David Weekley Homes, the Houston-based builder, today awards 24 suppliers that were ranked highest in quality and service by its employees who are polled quarterly as part of the builder’s Partners of Choice program, which celebrates its 10th anniversary this year.
About 200 of Weekley’s trade partners participate in the program, which involves more than 600 of the builder’s employees, including division and area presidents, project managers, and directors of construction, sales, warranty, purchasing, and accounts payable. More than 80% of these employees fill out questionnaires each quarter, says Bill Justus, Weekley’s vice president of supply chain services.
“The survey is designed to make good suppliers great,” says Justus. “Over the years, we have closed the loop in the process. When our team fills out a report that requires a corrective action, we follow up and make sure the team member is satisfied. The beautiful thing about the survey is that I have a line of sight on this. We can go to our supervisors and get in front of an issue before it gets critical. This process has literally saved us millions of dollars.”
He estimates that between 15% and 18% of Weekley’s suppliers receive an “A” or “A-plus” grade annually. (See this year’s winners below.) And the suppliers take the scoring seriously. “CEOs call me all the time checking on how their companies are doing,” says Justus. “And sometimes, this is a Kodak moment for them as, over time, the evidence mounts.”
Weekley benefits from Partners of Choice in several ways, says Justus. For example, if a supplier wants to get into a new market with the builder, Weekley has data on that supplier’s performance in other markets to analyze. This process also is driving quality and service at a time when the industry’s supply chain, in many categories, still is recovering from the recession.
Justus says invoicing, product installation, warranty service, and visiting Weekley’s design centers are three areas where suppliers often stumble. And he concedes that Weekley has its share of subpar product and service providers.
However, the builder has agreements with several suppliers that if they score poorly on the survey “there’s an excise tax,” says Justus, that Weekley deducts from its invoices, sometimes for up to 12 months. Those penalties certainly get most suppliers’ attention.
In addition, the survey asks employees about suppliers’ pricing policies. Those scores don’t factor into the awards, but they do give perspective about a vendor’s price sensitivity, and how Weekley might negotiate better terms.
“Do we have the opportunity to buy in at an older price, or purchase a less-expensive substitute?,” says Justus about some options that might be broached to lower prices. He is quick to note, though, that the purpose of Partners of Choice is to get away from a price-only relationship with suppliers that he thinks too many builders have succumbed to.
Most builders don’t engage their suppliers at this level, he speculates, because a program like Partners of Choice “takes a lot of time and some finesse. You can’t just hand over black and white [survey] results and walk away. What we’ve done is to demonstrate the value of the partnering proposition: We want to invest in suppliers that invest in us.”
2013 National Account Award Winners
“A” score in either quality or service:
Acme Brick (quality)
Eaton Corp. (service)
Home Team Pest Defense (service)
Johns Manville (quality)
“A” scores in both quality and service:
Boise Cascade (engineered wood)
Building Specialties/Acoustical Materials
Simpson Strong Tie
Skelton Business Equipment
Weyerhaeuser (Trus Joist)
John Caulfield is senior editor for Builder.
Learn more about markets featured in this article: Houston, TX.