Quality Matters
October 2006
Welcome to the Quality Matters E-Newsletter, a regularly-distributed publication
that will keep readers up to date on quality-related news and resources for the
home building industry. You can access prior issues or subscribe to this
electronic news service on the NAHB Research Center's website - http://www.nahbrc.com/quality
- by clicking the "Read All About It" link on the right-hand side of the page.
We want to hear about your quality-related news for future issues-email
information to qualitymattersmoderator@nahbrc.com.
(The NAHB Research Center's editorial staff reserves the right to refuse or
condense any news submission.) Enjoy this issue of Quality Matters.
In this issue:
Thank You NHQ Sponsors
The National Housing Quality Program thanks its founding sponsor,
SimpsonStrong-Tie Co., Inc., for their continued support of quality
assurance in home building.
The NHQ Program is continuously seeking additional partners to support its
efforts to improve quality in the home building industry. If your company is
interested in pursuing NHQ sponsorship, a variety of opportunities are now
available.
For more information, visit the
NHQ sponsorship information page or contact Lisa Gibson, NHQ Program
sponsorship coordinator, at (301) 785-3100 or lwgllc@yahoo.com.
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K. Hovnanian Achieves NHQ Builder Certification
The Northern Virginia division of national builder
K. Hovnanian Homes (NYSE: HOV) was recently awarded the nation's latest
NHQ Certified Builder designation following a rigorous NAHB Research Center
audit of the implementation of their quality assurance systems. K. Hovnanian is
the first publicly-owned production builder in Virginia to earn the
certification, and is the second of only two home builders in the state to
successfully complete the program since its launch in early 2005.
K. Hovnanian is a nationally recognized home builder that has sold more than
233,000 homes since the company was founded in 1959. Although started as a
family-owned business, it has expanded over the years to become a family of
home builders with localized expertise in numerous markets throughout the
United States. K. Hovnanian's Virginia division is currently ranked as the
second largest builder in the Northern Va. and Metro Washington, D.C. area.
Even with its impressive growth and current ranking by FORTUNE magazine as one
of the nation's 100 fastest growing companies, K. Hovnanian maintains its
commitment to continuous improvement and customer satisfaction, demonstrated by
its successful participation in the NHQ Certified Builder program.
The NHQ Certified Builder Program was initiated to foster consistency and
quality in building practices. Since its launch in early 2005, participating
NHQ Certified Builders have noted measurable improvements in their
productivity, homebuyer satisfaction, and their bottom lines.
Charles Merlin, vice president of operations for K. Hovnanian's Landover Group
said, "Achieving NHQ certification is a demonstration of K. Hovnanian Homes'
Virginia Region's commitment to continual improvement. Our Company's vision is
to be 'The best home builder in the nation'...in the eyes of our customers, our
associates, our business partners, and our shareholders. As a result of
pursuing NHQ certification, K. Hovnanian Homes has realized quality and
efficiency gains in our finished product as well as in the process that
underpins our operations. The Research Center's certification programs for
builder and trade partner alike are powerful platforms, raising the home
building industry's quality bar higher."
If your company has a strong commitment to customer satisfaction, a focus on
quality assurance and continuous improvement, and strives for operational
excellence, start on the path to NHQ certification today. Visit www.nahbrc.com/quality
or contact Don Carr, NHQ Certified
Builder program manager.
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Learn More by Applying for the National Housing Quality Award
The National Housing Quality Award gives the highest recognition in the housing
industry for quality achievement. Unlike many award programs, the greatest
benefit of the NHQ Award is not only the recognition, but also the application
process.
Patterned after the Malcolm Baldrige Quality Awards, entries are judged by
seasoned building industry professionals and former award winners who evaluate
the role that customer-focused quality plays in construction, business
management, sales, design, and warranty service. During the process, all
applicants are provided with an informative feedback report containing valuable
suggestions for improvement.
"Unlike quality awards concerned only with the finished product, the National
Housing Quality Award examines the builder or trade's business and quality
management practices. We are concerned with the company's ability to deliver a
quality product consistently, satisfy customers, and achieve a high level of
productivity," says Michael Luzier, president of the NAHB Research Center,
cosponsor with Professional Builder magazine of the NHQ Award.
The NHQ Award has two divisions, one for builders and the other for trades.
Three NHQ Awards and two honorable mentions were presented during Professional
Builder's 2006 Benchmark Conference in Las Vegas, Nev.
Trade contractors, small and large volume builders alike must satisfy their
customers with quality products. How a company accomplishes this must be
appropriate for the size of the business. "The award is not about sophisticated
systems, fancy pictures or elaborate applications," said Frank Alexander, NHQ
Programs director. "It focuses on the degree to companies integrate quality
into their daily business practices. Builders and trades of any size are
capable of achieving this, and we encourage all quality-driven companies, large
and small, to apply."
For companies wanting to learn about the elements of Total Quality, the award
program application is an education in itself. The award criteria set the
learning agenda. The application's 24 questions invite applicants to examine
their Total Quality practices in eight categories - leadership, strategic
planning, performance management, customer satisfaction, human resources,
construction quality, trade relationships, and business results. This process
allows applicants learn their strengths and weaknesses, and recognize
opportunities to improve their business.
For many, the NHQ Award feedback is their main source of information on how well
they're applying Total Quality principles. Former NHQ Award winners credit the
expert assessment they received during the application process with helping
them achieve a higher level of performance and continuing on to win an NHQ
Award the following year.
For more information on the National Housing Quality Award contact the NAHB
Research Center at (800) 638-8556, x6225 or visit www.nahbrc.com/quality.
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Six Ways to Improve Your Trade Contracts
The most important outcome for a quality-focused builder is to deliver a home
that is consistent with the sales contract and meets the buyer's expectations.
Achieving this result requires clearly established guidelines and effective
communication between the builder and the many trade contractors who actually
construct the new home - up front. According to the National Housing Quality
(NHQ) program, there are six key clauses that should be included in a trade's
contract in order to deliver a quality home.
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All trade partners will put competent people on the jobsite at all times.
Clearly, it makes sense to deal with reliable and reputable contractors, but
while this may seem like a simple concept, it is not always standard practice.
Ensuring that each worker fully understands the builder's expectations and
requirements for each task on the jobsite makes good business sense and is an
important part of reducing cycle time. A shortage of qualified work crews is a
common stumbling block during the busy construction season, so it's necessary
to be specific about expectations for quality.
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A competent crew leader will be in charge of all crews at all times and
able to communicate with the builder's field management staff on the jobsite.
Lack of training and language barriers between construction supervisors and
workers can contribute to poor workmanship. Regardless of the ethnicity of the
trade's various crew members, the builder should require that the company
provide an established crew leader who is accessible at all times and able to
communicate effectively with the field superintendent. By addressing potential
issues during the contract process, areas of difficulty can be anticipated and
solutions addressed before the work begins.
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Trades must self-inspect each phase of the work before reporting to the
builder, or to the builder's field management staff, that the work is complete.
By providing a clear outline of the task at hand for each trade, builders can
help to minimize circular activity. The need to continuously repeat and correct
the same tasks can be limited with a simple checklist based on the scope of
work. Field crews should be required to check their work against this list on
their own before requesting an inspection by the superintendent. This saves
time and encourages the trade contractor to take responsibility for getting the
job done right the first time.
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All work will be completed in accordance with applicable building codes,
industry standards, and established construction quality standards.
Most builders have an established set of quality standards they follow, so the
requirement to comply with those, as well as local codes and industry
standards, should be no problem for a quality trade contractor. Don't leave the
definition of quality up to chance. Clearly defined standards should be
included in the contract and enforced in the field.
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Trades must take the time to identify recurring errors in their work and
train crews as needed to reduce similar errors in the future.
Production and site efficiency is important to a builder's bottom line, so
field training techniques must support this priority. Hot spot training, an
effective process used by all NHQ Certified Trades, is simple to implement and
helps to reinforce best practices. The graphics-based technique helps
illustrates the right and wrong way to do a task.
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Trades will confirm in writing that all materials and/or equipment covered
by the contract were installed in accordance with the manufacturer's
instructions.
There is an unfortunate perspective common in the construction industry - "When
all else fails, read the instructions." However, this must be the first step to
quality, not the last. A copy of the installation instructions should be
available for reference at all times on the jobsite. This allows a trade to
check his work, and the builder to verify the manufacturer's intentions.
All said, the builder is the trade contractor's customer in this process, and
thus sets the terms of the contract. By defining an acceptable level of
competency and including a detailed stipulation in the contract, a builder can
establish the first line of defense against defects and warranty claims.
The information contained in this article does not constitute legal advice. Be
sure to consult your lawyer for advice regarding the wording of your contract
forms or the terms of particular contracts. For more information on the NHQ
Program, visit www.nahbrc.com/quality.
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Quality Enabled E-Homesales
In this era of e-commerce, quality builders are poised to make their mark. They
are uniquely qualified to develop the high levels of e-homebuyer confidence
necessary to sell homes over the Internet. Quality is the great confidence
builder that makes it all work.
Breakthroughs in the way information is conveyed over the Internet allow
prospective buyers to get the information they need without visiting a
traditional sales office. Online customization and self-guided virtual tours
have the potential to minimize the need for model homes. Coupled with 3-D views
of available lot inventories, it is easy to imagine buyers signing a contract
at the first face-to-face meeting. Streamlining the home purchase to a single
meeting can have enormous cost savings and it opens up new market opportunities
for out-of-town buyers.
Presenting a pleasing product, however, is only half the story. E-homebuyers
must have confidence that they will actually get the home they see displayed on
the web pages. To help e-homebuyers feel comfortable doing business over the
Internet, the web pages should also present a compelling account of the
builder's ability to reliably deliver quality homes to satisfied customers.
Several tactics can be used to tell the company's quality story.
A good place to start is displaying the company's customer-focused mission and
value statements in plain view in sales offices. Reaffirm the quality policies
that address areas of buyer concern, such as closing only 100 percent complete
homes, extended warranty terms, and quick-response service standards.
Highlighting actual performance data is an extremely effective way to build
trust while managing homebuyer expectations. Gain instant credibility for
following through on the quality policies when performance data shows industry
leading results, for example:
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95 percent of homebuyers would recommend us to a friend or family member.
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On average, 2.2 correction items are discovered at final inspection. All but
.25 per home are corrected before closing.
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90 percent of warranty service calls were completed in less than two days.
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Over 97 percent of homes closed on or before the scheduled completion date.
Recognition from independent organizations can further enhance these
confidence-builders by providing an unbiased assessment of company performance.
Achievements through awards programs such as the National Housing Quality Award
or the EnergyValue Housing Award demonstrate superior
company performance. High customer satisfaction rankings among other builders
by independent survey companies such as NRS or J.D. Power and Associates may
suggest your company is an outstanding choice as well. Quality- or
performance-related certifications can also lend credibility to your
construction practices, such as, the EPA ENERGY STARTM or NAHB
Research Center Certified mark. And finally, testimonials from satisfied
customers are always a beneficial asset that speaks volumes.
In a softening market, quality-focused builders have a huge advantage in the
electronic marketplace. Begin thinking about what you need to do to tell a
compelling quality story that will create e-homebuyer confidence at levels that
enable the single-visit home sale. Whatever your sales tactics, remember that
delivering homes that satisfy customers is more important than ever, and it all
starts with quality.
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NHQ Program Welcomes New NHQ Certified Trade Contractors
The NHQ Program is proud to announce the following newly-certified trade
contracting companies:
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Air Flow Heating Company of Sequim, Wash. - first HVAC company certified in
Washington
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Alcantara Concrete of San Antonio, Texas - concrete contractor
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Arnulfo Rodriguez Roofing of Houston, Texas - first roofing company
certified in Texas
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Classic Floors Ferrazzano of Port St. Lucie, Fla. - flooring contractor
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D&R Framing Contractors of Centennial, Colo. - first framing company
certified in Colorado
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Dawson Electric of Martinez, Calif. - electrical contractor
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Dynamic Roofing Company of Rancho Cordova, Calif. - roofing contractor
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Gary's Carpeting, Inc. of Corona, Calif. - flooring contractor
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Guy Evans, Inc. of Riverside, Calif. - finish carpentry contractor
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KBI Mechanical dba SelectBuild of Las Vegas, Nev. - HVAC contractor
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MC Framing of San Antonio, Texas - framing contractor
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Melco Painting of Clarksburg, Md. - first painting company certified in
Maryland
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Petersen Dean, Inc. of Santa Clarita; Riverside; Laguna Hills; Calif. - roofing
contractor
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Precision Framing of Roseville, Calif. - framing contractor
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Quality Cabinets of Rancho Cucamonga, Calif. - cabinet contractor
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Quality Production Construction of Frederick, Md. - framing contractor
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Ridgeway Plumbing of Boynton Beach, Fla. - first plumbing company certified
in Florida
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Roy Hollon Construction of Bulverde, Texas - trim contractor
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Southwest Finish & Supply of Ontario, Calif. - finish carpentry contractor
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T.W.R. Enterprises of Corona, Calif. - framing contractor
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Valley View Electric of Cibolo, Texas - electrical contractor
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Venetian Marble & Granite of Helotes, Texas - first cultured marble
company certified in Texas
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Whitey's Landscape of Gilbert, Ariz. - landscaping contractor
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Whitman Construction of Pt. Pleasant, N.J. - roofing and siding contractor
Business efficiency is vital to a company's success, so the importance of
achieving high levels of customer satisfaction should never be underestimated.
The NHQ Certified seal represents the high standards of quality today's
builders and homebuyers expect.
If your company has a strong commitment to customer satisfaction, a focus on
quality assurance and continuous improvement, and strives for operational
excellence, start on the path to NHQ certification today. Visit www.nahbrc.com/quality.
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New NHQ Certified Trade Guidelines Issued for 2007
The NAHB Research Center recently released its new NHQ Certified Trade
Contractor guidelines for 2007, which will become effective for all audits
conducted after January 1, 2007. The guidelines for certification are
periodically updated to improve the quality of the program and to clarify the
requirements for certification.
Changes for 2007 are moderate, with one substantial change to affect contractors
with yard or shop fabrication operations such as trusses, wall panels,
countertops, and pre-assembly of components. Additional editorial changes were
also made to the guidelines to ease understanding of the requirements, but no
substantive changes have been made to the expected implementation.
Compliance with the new guidelines will affect each trade company differently
depending on their tenure in the program. All NHQ Certified Trade Contractor
program applications received in 2007 will be subject to the new requirements.
Companies that have been accepted into the program in 2006 but have not
received an audit will be audited to the old requirements in 2007. However,
those companies will be expected to comply with the new requirements in by the
time of their next audit. All other NHQ Certified contractors will be audited
to the 2007 requirements during their 2007 audit.
A copy of the new requirements can be downloaded at www.nahbrc.com/nhqtradereqs.
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Tim Lewis Communities Ranked #1, and #2
In 2005, privately-owned Sacramento builder
Tim Lewis Communities (TLC) was certified through the NHQ Certified
Builder program. With over 20 years of home building experience, TLC was one of
the first builders to participate in the program, and proved early on that
their commitment to quality was more than lip service. In the past year since
joining the NHQ Program, that same commitment has fostered direct results in
improved quality performance and customer satisfaction for the company.
The NHQ Program was designed to increase efficiency and consistency in building
practices, and ensures through rigorous review that all elements of a company's
quality assurance system are incorporated to improve customer satisfaction. In
addition to becoming NHQ Certified, TLC surveys every buyer through Eliant
Surveys, after move-in, after four months, and after 11 months and has been
ranked #1 nationwide in customer care and home quality in both 2005 and 2006.
"Our focus on quality has bolstered our survey scores dramatically," said Tim
Lewis, president of TLC. "TLC's participation in the NHQ Program signals our
dedication to maintaining the highest quality standards throughout every step
of the home building process." TLC encourages their trades to earn
certification as well. To date, the company is working with 10 NHQ Certified
trade partners, and an additional six affiliated trades are working toward
certification in the future.
In September, 2006, J.D. Power and Associates, a global marketing information
firm that represents the voice of the customer, released its 2006 New Home
Builder Customer Satisfaction StudySM where Tim Lewis Communities ranked #2
among the top three builders for Customer Satisfaction in Sacramento. This
study, now in its 10th year, includes satisfaction rankings of builders in 34
of the largest U.S. home building markets. Sacramento is among the five
top-performing markets in the country, boasting an average customer
satisfaction index score of 123. Tim Lewis Communities' average customer
satisfaction index score is currently149-26 points higher than the Sacramento
average and 37 points higher than the 34-market average of 112.
To learn more about the National Housing Quality Certified Builder Program,
visit www.nahbrc.com/quality.
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Quality Matters to Me...
The following testimonials describe how customer-focused quality has improved
the business of home building for National Housing Quality program
participants:
"We worked extremely hard towards achieving certification. We fully support the
NAHB Research Center's efforts towards improving the building process. We are
proud to be part of the team."
-Melco Painting, Inc.
"The NHQ Program is great! It will definitely help us reduce callbacks."
-T.W.R. Enterprises, Inc.
"Having a third-party review policy and procedures is valuable clarification of
how well your system works."
-Craig Hanks, Purchasing Manager, Barratt American, Inc.
"This has been a great experience. We learn every day how to improve, and that's
what keeps you on top!"
-Guzman Construction
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NHQ in the News
The following is a list of recent NHQ Program media coverage. Read all about
it...
Professional Builder, "National Housing Quality Award
Winners: Achievement and Awards," September 2006.
HGTVPro.com, "Big Picture Planning Can Lead to Bigger Profits,"
article features benefits of just-in-time delivery. September 2006.
HGTVPro.com, "Quality Control Levels the Playing Field," article
touts quality assurance program benefits for small builders. September 2006.
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