Lecture 32-33: Total Quality Management

1. Lecture 32-33:Total Quality Management CEE 498 Construction Project Management Jeffrey S. Russell, P.E., Ph.D. Construction Engineering & Management Civil & Environmental Engineering University of Wisconsin-Madison

2. Structure I. TQM video by Deming II. Reasons to learn about TQM III. Cost of quality IV. Total quality management principles V. Tools of TQM VI. Quality process component

3. Structure (Cont’d) VII. Barriers to TQM VIII.Benefits of TQM IX. Summary

4. I. TQM Video By Deming I. TQM video by Deming A. Relation to project objectives 1. Cost 2. Scheduling - Time 3. Safety 4. Quality

5. I. TQM Video By Deming (Cont’d) B. Relation to topics 1. Systems approach - Facilities Delivery Process a) What b) Why c) How 2. Constructability 3. People/Productivity - most important asset/resource 4. Teams - cooperation, not competition

6. I. TQM Video By Deming (Cont’d) 5. Win-win negotiating lectures 6. Communication - among and between suppliers, workers, etc.. 7. Leadership 8. Ethics - trust C. Deming’s 14 points of TQM - See Attachment #1

7. II. Reasons To Learn About TQM (Cont’d) A. Engineers need to use their technical expertise and the quality process to improve product quality and their firm’s productivity B. Engineers need to use their interpersonal skills as a change agent and contest for power in an organization C. Engineers need to understand that management is a part of engineering - it is not apart from engineering

8. II. Reasons To Learn About TQM (Cont’d) D. Engineers need to be creative in improving the engineering process, and recognize that “quality” is not features; that is, a Ford-built Lincoln has more features than a Ford-built Taurus, but it does not necessarily have higher quality E. Engineers need to think beyond issues of technology, and learn the means whereby people, processes and technology come together

9. III. Cost of Quality A. Contractors pay a significant price for poor quality resulting from accidents, waste, rework, inefficiencies, poor subcontractor performance and poor communication - these costs are estimated to be between 5% and 30% of the construction cost of a facility B. Cost of nonconformance - includes both direct and indirect costs of not doing things right the first time

10. III. Cost of Quality 1. Factors a) Accidents b) Omissions c) Errors d) Poor workmanship e) Being late 2. Results a) Rework b) Recalls c) Expediting

11. III. Cost of Quality (Cont’d) d) Removal of punch list items e) Time extensions f) Litigation costs and damages g) Penalties and liquidated damages h) Increased insurance costs

12. III. Cost of Quality (Cont’d) C. Cost of Conformance - includes preventive measures 1. Inspection of direct hire work 2. Inspection of subcontractor work 3. Inspection at vendor source of supply 4. Inspection of shipments 5. Review of shop drawings

13. III. Cost of Quality (Cont’d) 6. All training costs, including safety 7. Facilitator costs 8. Salary of quality coordinator 9. Meetings of the steering committee and quality improvement teams 10. Administration of the quality management program 11. Reward system

14. IV. Total Quality Management Principles • Provide understanding of and guidance on the application of TQM - See Attachment #3 A.Customer-Driven Organization 1. Organizations depend on their customers and therefore should understand current and future customer needs, meet customer requirements, and strive to exceed customer expectations

15. IV. Total Quality Management Principles (Cont’d) 2. It requires 10 times as much money to attract a new customer than it requires to keep a customer you already have......keep the present customer happy B. Leadership 1. Leaders establish unity of purpose, direction, and the internal environment of organization; they fully involve people in achieving the organization’s objectives

16. IV. Total Quality Management Principles (Cont’d) 2. The difference between an average and an outstanding company is the leadership they have C. Involvement of People 1. People are the essence of an organization and their full involvement enables their knowledge and experiences to be used for the organization’s benefit 2. Employees are a company’s greatest asset

17. IV. Total Quality Management Principles (Cont’d) 3. An individual without information can not take responsibility; an individual with information can and will take responsibility D. Process Approach - A desired result is achieved more effectively when related resources and activities are managed as a process

18. IV. Total Quality Management Principles (Cont’d) E.System Approach to Management - Identifying, understanding, and managing a system of interrelated processes for a given objective will contribute to the effectiveness and efficiency of the organization

19. IV. Total Quality Management Principles (Cont’d) F. Continual Improvement - See Attachment #4 1. Continual improvement is a permanent objective of the organization 2. In the race for quality, there is no finish line 3. Quality comes from within; it comes from the hearts and the minds of the people

20. IV. Total Quality Management Principles (Cont’d) G. Factual Approach to Decision Making - Effective decisions and actions are based on the analysis of data and information H. Mutually Beneficial Supplier Relationships 1. Mutually beneficial relationships are established to enhance the ability of both organizations to create value 2. Relates to Partnering -Lecture 33

21. V. Tools of TQM A. Check Sheet - See Attachment #5 1. Tabulates frequency of occurrence 2. Easy to use and understand 3. Data gathered here can be used in other tools

22. V. Tools of TQM (Cont’d) B. Graph 1. Visual display of data 2. Major types a) Line graph b) Bar chart c) Circle diagram (pie chart)

23. V. Tools of TQM (Cont’d) C. Histogram - See Attachment #6 1. Portrays frequency of occurrence 2. Shows various measures of central tendency D. Pareto Chart - See Attachment #7 1. Visually portrays problems and causes in order of severity or frequency

24. V. Tools of TQM (Cont’d) 2. Helps determine which problems or cause to tackle first E. Cause-and-effect diagram - See Attachment #8 1. Portrays possible causes of a process problem 2. Helps determine root cause

25. V. Tools of TQM (Cont’d) F. Scatter diagram - See Attachment #9 1. Indicates the relationship between two variables 2. Displays the strength of that relationship G. Control Chart - See Attachment #10 1. Monitors a process to determine magnitude of variation

26. V. Tools of TQM (Cont’d) 2. Estimates the parameters of a process 3. Reduces the variability of a process H. Flowchart - See Attachment #11 1. Portrays all the steps in a process 2. Helps understand the process

27. VI. Quality Process Component A. Motivation - based on recognition, commendation, recommendation, repeat business, reward B. Communication - must be team-wide, involving all partners, as well as thorough, honest, and complete C. Commitment - to the project, to the process, to all the partners, and to the promised result

28. VI. Quality Process Component (Cont’d) D. Expectations - realistic, reasonable, communicated, understood, and accepted E. Ability - adequate, understood, and consistent F. Involvement - total, all-party, and consistent G. Feedback - thorough, understandable, and complete Follow-up - complete and consistent, as well as long term

29. VII. Barriers to TQM A. Lack of trained workers/poorly installed equipment/poor workmanship B. Competitive markets C. Poor plans and scheduling specifications/poorly defined work scope D. Bad attitudes E. Lack of competent field managers

30. VIII. Benefits of TQM A. Better defined project scope and objectives B. Greater communication of objectives C. Teamwork D. Effective planning and scheduling E. Appropriate Training

31. VIII. Benefits of TQM (Cont’d) F. Improved quality of materials, equipment, and workmanship • Case Studies - See Attachment #13

32. IX. Summary • TQM principles • Tools of TQM • Barriers to TQM • Benefits of TQM