By Steve Zurier. SunCor's Golden Heritage Homes in Tempe, Ariz., reports annual cost savings in excess of $500,000 in salaries alone after switching to NewStar's Homebuilder integrated construction management system.
But instead of laying off all those employees and pocketing the savings from deploying NewStar, which includes streamlined purchasing, more efficient punch lists, and reduced accounting man hours, Golden Heritage did something different.
The company laid off only a few workers and used the savings to reassign and hire people to work in the company's new customer care and quality assurance departments.
Mike Richards, operations manager for the builder, says assigning customer care managers to customers after the options selection process frees up the company's salespeople to focus more on selling and closing sales. And having dedicated people inspecting the jobsites has significantly cut down on warranty claims. For example, the company's New Mexico division reduced its warranty costs 75 percent.
The result has been that sales increased every year since the company reorganized a few years ago, and gross margins increased 3.4 percent from 1999 to 2002. Richards also notes that standardizing on NewStar cut the time it takes to set up a new community from a month to less than a week.