While other home builders dream of removing links from their supply chains to cut costs, David Weekley Homes focuses on making each link more accountable.
“You might save 25 basis points or so, but, honestly, when you buy direct, you take on a number of headaches,” said Bill Justus, Weekley’s vice president of supply chain services. “What we have done is taken the opposite approach. We recognize the importance of the suppliers in the chain and challenge the entire chain to be consistent.”
Weekley’s main tool for link assessment is an intensive performance review system that culls the ranks of underperforming suppliers and rewards those who outperform with its Partners of Choice Awards. The rating effort is now in its seventh year at the Houston-based private builder.
Essentially it’s a quarterly report card with every Weekley employee who has anything to do with the suppliers, from the design studio staffers to field superintendents, who rank each vendor from 1 to 10 on quality and performance every quarter. The raters put their names to the grades because any supplier who receives a 5 or less is expected to touch base with that rater to find out what the problem is and develop a plan to fix it.
Needless to say, the process can laborious, especially given the housing downturn’s impact on personnel. (Weekley's workforce has declined from about 1,600 to 600 employees.) “It would be very easy for us to say we aren’t going to do the survey for a little while, but we haven’t done that,” said Justus.
The quarterly survey helps Weekley find and resolve problems more quickly through the communication process. As an example, Weekley was having trouble getting lighting on time from one of its vendors, despite placing orders a month to six weeks before they were needed. It turns out the distributor was holding the orders and not processing them for a few weeks to maximize cash flow.
And while the survey helps Weekley spot problems, it also helps vendors do the same. Many of Weekley’s suppliers have consistently said through the years that they appreciate the process because it helps them stay on top of their game.
And, frankly, David Weekly Homes would prefer not to do business with suppliers who don’t want to know about problems with their products or service.
“We are moving our spending to those companies that invest that time,” which smart trade partners realize can improve their business with other clients as well, Justus said. “I have to tell you that over and over and over again the award winners tell me that they have learned and they have generated more business as a result of participating in our survey.”
Chairman David Weekley will pass out the awards this week during the company’s annual trade partner event.
Teresa Burney is an editor for BUILDER and BIG BUILDER magazines.
Learn more about markets featured in this article: Houston, TX.