refrigerating & Air-Conditioning Engineers] and will be by ANSI [American National Standards Institute] within a couple of months. This is one way things end up in building codes, and I need to check out our options now so we don’t get blindsided later.”

The proposed standard requires a low level of mechanical ventilation in houses 24 hours a day to regularize air turns or a higher level half of the time.

“We’ll also have to get a fan in every bathroom, whether there’s a window or not, and they’re going back to requiring range hoods to be vented,” Luther says. “I always want to get to work on stuff like this a couple of years before it’s mandated.”

When he hits a booth, Luther looks immediately for the technical people behind the product.

“I want to know why they came up with it, how they make it, where the technology comes from,” he explains. “Then I want to know about the manufacturer. Do we know them? Are they new to the industry? We also want to understand their quality-control program and get a feel for the strength of the warranty. If the product is an innovation involving structural integrity or water in any way, our investigation would really get intense before anything would come of it. Same with products that touch the customer in a major way.”

Siding Story
Nearly a decade ago, Luther used his form as a guide to investigate fiber-cement siding when it appeared in the United States for the first time. Today, Centex divisions across the country use fiber-cement siding, its durability a key component of perceived product quality, especially in the Southeast.

Centex’s interest was boosted by problems in the hardboard siding industry. When the firm stopped using hardboard siding, vinyl initially picked up a lot of its business. But when Centex looked at fiber-cement siding, the more it learned, the better it liked the product.

“The form guides us to ask questions for a siding product like: What would the concerns be — paint adhesion, water intrusion, edge swell, warping?” Luther says. “We’ve been building so long, we have a pretty strong history in every product category, including this one.”

Centex has national and regional performance standards that all divisions must meet, so structural and building science requirements are stiff. Besides code, manufacturers’ specs and 24 industry standards, the firm has 22 supplemental standards 22 of them directly geared to water and structural issues left hanging by the codes. But Centex’s divisions are closer to customers on such things as design and finish details. They call their own shots in those areas.

“Then, in the middle of all this, we have our national and regional purchasing efforts,” Luther says. “Fiber-cement siding made it through all of that, and we moved pretty fast.”

Centex had issues with the siding. It wanted the product pre-primed. It had to get trim to work with it. It needed tools to cut it.

“But when I looked at my form, vinyl siding had some issues with shrinkage and expansion, and fiber-cement had none,” Luther says. “It’s also not subject to water damage when used as a siding product. But it does takes a lot of paint to cover it. It’s porous.”

However, fiber-cement siding also offered huge design advantages — opening Florida to a return of lap siding, for instance, as an alternative to stucco. The widespread use of fiber-cement lap siding in Florida today testifies to its popularity with many builders, not just Centex, and hints that there must be consumer quality perceptions tied to it as well.

The Bottom Line
In the final analysis, the message for builders heading for the International Builders’ Show is probably to keep what they know of their customers’ perspective squarely in the forefront. No product, technology or construction method will work for you if it doesn’t work for customers and compute to value by being worth more in the finished product than it costs you to buy and install it.

Second, look for anything that increases the durability of homes without busting the budget on hard costs. In a way, the liability crisis might be doing the industry a favor by lengthening a builder’s horizon of concern. Anything that increases the durability of your houses will not only help keep you out of court, but also will improve customer satisfaction scores, and that word eventually will get back to shoppers evaluating your houses against those of competitors.

Finally, if you look at Randy Luther’s evaluation form closely, it’s hard to imagine that he ever finds the answers to all of his questions at the show. Don’t make snap decisions on a Las Vegas whim. Do your homework first.

Technical Evaluation

1. Name of innovation:
2. Manufacturer of innovation:
3. Stage of development:
4. Affected building systems:
5. Description of innovation:
6. Current best practice (standard of comparison):
7. Principal advantages of innovation:
8. Principal disadvantages of innovation:
9. Cost compared with best current practices:
10. Cycle time comparison to best current practices:
11. Risk of innovation
12. Effect on labor:
13. Durability:
14. Anticipated impact on warranty service:
15. Environmental impact:
16. Supply capability for all operating divisions:
17. Reputation and perception of manufacturer:
18. Warranty:
19. R&D capabilities of manufacturer:
20. Quality-control procedures of manufacturer:
21. Financial strength of manufacturer:
22. Benefits to homeowner:
23. Evaluation: