QUALITY MANAGEMENT AND ITS APPLICATIONS TO CONSTRUCTION INDUSTRY

2. QUALITY MANAGEMENT AND ITS APPLICATIONS TO CONSTRUCTION INDUSTRY BY ENGR HAFIZ EHSAN QAZIPE BSc Civil Engg, MSc Envir Engg , Post Grad Dip in Quality Management ( Canada), Life Fellow IEP ( Pak).

3. What is quality? • All those features of a product (or services) which are required by the customer. • Quality may include a number of different attributes, such as: • Availability- can it be delivered when I want it? • Reliability- will it work first time every time • Responsibilities- will the supplier be reasonably flexible

4. Competence- do the necessary skills and knowledge exist to perform the service? • Communication- can I contact the supplier easily and do they speak my language? • Credibility- do they inspire confidence? • Security- are their systems and procedures secure.

5. Illustration 1 – what is quality? The management of a bank’s call centre that served business customers was concerned to ensure that customer expectations were being met in relation to what they, the customers, perceived to be critical areas. A survey identified two areas of importance to customers (period waiting for calls to be answered and lack of familiarity with the mechanics of key products) where there was a significant gap between customer expectations and reality.

6. After discussion with call centre supervisors it was agreed that staffing at the call centre should be increased and that additional training in bank products should be provided to the call centre staff. Subsequent customer survey identified material improvements in customer ratings in these two areas.

7. Why is quality important? The effectiveness of quality management has been shown to be one of the most important characteristics of successful companies. In recent years quality has become the key in determining many organizations’ position in respect of their competitive advantage. Improved quality can increase revenue and reduce costs, since:

8. Better quality improves the perceived image of a product or service and makes customers more likely to buy it. • Higher demand should result in higher sales volume and higher profits. • Higher quality in manufacturing should result in lower unit costs, with economies of scale in production and selling. • Higher quality in manufacturing should result in lower waste and defective rates, which will reduce production cost. • The volume of customer complaints should fall, and warranty claims should be lower. This will reduce costs. • Better quality in production should result in shorter processing times and less capital equipment requirements.

9. The cost of quality • A report into ‘ The effectiveness of the corporate overhead in British business ‘ by Develin & Partners (1989), estimates that the average cost of waste and mistakes in the UK represents 20% of controllable corporate overhead. • This includes the cost of ensuring and assuring quality, as well as the loss incurred when quality is not achieved. Quality costs can be classified as prevention cost, appraisal cost, internal failure cost and external failure cost.

10. Quality control Quality control is the traditional approach concerned with ensuring that actual quality, as measured, meets the target or benchmark standards that have been set. It is concerned with maintaining quality standards, rather than improving them and involves:

11. Establishing quality standards for a product or service. • Establishing procedures and processes that ought to ensure that these quality standards are met in a suitably high number of cases (in other words, quality acceptance standards are established) • Monitoring actual quality • Taking control action in cases where actual quality falls below the standard. • Procedures for inspecting and checking the quality of bought – in material’s and production output.

12. QUALITY ASSURANCE Quality assurance is the term used where a supplier guarantees the quality of goods supplied and allows the customer access while the goods are being manufactured. This is usually done through supplier quality assurance (SQA) officers, who control the specification of the goods supplied. Quality assurance may:

13. save purchasers quality control and production costs as items can be passed unchecked straight to production. This can give large savings in cost and time inflow production, and can facilitate Just- in- Time (JIT) production. • help companies to identify and remove the causes for poor quality goods before production instead of waiting for the end result • be particularly useful where extensive sub-contracting work is carried out, such as in the motor industry.

14. WHAT IS QUALITY? Quality is “fitness for use” (Joseph Juran) Quality is “conformance to requirements” (Philip B. Crosby) Quality of a product or services is its ability to satisfy the needs and expectations of the customer

15. Quality Gurus • Edward Deming • Deming’s 14 points • Constantly improve people, processes and products and services • Focus on long term needs than short term profits • Abolish MBO and Performance Appraisal

16. Quality Gurus • Philip Crosby • Conformance and non-conformance rather than low or high quality • Zero defect program - do it right, first time, every time. • Cost of quality < 2.5% of sales, reduce through prevention • Quality policy statement • Joseph Juran • Quality planning, quality control, quality improvement – Juran Trilogy

17. Quality Gurus • William Conway • 3 categories of waste – time, material, capital • Kaoru Ishikawa • Quality Circles (QC), Ishikawa Diagram (Fishbone Diagram)

18. Quality Gurus • Walter A. Shewart • Concepts of SQC • Germ Theory of Management- elimination of the virus of variability. • Genichi Taguchi • Design of Experiments

19. WHAT IS QUALITY • FEDEX - “PERFORMANCE TO THE STANDARD EXPECTED BY THE CUSTOMER” • GENERAL SERVICES ADMINISTRATION - “MEETING THE CUSTOMER’S NEED THE FIRST TIME AND EVERY TIME” • BOEING - “PROVIDING CUSTOMERS WITH PRODUCTS AND SERVICES THAT CONSISTENTLY MEET THEIR NEEDS AND EXPECTATIONS”

20. WHAT IS QUALITY • US DEPARTMENT OF DEFENSE - “DOING THE RIGHT THING RIGHT THE FIRST TIME, ALWAYS STRIVING FOR IMPROVEMENT, AND ALWAYS SATISFYING THE CUSTOMER”.

21. WHAT IS QUALITY • QUALITY INVOLVES MEETING OR EXCEEDING CUSTOMER EXPECTATIONS. • QUALITY APPLIES TO PRODUCTS, SERVICES, PEOPLE, PROCESSES, AND ENVIRONMENTS. • QUALITY IS AN EVER-CHANGING STATE (i.e. WHAT IS CONSIDERED QUALITY TODAY MAY NOT BE GOOD ENOUGH TO BE CONSIDERED QUALITY TOMORROW).

22. Evolution of Quality Management Salvage, sorting, grading, blending, corrective actions, identify sources of non-conformance Inspection Develop quality manual, process performance data, self-inspection, product testing, basic quality planning, use of basic statistics, paperwork control. Quality Control Quality systems development, advanced quality planning, comprehensive quality manuals, use of quality costs, involvement of non-production operations, failure mode and effects analysis, SPC. Quality Assurance Policy deployment, involve supplier & customers, involve all operations, process management, performance measurement, teamwork, employee involvement. TQM

23. Deming’s view of a production as a system Receipt & test of materials Design & redesign Consumer Research Suppliers, materials & equipment Production, assembly, inspection Distribution Consumers Test of processes, machines, methods, cost

24. Deming’s Chain Reaction Improve Quality Provide jobs and more jobs Cost decreases because of less rework, fewer mistakes, fewer delays, snags, better use of machine time and materials Stay in business Productivity improves Capture the market with better quality and lower price

25. The Deming Cycle or PDCA Cycle PLAN Plan a change to the process. Predict the effect this change will have and plan how the effects will be measured ACT DO Adopt the change as a permanent modification to the process, or abandon it. Implement the change on a small scale and measure the effects CHECK Study the results to learn what effect the change had, if any.

26. W. Edwards Deming’s 14 Points 1) Create constancy of purpose towards improvement of product and services. Adopt the new philosophy. We can no longer live with commonly accepted levels of delays, mistakes, defective workmanship. Cease dependence on mass inspection. Require, instead, statistical evidence that quality is built in. End the practice of awarding business on the basis of price tag. 2) 3) 4)

27. W. Edwards Deming’s 14 Points 5) Find problems. It is management’s job to work continually on the system. Institute modern methods of training on the job. Institute modern methods of supervision of production workers. The responsibility of foremen must be changed from numbers to quality. Drive out fear that everyone may work effectively for the company. 6) 7) 8)

28. W. Edwards Deming’s 14 Points 9) Break down barriers between departments. Eliminate numerical goals, posters and slogans for the workforce asking for new levels of productivity without providing methods. Eliminate work standards that prescribe numerical quotas. Remove barriers that stand between the hourly worker and his right to pride of workmanship. 10) 11) 12)

29. W. Edwards Deming’s 14 Points 13) Institute a vigorous programme of education and retraining. Create a structure in top management that will push everyday on the above 13 points. 14)

30. Joseph M. Juran and the Cost Of Quality 2 types of costs: Unavoidable Costs: preventing defects (inspection, sampling, sorting, QC) Avoidable Costs: defects and product failures (scrapped materials, labour for re-work, complaint processing, losses from unhappy customers “Gold in the Mine”

31. Cost of Quality Cost of Quality Cost ofCost ofCost of lost ConformanceNon-ConformanceOpportunities Cancellation of Orders Cost of Cost ofCost of Cost of Cost of Prevention AppraisalInternal External Exceeding Training, Inspection,Failure Failure Requirements QC, QA Checking,Scrap, Warranty, Redundant Audits Rework Installation, Documenting Service Costs

32. Joseph M. Juran and the Cost Of Quality Costs Total Costs Unavoidable costs Avoidable costs 100% defective Point of “Enough quality”

33. THE CASE FOR QUALITY 1 Success of competitors who take quality seriously 2 Rising expectations of customers 3 Quality differentiates companies from the competition 4 Narrowing of supplier bases by quality conscious companies .

34. THE CASE FOR QUALITY 5 Growing evidence that growth in market share comes from sustained quality. 6 Cost advantages 7 High cost of catastrophic failure 8 Inspection poor substitute for right first time

35. THE TOTAL QUALITY APPROACH • TOTAL QUALITY IS AN APPROACH TO DOING BUSINESS THAT ATTEMPTS TO MAXIMIZE THE COMPETITIVENESS OF AN ORGANIZATION THROUGH THE CONTINUAL IMPROVEMENT OF THE QUALITY OF ITS PRODUCTS, SERVICES, PEOPLE, PROCESSES AND ENVIRONMENTS.

36. THE TOTAL QUALITY APPROACH CHARACTERISTICS OF THE TOTAL QUALITY • STRATEGICALLY BASED • CUSTOMER FOCUS (INTERNAL AND EXTERNAL) • OBSESSION WITH QUALITY • SCIENTIFIC APPROACH TO DECISION MAKING AND PROBLEM SOLVING • LONG-TERM COMMITMENT

37. THE TOTAL QUALITY APPROACH • TEAMWORK • CONTINUAL PROCESS IMPROVEMENT • EDUCATION AND TRAINING • FREEDOM THROUGH CONTROL • UNITY OF PURPOSE • EMPLOYEE INVOLVEMENT AND EMPOWERMENT

38. TQM IN CONSTRUCTION INDUSTRY IMPLEMENTATION OF TQM RESULTED IN IMPROVED CUSTOMER SATISFACTION, REDUCED CYCLE TIMES, DOCUMENTED COST SAVINGS, AND MORE SATISFIED AND PRODUCTIVE WORK FORCES. A TQM PROCESS IMPLEMENTED BY TEXAS INSTRUMENT (USA) HAS FOLLOWING OUTCOMES:

39. THE TQM IN CONSTRUCTION INDUSTRY • REWORK REDUCED FROM 11% TO LESS THAN 1% OF PROJECT • IMPROVED SAFTY AND HEALTH • REDUCED WORKERS’ COMPENSATION INSURANCE, AND COMPLETION ON SCHEDULE.

40. IS QUALITY A SOUND INVESTMENT? YearCompanyStock Growth (Oct 94) 1988 Motorola 373.0% 1988 Westinghouse (CNFD) - 49.6% 1989 Xerox (BPS) 75.9% 1990 General Motors 1.6% 1990 Federal Express 10.6% 1990 IBM (IBM Rochester) - 34.9% 1991 Selectron 526.9% 1992 AT&T (UCS) 32.2% 1992 AT&T (TSBU) 32.2% 1992 Texas Instruments (DS&E) 106.8% 1993 Zyta 8.4% 1994 Eastman Chemical 18.5% Total Stock Value £23016 (91.8% growth) Standard & Poor 500 Stock value £15911 (32.6% growth) Source: US Dept. of Commerce Study 1995

41. Quality is a Journey, not a Destination

42. Quality-Based Construction Quality principles extend to the tendering and construction phase. Means to incorporate quality principles include: Prequalification of contractors; Quality-based construction management procedures; and Documentation of contractor performance.

43. Quality-Based Project Management FIDIC recommends that consulting engineers adopt a Quality Management System, and that Owners have regard to this policy during selection. A Quality Management System is a formalized project management structure that incorporates: • Customer-focused leadership and organization; • Employee involvement; • A process and factual approach to decision making; • Continuous improvement; and • Mutually beneficial supplier (sub consultant) relationships.

44. Monitoring of Outcomes • A Quality Outcome requires a long-term commitment on the part of the Owner to Quality-Based Principles during the operational life of the project, including Sustainability and Capacity Building. • The success of the other Quality-Based Principles should be monitored and analyzed, and this information should be used to refine the principles.

45. THANKS

46. Questions/Queries?