© 2002 KB Home American Society for Quality IBH Lanehart Electric Companies 2005 National Energy & Environmental, Design and Construction Division's Conference

© 2002 KB Home© 2002 KB Home

American Society for Quality American Society for Quality

IBH

Lanehart Electric

Companies

2005 National Energy & Environmental, Design and Construction Division's Conference


Today’s ForumToday’s Forum

• Moderator – Cathy Teague– Introductions

• KB Home

• IBH

• Lanehart Electric Co.

• Structure• Wrap Up

• Moderator – Cathy Teague– Introductions

• KB Home

• IBH

• Lanehart Electric Co.

• Structure• Wrap Up

KB Home

San Antonio Division


KB Home & San Antonio Division KB Home & San Antonio Division

• Overview

• The Builder Certification Process

• KB’s Business Partners

• Overview

• The Builder Certification Process

• KB’s Business Partners


History History

• KB Home

– Founded 1957

– Listed on American Stock Exchange 1962

– Entered Texas Market 1996

– Delivered over 33,000 units last year

– Ranked Top 3 by JD POWER & Associates

• KB Home

– Founded 1957

– Listed on American Stock Exchange 1962

– Entered Texas Market 1996

– Delivered over 33,000 units last year

– Ranked Top 3 by JD POWER & Associates


VisionVision

To redefine our industry by creating a premier, disciplined, process driven company as measured by customers, employees and shareholders

To redefine our industry by creating a premier, disciplined, process driven company as measured by customers, employees and shareholders


Company StrategyCompany Strategy

•Make detailed customer and market knowledge a competitive advantage •Developed unmatched operating excellence•Build a world-class organization•Make decisions based on fact throughout the organization•Deliver maximum volume with sustainable high returns•Set the stand for a consistent and reliable business partner


San Antonio Division HallmarksSan Antonio Division Hallmarks

• Comprehensive business model – KBnxt

• Construction Quality

• Continuous Improvement

• Customer Involvement

• Comprehensive business model – KBnxt

• Construction Quality

• Continuous Improvement

• Customer Involvement


KBnxtKBnxt

Post CloseFollow-up

ReferralSales

Buildto Order

Pre-Qualify forMortgage

Choice ofDesign Option

90% Retention Rate$2,500 Profit per Home

Design Studio >7,000 options

Choice ofFloor Plans

15-20 Floor Plans

DevelopLand

>20%Growth in 2003

@ Below MarketCosts

AcquireLand

Open NewCommunities

Sub-marketSurvey

KBnxt Operating Model


Construction QualityConstruction Quality

• Third Party Inspection

– 100% independent soil samples

– Certified Engineer slab certification

– Master plumber video of 100% completed slabs

– Universal Forest Products Texas Engineer stamps every frame & truss package

– 100% FHA Frame Inspections

– Quality Management Systems Frame Inspections

• Third Party Inspection

– 100% independent soil samples

– Certified Engineer slab certification

– Master plumber video of 100% completed slabs

– Universal Forest Products Texas Engineer stamps every frame & truss package

– 100% FHA Frame Inspections

– Quality Management Systems Frame Inspections


Quality Construction ContinuedQuality Construction Continued

–Sequenced production cycle

–10 Point Quality Check Points

–100% FHA Final Inspection

–Quality Management Systems Final Inspection

–Sequenced production cycle

–10 Point Quality Check Points

–100% FHA Final Inspection

–Quality Management Systems Final Inspection


Continuous ImprovementContinuous Improvement

• Action Plan

– Stoplight feature– GAP analysis– Track it – Improve it– Measure it

• Action Plan

– Stoplight feature– GAP analysis– Track it – Improve it– Measure it


Partner With the Customer Partner With the Customer

• 10 Commitments• Point of sale survey• Design Studio survey• Preconstruction meeting• Frame walk meeting• Orientation• Close of escrow survey• 10-day Customer Service• Multiple surveys, post close• 10-year warranty

• 10 Commitments• Point of sale survey• Design Studio survey• Preconstruction meeting• Frame walk meeting• Orientation• Close of escrow survey• 10-day Customer Service• Multiple surveys, post close• 10-year warranty


Who BenefitsWho Benefits

• Quality, value, choice, continuous improvement, involvement

– Buyer

– Trades

– KB Home

• Quality, value, choice, continuous improvement, involvement

– Buyer

– Trades

– KB Home


Buyer BenefitsBuyer Benefits

• Consistently deliver a quality home on time

• Communicate honestly and often

• Partner the whole way through

• Maintain a 95% or better Customer Service Index

• Consistently deliver a quality home on time

• Communicate honestly and often

• Partner the whole way through

• Maintain a 95% or better Customer Service Index


Trade Benefits Trade Benefits

– Consistency of product & service

– Fewer callbacks and back charges

– Continuous improvement

– More efficient operations

– Accountability and annual certification

– Consistency of product & service

– Fewer callbacks and back charges

– Continuous improvement

– More efficient operations

– Accountability and annual certification


KB Home BenefitsKB Home Benefits

– Satisfied customer

– Predictability

– Return on equity

– Satisfied customer

– Predictability

– Return on equity


Builder Certification ProgramBuilder Certification Program

•NHQ Certified Builder Program Description

•Verification

•Communication

•Certification


Building Quality Building Quality

– “KB Home is implementing a first of its kind quality assurance initiative, partnering with the NAHB Research Center”.

– “The NAHB Quality Center certified contractor program is a powerful tool in assuring and documenting best construction practices”.

– KB Home, San Antonio Division is the first builder in Texas to become a Certified Builder by the NHQ!

– “KB Home is implementing a first of its kind quality assurance initiative, partnering with the NAHB Research Center”.

– “The NAHB Quality Center certified contractor program is a powerful tool in assuring and documenting best construction practices”.

– KB Home, San Antonio Division is the first builder in Texas to become a Certified Builder by the NHQ!


Redefining Quality Residential Construction Redefining Quality Residential Construction

• NAHB Research Center’s Builder Certification Program

• San Antonio Division 1st in Texas

• Annual third party audits

• Prevention rather than detection

• Quality is everyone’s job at KB Home

• Trade Contractor Certification Program

• NAHB Research Center’s Builder Certification Program

• San Antonio Division 1st in Texas

• Annual third party audits

• Prevention rather than detection

• Quality is everyone’s job at KB Home

• Trade Contractor Certification Program


KB’s Business PartnersProgram HighlightsKB’s Business PartnersProgram Highlights

• NHQ Certified Trade Contractor Program

– Initial screening [ (1.0) General]

– Implementation [ (2.0) QA Plan]

– Verification [ (3.0) Job Site Inspection]

– Continuous improvement [ (4.0) Quality Improvement]

– Certification [ (5.0) QA Systems Management]

– Audit

• NHQ Certified Trade Contractor Program

– Initial screening [ (1.0) General]

– Implementation [ (2.0) QA Plan]

– Verification [ (3.0) Job Site Inspection]

– Continuous improvement [ (4.0) Quality Improvement]

– Certification [ (5.0) QA Systems Management]

– Audit


Trade Program ContinuedTrade Program Continued

• Trade and Vendor Relationships– Coordinator and Quality Management – Quality System Management – Automated scheduling

• Verification– Project Manager sign off– Annual Certification

• Communication– One-on-one– Appreciation day– Hot Spot Meetings

• Trade and Vendor Relationships– Coordinator and Quality Management – Quality System Management – Automated scheduling

• Verification– Project Manager sign off– Annual Certification

• Communication– One-on-one– Appreciation day– Hot Spot Meetings



• Integration

– Registration, plan, execute, follow up, survey

– KBTPO • Post work orders

• Auto voucher process

• Upcoming Web Payables function will replace the Auto Voucher process.

• Integration

– Registration, plan, execute, follow up, survey

– KBTPO • Post work orders

• Auto voucher process

• Upcoming Web Payables function will replace the Auto Voucher process.



• Measurement

• Closing GAPs

• Leveraging Expertise

• Measurement

• Closing GAPs

• Leveraging Expertise


Trade Discussion – Small CompanyTrade Discussion – Small Company

• IBH– Q&A

• IBH– Q&A


Trade Discussion – Large CompanyTrade Discussion – Large Company

• Lanehart Electric Company– Q&A

• Lanehart Electric Company– Q&A


Open ForumOpen Forum

• Questions?• Questions?


American Society for Quality American Society for Quality

Craig WestmorelandPresident, San Antonio

Division

Geoff BellchambersDirector, Quality Management Systems

Tel: 210-301-2851Email: [email protected]

Dave Howell 210-301-2767

Craig WestmorelandPresident, San Antonio

Division

Geoff BellchambersDirector, Quality Management Systems

Tel: 210-301-2851Email: [email protected]

Dave Howell 210-301-2767

Documents

© 2002 KB Home American Society for Quality IBH Lanehart Electric Companies 2005 National Energy & Environmental, Design and Construction Division's Conference