CSI: Construction: Aiming High

WHEN KB HOME ANNOUNCED A COUPLE of years ago that it would no longer work with contractors who were not participating in the NAHB Research Center's National Housing Quality (NHQ) program, it surprised the industry. But now that the policy is solidly in place, the numbers are in, and the decision looks smarter than ever. Fewer callbacks, streamlined inspections, happier consumers, and (gasp!) even lower insurance premiums have resulted from the focus on quality.

That is because the company has tapped into something highly unusual: rapid growth concurrent with rising customer satisfaction.

Doug Eddie, quality manager for KB's Las Vegas division, notes that the company built more than 3,500 homes last year, moving from third to first place in number of units built in its market. At the same time, its J.D. Power satisfaction ranking climbed from ninth to third place, hovering around 95.3 percent.

“I think what the [NHQ] program did was introduce a language of quality that helped both the builder and trade partner get the dialogue going,” says Eddie. “Now, they're both moving toward a common goal, not an adversarial position.”

But the rewards of a quality program have proven far more tangible than just good feelings among the crew. For example, Eddie says several of his trade contractors have just reported in with good news.

“They're doing complete inspections,” notes Eddie, “one at underground, one at rough finish, another at final finish.”

That process, according to Eddie, has made plumbers far more attentive to any potential underground breaks in fittings or pipes, damaged finishes, and improper rough-ins. And some potential “hot spots” such as the bathtub overflow get special treatment (see “Cooling the Hot Spots,” page 95).

But for many subcontractors, the biggest advantage to getting NHQ certified (at KB's urging) has been their ability to get liability insurance.

“I believe a lot of our trades would not be in business were it not for their involvement in this program,” Eddie says. “They simply couldn't get liability insurance.” He explains that because KB only works with certified subcontractors, the company has been able to create an insurance “wrap” that any of their trade partners can buy into.

Sometimes, Eddie points out, major improvements in quality require only a minor adjustment in behavior. For example, another “hot spot” pointed out by his subcontractors was flat tires on the jobsite. The reason: Framers often spill a box of nails and just leave them where they fall, preferring to open a new box instead of picking up the spilled nails. By identifying the problem, subs have greatly reduced time lost changing tires.

Of course, some problems take more effort to solve, but if subs feel they will get help from the builder to solve an issue, they're more willing to be proactive. For example, in arid Las Vegas, drywall that is installed over wood framing often develops an unsightly bulge on the taped joint due to wood shrinkage.

KB and the drywall sub worked together and came up with a solution using a product designed for soundproofing—resilient channel. This channel attaches to the bottom of the floor joists or roof trusses and allows the drywall to “float.”

On the traditional jobsite, the root of virtually every item on the punch list is the disconnect between one subcontractor and the next, Eddie notes. Under the NHQ program, the subs are responsible for complete inspection of the jobsite before leaving the home.

“They have to document that they inspected everything,” Eddie says, “so we get a reduction in cycle time because they're looking for cut water lines—even something as simple as dragging a carpet backing over a door handle that scratches the finish or scratches in windows.”

Another unexpected benefit to the NHQ process: “a formalized system [in which] we can invite the customer to the home at three different times to talk about quality features,” Eddie says. “They can tell if you installed their windows properly, and they get to see the house at pre-drywall stage. You can say, ‘Here's the documentation.'”

And, of course, that kind of handholding makes a major difference if the customers ever think about litigation. They saw the house before the walls went up, so they know the builder has been up front about construction quality and methods.

Selling the subs on NHQ didn't happen overnight, Eddie says. But two years later, most of the grumbling is gone. Not only have they walked into a nice insurance deal, but most are reaping financial rewards. “They're beginning to see that they can spend 15 minutes now that will save them five hours on the back end. And some are tying their quality performance into performance bonus profits.”

One of the most successful features of KB Home's participation in the National Housing Quality program has been the identification of “hot spots.” These are recurring problems that trade contractors identify and fix. But the fix is formalized, which may be why it works so well. When the sub identifies a problem, he creates a placard showing the wrong way versus the right way to do the job. That sign is then laminated and posted at the spot where the problem has occurred on past jobs. Result: far fewer callbacks. Here are two examples of hot spots identified by KB subcontractors:

Tub Overflow: Replacing a faulty tub overflow drain can be a costly operation, particularly after the tub has leaked through the second floor and ruined the ceiling of the first floor. Plumbers came up with a simple hot spot solution. Prior to finish, they now fill every bathtub until it overflows to make sure the drain does its job.

Glue Or Die: Some of KB's crews apparently found out firsthand the problem with applying glue to floor trusses and waiting too long before applying flooring. Bad timing can result in lumps or poor glue bonds. This hot spot reminder ensures that contractors start nailing on the second-floor subfloor within 10 minutes of glue application.

The Case: Poor workmanship adds unnecessary expense to construction costs.
The Investigation: Hunting for ways to improve quality, reduce mistake, and increase customer satisfaction.
The Evidence: The National Housing Quality program provides formal methods to identify and fix problems, and it requires all trade contractors to inspect the site before they leave, among other benefits.
The Verdict: Higher profits, fewer callbacks, more jobsite cooperation, and the ability to obtain liability insurance.