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Roadmap to Business Excellence
PedS 2010 1
Words of Wisdom
“In business, a major dividing force is
the element of competition. A supplier’s competitiveness is determined by the quality of its manufactured product or from the service rendered.”
John S. Oakland
PedS 2010 2
Internal and external customers
• • • • • • • • Workers, Managers, Equipment, Facilities, Materials, Services, Land, Energy.
1 3 5 2 4
• Services • Goods
Information on performance
• 20/20 Rule
• 30/30/30 plus 100 Rule
Paradigm Shift “To be a leader in the industry a paradigm shift is required to become a going concern and continuously meet the challenges of today and of the future.” Ped Salvador – TQM Consultant PedS2010 5 .
A Paradigm Shift PedS2010 6 .
” * “The .What is Quality? totality of characteristics of an entity that bear on its ability to satisfy stated & implied needs.
that builder shall be put to death. they shall kill the son of that builder.Code of Hammurabi King of Babylon 1792-1750 BC “If a builder has built a house for a man.” . and his work is not sound. If it causes the death of the son of the owner of the house . so that the house he has made falls down and causes the death of the owner of the house.
What is Quality Classical Idea Q: Degree of conformance to a standard (As a product or service) Product or Service Conformance Specification or Rule Modern Idea Q: User’s Satisfaction or fitness for use Product or Service Give Satisfaction Specification or Rule Product or Service Build In Reflect .
CUSTOMER-DRIVEN QUALITY • A simpler. “ Quality is meeting or exceeding customer expectations ” . more powerful definition came up….
What is Quality Customer Expectations Meet/exceed Features Freedom from deficiency Doing the things right Doing the right thing .
Quality is a Habit not an Act. Aristotle .
• It is high time to develop better and more direct relationships with the owners/customers. and to produce better quality work. it is essential for construction companies to provide more consistent quality and value to their owners/customers. . which imposes serious drain on the financial resources of a company and limits profit potential. • To be competitive in today’s market.Quality in Construction Business • In today’s world due to insufficient quality or indifference to quality lead to disputes. to initiate more teamwork at the jobsite.
sorting. identify sources of non-conformance Quality Control Develop quality manual. product testing. basic quality planning. Quality Assurance TQM . teamwork.failure mode and effects analysis Policy deployment. self-inspection. process performance data. grading. blending. comprehensive quality manuals.Evolution of Quality Management (1920-1980) Inspection Salvage. corrective actions. involve all operations. use of quality costs. advanced quality planning. involve supplier & customers. paperwork control. Quality systems development. involvement of non-production operations. process management. use of basic statistics. performance measurement. employee PedS 2010 14 involvement.
TQM Standard Definition • The British Standards (BS4778) defines TQM as: – A management philosophy embracing all activities through which the needs and expectations of the customer and the community and the objectives of the organization are satisfied in the most efficient and cost effective way by maximizing the potential of all employees in a continuing drive for improvement • The American Society for Quality (ASQ) defines TQM as: – The management approach of an organization centered on quality. based on the participation of all of its members and aiming at long-term success through customer satisfaction and benefits to all members of the organization and to society PedS 2010 15 .
Management by Fact Concern for employee involvement and development Result Focus Passion to deliver customer value / excellence Organization responsibility Actions not just words (implementation) Process Management Partnership perspective (internal / external) PedS 2010 16 .What is TQM? Constant drive for continuous improvement and learning.
Construction VS Manufacturing The construction industry differs from the manufacturing industry where TQM has proven its effectiveness. in a way that makes the introduction of TQM more challenging Some of the construction problems such as fluctuation of demand (non-steady state) create difficulties in TQM implementation and TQM could only help the organization to cope with such fluctuations PedS 2010 17 .
Honesty. Sociability. Risk Mgt. Leveling. Training. Variance Analysis. WBS. Consulting 20% SCIENCE ART 80% Effective Communications. Problem Solving..Construction Management as Art and Science Plans. Integrity. Flexibility. Gantt Charts. Staff Development. Leadership. Controls. S-Curves. Methods. Standards. Customer Relations. Sound Business Judgment Negotiations. CPM/Precedence Diagrams. Trust. Meeting Agendas. Managing Expectation PedS 2010 18 6 . Managing Change. Values. Earned Values. Metrics. Status Reports. Perspective. Mentoring. Resource Estimating. Decision Making.
believing that compliance with QA Standards is all that there is to the application of TQM on construction projects • QA and QC are applied during project implementation while TQM is a strategic philosophy adopted by an organization and implemented on a continuous basis. even if the organization is waiting to perform a new project PedS 2010 19 .TQM and Construction Industry • The construction industry has tended to confuse TQM and Quality Control (QC) and Quality Assurance (QA).
customer/supplier involvement & training PedS 2010 20 .Aims Of TQM To achieve Customer Satisfaction & Cost Effectiveness Focusing on process improvement.
Major Components of TQM Customer Satisfaction Focus on Employees Mgt. Commitment Process Improvement Continuous Improvement Components of TQM Training Communication Teamwork PedS 2010 21 Supplier Involvement .
– Determine customer expectations.Customer Satisfaction • The first step in achieving customer satisfaction is to define the customer’s needs and wants and then translate these needs and wants into standards • the organization must adopt an information gathering program that measures the level of customer satisfaction • Customer satisfaction can be achieved by implementing the following steps: – Make the customer (internal and external) aware of the organization’s quality management initiative. – Measure the customer’s degree of satisfaction. – Take action to improve satisfaction PedS 2010 22 .
it will provide the necessary resources of time and money to permit improvement • Senior management.Management Commitment and Leadership • Prior to management commitment. might need to draft a vision statement and a mission statement • They should cause changes and not continue to execute policy and cope with existing organizational systems. PedS 2010 23 . management should have a thorough understanding of TQM • Once management is committed to TQM. in the form of a Quality Steering Committee.
each employee should try to satisfy his or her internal customers. so honest comments can be made without fear of punishment. • Management should make the working environment open. • management should encourage suggestions and a procedure PedS 2010 24 should be developed for taking action on suggestions .Focus on Employees (Empowerment) •• TQM views employee satisfaction as an essential factor in improving the contribution of each employee. • TQM considers the employees as internal customers with whom the company exchanges information and services • As a result.
understand what TQM is and how it works and its payoff • The training program should cover cause-and-effect analysis.Training • The training program must target everyone in the organization. interpersonal communication and interaction. since quality under TQM is everyone’s responsibility • All employees from top management to labor should understand the need for TQM. and the collection and evaluation of quantitative information • Training should be continuous PedS 2010 25 . cost of quality measurement. rudimentary statistical methods. team problem solving.
procedures. to contact upper management regarding an idea for improvement or a particular concern PedS 2010 26 . and decisions • The employees should also know the use and the importance of the work he/she produces • One effective strategy might be open lines of communication that allow direct access for any employee.Communication • Good communication will result in eliminating fear • Fear makes employees reluctant to voice their opinions or question policies. at any level.
but it should cover vendors and external customers under its umbrella • The major responsibility of a quality team is to identify the areas of improvement and the reasons for the problem • After this. team should select a specific goal for improvement • The solutions to overcome the cause of the problem should then be implemented • Once the solution proves its effectiveness a new standard PedS 2010 27 should be developed and continuously tracked .Teamwork • TQM recognizes that the team approach should not be limited to the internal organization’s team.
Teamwork Requires Teamwork 6 PedS 2010 28 .
Continuous Improvement • Total Quality Management is often termed a journey. not a destination Deming’s “plan-do-check-act” (PDCA) cycle is a systematic procedure for improving methods and procedures by focusing on correcting and preventing defects Avoiding defects is usually less costly than the typical approach of attempting after the fact to determine defects Continuous improvement entails focusing on processes so that they can be changed to be more efficient • • • • The degree of success can be determined by comparing the progress against certain criteria PedS 2010 29 .
Pareto diagrams. These tools include histograms. cause-and-effect diagrams. check sheets. process improvement is referred to as statistical methods or Statistical Process Control (SPC) • The quality improvement team should consist of a representative from each area that might be involved in a process • The team has to identify and separate causes of quality problems and propose solutions • The proposed solutions should then be screened and the best solution should be selected for implementation • Several tools can be used by the quality improvement team to assist it in studying processes.Process Improvement • In some literature. graphs PedS 2010 30 .
minimize total cost by working with a single supplier. Instead.Supplier Involvement •• • TQM pays attention to the suppliers or vendors of an organization Maintaining close and long-term relationships with suppliers results in achieving the best economy and quality Maintaining a close relationship with the suppliers help them to have a good understanding and a feel for their customers’ requirements Deming emphasized the importance of maintaining special relations with suppliers Deming stresses this and states: – End the practice of awarding business on the basis of price tag alone.” • • • • PedS 2010 31 .
Benefits of TQM Work consistency Reduced production time Reduction in the quantity of goods damaged in transit Reduced delivery time Improvement in customer perceptions of the organization Customer Satisfaction Increase in sale Decrease in costs PedS 2010 32 .
failing to involve suppliers & subcontractors PedS 2010 33 .The Difficulties in Implementing TQM Fundamental organizational culture change Inadequate knowledge and information about TQM Doubts of employees about management’s intentions Failure of management to maintain interest and commitment over a long period of time Difficulty in measuring the effectiveness of TQM Poor internal communication Difficulty in assessing customer expectations and satisfaction Failure to have some means of monitoring and managing the overall progress of the TQM implementation.
Implement & Monitor Measure PedS 2010 34 benefits . procedures and processes Design action plans Develop strategies for implementation. and list the long-term changes required Define the objective of TQM Identify resources available and develop understanding of the organizational system with the quality system Specify top management commitment through quality policies.TQM Implementation Identify the degree of commitment and area of key interest.
The Cost of TQM Cost of TQM Benefits of TQM PedS 2010 35 .
Benchmarking and Metrics Data Report 2001.Business Perspective Facility First Costs 3% 3% 11% Planning Design 25% Procurement Construction Startup Source: Construction Industry Institute. BMM 2001-1 6 58% PedS 2010 36 .
18 .New Paradigm The Old Model Cost The New Model Cost Schedule Human Safety Schedule Quality Quality Ecology minimize first cost minimize life-cycle cost 37 Source: The HOK Guidebook to Sustainable Design. p.
design and other resources. which 38 PedS 2010 are not identified by cost accounting systems . and many hidden costs and opportunities. materials. and other direct expense related to defects is the drive for continuous improvement of process. Quality costs are those incurred in excess of those that would have been incurred if the product had been built Costs include the indirect (hidden cost) costs such as lost customers. the additional benefits from improved quality do not compensate for the additional expenses The cost of improving quality is less than the resulting savings the saving resulting from less rework. lost market share.The Cost of TQM Higher quality means higher cost An enhancement in quality requires investment in terms of labor. scrap.
TQM and Measurement To be able to attain and sustain reasonable objectives To justify the use of resources To provide standards for establishing comparisons To determine priority areas that requires improvement To identify quality problems PedS 2010 39 .
TQM Measurement in Construction Industry Concentrate on the measurement of laborers’ productivity since it is a labor-intensive industry Other measures could be developed to measure the rework and the effect of the training on minimizing the rework. the effect of improvement in inventory and materials handling and equipment operation Criteria for selecting measurement: Progress Continuous Improvement Forecasting PedS 2010 40 .
TQM Measurement in Construction Industry Benchmarking is one of the tools which may be used for obtaining quality improvement in TQM Effectiveness Efficiency Productivity Quality Improvement PedS 2010 41 .
The mobility of labor Diversity in the types susceptibility to weather Geographical dispersion contractual relationships Demand Fluctuation PedS 2010 42 .TQM and the Construction Industry These Functions Should be Assigned to the Channel Member Who Can Perform Them Most Efficiently and Effectively.
the people have no company loyalty and the environment is too difficult Spending more money on management programs is also difficult . because individual employments short-term. because there is too much competition and the margins won’t allow it PedS 2010 43 .Difficulties of TQM Implementation in the Construction Industry Difficulty in applying industrial management solutions to construction. because they are unique and non-repetitive Hard to invest in training at the job level. because of the unique nature of the construction industry You can’t do statistical inferences of construction processes.
Partnership in the Construction Industry Benefits Reduced costs related to potential claims and litigation Of Implementing Reduction in claims and improved conflict resolution strategies Reduced cost overruns and delays Increased opportunity for innovation Lower risk of cost overruns and delays Financial success through innovative construction Partnership methods PedS 2010 44 .
Challenge of the Construction Industry Insufficient experience of management at all levels Delays in payments Poor labor productivity The autocratic characteristics of the management Poor estimating PedS 2010 45 .
PedS 2010 46 .Quality is a Journey. not a Destination.