Tuesday, February 11, 2020

Improving Modular Factory Quality Isn’t a Two Week Fix

There are three separate and distinct parts to every modular home before the home buyer gets the keys to the front door. Not counting all the ‘stuff’ needed before the house goes to the production line, those three areas are the production line; transportation and set; on-site finishing the home for the customer.

For this part of the discussion let’s just talk about what happens in the factory. Every factory wants to improve quality, even those known for good quality are always looking to improve it.

Today there are any number of consultants that will come to your factory and for a fee observe your production line and make a ton of recommendations. Isn’t that what you paid them all that money to do?

The problem is many of their recommendations are unproven and total generalization at best. The fact remains that this is your factory and having someone come in for a couple of weeks with recommendations of how to do things better than you’ve been doing for 40 years just doesn’t sit right with a lot of people in the company.

Instead, you may want to try these strategies to make quality your competitive edge.

Total Quality Integration

Reducing order times and rework may require you to begin implementing a single integrated system for pricing, quoting, ordering and builder approval.

Enterprise Resource Planning (ERP) is management software that allows an organization to use a system of integrated applications to manage the business. ERP software integrates all facets of an operation, including product planning, development, manufacturing processes, financials, sales and marketing.

This is the toughest thing you may ever do for your factory but the rewards will be worth the investment. Many of today’s modular home factories already have an ERP program installed while others are implementing the process.

Quality Assurance Upgrades

People outside the modular housing industry look at our assembly lines and say “Why don’t you automate your factory?”

First of all, we are not an automobile factory. Maybe we could semi-automate the wall, truss and floor assembly systems but every step after that requires ‘hands on’ attention. How do you get robotics to wire a house, install and plumb baths and kitchens or any of the other myriad of things required to complete each module?

Every factory has a Quality Assurance person(s) that inspects and notes defects before each module is shipped to the builder but quality won't be sustainably improved by single individuals.

That takes a complete Team Mindset from the owner, GM, production line workers and all the way down to the receptionist at the front desk. If everyone isn’t proud of what they build and only look at their job in terms of the money in their paycheck, no improvement will ever happen.

I visit quite a few modular home factories and talk with a lot of receptionists while waiting for an appointment. When I ask them if they know what they build in the factory the answer is always “homes.” But when I ask them how they do that, most answer “I really don’t know” or “I’ve never been in the factory.”

Everyone in your company has to know what you build, how you build and why quality is so important. Even the receptionist and clerical staff. They want to know you build a quality product.

I worked for PA factory at one time where most of the people on the production line had been there more than 15 years and now their children were working there as well.

Quality control in that factory occurred when one of the parents, who had worked their way up to more skilled positions on the line received a less than quality ‘floor’ coming up the line built by one of their kids. Not only were they on their kid’s case about the poor quality but everyone else knew whose kid did it.

Then the kid was brought up the line and made to fix their mistake or omission in front of all those seasoned veterans. That didn’t happen to the same kid more than once or twice. That was teamwork quality assurance in action.

Everyone’s heard the term “WWJD” (What would Jesus do?). Everyone in your factory needs to adopt this term “WBP” (We build perfection). It won’t happen unless everyone believes it. If that were to happen, can you imagine the receptionist’s reaction if a builder calls about a problem? Total shock if he/she truly believes the company only builds perfection.

Understanding of the Cost of Quality.

The Cost of Quality is the money spent beyond expected production costs (labor, materials, equipment) to ensure that the product the customer receives is a quality (defect free) product.

Every factory has a service department. Even though we should strive for perfection, there has never been a perfect house built since the time of Adam and Eve. We expect flaws, the builder expects flaws and the customer is always looking for flaws. Hence the factory service department.

Many modular home factories use a percentage of the total module cost to fund the service department. Most use between 3-5% which means the company EXPECTS problems with their product. If a house FOB to the builder is $150,000, then the service department has between $4,500 and $7,500 to spend to make it right for the builder and their customer.

Not sure what you spend on fixing a problem that shouldn‘t have left the factory gate in the first place but even $7,500 is probably not going to be enough to correct most problems.

In order for the service department to be able to function within their budget, they must rely on the production workers to build a quality product. Otherwise, what might have taken a few minutes to correct on the production becomes a fight between the service department and the builder as well as a fight between the CFO and the Service Manager. Simply sending a service truck and crew 250 miles to correct a problem which might require a 2-3 day trip to the house will eat up most of the allowable expense.

One factory on the East Coast told their Service Manager that every dollar he saved under his allowable expense would be split 50% to him and 50% to his staff. Needless to say, he approved very few repairs and told the builders the problems were theirs since they accepted the house in the place.

It took more than 6 months before management understood the problems they had created with the new system.

The savings of doing something right the first time far outweighs the cost of bad quality that is discovered at the job site.

Solve Problems Completely.

The new home builder and their customer expects problems to be resolved not only quickly but completely. Many builders have emailed me over the years complaining that the service techs that were sent out only corrected what was on their work order and would not correct any other problem that was the factory’s fault. The service techs have even been heard slamming the builder and even their own factory for the shoddy work.

Of course there is another side to this coin. Builders and their customers often find more problems between the time the service crew was dispatched and when they arrive. Materials needed to fix the additional problems may be back at the factory or the problems may be the builder’s fault.

Going back to the production line, the problem that is occuring at the jobsite may be that a process or a person is at fault. If that is the case, management must retool the process and/or retrain the worker. Either way the problem needs to be completely corrected.

There are so many factors that go into creating a Quality New Modular Home that at times it feels like an overwhelming challenge. But introducing Quality into the factory is an absolute and it’s well within their ability to do it. Step by step, process by process and person by person. Building Quality homes in the factory will set modular home construction far ahead of site built housing.

Gary Fleisher is a housing veteran, editor/writer of Modular Home Builder blog 
and industry speaker/consultant. 


Anon said...

You need to get away from the computer and your cocktail parties and spend some real time on the production floor. Go incognito and put on your toolbelt for a month. You'll see where the real quality issues are. You've written too many articles to count that, basically, all say the same exact thing. Start by having conversations with those on the front line instead of what your fed by upper management. The real strength in any army is with those actually fighting the battle, yet the general's are the ones remembered. You are a strong voice in the industry and are to be commended for that but, you seem to miss the basics. Good pay + good benefits + good treatment = good quality.

modcoach said...

I think you misunderstood what I was saying. Quality begins at the top. If management doesn't buy into it 100 percent, then the rest of the company has no guidance as to what is expected. Defining quality is tough to do but it has to start with whoever makes the final decisions for the factory.

Yes, I have worked on the production line and have seen first hand poor worker attitude result in mistakes. And I haven't been to a cocktail party in decades.

Anonymous said...

Was there something of value I can use for my business in that diatribe?