November 2008 | Case Studies | Reader Profile

Bill Justus: Home Sweet Home

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Throughout your industry, sales are down. But the cost of materials keeps going up, and those higher prices sure don't help you draw in hordes of new customers. What to do? Get all your partners working together to drive costs out of the supply chain, says Bill Justus, vice president, supply chain services at David Weekley Homes, Houston.

"We're not looking to pull links out of the chain," Justus says. "We're looking to challenge all partners to actively manage the supply chain and deliver optimum performance."

David Weekley builds homes in 16 cities in Texas, Colorado, Arizona, Florida, Georgia, and the Carolinas. Like other construction companies, it deals with some unusual challenges, such as the fact that manufacturing takes place outdoors, where a storm can shut down work completely. Then there's the fact that the main manufacturing labor—carpenters, roofers, tile installers, and the rest—are a transient group, with new personnel constantly arriving at job sites.

"Training is a big challenge," Justus says. "We have to make sure these tradesmen maintain the standard of quality we expect."

But since Justus arrived at David Weekley in 2002, he has devoted much of his energy to a different challenge: finding creative ways to keep costs down so more buyers can afford the company's homes. Key to his strategy has been the National Trading Partner Survey, a tool Justus launched five years ago to give manufacturers and distributors constructive feedback on their products and services.

In the past, that feedback simply wasn't flowing. Like their counterparts in other building firms, David Weekley employees who worked in the field often complained that suppliers didn't respond to their needs. For their part, suppliers said it was difficult to learn what the builders needed. If a product or service didn't meet expectations, suppliers didn't always get the news.

"Everyone operated in their own silos, doing the best they could," Justus says. "But the reality was, we needed to improve the performance of the supply chain." The Trading Partner Survey addresses that need.

Each quarter, 1,000 employees—anyone who deals with suppliers, from senior executives to accounts payable staff—complete the survey. Respondents score trading partners on product and service quality, using a scale from one to 10. By averaging the product and service scores, the company ranks suppliers in descending order and assigns letter grades—A for companies in the top 20 percent, B for the next tier, and so on.

Each supplier receives a report card containing its grade plus every rating it received, with each rater's contact information.

"We instruct suppliers to have a conversation with anyone who gave them a rating of seven or less," Justus says. Low-scoring partners work on improving the relationship. Suppliers that earn A's throughout the year win David Weekley's annual Partners of Choice Awards.

The strategy has boosted performance. "Each year, the survey's average scores have improved," Justus says. "We also have seen job site issues drop dramatically. And we have reduced turnover among our base of tradesmen."

In today's weak housing market, working with partners to tighten the builder's supply chain is especially important. "There are a lot of smart people and innovative products that we can leverage to help us drive down building costs," Justus says.

The Big Questions

What do you do when you're not at work?

I collect art, garden, read, and do some community work. I also like to fish.

Ideal dinner companion?

Norman Schwarzkopf.

What's in your briefcase?

My cell phone and keys, a few files for projects I'm working on, and some family photos.

Your idea of a successful day?

When we overcome a critical need by creating a win-win situation with a home buyer, team member, or trading partner.

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