How do you achieve higher performance in your homes and business during a downturn in the industry? This is a critical question to answer, especially now that profits from land and home sales appreciation aren’t coming in as easily as they have over the last 5 years. Production homebuilders are being forced to quickly learn how to do more with less—fewer employees, fewer resources, and fewer home sales. The smart builders have made positive strides in this area without destroying their company culture or diminishing their brand.

Eliminating the quality assurance department isn’t the best way to do more with less. Builders who take this approach will find it more difficult to survive and prosper once the market corrects itself and returns to full strength. As time passes, homebuyers only get smarter and savvier about buying new and greener homes. The Internet has significantly increased the amount of information at consumers’ fingertips. Armed with this ready source of information, the number of people demanding higher performance homes will only increase.

A better approach is to focus on raising quality, which will help you reduce the millions of dollars wasted on warranty issues. It will also engender trust and boost your company’s image in the eyes of current and future customers. Here are a few steps some of our builder clients are implementing to raise quality.

Step 1: Assess your weaknesses
Find out where your greatest weaknesses lie. For many teams, durability, indoor air quality, and occupant comfort are the least understood. They can present the greatest business risk and ultimately be the most expensive to repair. Coach your teams about these top issues to increase awareness. Use a set of performance checklists and third-party assessments to increase focus on these areas.

Step 2: Define your homebuilding quality standards
Every day, your teams are gathering and communicating information that your company doesn’t monitor. This information may be shared across departments and with trades; some of it’s good, and some of it isn’t. You don’t want the homes you build now to have issues you’ll have to pay for later. Take time to look at the entire construction process—from house placement and excavation to closing—and identify the Best Practices® you want your teams to consistently use. Create a set of quality construction standards that address your highest areas of risk to share across your company. If you don’t have a quality guru in-house, consider taking advantage of a third-party expert.

Step 3: Share your homebuilding quality standards
Once you’ve defined your quality standards, make sure to the share them with your key departments, such as design, purchasing, construction, customer care, and risk management. With these standards, designers will know what details to include in house plans, purchasers will know which products to buy, and site supervisors will be better equipped to look for problems onsite and to proactively manage trades.  Customer care and risk management will be able to identify what quality standards should have been followed, helping them determine where the process failed or broke down. Part of sharing these standards is putting them in a place that’s easily accessible 24/7, such as on the company intranet, which is a great tool for delivering information. In addition, keep in mind the best format for delivering the information; for many, the combination of text and images really helps explain and reinforce the material. Graphics also help overcome any language barriers that may exist.

BuildIQ’s “Quality Library” for Pulte Homes
Over the past two years, BuildIQ has developed and implemented a “Quality Library” for Pulte Homes that seeks to help their quality leadership team:

• Reduce overall annual home warranty and service costs
• Increase the accessibility and consistency of regional and divisional team knowledge
• Establish a platform for an improved total quality management system for Pulte Homes nationwide.

In collaboration with IBACOS, a well-known expert in building science and BuildIQ’s sister company, BuildIQ created a “Quality Library” system and website. Today, the site contains information on 28 warranty topics, from drainage planes to foundations. For each topic, the site lists the common issues builders experience in the field, as well as solutions to each issue. To complement this information, the “Quality Library” includes more than 400 details, such as step-by-steps, checklists, CAD drawings, spec sheets, and inspection documents. Although we can’t share Pulte Homes’ proprietary, custom version with you, take a look at Toolbelt, the pared-down version available at http://toolbelt.buildiq.com.

As we better understand the business challenges and goals of Pulte Homes, we see some commonalities across our other production homebuilder clients. First, everyone’s trying to find ways to reduce wasted expenditures caused by not doing things right the first time. So, we’ve designed Toolbelt to provide builders with the knowledge and answers to their most pressing issues. Second, builders want to improve the accessibility and consistency of information across the disparate divisions. Toolbelt enables every team member to access and share the most important quality standards 24/7. Toolbelt acts as the fundamental platform needed for an improved total quality management system for builders.

Warranty issues can be costly, but by establishing quality standards and sharing them companywide, builders can reduce costs and be in the best position when the market rights itself again.

- Michael Dickens
Founder and CEO, BuildIQ