2002 Pacesetter Awards: Excellence in Production

Barry Frey

Producing $20 million of annual custom home volume means managing a staggering number of individual decisions and operations. Barry Frey rides herd on this unruly process with a simple but powerful principle: Get things down on paper.

Rather than rely on his own memory and that of his staff and subcontractors, he has produced exhaustive checklists and manuals that cover every stage of a project. Frey and his superintendents have all built enough houses to know what is involved. But no one is above forgetting to budget for wind insurance or to deliver paint colors to the architectural review board, and no one needs to lie awake nights dwelling on such matters.

With a sequential script to follow for important project phases his people can keep track of slippery details without unnecessary strain on the brain. A separate superintendent’s manual covers production matters in exhaustive detail. “They were things we were doing anyway,” Frey says. “It was just a matter of getting it down on paper.”

Frey began building his checklist system four years ago, after attending a seminar on Total Quality Management, a philosophy that stresses continuous improvement. Reasoning that his company could not improve its procedures in a measurable way without a baseline from which to measure, Frey roughed out the first checklists, then opened the documents to input from his staff. “I would tell them, ‘You need to continually refine this. Every time there’s a situation that’s not on the list, you’ve got to put it on the list.'”

Skeptical at first, his superintendents soon became enthusiastic converts to the system, which allows them to address such perennial irritations as incomplete plans. “I told my supers, ‘If you think the plans are lousy, let me know,'” Frey says. As a result of input from field staff and subcontractors, “There’s a much greater faith in the plans.”

And with his whole company reading from — and writing on — the same page, Frey can continuously improve on the quality and consistency of both his process and his product.

Frey & Son Homes, Bonita Springs, Fla. Type of business: custom home builder; Years in business: 30; Employees: 23; 2001 volume: $22 million; 2001 starts: 19

Stephen Rolston

Stephen Rolston is not a control freak, but as a businessman he recognizes the value of nailing down as many key variables as possible. And in custom building, few things are as variable or as key to production efficiency as the performance and availability of trade contractors.

Rolston holds his long-time subs in high esteem for their performance, but availability was always an issue. That is, until Rolston instituted a system that builds his subs into his schedule in a way that benefits both parties.

“The key component was incorporating the concept that they weren’t going to take on projects that would take them away from us,” Rolston says. To ensure that kind of fidelity, he has made his company a trade contractor’s dream come true. “We’re the only guy in our market who is both a builder and developer working in the range between $400,000 and $1 million,” he says. That helps in two ways. By building homes at twice the local average price — and by paying his bills “incredibly quickly” — Rolston sweetens the jobs he offers his subs. More important, controlling the land allows him to schedule jobs like clockwork. Using a “slot scheduling” system, Rolston plans a closing date every two weeks throughout the year. Working backward from the closing date gives him all the other important milestones in each job and lets him maintain his subs at a steady, predictable rhythm.

At any one time he averages between six and 12 active custom projects. But if a hole appears in his schedule he fills it with a spec house. If he has enough capital tied up in spec projects already, he says, “We’ll just move ahead in the slot-schedule process those that are pre-sold.”

The result is a classic win-win scenario. “Our plumber knows that every other Friday he’s got another house to rough,” says Rolston, who spends Monday through Thursday doing better things than chasing his plumber.

Land Ark Homes, Stittsville, Ontario, Canada. Type of business: custom home builder/spec builder; Years in business: 15; Employees: 10; 2001 volume: $12 million; 2001 starts: 23 homes

Chris Thompson – Production

Chris Thompson and his employees at On the Level base their production procedures on a simple, elementary-school principle: Learn from your mistakes. Over the past two years they’ve examined the hiccups that have slowed them down or caused extra expense, and addressed them in smart, effective ways.

Take the company’s relationship with subcontractors, for example. Its dealings with them had always gone just fine. “We tend to keep the same subs for years,” Thompson says. “It’s a lot easier for them to talk to one another when they already know each other.” But while the lines of communication among the subs were open, those between them and On the Level project managers weren’t. Mistakes were happening, and the managers wondered if they or their subs were to blame. So they started using a quarterly evaluation form to track back charges and service problems. They grade each subcontractor on an A to F scale, sit down with each one to talk about their rating, and keep the form on file for future reference.

“If nothing else, it gives you a chance to sit down and communicate with them,” Thompson says. “You can tell them what they’re doing wrong, and they can explain how you can help them do their job better. It helps us both — it’s not just criticizing.”

On the Level has also taken to posting customer selection sheets on site, which cuts down on mistakes and change orders. And it has improved internal communication by instituting a post-construction recap. “Everyone in the company participates in the recap,” Thompson explains. “Staff carpenters, designers, field managers. We go over the whole project.”

Taking digital photos at every step during construction has streamlined the process in many areas. “We take them before backfill so we’ll know where the final grading has to come up,” says Thompson. “We also take every wall and ceiling so that we know where all the mechanical outlets are in case any get Sheetrocked over.” The photos generally facilitate any future changes the clients may want. “The digital camera has been wonderful,” says Thompson. “It just seemed like it made sense.”

On the Level, Carver, Minn. Type of business: design/build; Years in business: 17; Employees: 11; 2001 volume: $6.25 million; 2001 starts: 5