Comparing Internal Quality Assurance with Third-Party Programs—Are We Ready to Start Trusting Builders?

For the past 20 years I have said that W.E. Deming was right when he decried, “You Cannot Inspect Quality into a Product,” yet ironically I built the largest third-party QA inspection firm in the USA during this time doing just that.  Why does our industry have such disregard for home builders that our insurance providers require a third-party observer to measure the quality?  The answer in a minute, but first—some background.

Builders are unique in the entire manufacturing industry. They build a complex product, using largely under-skilled workers with almost zero perfected and replicable processes.  We build these complex structures not in a refined factory, but in the mud, snow and wind and with very basic and highly variable raw materials.

If Boeing or Qualcomm were in the home building business, we would not see subcontracted designs for a “builders set” of blueprints but a robust, time-tested and highly repeatable product.  The term “Subcontractor” would be replaced by “skilled worker” with whom they directly control, and the home would be internally measured throughout production to verify the expected performance outcome. There would be no punch lists, since the opportunity for failure would be eliminated via processes.

This is far from reality, but many builders are developing a great Culture for Quality and implementing systems and business rules to push them closer to a consistent end result that has fewer defects. We should embrace these bold new manufacturers because they will drive defects down, profits up, and greatly reduce claims for their insurance partners.

As builders emerge from their caves and enter this next housing cycle, better builders are conforming to world-class Quality cultures that cannot be easily supported by an occasional third-party QA inspector brandishing a can of marker paint.  Although we have learned that inspection can and does result in quality improvements, the reliance of third-party QA inspectors must segue to an elevated support culture of continuous process improvement, robust measurement and the elimination of ‘Muda’, e.g. anything that does not add value to the final product (as in the Toyota Production System).  Third-party QA should not be an inspection, but an external measurement that judges a builder’s ability to continuously improve from their baseline level.

Our challenge is to embrace and encourage a builder’s investment in a Quality Culture.  Baseline QA audits should become an underwriting requirement, much like a builder supplies its financial reports to its investors. Only builders who continually improve and permanently eliminate defects should enjoy the lowest insurance rates.

So back to my question: Why has third-party QA become so popular?  Well, because it is relatively easy for both the builder and the risk partner.  Building a culture to emulate Toyota is not easy, and cannot be accomplished overnight, so third-party QA is a good stop-gap risk management tool to use until a builder outgrows it.  There are great builders out there—I have many as my customers.  AxisPointe will help you get to Great, no matter what level you are at right now.  All it takes as commitment, and trusting us to help you in this very profitable and exciting journey towards excellence.

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