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Total Quality Management: A Continuous Improvement Process

Introduction
In order to comprehend the need for improvement in the construction industry and to better manage our projects and construction companies, we need to look for a method to do so. Construction managers need to improve their performance. Construction costs are becoming far too high. Construction project management is more difficult than it should be. When turnaround at the end of a project becomes a gut-wrenching experience with unnecessary disputes which must be settled! that arise due to insufficient "uality or indifference to "uality, settlement by negotiation, arbitration, or even litigation imposes a serious drain on the financial resources of a company and limits profit potential. #o be competitive in today$s market, it is essential for construction companies to provide more consistent "uality and value to their owners%customers. &ow is the time to place behind us the old adversarial approach to managing construction work. It is time to develop better and more direct relationships with our owners%customers, to initiate more teamwork at the jobsite, and to produce better "uality work. 'uch goals demand that a continuous improvement CI! process be established within the company in order to provide "uality management. (ncient )reeks referred to the concept of continuous improvement as well as the Chinese. *ecently CI has been referred to as #otal +uality ,anagement #+,!. Whichever name is preferred, the concept must be understood and applied to a firm$s operations. ,eeting owner%customer re"uirements providing customer satisfaction! is a primary objective of "uality management, and contractors who are the suppliers of construction services must address owner%customer re"uirements if they are to succeed. #he construction industry exists to provide a service to its owners%customers who are becoming more demanding and are seeking higher "uality, better value, and lower costs. #hese owner%customer re"uirements mirror the economic pressures they face in their own businesses. Implementing total "uality management % continuous improvement in managing everyday construction activities is relevant to all those who participate in and contribute to the construction process.

What you will learn from this article:


-. .. /. ( management style that focuses on customer satisfaction, the elimination of waste, and continuous improvement ( method for upper management leadership to demonstrate its commitment to the new style of management with the involvement of all employees (n understanding of how the new style of management applies to owners, designers, prime contractors, specialty contractors, and suppliers

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What is Total Quality Management?


#+, is a management philosophy, a paradigm, a continuous improvement approach to doing business through a new management model. #he #+, philosophy evolved from the continuous improvement philosophy with a focus on quality as the main dimension of business. 0nder #+,, emphasi1ing the "uality of the product or service predominates. #+, expands beyond statistical process control to embrace a wider scope of management activities of how we manage people and organi1ations by focusing on the entire process, not just simple measurements. #+, is a comprehensive management system which2 3ocuses on meeting owners$%customers$ needs by providing "uality services at a cost that provides value to the owners%customers Is driven by the "uest for continuous improvement in all operations *ecogni1es that everyone in the organi1ation has owners%customers who are either internal or external 4iews an organi1ation as an internal system with a common aim rather than as individual departments acting to maximi1e their own performances 3ocuses on the way tasks are accomplished rather than simply what tasks are accomplished 5mphasi1es teamwork and a high level of participation by all employees

TQM eliefs
6resented here are universal total "uality management beliefs. 7wner%customer satisfaction is the measure of "uality 5veryone has owners%customers8 everyone is an owner%customer +uality improvement must be continuous (naly1ing the processes used to create products and services is key to "uality improvement ,easurement, a skilled use of analytical tools, and employee involvement are critical sources of "uality improvement ideas and innovations 'ustained total "uality management is not possible without active, visible, consistent, and enabling leadership by managers at all levels If we do not continuously improve the "uality of products and services that we provide our owners%customers, someone else will

TOTAL QUALITY MANAGEMENT: A CONTINUOUS 1996 PHCC EDUCATIONAL FOUNDATION

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!eming"s #ourteen Points


6resented below are 9eming$s fourteen points for total "uality management. Create constancy of purpose for improvement of product and service. 6lan to stay in business.! (dopt the new philosophy. 'top tolerating poor "uality.! Cease dependence on inspection to achieve "uality. Improve the process.! 5nd the practice of awarding business on the basis of price tag alone. 'eek longer-term supplier relationships8 reduce the number of suppliers.! Improve constantly and forever every process in the system of planning, production, and service. Institute modern training for everybody:!. Institute modern methods of supervision. #he responsibility of foremen must be changed from sheer numbers to +0(;I#<.! 9rive out fear. 5ncourage employees to speak up.! =reak down barriers between departments. 5liminate slogans, exhortations, and targets for the work force. 5liminate work standards that prescribe numerical "uotas. *emove barriers to pride in workmanship. 6oor supervisors, poor materials, inade"uate e"uipment, lack of training, etc.! Institute a vigorous program of education and self-improvement for everyone. 6lace everybody in the company to work to accomplish the transformation and create a structure in top management that will push every day on the above points.

The !eming Theory


#he 9eming #heory of ,anagement is a management philosophy based on four principles2 -! an appreciation for systems, .! a knowledge of variation, /! a theory of knowledge, and >! psychology. (lthough the principles for continuous improvement are clearly profitable for companies to implement, why has it been difficult to transform the culture of western management to focus on "uality? 9eming compiled a list of seven deadly diseases that have inhibited change in style of management. (lthough 9eming$s 5ncyclopedia =ritannica videotape only highlights five, the entire list is presented in figure -.@. ;ack of constancy of purpose to plan product and service that will have a market and keep the company in business and provide jobs. 5mphasis on short-term profits2 short-term thinking just the opposite from constancy of purpose to stay in business!, fed by fear of unfriendly takeover, and by push from bankers and owners for dividends. 6ersonal review system, or evaluation of performance, merit rating, annual review, or annual appraisal, by whatever name, for people in management, the effects of which are devastating. ,anagement by objective, on a go, no-go basis, without a method for accomplishment of the objective, is the same thing by another name. ,anagement by fear would still be better. ,obility of management2 job hopping. 0se of visible figures only for management, with little or no consideration of figures that are unknown or unknowable. 5xcessive medical costs. 5xcessive costs of liability, fueled by lawyers that work on contingency fees.

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Characteristics of $uccessful TQM Companies


#he construction industry has arrived late to #+,, probably due to the tendency to easily brush aside anything in management that is new, or to dismiss #+, as a fad. Continuous improvement is not a fad but a necessary part of management$s obligation to properly run its company. )one are the boom days when "uality did not matter due to the volume of work available and the ease of obtaining work. #he attitude of construction managers and contractors was simply to add it to the bill, because the owner will pay for it . In other words, in those boom days Cost plus Profit equaled Price . &ow, however, the new attitude is Price minus Cost equals Profit. 7wners are now demanding higher "uality work, and at a lower cost. In attempting to keep pace with the new attitude, a "uality management system that helps keep costs down is well worth implementing. #he characteristics that are common to companies that successfully implement #+, in their daily operations are listed here. 'trive for owner%customer satisfaction and employee satisfaction 'trive for accident-free jobsites *ecogni1e that the owner%customer provides the revenue while the employees are responsible for the profit *ecogni1e the need for measurement and fact-based decision making (rrange for employees to become involved in helping the company improve #rain extensively Work hard at improving communication inside and outside the company 0se teams of employees to improve processes 6lace a strong emphasis on the right kind of leadership, and provide supervisors with a significant amount of leadership training Involve subcontractors and suppliers, re"uiring them to adopt #+, 'trive for continuous improvement +uality principles that successful #+, companies recogni1e #he "uality principles that successful #+, companies recogni1e and attempt to continually incorporate into their actions are the following2 6eople will produce "uality goods and services when the meaning of "uality is expressed daily in their relations with their work, colleagues, and organi1ation. Inspection of the process is as important as inspection of the product. +uality improvement can be achieved by the workers closest to the process. 5ach system with a certain degree of complexity has a probability of variation, which can be understood by scientific methods. Workers work in the system to improve the system8 managers work on the system to improve the system. #otal "uality management is a strategic choice made by top management, and must be consistently translated into guidelines provided to the whole organi1ation. 5nvision what you desire to be as an organi1ation, but start working from where you actually are. 'tudies have indicated that people like working on a "uality-managed jobsite especially due to the cleaner site and safer place to work. (ccept the responsibility for "uality. 5stablish datums for measurement. 0se the principle of get it right, the first time, every time. 0nderstand that "uality is a journey, not a destination. It consists of steps that form a process that is continuous.

TOTAL QUALITY MANAGEMENT: A CONTINUOUS 1996 PHCC EDUCATIONAL FOUNDATION

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#he goal of management is to create a culture of "uality across the entire project site-- get the job done right, the first time, every time . (s in the airline industry where AA-percent "uality is not good enough, the construction industry also needs to strive for -BB-percent "uality. #oday, the number of contractors being considered for projects by some owners is growing smaller, and only those contractors who can produce "uality work are being asked to bid by these owners. 5very effort to incorporate the above principles into the company$s actions will further "uality production.

%ow does a construction firm egin implementing the process?


$etting the stages
Cow can a construction firm begin the continuous improvement process? 7utlined briefly here are the overall target stages for establishing a successful continuous improvement strategy. 'tart setting goals, and start meeting the goals you have set. ,anagement indicate complete commitment to Continuous Improvement CI! Identify stages
0se measurements to determine how exact your goals are.

+uality can only be achieved when management gives CI a high priority and a clear need. 6roductivity in the construction industry is estimated to be, at best, DB percent, with some sources placing it at /D percent, leaving room for improvement.

#he objectives of continuous improvement are to reduce waste, reduce costs, and increase productivity. #he starting point is simple but radical. #he work at any construction site can be sliced into a series of stages. #he stages can begin with groundbreaking and end with completion. (t each stage, a team goes to the jobsite and accomplishes its own work. When the work is completed, it can be handed over to another crew or another contractor. #his chain of events can be identified as a process. #he next step is to establish responsibility for the work. If we define what each team does and establish responsibility for who is to accomplish the task, we have defined a product and an owner%customer. #his is the heart of the matter with CI2 to define the product and the owner%customer. 5ach team or crew is responsible for providing a first-class product to its owners%customers. #he product must be supplied with no hassles, no concealed errors, and no botched work. CI goes well beyond the concept of "uality assurance. ,erely relying on a "uality product is not the only responsibility of management. #raditional "uality assurance simply fixes the product8 however, it is not enough that supervisors simply accept or reject faulty work. CI maintains that when something goes wrong, we must find the root cause of the error and correct that cause. What CI means is the setting of a datum so everyone can evaluate his or her work or product by measuring against the datum. CI then becomes everyone working together to improve the way work is actually completed. #he chain actually starts before breaking ground for the building. It actually starts with an owner%customer who wants the building. We must know what our owners%customers who are going to use the building actually want. We can do this by doing a great deal of pre-planning. #he pre-planning involves creating a team that is capable of doing the project. We have to ensure that the process used to analy1e job segments is in place so we can make the right decisions at the right time and that the flow of information needed to make decisions is in place. ( revolutionary idea here is that even the designer can become part of the process of CI from the conceptual stage of the project. We can learn something from each project when we regard each project as part of a cycle.

5stablish responsibility

'et the datum

6re-6lan

*egard each project as part of a cycle 5ach worker regard himself or herself as a "uality inspector of his or her task

5ach worker becomes his or her own "uality inspector. In efforts to increase productivity and lower costs, each worker becoming a "uality inspector is vital.

TOTAL QUALITY MANAGEMENT: A CONTINUOUS 1996 PHCC EDUCATIONAL FOUNDATION

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(dditional goals include2 5ach person initiates and personally leads "uality improvement projects in his or her area. 5stablish organi1ational performance goals that will provide a benchmark for success. 'upport teamwork not individualism. 5nsure resources are available throughout the organi1ation. *einforce deliberate process improvement. Constantly communicate and share our vision with all levels in the organi1ation. Constantly review policies and decisions to ensure support for #+, implementation. Integrate #+, principles into all planning. *e"uire data-based decision making. *eward "uality-focused behavior. *emove cold middle management. ;ead the organi1ation to establish an aggressive customer-focused culture.

&easons to 'egin (ow


#he reasons to begin establishing "uality improvement processes now are several. 'tudy the various areas below to determine which would affect your company in a positive way. It is believed that all of the following would be of great benefit. Cost reasons are discussed at the end of this section, under What are the Benefits of !"#

3or ,anagement
6rovides an invaluable problem-solving tool for managers and supervisors to use 9ispels negative attitudes ,anagement becomes more aware of problems that affect the individual$s work environment 5mployees gain a sense of participation Increases efficiency and productivity *educes turnover rate, tardiness, costs, errors, and scrap E rework Improves communications within and among all departments 9evelops management skills that were never taught, or are long forgotten due to lack of application 9evelops overall company awareness and company unity *earranges priorities which once seemed locked in place =uilds loyalty to the company *eveals training re"uirements in all departments ;essens the number of defects received from suppliers when they are encouraged to train in "uality management

3or 5mployee
6rovides opportunity for personal growth and development as a result of team training activities! and the opportunity to develop and present recommendations Increases innovation through a greater variety of approaches and perspectives! for solving problems, removing fear of failure 5mployees use their knowledge and skills to generate data-driven recommendations that will lead to well-informed decisionmaking 5ncourages decision-making at the most appropriate level Increases motivation and acceptance of new ideas Increases job satisfaction as a result of the opportunity to participate in and have influence over work! *ecogni1es employees for their knowledge, skills, and contribution toward improvement 9evelops mutual respect among employees, management and customers 6romotes teamwork

*educing rework to 1ero is achievable2 0sing "uality management and CI to reduce rework to nearly 1ero is an achievable goal. #he negative cost of "uality, which includes errors, delays,

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rework, etc., is estimated to be /B percent of the cost of construction. #his figure does not include dissatisfied owners%customers who do not come back for repeat business.

%ow several companies successfully implemented continuous improvement in their firms


$ample Company: (s an illustration of "uality management in action, one construction company procedure was enacted by establishing a daily foreman$s meeting that usually lasts one hour. (lthough an hour may have appeared to be a long time, the company and its people believe it to be worthwhile. 5very person in the company has an opportunity to relate the status of his or her task in the work cycle. Included among the benefits from conducting this daily foreman$s meeting are the elimination of conflicts between crews and crafts at jobsites, work crews not occupying the same space at the same time, and the entire working staff becoming and remaining knowledgeable about all phases and problems which exist at the jobsite. (dditional benefits include improved coordination with other trades, increased problem solving, and improved morale and efforts as a result of the ability to directly air concerns. Mechanical Contractor ) *+, TP -,m volume. ( commercial and industrial mechanical contractor has started to implement #+, by forming F6rocess #eamsG to study problem areas. #he company is also using strategic planning on a company-wide basis. 'ome of the areas they are attacking are2 a. b. c. 9elays in the field--obtain information to reduce delays (dministrative problems--=illing, accounts payable, invoicing, phones 9evelop partnering agreements with suppliers and vendors

6ositive results were obtained in accounts payable and invoicing. #ime was wasted on invoices due to errors from vendors. #he results were that the contractor and vendors were paid promptly, thus improving cash flow. ( supplier now warehouses safety e"uipment for the company. A .eneral Contractor with a volume of */,,M0yr . #his company embarked upon the implementation of the #+, process by hiring a consultant to work with a key person in the company to start #+,. #he objective of the process was to provide a more participative management-oriented company. #he process is customer-driven and the company has worked hard to involve all employees. #ask teams have been formed and are producing solutions to problems. #he company feels that a Continuous Improvement 6rocess has been reached. #he positive result that has been obtained through #+, is that morale is much improved, helping the company to weather a declining market. A large .eneral Contractor ) volume over *-,,M0yr. #his contractor is using #+, to improve "uality in daily work. #he contractor has HB teams trained and functioning, and a seven-step problem solving techni"ue to solve problems. (ll participants have been trained in group dynamics. A large .eneral Contractor with a volume of *1,,M0yr2 ( "uality circle program was initiated nine years ago and has resulted in creating a company environment that is conducive to partnering. #he company$s ability to conduct business using partnering has led to successful new contracts and has been responsible for turning poor jobs into profitable ones. #he key to the company$s successful partnering process is the utili1ation of an outside facilitator a professional psychologist!. #he facilitator conducts preconstruction sessions on how to communicate with different personalities with varying styles of communication. 6artnering has enabled them to obtain significant new amounts of work. Wal)Mart #he expansion of Wal-,art 'tores has been successfully accomplished with the application of the principles of #+, to their 9esign and Construction process. Wal-,art could not have expanded with their past system that allowed change orders to average I-.BB%'3. #hey brought in a designer who committed to them a team of design professionals, and e"uipment which produce complete construction documents that are biddable and buildable. 9ecisions on design and

TOTAL QUALITY MANAGEMENT: A CONTINUOUS 1996 PHCC EDUCATIONAL FOUNDATION

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construction are now made at the lowest possible level. #he result is that change orders were reduced to less than IB.-.%'3.

TOTAL QUALITY MANAGEMENT: A CONTINUOUS 1996 PHCC EDUCATIONAL FOUNDATION

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'echtel #+, was started in -AHJ and has recently been reorgani1ed into CCI an acronym for Commitment to Continuous Improvement!. #he initiatives for their #+, process were obtained from their customers by using a simple "uestionnaire. #hey use =aldrige criteria to measure success in the CCI process. #hey do not seek the award, just the benefits of the process. =echtel$s facilitator has worked under the 9eming philosophy for four years and has told top management that he does not want to go back to the old way of doing business. &either do their customers or their employees. Indianapolis !epartment of Pu lic Wor3s #he Indianapolis 9epartment of 6ublic Works started a #+, process that was modeled after the 3lorida 6ower and ;ight +ualtec! process. (ll department employees are involved approximately ABB people!. #he process has recently been updated to meet their needs. #he result of their #+, process has improved employee morale. Motorola ,otorola has a successfully working #+, process. ,otorola$s fundamental objective everyone$s overriding responsibility! is #otal Customer 'atisfaction. #hey have won the =aldrige award and are corporate leaders in #+,. #hey will tell you that implementing #+, was a sound business decision and a matter of survival for them. 'imilar cases are available from other large corporations. #hey re"uire a working #+, process of all contractors doing work for them. &ogers)4"'rien Construction Co. - volume of I/B,%yr. #his 9allas-based contractor started a #+, process due to exposure to #exas Instruments$ #+, process. #exas Instruments is their major client. *ogers-7$=rien feels that #+, has been largely responsible for reducing overall rework expenditures from approximately J percent to approximately -.D percent of construction costs. 'uilt)&ite #he =uilt-*ite way is an example of labor-management cooperation using the principles of #+,. =uilt-*ite is managed by the 6hiladelphia (rea ;abor-,anagement Committee 6(;,!. 6(;, is an alliance of construction users, contractors, and building craftspersons who are committed to labor-management teamwork at the jobsite. In the past five years, over I@ billion in construction projects has been completed without any work stoppages.

$uccessful companies who have received the Malcolm 'aldrige (ational Quality award
#he ,alcolm =aldrige &ational +uality award was established by an act of Congress in -AHJ. In several ways, it is modeled after the 9eming 6ri1e of Kapan. #he award is jointly administered by the &ational Institute of 'tandards and #echnology &I'#! and the (merican 'ociety for +uality Control ('+C!. #he -AA. (ward Criteria stipulate that awards are presented annually to recogni1e those 0' companies that excel in "uality management and "uality achievement. 0p to two awards may be presented in each of three eligibility categories of manufacturing companies, service companies, and small business firms. 6ast award recipients are

-AA-AAB

,arlow Industries 'olectron Corporation Lytec Corporation Cadillac ,otor Car Company I=, *ochester 3ederal 5xpress Corporation Wallace Co., Inc.

-AHA -AHH

,illiken E Company Merox =usiness 6roducts and 'ystems )lobe ,etallurgical Inc. ,otorola, Inc. Commercial &uclear 3uel 9ivision of Westinghouse 5lectric Corp.

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The Pitfalls $uccessful TQM Companies Must Avoid


#he transformation to "uality is not without its pitfalls. ,any companies have started on the road to "uality but failed to achieve success due to several factors2 ;ack of top management support. ;ack of middle management support. Commitment in only one department. 'hort-term commitment - failure to stay on course. Capha1ard approach - a little of this and that with no meaningful change in the system. 3ailure to ac"uire the services of a competent statistician or to provide statistical training for employees. ,easure success and guide program on the basis of short-term profits. 3ailure to solicit worker input. 7ver dependence on computeri1ed "uality control. 3unding failure - lack of funds to make meaningful changes in the system i.e., new machinery, training, improved raw materials!. &o market research. &ot knowing what the re"uirements are. no testing of incoming materials - garbage in garbage out. 7verselling hourly workers - expecting instant pudding. (dversarial management management by fear!.

Cowever, with total commitment and constancy of purpose, these ha1ards can be overcome. Misconceptions regarding the implementation of the continuous improvement process Common misconceptions which appear at the beginning of the following paragraphs are discussed. $very site is different -- ( common mistaken notion about #+, is that it does not readily apply to construction because every site is different, and that construction is a one%time%only industry. #his notion is not true, because the plain fact is that wherever you work, the processes are the same, and so are the methods and techni"ues. $rrors and delays are different -- 'ome maintain that errors and delays can be controlled on a large job Nversus a small jobO8 however, this is not true. 5rrors and delays are the same on large and small projects, and they have the same negative effects. 7ne example involves a concrete project with the improper placement of anchor bolts. Improper placement of anchor bolts results in a delay in erecting the structural steel. 'omeone has to pay for this delay that will affect everyone at the jobsite, whether it is a large jobsite or a small jobsite. &t is a typical jobsite problem -- 7ne might be tempted to say that the delay in the above example is no big deal, that it is a typical jobsite problem, but that is precisely the point2 #ypical problems must be eradicated at jobsites. &t costs too much -- #he cost of implementing "uality results from -! training and .! the cost associated with transforming a company into the "uality mode to follow common ideas and goals. #he profits incurred for implementing a continuous improvement process far outweigh the profits gained while not using a continuous improvement process. It$s time to get started on Continuous Improvement. <our competitors may have already started.

TOTAL QUALITY MANAGEMENT: A CONTINUOUS 1996 PHCC EDUCATIONAL FOUNDATION

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1!

$teps in implementing TQM

- 7btain C57 Commitment . 5ducate 0pper-;evel ,anagement / Create 'teering Committee > 7utline the 4ision 'tatement, ,ission 'tatement, E )uiding 6rinciples D 6repare a 3low 9iagram of Company 6rocesses @ 3ocus on the 7wner%Customer 5xternal! E 'urveys J Consider the 5mployee as an Internal 7wner%customer H 6rovide a +uality #raining 6rogram A 5stablish +uality Improvement #eams -B Implement 6rocess Improvements -- 0se the #ools of #+, -. Pnow the =enefits of #+,

Continuous Improvement

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4 tain C54 Commitment6 and 5ducate 7pper)8evel Management

The first and second steps are 2 2 2


#he first step in implementing #+, is to obtain the total commitment, involvement, and leadership of the C57 and upper-level management. #he second step is to teach the C57 and upper-level management how to conduct the following2 0ndergo "uality training Commit to #+, and provide the necessary resources of time and money to permit improvement (ssist in the development of the corporate vision statement, mission statement, guiding principles, and objectives 'erve as a model of expected behavior (ctively lead the way by participating in the activities of the "uality steering committee and company training 9rive fear out of the organi1ation 6rovide suitable recognition for those who contribute to the "uality mission 9rive decision making and problem resolution to the lowest practicable level

C54 and senior management roles are 2 2 2


#he roles of the C57 and 'enior ,anagement #eam are to create an organi1ational culture in which #+, can exist and flourish. (n excellent culture that management can create for #+, to exist and flourish contains the eight cultural elements indicated in the figure below.

5lement (um er . / > D @ J H

Cultural 5lements &e9uired for TQM +uality information must be used for improvement, not to judge or control people. (uthority must be e"ual to responsibility. #here must be rewards for results. Cooperation, not competition, must be the basis for working together. 5mployees must have secure jobs. #here must be a climate of fairness. Compensation should be e"uitable. 5mployees should have an ownership stake.

#otal +uality ,anagement, by ,arshall 'ashkin and Penneth K. Piser, -AA-, 9ucochon 6ress.

Create a $teering Committee

0pon completion of upper management$s commitment and training, a steering committee must be created to guide the company through the process of implementing #+,. #he role of the steering committee and the processes the committee follows are listed here.

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$teering committee roles are 2 2 2


*eview and evaluate customer surveys. 9etermine processes to be improved, based on customer and employee recommendations, surveys, and a knowledge of existing problems. (ppoint task process improvement teams and ensure they receive proper training. ,onitor process improvement. 7versee employee recognition for "uality improvement. Communicate successes and progress.

The steering committee handles a pro lem y 2 2 2


-. .. /. 6roblem is brought to the attention of the steering committee 'teering committee forms a team to examine the process and make necessary recommendations for improvement #eam meets, reviews its mission, and determines how often it will meet. #he problem is assigned to the team following the procedures outlined in Q-B, #he 'tructure (pproach to 6rocess Improvement.

>

4utline the :ision $tatement6 Mission $tatement6 ; .uiding Principles

5sta lishing guiding principles


In developing the fourth step, important principles to consider including in the company$s vision statement, mission statement, and guiding principles are as follows2 7wner%customer 'atisfaction Improved 'afety 5limination of errors and defects 9oing things right, the first time *eputation as the best in the field Continuous Improvement 5mployee 5mpowerment

=elow are sample statements and principles.

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'ample 4ision 'tatements

%eartland Professional Construction $ervices6 8ansing6 Michigan


#o revolutioni1e the construction industry by achieving new standards of "uality and productivity that are significantly above current industry standards.

'rown < &oot


We will consider ourselves successful when we are the preferred provider of project services and the favored employer in our industry, and when all of our businesses produce financial results superior to those of their leading competitors.

'ample ,ission 'tatements

The Wal ridge Aldinger Company6 !etroit6 Michigan


We are in the business of providing the best construction-related services that exceed our customers$ expectations. #his will be achieved through the commitment of a responsive team of experienced professionals.

Wal ridge Aldinger"s Quality 4 =ectives:


6rovide a logical structure for continuous improvement. 5xceed both internal and external owner%customer expectations. 'timulate environment for change. 0tili1e +uality Improvement #ools to change the results of our actions for the benefit of our owners%customers, employees, and communities. 0nderstand process thinking and value adding. 3ocus on the process to achieve results. 3ocus on prevention, not inspection. 'ecure total employee involvement. Commit a cultural change, beginning with management.

'ample )uiding 6rinciples

Pepper Construction Company6 Chicago6 Illinois Pepper :alues


Total Client $ervice: 6epper is committed to total client satisfaction. $3ill6 Integrity6 Quality6 and &esponsi ility2 6epper is dedicated to maintaining the highest level of skill, integrity, "uality, and responsibility in providing professional services to its clients. People2 6epper recogni1es that the "uality of its people is the critical element in achieving its mission. 6epper is committed to the growth and empowerment of its people and to human resources practices based on standards of excellence, fair treatment, and e"ual opportunity. 8eadership2 6epper is committed to providing strong leadership to its industry and to the communities in which it does business. A #air Profit' 6epper is in business to receive a profit for its services. 6rofit objectives are established at fair levels and must
IMPROVEMENT PROCESS

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be met for the company to continue to exist and serve the needs of its clients and employees.

!efining the meaning of 9uality


What does one mean when one uses the word quality? If you can ask -. people in an organi1ation what the word "uality means, and you receive -. different answers, then "uality management, CI, #+,, right the first time, (ero defects, and defect free are only serving as bu11words within the organi1ation. +uality is only useful and of value when it means the same thing to all the people in an organi1ation. =elief in too many ways to achieve "uality can cause serious problems. +uality must consist of well-defined objectives, so that "uality means the same to all in the organi1ation. In defining #+, for construction firms, we could choose the definition2 !" means keeping the company running smoothly with continuous input from our owners)customers . In choosing this definition, we accept that the idea is owner-driven and that owners want a new deal from the construction industry. 5ach job starts out on a new, clean sheet of paper--we build each project on that new sheet of paper to meet the needs of the owner. With each new job and new set of people, we continually carry on the continuous improvement on the new, clean sheet of paper. In addition, the further goal is to make each project or job better than its predecessor. 7wners are under competitive pressure and have endured periods of downsi1ing, cost-cutting, and "uality improvement to become efficiently competitive. 7wners view construction as an industry that has been resistant to change and have labeled it as simply non-competitive.

Prepare a #low !iagram of Company Processes

( mechanical contracting firm created the #+, flow diagram illustrated in the figure below to implement "uality processes within the company.

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#ocus on the 4wner0Customer >5?ternal@ ; $urveys

#ocusing on a customer"s concerns


'till one of the best ways of accomplishing "uality improvement is obtained by focusing on customers$ concerns, and by learning what those concerns are through owner%customer surveys. ,uch can be provided by studying how your owner%customer feels about your service, your attitude, and whether you would be recommended to another owner%customer. 'everal areas to survey, and to take care to provide or honor, are listed here.

'afe operating procedures (ccident experience (ttitude 6rofessional competence of the project manager, superintendent, and project engineers #echnical competence of the work force 7verall responsiveness to owner%customer re"uests

9egree of communications 6lanning (dministrative procedures (ppearance and conduct of the work force Condition of e"uipment Coordination and supervision of subcontractors (ppearance of the jobsite #imeliness

#he six principal elements of owner%customer satisfaction are2

<our product%service delivery system <our product%service performance #he general image of your company <our people$s level of performance

#he perceived price-value relationship of your product%service <our competitors$ strengths and weaknesses

$urveying the customer


'uccessful #+, companies have asked their owner%customers the following "uestions. -. .. /. >. D. @. J. H. A. -B. --. Cow well do we deliver what we promise? Cow often do we do things right the first time? Cow often do we do things right on time? Cow "uickly do we respond to your re"uest? Cow accessible are we when you need to contact us? Cow helpful and polite are we? Cow well do we speak your language? Cow well do we listen to you? Cow hard do you think we work at keeping you a satisfied owner%customer? Cow much confidence do you have in our products or services? Cow well do we understand and try to meet your special re"uest?
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-.. 7verall, how would you rate the appearance of our facilities, products, communications, and people? -/. Can you list any specific instances where we have fallen down? ->. 7verall, how would you rate the "uality of our service? -D. What could we do to improve our service to you? -@. 7verall, how would you rate the "uality of service provided by our competitor? -J. Cow willing would you be to recommend us? -H. Cow willing would you be to buy from us again? -A. (re we doing or not doing anything that bugs you? .B. What do you like best about what we do? .-. What parts of our service are most important for you? ... What parts of our service are least important to you? ,any of these "uestions are from ;e=ouf$s, *ow to Win +wners)Customers and ,eep hem for -ife.

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Consider the 5mployee as an Internal 4wner0Customer

In order to conduct an analysis of the internal processes within the company, the following steps should be applied to the internal processes within a company. ;ist several of your internal owners%customers within your company Choose one of these owners%customers to focus on for the application of this techni"ue 9etermine the +utputs products, services, information! that must be provided to this internal owner%customer 9etermine the work Processes your company uses to produce these +utputs ;earn how your customer$s expectations are met and how satisfaction is measured

Provide a Quality Training Program

Which employees are trained first?


#he successful #+, company provides training to employees in the order illustrated in the figure below. #he training program must begin with upper management, then training must be provided for the remaining management, and the in-house trainers and facilitators. It cannot be emphasi1ed enough that if upper management is not trained and is not a viable, visible participant from the beginning, then the program will not survive.

0pper ,anagement

*emaining ,anagement

In-Couse #rainers E 3acilitators

3ront-;ine 'upervisors

5
'uppliers

&on-'upervisory 5mployees

3
Continuous Training

#eam #raining

#raining of 'ubcontractors E

#o train employees in the order presented above, the following is recommended.

(reas of #raining

#opics to cover
Cover basic awareness topics such as understanding "uality, the importance of owner%customer satisfaction, definitions, historical background, principles of the gurus 9eming, Crosby, Kuran, Ishikawa!, overview of #+,, benefits of #+,

(, =, C
,anagement #raining

Cost of "uality2 Identifying It and #racking It #he role of management Changing leadership styles in a #+, environment8 internal
TOTAL QUALITY MANAGEMENT: A CONTINUOUS 1996 PHCC EDUCATIONAL FOUNDATION
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owner%customer concept 'teps in implementing #+, 'tructure needed, i.e., steering committee, process improvement teams, facilitator s!, trainer s!, possibly a corporate coordinator 6rinciples of team building 3ormali1ed process improvement understanding variation measurement what, why, how the seven tools of "uality "uality improvement teams 7wner%customer and employee surveys 5mployee empowerment ,alcolm =aldrige (ward criteria

9
3ront-;ine 'upervision #raining

5
#raining of &on'upervisory 5mployees

&eed for "uality, some definitions, overview of #+,, i.e., the ten elements or their e"uivalent, benefits of #+, Company vision, mission, guiding principles Company-planned steps for implementing #+, Cost of "uality2 Identifying It and #racking It Changing leadership styles in a #+, environment, employee empowerment, the role of the front-line supervisor 7verview of formali1ed process improvement, role of the steering committee, process improvement teams, facilitators &eed for "uality, some definitions, overview of #+,, i.e., the ten elements or their e"uivalent, benefits of #+, Company vision, mission, guiding principles Company-planned steps for implementing #+, #reating others as owners%customers 5mployee involvement Cow to operate as a team #eam-building exercises =rainstorming 0nderstanding variation 6rocess improvement procedure 'even tools of "uality *eaching consensus Improvement exercise using actual company process 'ubcontractors and suppliers conduct in-house training.

3
#eam #raining

)
#raining of
'ubcontractors and 'uppliers

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%ow are management and other employees trained?


In order to implement the training mentioned above, the following process should be undertaken2 -. .. /. >. D. @. J. H. A. -B. 'elect a consultant, community college, or other training #rain management 'elect trainer, facilitator 'end trainer, facilitator to training #rainer trains front-line supervisors #rainer trains remaining employees 5stablish a training committee 7rient short-term hires and new employees 3acilitator or trainer provides team training 5stablish long-term, continuing program for training in "uality management, leadership, communication, technical skills --. 5valuate all training -.. Improve training

5sta lish 9uality improvement teams

Quality improvement teams focus on 2 2 2


In establishing "uality improvement teams, a smaller company might assign one "uality improvement team. ;arger firms might assign several, possibly with one "uality lead team as a guide for the other teams. (reas where "uality improvement teams could begin investigating for possible improvement are2 Increased 5mployee 4alue Informed 5mployees #echnical #raining +uality #raining 5mployee 'uggestions 5mployee 6articipation Cigher +uality of (rtistry 6ersonal 9evelopment

.ood QIT mem er 9ualities are 2 2 2


*epresentatives who are selected to be "uality-lead team members should possess the following attributes2 commitment to "uality, customer satisfaction, and the success of the organi1ation good communication and interpersonal skills a Fbig pictureG view of the organi1ation and of the industry a strong commitment to learning and change representation of a different area and level of the organi1ation good organi1ational skills
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Quality improvement team tas3s are 2 2 2


+uality improvement teams are active in the following task areas2 Identify the customers of the process 9etermine customer expectations 3lowchart the process Identify all of the inputs and interfaces Identify the output s! 'ystematically review the procedures currently being used in the process Collect and analy1e available "uantitative data 9etermine the need for additional data Identify the problem s! 9etermine the root cause of the problem 9etermine potential solutions 'elect a trial solution 6resent recommendations to the steering committee Implement the solution on a pilot-project basis (naly1e the data to discern if there has been improvement #he "uality improvement team +I#! is responsible for planning and managing the #+, implementation process for the organi1ation. #he +I# is responsible for ma3ing TQM happen. #he +I# must take the lead in managing the cultural changes that #+, will re"uire. (t least one member of the 'enior ,anagement #eam ',#! should be a member of the +I#. #he +I# reports to the Chief 5xecutive 7fficer C57! and the ',#. #he +I# and ',# should hold a joint meeting to review the #+, effort at least "uarterly. Quality improvement team structure is 2 2 2 ( "uality improvement team +I#! meets on a regular basis. 9uring the first months of the #+, effort, the +I# will probably wish to meet once per week for / to D hours. In addition, +I# members will spend an additional @ to -B hours per week on training, education, and +I# assignments. (fter the #+, implementation plan is complete and underway, the +I# should meet once or twice per month. #he +I# determines and defines the duties of each +I# member. #ypical positions for members are #+, 9irector or Coordinator8 Communications, 5ducation, and #raining Coordinator8 +uality ,easurement8 Customer 'atisfaction8 and 5mployee Involvement and 'atisfaction. #he types of "uality improvement teams are permanent, temporary, preparation, planning, and implementation. 3acilitators hold an extremely important role in the success of implementation. In the order presented here, the +I# plans the ongoing #+, education for2 -! +I# and ',# members, .! facilitators and supervisors, and /! all employees. #he +I# reviews, approves and helps implement "uality improvement plans, establishes the #+, organi1ational structure and team structure for the company, procures from management! and manages the resources re"uired for #+, implementation, solicits and evaluates +uality Improvement 7pportunities +I7s!, selects and commissions teams to work on +I7s, and proffers rewards and recognition. #he permanent teams of the "uality improvement process are based on the following areas of concern2 TOTAL QUALITY MANAGEMENT: A CONTINUOUS 1996 PHCC EDUCATIONAL FOUNDATION
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Pey 7bjective #eams Customer 'atisfaction 5mployee ,orale%'atisfaction 'takeholder *elationships #ask 3orce +I#s

3unctional (rea +I #eams 5mployee Involvement #eams &atural Work #eams

#he temporary teams of the "uality improvement process are2 6roject +uality #eams

#he facilitators of the "uality improvement process should retain the following characteristics2 Qualities of a good facilitator: Is respected by people at all levels of the organi1ation Is organi1ed Is a good listener and communicator 0nderstands #+, principles and philosophies Is objective and open-minded Is a team player, one who likes to accomplish things through others &oles and duties 7rgani1es team meetings Peeps meetings on track Is record keeper 6rocures needed resources and outside support Communicates progress to +I#

Quality improvement teams address these special needs 2 2 2


#he principal items that "uality improvement teams should address are discussed here. &ote that the items can be added or deleted as necessary, and are not listed in a particular order.

TIM5 84CATI4(

(ll participants, from the members to the steering committee, need time to prepare and participate in these team activities. Consideration must be planned for where the meetings will be held, and where members can prepare for these meetings. It should be a "uiet area away from the work station. ,eetings should be on a regular schedule and, if missed, then rescheduled within three working days for the sake of continuity and to show the importance of these meetings. It must oversee and nurture, not drive, the program. (n analogy to this is how do you bring up your children to be confident, respected and healthy, and to eventually become independent and make wise decisions. )et union members involved at the outset of a program. (sk them to be participants in the steering committee. #his is a long-range program and results come slowly. 6atience must be exercised continually. #his is highly important. ,embers must want to join or depart from teams freely. =e consistent in the mode of advertising activities. #hink it out before implementing it to avoid a paper mill trap. )et all company employees educated about teams - not a select few. 'ome form of tracking is re"uired but can become another paper mill
IMPROVEMENT PROCESS

$C%5!785

$T55&I(. C4MMITT55

7(I4($ PATI5(C5 :487(T55& A!:5&TI$5

T&ACAI(.

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which consumes too much time. 'erious consideration for minimi1ing paperwork must be given at the outset of your program and modified as re"uired.
T&7$T

;ack of it, by management, will demotivate teams "uicker than anything. ;ikewise, the team members must trust those involved in the program not to steal their problems or solutions. It can be secured if properly nurtured. 7btaining this must be a goal of management. #his is so basic, but can delay a successful program needlessly by lack of a good, practical training program. 5very attempt must be made to follow the training program, at all levels, once it has been documented and approved.

84BA8TB T&AI(I(.

-B

Implement Process Improvements

,anagement interest and support 3ocus on customer satisfaction Identification of areas needing improvement 5mployee involvement Cooperative attitude between elements of the company 4iewing every person who is on the receiving end of a process as a customer 3ear driven from the company Correctly composed teams ( system for selecting processes to be improved #raining for all employees in "uality awareness #raining for teams in team procedures and disciplined problem solving Improved communications outside the company

The structure approach to process improvement -. 6roblem is brought to the attention of the steering committee .. 'teering committee forms a team to examine the process and make necessary recommendations for improvement /. #eam meets, reviews its mission, and determines how often it will meet >. #raining is initiated for team members D. #eam meets weekly for an hour or two to analy1e the problem and develop a solution @. 'olution is initiated on a pilot basis J. *esults of pilot study are examined H. 'olution is implemented company-wide

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Process Improvement
'uggested areas where "uality improvement could begin are presented below.
Administrative Pro=ect Management and 5ngineering 8ogistical Construction

6ayroll Invoices 6ersonnel actions Investme nts Insurance ,arketin g #raining safety, "uality, technical!

'ubcontracts 6artial payment re"uests 6rogress review meetings 5stimating 'cheduling Interfacing with architect%engineer 'hop drawing review 'urvey and layout #esting

'torage Wareho using 9elivery ,ainten ance

;ayout *ough grading 3orming 6lacing concrete 6lacing reinforcing 5recting precast panels 3raming drywall 6ulling electrical cable Canging ductwork

--

7se the Tools of TQM

'even classical tools of "uality and process improvement, plus one, are presented below.

Tool 3lowchart Cause and 5ffect 9iagram Control Chart Cistogram Check 'heet 6areto 9iagram

7se 6ortrays all the steps in a process. Celps understand the process. 6ortrays possible causes of a process problem. Celps determine root cause. 'hows if a process has too much variation. 6ortrays the fre"uency of occurrence. #abulates fre"uency of occurrence. 4isually portrays problems and causes in order of severity or fre"uency. Celps determine which problem or cause to tackle first. Celps determine if two variables are related. 'hows variation and trends with time. 6rovides baseline data, and helps to determine if a process is improving or not.

'catter 9iagram *un Chart

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6resented here is an alphabetical listing of several "uality improvement tools, followed by a presentation of a few sample charts and diagrams.

(ctivity network diagram (ffinity diagram =enchmarking =rainstorming Checksheets Control charts2 statistical process control '6C! Cost-=enefit analysis Cost of "uality analysis Cause-and-effect diagrams Customer surveys 9ot plot 5mployee surveys 3ishbone diagram 3lowcharts 3ocus group interviews

3orce field analysis Cistograms Is%Is-&ot analysis Interrelationship 9iagram Interviews2 5mployee, Customer, 'takeholder ,atrix diagram ,otivating techni"ue &ominal group techni"ue 7perational definitions 6areto charts 6ie chart 6lus - 9elta 6rioriti1ation matrices

6rocess capability analysis 6rocess decision program chart 6roductivity charting +uality function deployment *egression analysis *oot-cause evaluation matrix *un chart 'ampling 'catter diagrams 'olution-selection matrix 'takeholder surveys 'tratification #ime plots #ree diagram 4alue engineering

#op-9own 3lowchart 'imple, easy-to-construct charts that emphasi1e the major steps of a process. 3irst, list the most basic steps in a process or project. #hen, below each one, list the major substeps.

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9etailed 3lowchart 9escribe most or all of the steps in a process, with varying levels of detail. When needed, have the team as a whole develop a top-down version, then have smaller groups add levels of detail.

Work 3low 9iagram 'how the movement of materials, people, or information within any space. It is created by tracing these movements on a sketch of the floor plan or some similar map of the workspace or document!.

3ishbone cause and effect diagrams.

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Control charts are time plots that also indicate the range of variation built into the system. #hey are used to monitor a process to see whether it is in statistical control.

( histogram is a bar graph of a frequency distribution in which the widths of the bars are proportional to the classes into which the variable has been divided and the heights of the bars are proportional to the class frequencies .

Checksheets are structured forms that make it easy to record and analy1e data. #he best checksheets are simple to use, make use of your operational definitions, and visually display the data to reveal underlying patterns.

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-.

What are the enefits of TQM?

The cost of 9uality


Why do we implement the above information into our companies? #o make more money and%or to stay in business. If you don$t implement #+,%CI, it will cost your firm money. It$s management$s choice to obtain these improvements. 3ailure to implement "uality processes results in a status "uo situation where unnecessary costs remain and improvements are not implemented. &oted here are the costs of nonconformance. Cost of +uality R Cost of &onconformance S Cost 6revention

The Cost of nonconformance (ccidents 7missions 5rrors 6oor 6roduct +uality =eing ;ate 8ead us to

*ework *ecalls 5xpediting *emoval of punch list items #ime extensions ;itigation costs and damages 6enalties and li"uidated damages Increased insurance costs

(reas where savings can be derived by making improvements are noted here.

Inspection of direct hire work Inspection of subcontractor work Inspection at vendor source of supply Inspection of shipments

*eview of shop drawings (ll training costs, including safety 3acilitator costs 'alary of "uality coordinator, if needed

,eetings of the steering committee and "uality improvement teams (dministration of the "uality management program *eward system

FWhat$s it going to cost us to do #+,?G you ask. Well, what is it costing you now &7# to do it? . . . What is your cost of "uality? I3 you don$t have the FrealG facts, the truth is you really don$t know, . . . but you probably sense what your cost of "uality is costing you. <ou can feel it, and it$s not a comfortable feeling.

Cost)Categories for unaccepta le wor3


Work areas that affect cost are listed here2 *ework%revisions Complaint resolution Insurance premiums%coverage *emove%replace =onding limits and costs Write-offs 0nbilled charges 7verdue receivables Claim defense Change order redesign
IMPROVEMENT PROCESS

Ineffective interdisciplinary coordination (ccept as-is, with credit to client Ineffective trade coordination

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0nplanned field services Call-backs 0nrecorded time 0nplanned premium overtime

engineers and architects! 9isputed invoices 0npaid time *epetitive "uality assurance

Invoice errors 0npaid invoices (ccept as-is, with no extra compensation

The high cost of poor 9uality


3acts to consider when counting the high cost of poor "uality are2 What is poor "uality costing you? Waste is the opposite of "uality. #he tangible costs of poor "uality include rework, accidents, missed schedules, unused labor, liability and insurance, and scrapped materials. #he intangible costs of poor "uality include lost customers, Fnever-hadG customers who went elsewhere because of what they heard from unhappy customers, and poor morale among employees and stakeholders.

#our types of 9uality cost


#he four types of "uality cost are2 Prevention cost (ll costs associated with error prevention in a product, process or service. Appraisal cost (ll costs associated with the assurance to conformance of "uality standards%re"uirements, inspection, testing, observation, etc. Internal failure cost (ll costs associated with the evaluation and correction of the design before it is released for construction, and all costs for rework on a project before it is turned over to the owner. 5?ternal failure cost 'imilar to internal failure costs except that they occur after the FoutputG has been turned over to the next processor or user. 5xternal failure costs often include significant intangible costs of lost reputation and good will.

$ummary
#he highly competitive economic conditions that exist in today$s construction industry re"uire that construction companies seek to achieve excellence to remain competitive. #his excellence can be achieved with a new style of management that focuses on customer satisfaction, the elimination of waste, continuous improvement, and employee involvement. #o be competitive in today$s market, it is essential for construction companies to provide more consistent "uality and value to their owners%customers. &ow is the time to place behind us the old adversarial approach to managing construction work. It is time to develop better and more direct relationships with our owners%customers, to initiate more teamwork at the jobsite, and to produce better "uality work. 'uch goals demand that a continuous improvement CI! process be established within the company in order to provide "uality management. ,eeting owner%customer re"uirements providing customer satisfaction! is a primary objective of "uality management, and contractors who are the suppliers of construction services must address owner%customer re"uirements if they are to succeed. #he construction industry exists to provide a service to its owners%customers who are becoming more demanding and are seeking higher "uality, better value, and lower costs. #hese owner%customer re"uirements mirror the economic pressures they face in their own businesses. Implementing total "uality management %

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continuous improvement in managing everyday construction activities is relevant to all those who participate in and contribute to the construction process.

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