Posted by: JC Gatlin | February 28, 2010

Closing Exception Letters = Overdraft Protection

 

Closing a home 100% clean and complete is not a goal; it’s a standard.

A goal is something the builder is trying to achieve. It’s the number of sales the company is striving to write this month. It’s a percentage of warranty reduction. It’s your ideal weight.

A standard is a commitment to maintaining a specific level of service. You do or do not, there is no try. You may achieve a goal. Or you may not. But to deviate from a standard means there’s a problem.

The Lean Construction Professional commits to closing a home 100% clean and complete on the scheduled closing date. He understands that returning to the home to perform any work after the job is supposed to be done is a text book example of waste, and is as far removed from lean as he can get. He understands the increased warranty potential, customer dissatisfaction, waste of his time and resources, and the Building Partner expense.

The Old School Superintendent relies on a “Closing Exception Letter” to close an incomplete home on the scheduled closing date. It allows the Old School Superintendent to neatly label the unfinished items on a form that both he and the Homeowner sign. Then, on schedule, close the incomplete home with the intent of finishing the incomplete items after the Homeowner moves in.

The “Closing Exception Letter” is like using the overdraft protection on your checking account. Overdraft protection, while it still allows the funds to transfer, is an expensive and wasteful crutch.  (At my bank, overdraft protection costs me $38 per check…)

Regardless of why it’s being used, the “Closing Exception Letter” is a slap-in-the-face, indisputable example of waste. It’s a failure on the part of the superintendent to deliver the home as promised, and the Lean Construction Professional takes that very seriously and personally.

The Lean Construction Professional knows that it’s not easy maintaining this standard. Damage, theft, vandalism, back-ordered items from a manufacturer are tough to overcome. But that’s why his commitment to the standard is crucial. With his personal commitment, he will seek out an answer to benefit the Homeowner, the company, the Building Partner, and his own reputation. And on those rare occasions that he must use the “Closing Exception Letter,” he learns from it. He analyzes the deviation from standard to get to the root cause and ensure that it doesn’t trip him up again in the future.

The Old School Superintendent, who lacks that commitment, finds it easier to fall back on the “Closing Exception Letter” crutch and will continue racking-up that overdraft protection.

© February 2010 Homebuilding Partners, Inc.   twitter-logo

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