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Thursday, November 15, 2018

Should Quality be a “Line Item” for Modular Home Factories?

Yesterday I received an email from a Sales Manager at a modular factory telling me that he would like to add a “Line Item” to the contract where the builder could select “Quality Warranty” at a cost of $5,000 so the builder would get his house flagged for Zero Defects.

I read that email several times and I still can’t believe what he suggested as a way to improve quality. Don’t ask, I won’t tell anyone who this is, not even his General Manager.

Modular home factory owners and management seek to contain costs in the manufacturing process and there is no better cost to eliminate than the cost of poor quality. Scrap material, lost labor hours and service and repairs after the house is set add to the cost.

In order to best eliminate these wastes, a modular home factory must plan a strategic approach to quality improvement. And don’t make it a “Line Item”.

By following these five steps, quality can be improved and it shouldn’t cost either the factory or the builder $5,000 a house.

1. Work as a Team Quality won’t be substantially improved by one or two people. To really make lasting and meaningful change in manufacturing processes, it will take a team-based approach.

One of the most important first steps is knowledge of current process and how it got to this point. Why is the process the way it is today? There must be a reason or cause, and that reason should be considered so as not to repeat a problem of days gone by.

2. What is the Quality the Builder and Their Customer Expect Too often, factories want to make a product “better” but don’t really know what better means. With additional cost, we almost always can make a product better.

Someone at the factory should serve as the builder/customer advocate. Typically this voice can come from the sales or marketing departments. Use the builder/customers’ perspective to define what the best-in-class product would be and meet those requirements while minimizing cost.

3. Share Repair and Service Costs in the Field with Everyone at the Factory
The cost to fix a defect in the field once it reaches a customer is dramatically higher than the cost to fix the source of the problem before it is created. It is essential that the production line people be trained to understand the cost multipliers involved with warranty repair or replacement and cost of damaged reputation. Once the staff take this perspective, a desire to find root cause for problem solving is inherently developed. It’s surprising the number of cost saving and quality improvements come from the people that actually do the work.

I remember building some very nice homes when I was a sales rep for Champion’s Genesis Home division. Curved walls, some curved half walls with matching curved oak tops, award winning kitchens and even factory installed Bruce flooring, finished oak staircases and ceramic. When one of then custom homes was finished by the builder I took pictures of both the inside and outside of the home and posted them on the bulletin board of the factory lunch room. None of the people realized that what they built on the production line looked like when completed. I got a lot of people telling me they were proud of the work they did on that house.

4. Look at the Root of the Problem All too often, management tries quality improvements fix the symptoms of failure rather than the root cause. And sometimes those improvements are just as bad as the original symptom.

If a modular factory has started a builder/customer advocate program the root cause may not be found in the production line, rather it might only show it’s ugly head when the house is assembled in the field and that is why the advocacy program can help identify these root causes.

5. Adherence and Discipline are the Keys to a Quality Modular Home Throughout the quality improvement process, it is essential that strong process discipline is employed.

However there is a rather large grey area when it comes to building a custom modular home. Some of the processes and options being asked of the production line people could be new when the module comes down the line. The line worker may not know how to do it properly. These areas need to be identified before the modules hit the line and addressed with the people that will be assembling it.

This doesn’t mean that someone needs to watch over the worker’s shoulder while they are doing it. It means that the problem was identified, discussed with the people that will be doing it and letting them know if they run into a problem that others will be available to help. A guess on the production could cost thousands of dollars in repairs in the field.

These are 5 general suggestions to help insure quality is built into every home and not just a “Line Item”.

9 comments:

Anonymous said...

Here! Here! Quality should be addressed at every station including final finish before release.

Anonymous said...

The only job of the third party inspection agencies is to assure the quality process is being followed.
Maybe, if the third parties weren't paid by the manufacturers, they would feel more empowered to do a thorough job of overseeing the quality process.
Just Saying!

Anonymous said...

It is not the responsibility of third party inspectors to oversee quality issues. Their responsibility is to make sure every module meets both the state and IRC requirements. Yes, they are paid by the factories but that is mandated by the states. Would you rather have state inspectors roaming through every factory.

Quality is the factory's responsibility from day one, not the builders. We have enough to do without having to send one of employees to every factory we buy from when one of our homes is on their production line.

Anonymous said...

The outside party, as already clarified, is for state inspection to make sure the house is being built per code. I only clarify this again because there is someone who clearly has an issue with the third party on many of your posts and has incorrect information of their job. Coach that is a troubling email and it goes back to your article a week ago about the builder wanting to just take a shell. At the end of the day it goes back to pride in your product. Whoever said that to you in the first place is ridiculous and if that was one of my employees they would be terminated immediately. Your goal should be to build it right from day one. I don't think anyone expects perfection in building, but that is a little overkill. The factories employee QUALITY CONTROL managers, so my response is just do your job. It is in the title...

PA factory rep said...

Maybe the Sales Manager thought that having a Quality Warranty for $5,000 meant that the factory would fix everything and not charge the builder. Still a stupid idea but I've seen Sales Managers so dumber things.

Anonymous said...

For being a part of this industry for many years, its a little disheartening to read some of these comments. I always thought there was a "partnership" between the manufacturer and the builder? Ultimately manufacturers and builders need to work together and not point fingers if and when a problem arises. Builders do need to inform manufacturers of problems so they can stop them from going out of the door and manufacturers need to address them. Third parties are required to inspect to approved drawings, however if they do encounter a problem, they too should make sure the manufacturer makes the problems go away. Don't point fingers, work together and don't throw each other "under the bus"....

NYBuilder said...

This idea is great from the builder/client perspective. If my factory said to me, "here, for $5k extra, we're going to ensure that all quality issues are addressed and taken care of before shipment" i'd gladly pay it. It's one more layer of protection on our end against the factory. What seems like all profit to them gives me peace of mind, added security, and tells me what my service budget really is going to be in the event that all the issues weren't cleaned up pre-shipment. If the average house is 2500 sq feet, that means im simply increasing my price to the client by $2/sq foot (minimum). No big deal. Plus i get to sell them on the quality package my factory supplies me. The shame is that no factory actually has the guts to give us this line item because they know their QC and end-of-line staff are not trained well enough to spot, identify and correct quality issues.

Josh Margulies said...

Here here!

josh margulies said...

Quality is not a pep talk or slogan. It is the product of the entire process working well together.

Nobody builds a zero defect house. What to do? Be REALISTIC about the quality of the thing. Measure, feedback, gather data, report!

Who has a defined, written industry standard!?

The nahb. Its ed no 4.