There is a saying "make a mistake once and it is a learning experience, make the same mistake over and over is a lesson in stupidity or insanity. Do you understand how maintenance costs are impacting your bottom line?
If you can focus on continuing improvement this will help prevent warranty issues and give you an edge over your competitors not to mention a boost to the bottom line.
Warranty problems can affect margins, sales, customer referrals, staff moral and a builder's reputation. However, minimising warranty expenses can help differentiate your business from the others because warranty issues can really destroy your reputation with your clients.You should focus on all areas of design, systems, construction methods, documentation, material selection, proper installation supervision, contractors, tracking of warranty issues and a program of continuous improvement.
Supervisors should be the last line of defence so make sure your systems ad processes support the site supervisors but be clear about your quality expectations to both supervisors and trades.
It all Starts with Design
Poor design can increase your maintenance and warranty costs from the very start. Good design considers build ability and warranty as much as aesthetics. You should involve your construction team, key trades and manufacturers in discussing your designs and construction methods because they will be aware of new systems and materials that you may not. Your trades will also be able to help with more efficient ways of construction leading to tighter costs to build.
Simple hip roofs and gables have been replaced with parapets, flat roofs and box gutters all in the name of 'looks' but these all have created further issues with water entry, problems with valley gutters on low pitch roofs and flashing issues.
The Top 10 defects (2019) as defined by the QBCC (Qld Building and Construction Commission) are:
Joinery
Painting
Floor tiling
Roof cladding
Drainage
Internal wet areas waterproofing membranes
Driveways and paths
Lining wall internal
Linings ceiling internal
External waterproofing membranes
How do your maintenance and warranty issues compare to the industry trends as measured by the QBCC? How can better design improve the performance in the above categories?
Review Construction Documents before sending to Site
Do you create a set of 'Construction Issue' documents before sending to site? It is quite unfair on site supervisors to expect them to work out what is included if there are numerous post contract variations and the plans haven't been amended to suit. This includes all the other documents -colour selection schedules,schedule of variations, engineering, post contract variations at least.
Not having the proper documentation can lead to mistakes onsite, wrong installation and trades taking shortcuts because they can't interpret the right information. You can read my article on why plans and documentation are so important here.
Protect Yourself in Contractor Agreements
Make sure your trade agreements hold the trade responsible for repairing any defects including the associated rectification because of the defect. However, in defence of the trades, make sure you provide full installation instructions for any new material, provide typical construction details so you can maintain a consistent approach to detailing and finishing in each home. With the emphasis on non-conforming building products these days, it is incumbent on the builder to provide all the relevant information.
Provide your trades with a scope of works that include a 'quality checklist' and enforce the use of the checklists and sets out your expectations of quality. Our Builders Business Resource Centre has a full set of Scopes of Works to use for your construction projects. You can access them here.
Provide your customers with a maintenance or warranty manual that helps them understand how to operate the home and avoid basic requests from customers about maintaining their home.
Use Better Materials
Don't confuse the price of materials with the 'cost' of installing and maintaining the material. Research the material to ensure it complies with the NCC and Australian Standards. Pleading ignorance when it fails is no defence anymore. Talk to your trades and construction team about a new material before specifying it. Understand the cost of ongoing maintenance or unintended consequences like staining from hardwood decking onto a concrete driveway or tiles below.
A Common Warranty Expense - Bad Installation
Nearly all defects and maintenance issues can be traced back to poor installation or workmanship. Unfortunately in today's industry, there is a culture of 'no responsibility' from trades as they need to get in and get out and don't have time to fix up mistakes from preceding trades. This could be due to the rates, it could be due to lack of training, it could be due to the lack of supervision not only by the builder but also by the contractor, it could also be due to trades moving up from southern States that did not complete a traditional apprenticeship and just started in a region or State that doesn't require trade licensing as in Queensland. It is not just one cause but from what I've seen onsite, the issues and defective work is rising and the resultant maintenance work is costing a lot of time and money.
I remember reading in an article many years ago that the cost of poor quality work is $1 if the contractor fixes it at the time of installation, if the defective work is found during a defect inspection by the builder, the cost rises to $10 but if it is found by the home owner, the cost balloons out to $100 because you now have to spend time on phone calls, inspect the work before and after, arrange the trade who is also spending more time travelling there plus the cost of the re-work as well.
Make sure you create a culture of doing it right the first time. If it feels wrong, it will be wrong and the fallout will come back and bite you 100 times over. I have seen it many times onsite where a supervisor accepts poor workmanship in the race to finish the job on time but end up spending more time later on arranging the trades to fix the work while having to work on the next project. The pressure builds up and can snowball with more defective work to fix and more projects to supervise.
Use Checklists to Create Consistent Quality
Create checklists for all the critical stages of the build and use the construction team to develop these along with the trades. Work out what critical items should be the responsibility of the trade and what should be the responsibility of the site supervisor.
Supervisors can't remember everything on every job, so checklists are a way of taking the pressure off the supervisors to keep everything in their heads-they have enough to remember without trying to remember every item at every stage of the construction.
Using checklists at the critical stages will make an immediate impact on your maintenance and warranty issues. Our Builders Business Resource Centre has a number of checklists available for the critical stages of construction. You can access them here.
Track the Problem Areas to Eliminate the Causes
Implement a system to track your defects and the elements of the building where the problems are being created. Create your own 'Top 10' defect categories and implement solutions to eliminate the causes of the problems.
Some construction software will enable you to do this. Homefront is one such system that has a warranty management module that easily allows you to track the issues, outstanding work orders, report by problem type and contractor so you can discover where to focus your efforts in reducing the warranty issues and costs.
Finish the Home before Handover
If you don't have a construction program or schedule, you will have no way of knowing how the progress of the home is proceeding until you reach the end of the contract period. Supervisors are under constant pressure to get the final payment before the keys are handed over.
Make sure you have a culture where the supervisors understand the home MUST be finished before handing over to the customer. Leaving unfinished items to appear on the Certificate of Practical Completion (Handover Sheet) with the promise to get them done as soon as you can is asking for trouble and the maintenance problems will get bigger and bigger until you find you have to employ a person just to follow up on handover items that are 'pushed' into the maintenance period. Remember the exponential costs of fixing a defect once the customer moves into the home -100 times the initial cost. If a customer finds there are numerous defects at handover, they will become suspicious and wonder what else is wrong and go over the home with a fine tooth comb. They may even engage an external inspector who is paid by the customer to find defects and they will 'go to town' on you with little sympathy from your customer.
Consider splitting the construction programs into the 'construction period' and the 'handover period' which provides for sufficient time to finish the home and all the defects. Consider offering incentives to supervisors to achieve a 100% completed home with no defects on the handover sheet.
Consider engaging an external 'quality control' inspector who works for the builder and can identify the defects while you as the builder still have control of the site. Create a 'rating' system that gives each defect a score, say 0.1% and insist on a minimum rating before a job can proceed to the handover stage- I would suggest at least 98.5% which means there are still 15 items to fix up before allowing the customer to walk through the home. The aim is to have 'zero' defects at handover. Establish the benchmarks with your supervisors and with all the trades and let them know there will be no tolerance. At the end of the day, it is the supervisors job to manage the construction and the trades to provide the finished workmanship for their expertise.
There is nothing more satisfying than completing the construction of a new home with zero defects and seeing the smile on your customer's face/s and having a reason to pop that bottle of champagne.
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