Welcome to the Building America Update, a monthly newsletter. Read this month's feature story, or select the other newsletter topics below for more information. You can also Subscribe to receive the email version of Building America Update or browse newsletter archives.
- Feature Story
- Zero Energy Ready Homes webinar, Jan. 28: Low Load HVAC in Zero Energy Ready Homes
- Building Technologies Office Emerging Technologies funding opportunity updates and additional funding
- EERE story featuring Building America team: Performance Improvements for Factory-Built Homes
- New Building America fact sheet highlights Program accomplishments
Builders today are under tremendous pressure. They have to build the tightest, most insulated buildings of all time that are structurally sound; free of defects, fire hazards, mold, and moisture problems; AND are both cheaper and faster to construct than ever before. We can only accomplish all this if we gain more control of the building science and construction processes than ever before. It is the new reality of the construction business.
To succeed in the 21st century, construction businesses will need to engineer building designs and construction processes to tighter and tighter tolerances. While codes have certainly been a catalyst for tighter homes, the compelling benefits of reduced leakage are driving the trend toward homes significantly tighter than code.
I believe tighter building performance tolerances are becoming the new reality for the industry in part because of improving quality and measurement approaches. There are two hard trends:
- Vastly more data is available to consumers and businesses than ever, with no foreseeable end to this trend—if you don’t measure your product quality and report it, someone else will, including your customers.
- When results are measured and compared in the market, there is competition to improve, which leads to higher and higher performance. We’ve been measuring air-tightness for 20 years or so, and guess what – houses are much tighter today!
W. Edwards Deming said, “It is not necessary to change. Survival is not mandatory." Deming’s work taught the American automobile industry an important lesson about two management paradigms in the 1970s and 1980s.
A. When people and organizations focus primarily on quality, defined by the following ratio—“quality equals the results of work efforts divided by total costs”— then quality tends to increase and costs fall over time.
B. When people and organizations focus primarily on costs, costs tend to rise and quality declines over time.
If Deming’s conclusions hold true for construction firms, than much of the industry – those who compete on cost per square foot – are at risk because their costs will rise and quality will decline over time. What is the “cost of quality" in the construction business? Recent unpublished research by experts on Building America's IBACOS team estimates that the “cost of quality” (or poor quality) may be as high as 7% of total sales revenue. That can easily amount to more than $10,000 per home sold.
Has your company switched to paradigm A? Do you focus on optimizing quality per dollar?
To make this switch, construction firms need to measure and analyze the attributes of their homes that affect customers’ perceptions of quality and relentlessly strive to improve these metrics. This approach works for every industry that figures out the right quality metrics. The trouble is that quality can be complicated and hard to measure. Building America resources can help you with this.
With more than 20 years of Building America research into how buildings perform, including partnerships with hundreds of the best experts in the business, we are convinced that performance metrics will become critical quality metrics for successful construction businesses in the future. For example, Building America case studies highlight great examples of builders reducing call-back costs by 50% or more, improving their J.D. Power scores (often leading their markets), and increasing average sales prices. Participants focused on quality improvement and used Building America expert advice to get there. Some timeless examples are described in the Building America Top Innovation profiles.
We urge you to focus on quality management in 2016, and leverage Building America resources such as the Building America Solution Center and the Building America Publications Library. Stay tuned for new building science developments in the coming year. Subscribe to the Building America Update newsletter to learn about breaking research, find funding opportunities, and find out where to meet us at conferences. We look forward to working with you in 2016!
- Eric Werling, Building America Program Director