Posted by: JC Gatlin | January 31, 2010

The Cost of 2nd Time Quality

The cardinal rule of lean homebuilding is to complete the job right the first time. In other words, achieve First Time Quality. But we actually spend a great deal of time, resources and money achieving 2nd Time Quality. That is having to return to the jobsite to finish the job or fix an error. The money spent on 2nd Time Quality will nickel and dime the Building Partner’s bottom line.

“Most builders are astounded to discover the extent of costs dealing with quality issues embedded into normal construction processes,” says Ed Caldeira of Caldeira Quality, a quality training and implementation firm. “ We tend to treat the constant stream of quality errors that plague daily operations as just another cost of doing business – that is, until we calculate the actual costs. We soon discover that the greatest profit opportunities may be inside our own organization.”

Here are some recent examples of those hidden costs on the jobsite:

 

The cabinet installers didn’t measure the back of the cabinets correctly for the plumbing, and there are now several large gaps around the plumbing penetrations into the wall. The Construction Professional had to call the cabinet company to return to the community to reskin the cabinets.

The Cabinet Quality Assurance Supervisor spent 10 minutes on the phone with the Construction Professional, then left his current job to drive out to the community to investigate the problem. The community was roughly 30 miles away and he spent 45 minutes talking to the Construction Professional onsite and inspecting the cabinets. He then spent 5 minutes on the phone with the Scheduler to go over the problem and to schedule the installer to correct the cabinets.

Meanwhile, the Scheduler spent five minutes on the phone with the Quality Assurance Supervisor, then an additional 15 minutes setting up the job. That included spending 10 minutes on the phone with the “Punch Guy” to explain the problem and give him directions.

Now the Punch Guy, an employee who is paid to return to jobs after the installer to complete or fix the work, has just spent 10 minutes on the phone with the Scheduler. He then drove out to the community, which was 15 miles from the shop and spent half an hour re-skinning the cabinets. He then called the Quality Assurance Supervisor and then the Scheduler to let them both know that he had finished and was returning to the shop.

Finally, at the end of the day, the Cabinet Quality Assurance Supervisor returned to the community to double check the Punch Guy’s work. He just spent 5 minutes on the phone with the Punch Guy going over the rework. Now, from his last location, the community was 22 miles away, and he spent 20 minutes on the jobsite. When he finished, he returned to the shop 15 miles away and left a voice mail message for the Construction Professional that error had been fixed.

 

The Construction Professional called the electrical supervisor because the electrical crew left without installing all of the nail guards. He needed the crew back immediately to finish the job.

The electrical supervisor spent 7 minutes on the phone with the Construction Professional, and then another 10 minutes on the phone with the electrical crew leader. One person from the crew was going to have to go back to the community to finish the job.

The crew leader spent 10 minutes on the phone with the Supervisor, then left his current job to return to the Construction Professional’s jobsite. That community was just over 50 miles away. Once he got back to the jobsite, he found many nail guards missing, and spent half an hour finishing the job and walking the house with the Construction Professional.

The electrical company must also factor in the time lost from the paying job the crew leader was pulled from to complete the unfinished job for the Construction Professional.


The goal of 1st Time Quality is to eliminate 2nd Time Quality (or all those return trips). Quality-based cost reduction allows the Building Partner to recover hidden or buried costs and return that money to the bottom line.

Says Caldeira, “Accounting figures do not reveal hidden costs ingrained into normal job activities. For example, when half of a superintendent’s time is spent reacting to things that go wrong, the cost is buried in labor budgets. Every employee in the company — from pick-up laborers to management – spends a significant portion of his or her time dealing with quality and customer satisfaction issues.”

© January 2010 Homebuilding Partners, Inc.   twitter-logo

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Responses

  1. Great post.
    It’s sad but today so many people do not care about doing the best job they possibly can. You find that at the banks, at the department stores,the cable providers , at restaurants and companies all over. The businesses that do care about quality are the businesses that will still be around when we get thought these rough times.

  2. Is there a spreadsheet or formula we can use to go over this with BPs during the weekly FTQ meetings on the jobsite?

  3. […] The Cost of 2nd Time Quality « Lean Homebuilding […]

  4. […] The Cost of 2nd Time Quality « Lean Homebuilding […]

  5. What an effective way to show our building partners the importance of participating in the first time quality program. Nothing brings it all into perspective like numbers in the red.

  6. Numbers don’t lie. We ran those similar scenarios with all Building Partners in Orlando 4 years ago, and the return trip cost was just as astounding back then. It is imperitive for the Building Companies to help our Building Partners realize these costs.

  7. […] took a couple of weeks to implement last December, but this PDCA cut out return trips to the jobsite for the electrician and has gotten the Construction Professional’s building schedule back on […]

  8. […] price difference between the current Building Partner and the cheaper company? Do they suffer from 2nd time quality issues (or even 3rd or 4th time […]

  9. […] It’s on every punch list. It’s one of the top reasons for return trips. And lately, it’s become the poster child for “Second Time Quality.” […]


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