Quality Systems Research for New and Existing Homes

NAHB Research Center

Residential Building Energy Efficiency Meeting July 2010

p. 2p. 2

Building America Quality Process

Goal:Make widely available to builders/remodelers processes, tools, and methods to build and retrofit high performance homes on a repeatable scale

Economics of Quality HPH Scopes of Work Hotspot Inspection Process HPH Quality Management System

p. 3p. 3

Economics of Quality

Goals: Quantify benefits of

implementing quality practices

Validate performance improvements achieved through quality practices

p. 4p. 4

Hypothetical Cost of Quality(Cokins, 2006)

PC=prevention cost AC=appraisal cost

IFC=internal failure cost

EFC=external failure cost

p. 5p. 5

Malcolm Baldrige National Quality (MBNQ) Award Winners Over 8 Year Study

(Wrolstad & Krueger, 2001)

MBNQA Winners 1988-1996

Matched, Non-Winning Companies, 1988-1996

Return on equity +18.73% -5.91%

Return on assets +10.28% -5.5%

Operating profit margin +46.77% +2.69%

Operating margin +1.12 -1.71

Return on investment +18.1%+16.2%

(S&P500 Index, +13%)

p. 6p. 6

Opportunities for Builders (Professional Builder Magazine, May 2009)

Do Builders See a Need for Improvement?

Operational Efficiencies 60%

Better Product Marketing & Services 29%

p. 7p. 7

National Housing Quality Award (NHQA) Results 1993-2009

CategoryNHQA Winning Builder

Benefit from Quality

Profits (Gross Margins) 12-20%

Revenue 15-100% increase/yr

Construction Costs vs. Budget +/- 1%

Customer Satisfaction 93-97%

Referral Rates (Sales made through referral)

29%

Cycle Time Reductions 15-50%

Zero Defects at Closing 98%

Defect Reductions 11-75%

Employee Satisfaction 94%

Trade Satisfaction 95%

Customer Endorsements/ Thank You Letters 73%

Warranty Requests 1 per every 15.5 homes

p. 8p. 8

How to Measure Quality?Performance Metrics

Construction schedules On-time delivery Energy performance Cost Training Satisfaction Referral Productivity Warranty/Defects

p. 9p. 9

Challenges of Performance Metrics

Comparing “apples to apples”

Defining them so all builders can use them as benchmarks

p. 10p. 10

Quality Impacts atVeridian Homes

Construction Costs -/+1% Budget vs. Actual

Customer Satisfaction 95% +

Veridian Homebuyers 76% only looked at Veridian

Zero Defects 90% of homes at home

orientation HERS Index

58-61

p. 11p. 11

Veridian Results

Reduced Defects 50% in 1 yr Cut inspections in half

Reduced Warranty Costs & Defects 30% - 75%

Reduced Construction Cycle Time 18 days

Reduced Material Variance 20% lumber, 24% siding, & 38% trim

Their Secret? Commitment to quality management Use of tools, principles and resources,

including a HPH quality management system

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Economics of Quality Existing Homes

Define remodeling industry quality management needs

Create industry-specific quality tools & techniques

Identify industry role model remodelers with QMS to create case studies

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Economics of Quality forExisting Homes Next Steps

Determine type of remodeling contractor(s)

Research quality management impact data for remodeling

Prioritize performance issues in the remodeling industry

Define remodeling performance metrics

p. 14p. 14

High Performance Homes (HPH) Scopes of Work (SOW)

Completed New Home Construction

HVAC Framing Foundations Vented & Unvented

Crawlspaces Excavation Grading Vinyl Siding WRB Rigid Insulating Sheathing

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Planned New HPH SOW

Envelope sealing Ventilation Insulation

(wall, ceiling, and floor) PV roof installation Window Installation Door installation

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New Home Elements

1) Design and Specification Prerequisites

2) Details

3) Jobsite conditions

4) Order of work

5) SOW Contract language

6) SOW QA Inspection checklists (Job ready, phase, and final)

Proposed Remodel

1) Re-design, Specifications, & Statement of job limits

2) Details

3) Jobsite conditions

4) Order of work

5) SOW Contract language

6) SOW QA Inspection/ Assessment checklists

HPH Remodeling SOW Considerations

p. 17p. 17

HPH Remodeling SOW Considerations

Customizing SOW for Remodeling (every time?) Other considerations for remodeling

Health and safety Demolition, crew type, materials, etc Quality performance criteria for remodeling

Remodeling SOW Quality Assurance (QA) Process Need to define types of QA

QA timing

QA criteria

QA documentation

p. 18p. 18

High Performance Home Hotspot Process

A Hotspot is a Problem that is:

Current

Widespread or recurring

A significantly important challenge

p. 19p. 19

Why Do Hotspots Work?

Hotspots work because they are: Focused on a prioritized topic Well-trained to all workers Inspected and tracked for all jobs

Which educates workers and creates accountability

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Hotspot Process

p. 21p. 21

Jobsite Installation or Supply

Office OperationsPersonnel Or Company Culture

High air infiltration Too many backordered items Culture of finger-pointing

Poor performing ducts

Difficulty locating records or documents

Lack of accountability

Squeaky floorsErrors on take-offs High employee turnover

Late or incomplete deliveries

Not responding in a timely manner to customer requests

Lack of pride

Hotspot Examples

p. 22p. 22

HOTSPOT/INSPECTION LOG

Builder/Lot Inspection Items from Job Complete Forms

Hotspot Item Item 1 Item 2 Item 3 Item 4 Item 5 Item 6 Item 7 Item 8Smith Building 2

Elders 23 1 1Elders 24 1Elders 25 1 1Elders 26

The Meadows 12The Meadows 13The Meadows 14 1The Meadows 15The Meadows 16 1The Meadows 17

1R&R Custom Homes1002 Peaceful Way 1 11004 Peaceful Way 11006 Peaceful Way 1 11008 Peaceful Way 1

Total 3 1 5 1 0 1 0 1 1

Choose Hotspot Using Data

p. 23p. 23

Determine The Root Cause

p. 24p. 24

Install mechanical dampers on supply-air duct lines off the plenum

Instale válvulas mecánicas en las líneas de conducción de aire del pleno

Develop Hotspot Training Sheet

p. 25p. 25

All crew members and all crew leaders must attend session.1.Lead man explains the problem and the proposed solution.2.Everyone examines both pictures and all notes.3.Lead man answers any questions.4.All crew members and crew leaders sign below.5.Lead man signs and dates bottom of page.TIME MEETING STARTED: __________________a.m./p.m.______ATTENDEES:_____(PRINT NAME)________ _________(SIGNATURE)_________________________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ ____________________________________

Sign Hotspot Training Log

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Conduct Hotspot Training

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Builder:Lot: Subdivision:

Date of initial inspection:

Builder Supervisor Name: Crew Leader Name:

Instructions: Check box if OK, circle box if correction is needed. Note specific correction action required. When corrected, then check box.

Trade Foreman

Trade Super Builder Explain Needed Corrections

List Date Corrected

OK OK OK/NA

Describe Current Hotspot: Lap and tape all horizontal house wrap seams

1.The house wrap is installed continuously with no tears or rips, or all rips or tears are properly repaired. [BCQC-23]

2. The house wrap is lapped as specified. [BCQC-23]

3. The house wrap is fastened with manufacturer’s specified fasteners.

4. The house wrap joints are taped with manufacturer’s specified product. [BCQC-16]

5. The house wrap covers the sill plate, rim joist, and top plates.

Inspect Hotspot On All Jobs

p. 28p. 28

HOTSPOT/INSPECTION LOG

Builder/Lot Inspection Items from Job Complete Forms

Hotspot Item Item 1 Item 2 Item 3 Item 4 Item 5 Item 6 Item 7 Item 8Smith Building 2

Elders 23 1 1Elders 24 1Elders 25 1 1Elders 26

The Meadows 12The Meadows 13The Meadows 14 1The Meadows 15The Meadows 16 1The Meadows 17

1R&R Custom Homes1002 Peaceful Way 1 11004 Peaceful Way 11006 Peaceful Way 1 11008 Peaceful Way 1

Total 3 1 5 1 0 1 0 1 1

Evaluate Inspection Data

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Repeat the Process, If Needed

If hotspot is not successful Return to the root cause

analysis stage

Reevaluate other possible causes

Repeat the process with the next most probably cause

Courtesy of www.khov.com

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Complete And Celebrate A Hotspot

If hotspot is successful, close-out the hotspot and recognize the contributors

Remove / demote successful hotspot items on inspection forms

Repeat process with new hotspot

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Quality Research & Next Steps

Develop & implement HPH Quality Management Systems and tools for Existing Homes

New Homes

p. 32p. 32

Questions?

Amber WoodProgram Manager, Energy Efficiency

NAHB Research Center

301-430-6309

awood@nahbrc.com