Project seminar-I 2013

Synopsis

Quality cost for Construction Projects

Meenakshi Goyal BEM-550

Project seminar-I 2013

Quality cost for Construction Projects

Introduction
Quality is defined as "conformance to established requirements". Referring to the construction industry in general, quality is measured based on whether the expected levels of quality by the owner, design, quality of the designer, and construction quality of the contractor on site are achieved. Good quality leads to increased productivity and reduced costs, which eventually, through increased customer satisfaction, lead to increased sales, profits and survival in todays highly competitive market. Some people say quality is free. Others claim it requires an investment. Construction industry is a huge industry which involves a heavy investment of capital for production of a user friendly product which aims at conforming to the quality standards as expected by the end users.

What is quality cost?

There are numerous definitions on quality Cost or cost of quality. It started with the founder of quality cost Juran (1951) and Feigenbaum (1956) classifies quality cost into prevention, appraisal and failure costs. Prevention costs are associated with actions taken to ensure that a process provides quality products and services, appraisal costs are associated with measuring the level of quality attained by the process and failure costs are incurred to correct quality in products and services before (internal) and after (external) delivery to the customer. Later Crosby (1979) defines the cost of quality as the sum of price of conformance (POC) and price of non-conformance (PNOC). The price of conformance is the cost involved in making certain things that are done right the first time and the price of nonconformance is the money wasted when works fails to conform to customer requirements (Schiffauerova and Thomson, 2006).

As per PMBOK
Cost of quality (COQ) refers to the total cost of all efforts related to quality throughout the product life cycle. It includes all costs incurred over the life of the product by investment in preventing nonconformance to requirements, appraising the product or service for conformance to requirements, and failing to meet requirements (rework). Failure costs are often categorized into internal (found by the project) and external (found by the customer). Failure costs are also called cost of poor quality.

Project seminar-I 2013

Quality cost for Construction Projects

Misconception for quality cost

Contractors often perceive TQM as an extra cost, but they do not realize that it is not the quality that costs but rather the nonconformance to quality that is expensive. The sources of costs associated with the non achievement of quality include the costs of rework, correcting errors, reacting to customer complaints, having decient project budgets due to poor planning, and missing deadlines(Culp 1993) Biggar (1990) argues that the costs associated with implementing a TQM system could be substantial, depending on the size and nature of the company. However, Biggar (1990) pointed out that the costs incurred from not achieving quality can cost owners upto 12% of the total project cost.

Need
Understanding the need and importance of quality requirement and management in the project, the concept of quality cost shall be understood and applied in the quality management programme. The study not only aims at studying the concept of quality cost but also analyzing the methods to minimize them for an efficient quality management system. The identification itself is not straightforward because there is no general agreement on a single broad definition of quality costs.

Aim of study
To study the different aspects of Quality cost in construction and finding the solutions to minimize the same for a zero defect, and cost efficient product conforming to quality standards.

Objectives

Study of concept of Quality cost for quality management Understand the application of this concept in industry Analyze methods to reduce the cost of quality

Project seminar-I 2013

Quality cost for Construction Projects

Methodology
Aims/objectives of the study

Literature study(develop a basic understanding of Quality cost)

Components of Quality cost: Conformance cost and non conformance cost

Survey regarding the understanding and use of quality cost in industry

Case study

Conclusion

References:
PMBOK The Challenge Of Measuring The Cost Of Quality; by Dr. Alexandros Antonaras, Dr. Chrysi Memtsa, Hellenic American University, Greece,Dr. Melpo Iacovidou, University of Nicosia,Cyprus. Managing Cost of Quality: Insight into Industry Practice: by Andrea Schiffauerova, Vince Thomson cole Polytechnique de Montral, Department of Mathematics and Industrial Engineering, Montreal(Department of Mechanical Engineering, McGill University, Montreal, Canada) Implementing Total Quality Management in Construction Firms: by Low Sui Pheng and Jasmine Ann Teo