By Pat Curry. Al Nunley is the guy Winmark Homes contractors have to please. The director of quality control for the Suwanee, Ga.-based builder, Nunley is responsible for finding flaws in the 500 houses the company builds each year. By the time he finishes what Winmark calls the first walk, the house is covered with stick-on arrows, and the builder has a to-do list that averages five to seven pages.
By most measures, that list is clearly an improvement to Winmark CEO Michelle Jenkins compared to the one buyers used to bring on closing days; or the pre-closing list system that Winmark experimented with to reduce customers' lists. Both approaches failed to stem the overwhelming work loads that fell upon the warranty repair crews.
That was before Al Nunley came aboard as part of a shift in operating philosophy at Winmark that has helped virtually eliminate warranty repair bottlenecks and has dramatically increased costs savings on every house.
More Than a Walk Through
It is a recent spring morning. Nunley is inspecting Lot Number 32 in Old Suwanee Station, a swim and tennis community of four- and five-bedroom homes priced from the mid-$220,000s. The Courtland model is a 2,800-square-foot, five-bedroom, three-bath home. Assisting him is Winmark's framing quality control manager, John Cooper, who documents Nunley's observations and adds his own.
The front door gets Nunley's first sticker. The lock has paint on it and the weather stripping has been cut too short. There's also some movement in the door, indicating the hinges need to be tightened. In the foyer, they're not satisfied with the rough condition of the walls and begin coin-marking defects throughout the house. The list grows as Nunley checks the formal living room and dining room. Windows need to be adjusted and some vents aren't square. An arrow on a chair rail points out a spot the painter missed on the underneath side. In the kitchen, Nunley runs the dishwasher to check for leaks (he'll fill all the bathtubs and sinks, too, and flush the toilets). Meanwhile, he checks cabinet doors and drawers for alignment and bumpers. He sees the first of several lines in the ceiling, and notes a patch that needs to be redone. He hops on the counter to make sure the cabinets are secured to the walls, that there are no holes, and that no trash was left by the installers.
In the downstairs bath, he stands on the tub to check for settling or cracking in the caulk. They're fine, but the faucet hasn't been caulked properly. By the time he hits the living room, he needs more stickers.
The stairway warrants some of his sharpest comments. There are some bad cuts on the landing.
"Man, that's just ugly," he says.
Beyond that, the railings feel as though they weren't cleaned before they were stained. But the real problem is the stain doesn't match the foyer floor. The entire stairway will need to be sanded and restained.
From an upstairs bedroom, he climbs onto the roof to check windows, flashing, shingles, gutters, and caulking around the brick. In the attic, he's not at all happy with how the walk boards have been secured. He also makes sure the AC drip pan is clean. In years past, these have been a huge source of warranty problems, Cooper says.
By now, Nunley is in the master bedroom, and he's on a roll.
"These builders think they're next to God," he says. "Once they pull a house out of the ground, they say, 'I have risen.' Then we come through and say, 'We're God's angels watching over you.'"
Cooper joins in the joking.
"We're purgatory," he says. "You have to work your way out."
It will take a lot of work for the builder to get out of this room. A window is broken and Cooper can feel the texture of the wallboard through the paint. The closet doors are snagging the carpet and the installers used exterior caulk around the tub. In six months, Cooper says, it will turn yellow, crack, and look terrible. The jets in the tub don't work; in the toilet, the drywall seams are ragged and there are several creases.
"This needs a good man with a good sanding block," Nunley says. "It makes all the difference in the world."
There's more to check outside. A bulge in the siding indicates a nail pop, and there's a hole in the patio. Some shingles are lifting, and a vent on the back wall needs to be replaced. "It looks tacky," Nunley says.
But overall, Nunley is impressed. A house of this size usually generates six pages of items to fix, he says. He has four. Most are minor, but some are the things that once ate away at the company's profits.
Home buyers used to come to closings with punch lists of 20 to 30 items, recalls Winmark's Jenkins. Their warranty repair crews couldn't keep up with the work load.
Their initial solution was to hire ProHome to handle warranty callbacks. Winmark warranty manager Bethany Taylor says the company does a good job of staying on top of the process, with walk-throughs at 45 days and 11 months after move-in, and regular reports on outstanding repair items.
That took care of the back end, but buyers kept coming to closing frustrated by the amount of work that still needed to be done on the houses. Something had to give.
"We were at a point where we were doing well, but warranty was a nightmare," Jenkins says. "We needed to get stuff taken care of on the front end."
It required a change in the company's approach to home building, which had been to rely on the superintendents to get the houses ready for closing. Chris Jenkins, Winmark's vice president of production, created a series of quality control inspections.
"We just changed our philosophy to be proactive rather than reactive," Chris Jenkins says.
First the company implemented a pre-drywall framing inspection that eliminated the most serious and potentially expensive warranty issues. By ensuring the frames are straight and square, they don't cut into finished walls to make repairs.
In mid-2001, Chris Jenkins brought Nunley into the process. When construction is finished, optimally 10 days to two weeks before closing, the area manager signs off that the house is ready for inspection. Nunley's check list covers 141 items.
The inspection originally was called a "nit-pick walk-through," a name well-deserved for Nunley's attention to detail. Once completed, the builder has seven days to complete the repairs -- to Nunley's satisfaction -- or lose his bonus. Superintendents' pay plans also are tied to the inspections. They get their bonuses only if the buyers come to closing with zero punch lists.
The results have been dramatic. Taylor says that warranty items reported to her from ProHome dropped approximately 60 percent in the first 18 months the full system was in place.
"The money saved in warranty is huge," Michelle Jenkins says. She estimates that their warranty costs per house, even with the cost of hiring ProHome, has dropped from an average of 1.5 percent to 2 percent per house to approximately .5 to .75 of a percent.
"When we started with Al, three warranty crews couldn't do all the work," she says. "Now, we don't have warranty crews."