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Towards Quality Risk Management Application


in the UAE Construction Projects

CONFERENCE PAPER · MARCH 2014


DOI: 10.5176/2301-394X_ACE14.98

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2 AUTHORS:

Naveen Didla Assem Al-Hajj


Heriot-Watt University Heriot-Watt University
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Retrieved on: 05 October 2015
Towards Quality Risk Management Application in the UAE Construction Projects

Naveen Ratnam Didla, PhD Student, Dr Assem Al-Hajj, Academic Head


School of the Built Environment, School of the Built Environment,
Heriot-Watt University Heriot-Watt University
Dubai, UAE Dubai, UAE
naveenratnam@yahoo.com a.al-hajj@hw.ac.uk

Abstract- This paper highlights the pressing need to adopt the Risk Following are some of the excerpts related to quality issues in
Management methodologies into the Quality Management processes, the UAE.
intended to steer from the traditional reactive approach of quality
management toward a more proactive one. This need is pursued
through conducting a review of the failures/deficiencies of the Source Quality problems/issues
existing project quality systems in terms of lack of
preventive/proactive approaches on the one hand, while giving due James (2009) Poor quality materials caused building collapse
consideration to the possibilities of support offered by risk Hugh (2009) Villas show their age
management research studies on the other. The paper concludes by
proposing a risk-based quality framework named Quality Risk Jeff ( 2012) Build quality seen as looming threat to Dubai property
Management (QRM) model capable of identifying and mitigating the market
risks to achieving quality objectives in construction projects, along
Hisham (2009) Failure costs due to poor quality are 0.7 % of the total
with some recommendations on effective implementation. The project cost.
application of this model is expected to provide a clearer picture
Sameh (2008) ‘Poor quality of work’ is ranked as 14 out of 42 risks
regarding the risks to quality processes at any given point of time, listed, while ‘Quality problems of supplier material’ is
thereby enabling the project team to be in a better position to make ranked as 22
more informed decisions in controlling quality. This is the first in a
Table-1
series of papers that will be written with the aim to develop the model
for applications in the UAE construction industry.
Key words: Quality Management (QM), Risk Management (RM), Issues raised in table-1 could instigate an instantaneous
Quality Risk Management (QRM), Project Quality Plan (PQP), Cost question –why do failures still continue to sprout up despite all
of Quality (COQ), UAE the great efforts put in the implementation of the QMS in
construction projects? Probably, the above failures could have
I. INTRODUCTION
While the construction sector continues to be one of the been avoided if the associated risks to quality were identified
leading sectors of economic growth in the United Arab much ahead and due diligence taken at the appropriate time!
Emirates (UAE) economy, there is little escape for construction Pursuing this, review and discussion is continued in the
companies not to secure a stable business, if unable to succeeding sections toward a proposed solution, followed by
demonstrate high scale of quality. While ‘Cost’, ‘Time’ and some concluding thoughts.
‘Quality’ are widely considered to be the three primary
objectives of a project’s success, the growing complexity and II. QUALITY MANAGEMENT IN CONSTRUCTION
dynamics of construction projects, especially the emergence of PROJECTS
new contracts that place an increasing pressure on maximizing A. Overview of Quality Managements
the quality while minimizing cost and time, puts quality in the In the last two decade numerous publications like Jain (2001),
spot-light. The construction industry is still viewed as one Ron Basu (2004) have focused on the appraisal of works done
with poor quality emphasis compared to other sectors like by quality gurus and the emerging concepts like TQM, Six
manufacturing and services, and therefore continues to be Sigma, and ISO. Some empirical studies were done on quality
under tremendous pressure for maintaining and improving aspects – cost of quality (Abdelsalam et al., 2009), measuring
quality in projects. PMI (2013) cautions about the high failure quality (Conca et al., 2004), importance of tools and
costs resulting from poor quality. Undoubtedly, poor quality techniques for quality management improvement (Tari and
can pose as a huge risk to the project’s success while putting Sabater, 2004). Meanwhile, few International standards viz.,
the organization’s image/repute at stake, sometimes
PMI (2013), BSI (2000), ISO 10005, ISO 10006 (2003), have
challenging the sustenance of the business itself.
emerged which provide overall guidance on establishing and
Construction projects usually start out with great implementing project quality systems. Based on these
enthusiasm and excitement of turning two-dimensional plans guidelines and as per the requirements of the contract
into three-dimensional objects, but it is when problems arise documents, the Project Quality Plan (PQP) is developed
that each quality deviation becomes a moment of truth. consisting of the processes and procedures related to Quality
Assurance and Quality Control which provide an assurance to
the Client and other stakeholders as to how quality would be Achieved: root-causes of 18.25% of the
achieved in line with the contractual requirements. ISO 10006 62.5% NCRs are similar which reflects
the poor effectiveness of
(2003) stipulates that the PQP should identify activities and corrective actions taken before,
resources necessary for achieving the quality objectives of the leading to repetition. There is not
project, while BSI (2000, p.33) statues that “the project even a single case of potential
management objective is to deliver on time, to cost and to NCR indicating lack of preventive
measures being followed in
specification; this can be made easier and more efficient if the alerting/avoiding potential
organization implements a sound quality policy”. failures/deviations.
Despite the evolution of many quality theories and research 7 Continual Best practices Almost no evidence found of
studies, the implementation of the project quality system has improveme Implementati Lessons learnt/Best practices fed-
nt on back into the system for
been facing an array of challenges, posturing risks to quality. Target: >90% appropriate continual
Table 2 summarizes some of the audits findings of randomly Achieved: improvement actions.
chosen construction projects in the UAE, depicting quality 55.5% The repletion of failure causes in
failures/deficiencies along with root causes in some of the above items 3 & 6 indicates that
there is no mechanism in place to
areas of the QM processes. enable lessons from previous
failures being recorded and efforts
QM put in to prevent them from
Objective / Failures/Deficiencies & Root
Process/Ar repeating.
No Target causes
ea Table-2
1 Quality Review rate After the first time approval of the
Planning Target: 100% PQP, no review/revision has been
Achieved: done in line with the new changes BSI (2000) states that a project manager may record statistical
0.0% in the scope and in response to the data on task owner performance and overall project
current performance of the performance in terms of costs, timing and the quality of
existing QM System. Proactive
culture is lacking wherein least
deliverables. This information may be used to validate future
efforts are put in identifying estimates from task owners for new project work. This is
potential risks to the achievement seriously lacking, especially the quality failures including
of quality objectives. lessons-learnt can be fed-back to the risk database which can
2 Quality Delivery rate Failure in delivery of planned
serve as an useful reference to the succeeding projects.
Training Target: >90% training sessions indicates that the
Achieved: opportunities to prevent potential
50.0% quality failures are being B. Overview of Risk Management
repeatedly foregone. The inherent dynamic nature of construction projects and
Poor guidance to the project
over-dependence on multiple specialist parties toward
teams in managing quality could
possibly result in overall poor achieving the project objectives definitely attracts a lot of
quality of products and service, risks. PMI (2008, p.309) expounds “The objectives of project
thus ending up with customer risk management are to increase the likelihood and impact of
dissatisfaction
positive events, and decrease the likelihood and impact of
3 Inspections Rejection First-time rejection rate is
rate observed to be increasing due to negative events in the project.” and hence stresses the need to
Target: <10% teams not adequately using identify potential problems for taking appropriate preventive
Achieved: proactive control measures like actions. ISO 31000 (2009) is an international standard which
24.5% checklists etc. serves as a guideline related to Risk Management. ISO 31000
In some cases the rejection is
repeating due to the same/similar (2009) highlights that organizations of all types and sizes face
failure cause. internal and external factors and influences that make it
4 Testing Rejection Demolition of part of raft due to uncertain whether and when they will achieve their objectives.
rate missed testing in soil The effect this uncertainty has on an organization's objectives
Target: <2% works.(COPQ approx. Dhs
Achieved: 320,000) etc. Testing frequency is “risk”. Extracted from ISO 31000 (2009), Fig.1 and Table-3
8.5% crossing more than required in the illustrate the Risk Management framework/ methodology used
specification due to lack of to manage risks.
proactive checking measures in
place.(Loss of Dhs. 53,000 due to
unnecessary extra testing in
concrete works)
5 Auditing Completion Focus on compliance oriented
rate auditing and not upon risk-based
Target: >90% approach.
Achieved: Audit schedule shows achieved
65.5% implementation deviating 50%
from the Target.
6 Corrective/ Closure of
Root cause analysis in some cases
preventive NCRs
shows lack of proactive control
actions Target: >95%
measures in place. Moreover, the
The basis of ISO 31000 is to provide a best practice structure
and guidance to all operations concerned with risk
management. Strategies used to manage risk include:
‘Transferring risk to another party’, ‘Avoiding the risk
altogether’, ‘Taking action to reduce the negative impact of
the risk’ or ‘Accept all or some of the consequences of the
risk’. Deciding on what strategy is best for a particular risk
determines the prioritization process that follows. Those risks
with the greatest probability of occurrence and that have the
highest impact to the business/process are first priorities
followed in descending order to the least likely to occur with
the lowest impact. ISO 13000 ensures that when implemented
and maintained in accordance with this International Standard,
Fig.1 (source : ISO 31000 (2009) the management of risk enables an organization to, for
example:
ISO 31000 clauses & brief details (refer to Fig.1)  increase the likelihood of achieving objectives;
5.2 Communication and consultation: Communication and consultation  encourage proactive management;
with external and internal stakeholders should take place during all stages  be aware of the need to identify and treat risk
of the risk management process. Effective external and internal
communication and consultation should take place to ensure that those
throughout the organization;
accountable for implementing the risk management process and  improve the identification of opportunities and
stakeholders understand the basis on which decisions are made, and the threats;
reasons why particular actions are required.
5.3 Establishing the context: By establishing the context, the organization
articulates its objectives, defines the external and internal parameters to be
One of the research studies based on risk aspects, (Patrick et
taken into account when managing risk, and sets the scope and risk criteria al., 2005) identified 10 quality related risks of which “Tight
for the remaining process. project schedule” tops the list. Sameh(2008) Fig 1. “Risk
5.4 Risk assessment: Risk assessment is the overall process of risk Breakdown structure” broadly classified project risks into
identification, risk analysis and risk evaluation.
NOTE : ISO/IEC 31010 provides guidance on risk assessment techniques.
internal and external risks and table 6 depicts risk allocation.
5.4.2 Risk identification: The organization should identify sources of risk,
areas of impacts, events (including changes in circumstances) and their C. Adoption of Risk Management methodologies in Quality
causes and their potential consequences. The aim of this step is to generate Management
a comprehensive list of risks based on those events that might create,
enhance, prevent, degrade, accelerate or delay the achievement of PMI (2013) warns that failure to meet the quality requirements
objectives. can have serious, negative consequences for any or all of the
5.4.3 Risk analysis: Risk analysis involves developing an understanding project’s stakeholders. One of the primary objectives of any
of the risk. Risk analysis provides an input to risk evaluation and to project is cost and in the scenario of quality management it is
decisions on whether risks need to be treated, and on the most appropriate
risk treatment strategies and methods. Risk analysis can also provide an
Cost of Quality (COQ). COQ continues to be on the center
input into making decisions where choices must be made and the options stage ever since it has been promoted by various Gurus. Philip
involve different types and levels of risk. Crosby’s Fourth Absolute ratifies that the measurement of
5.4.4 Risk Evaluation: The purpose of risk evaluation is to assist in quality is the price of nonconformance while Juran’s Trilogy
making decisions, based on the outcomes of risk analysis, about which
risks need treatment and the priority for treatment implementation. Risk
asserts that the cost of quality, or not getting it right first time
evaluation involves comparing the level of risk found during the analysis should be recorded and analyzed and classified into failure
process with risk criteria established when the context was considered. costs, appraisal costs and prevention costs. COQ expects an
Based on this comparison, the need for treatment can be considered. optimum cost to be maintained as depicted in Fig.2.
5.5 Risk treatment: Risk treatment involves selecting one or more options
for modifying risks, and implementing those options.
Risk treatment involves a cyclical process of: assessing a risk treatment;
deciding whether residual risk levels are tolerable; if not tolerable,
generating a new risk treatment; and assessing the effectiveness of that
treatment.
5.6 Monitoring and review The organization's monitoring and review
processes should encompass all aspects of the risk management process for
the purposes of: ensuring that controls are effective and efficient in both
design and operation; obtaining further information to improve risk
assessment; analyzing and learning lessons from events (including near-
misses), changes, trends, successes and failures; detecting changes in the
external and internal context, including changes to risk criteria and the risk
itself which can require revision of risk treatments and priorities; and
identifying emerging risks.
Table-3
Fig.2
Much is written about preventive actions for controlling recognition as part of regulatory requirements. The ICH Q9
COQ. PMI (2013, p) promotes prevention over inspection document on Quality Risk Management is a guideline that also
while RonBasu (2004, p.10) insists emphasis upon prevention applies to the regulatory authorities in the fields of
than detection such that the cost of supervision and inspection pharmaceutical assessment of the quality part of the marketing
will go down. ‘The 14 points for Managing’ by Edward authorization dossier, GMP inspections and the handling of
Deming strongly insists to cease dependence on inspection to suspected quality defects. As part of the EU implementation of
achieve quality through eliminating the need for mass ICH Q9, the GMP Guide (Quality Management) was
inspection by building quality into the product in the first published in February 2008 which came into force in July
place. Edward Deming says Failure of management to plan for 2008.
the future and to foresee problems has brought about waste of ICH9 explains the following definitions implying how
manpower, of materials, of the machine-time, of all which QRM has evolved in principle:-
raise the manufacturer’s cost. This is in line with the Philip o QUALITY : Degree to which a set of inherent
Crosby who preaches about Zero defects, Vaccine, DRIFT properties of a product, system or process fulfills
etc., emphasizing the old saying “PREVENTION IS BETTER requirements.
THAN CURE”. So the question is - how can we prevent when o RISK : combination of the probability of occurrence
we are not in a position to predict the risks/events leading to of harm and the severity of that harm
possible/potential failures resulting in poor quality? Obviously o QUALITY RISK MANAGEMEN: Systematic process
this implies the preliminary need of some mechanism/well for the assessment, control, communication and
proven methodologies like RISK MANAGEMENT which can review of risks to quality.
enable us to detect potential failures beforehand to take the
appropriate preventive actions. It states two primary principles of quality risk management
Previously some attempts have been made to integrate Risk are:
Management and Quality Management. Maria and Adina o The evaluation of the risk to quality should be based
(2011) attempted to highlight the links between risk on scientific knowledge and ultimately link tothe
management and quality management and brought up the achievement of quality objectives/project
considerations on Integrating Risk and Quality Management. requirements
This paper points out that the implementation of Integrated o The level of effort, formality and documentation of
quality-risk systems approach may shift from the reactive the quality risk management process should be
management to a new attitude, foresight and proactive. Some commensurate with the level of risk.
studies on Quality Risk Management have been done in
relation to various industries viz., Healthcare (ICH Q9), In support of the need to apply RM approaches in QM, the
Mining, Pharmaceuticals, Construction, and others, of which below table-4 summarizes various voices from three category
ICH9 has been taken seriously to the extent of getting of sources
REFERENCE INFERENCE/VIEW
QUALITY GURUS’ PHILOSOPHIES
Philip Crosby The Second Absolute: The system of quality is
prevention (not appraisal).
The Fourteen Steps to Quality Improvement: suggests to
measure processes to determine where current and
potential quality problems lie.
Juran Joseph Juran’s Trilogy: Identify the specific needs for
improvement, diagnose the cause and stimulate
establishment of remedies
Edward Deming PDCA Cycle: Plan the action. Assess the current
Deming state, and the future state, and plan how to close the gap.
Identify alternate solutions.
Armand V. Concept of “hidden plant”: In every factory approx 40%
Feigenbaum of the capacity of the plant being wasted through not
getting it right first time.
G. Hutchins Predicts “Future of Quality is Risk Management”.
INTERNATIONAL STANDARDS / GUIDELINES
PMBOK Suggests the use of
p.234  Risk Register indicating risks that may impact
quality requirements.
p.239  DOE to predict the QC activities and impact on
p.240 COQ
p.245  Sample frequency determination during the plan
stage
 Risk Breakdown Structure
ISO 10005 Refers to the term “RISK” for Quality Planning in and
Quality implementation stage and calls for minimizing
(d),(6.2.3).
the risks for not meeting the quality requirements.
cl 4.1 g
p.11 Organize and manage activities to meet quality
requirements and quality objectives and to optimize the
use of resources in meeting quality objectives to
minimize the risk of not meeting quality requirements
ISO 10006 Suggests risk sharing with suppliers (5.2.9) for mutual
p.17 beneficial supply chain relationships.
Cl 7.7.3 Insists that all identified risks should be assessed. In this
assessment, experience and historical data from previous
projects should be taken into account.
ISO 19011 One of the objectives of conducting audits is to identify
risks to the organization and communicate the same for
5.2.1,6.5.2
necessary actions.
ACADEMIC PUBLICATIONS
Sameh(2008) “Risk Breakdown structure” broadly classified project
Fig 1. risks into internal and external risks, depicting risks
related to quality and table 6 suggesting risk allocation
Moshe and Promotes that a risk-driven development approach can
Jon(2010) help in handling quality risks more effectively while
delivering a significant financial returns
Maria & This paper points out that the implementation of
Adina(2011) Integrated quality-risk systems approach may shift from
the reactive management to a new attitude, foresight and
proactive.
RICS Claims that the concept of quality risk has not attracted a
(2012) similar scrutiny, as projects where quality is a dominant
objective are rare and usually confidential.
IBM Suggests that Risk-based testing allows you to prioritize
(2010) what needs to be tested based on the risk that is
associated with various test plans and test cases. With
risk-based testing you can focus your resources on those
test assets that have the highest likelihood of failure or
the greatest impact if failure occurs. Ultimately, risk-
based testing helps your team mitigate risk.
Table-4
In the UAE construction projects, risk-based approaches are Fig.4 : QUALITY RISK MANAGEMENT FRAMEWORK
applied in the disciplines of Safety & Environment through
‘Risk Assessments’ and ‘Aspect & Impact Assessments’
respectively as per the demands of the Federal law/regulatory B. Application of the QRM framework in construction
requirements. Whereas, a similar obligation lacks in the projects
discipline of Quality, obviously overseeing the need for a risk- The QRM process can be applied to all the quality
based framework. This calls for the need to adopt the RM processes/areas mentioned in table 2 & as depicted in Fig 1,
principles by QM in the form of a Quality Risk Management throughout the lifecycle of the project.(Fig. 5)
model that can ensure the project quality objectives are
achieved. Traditionally, risks to quality have been assessed
and managed in a variety of informal ways (empirical and/ or
internal procedures) based on, for example, compilation of
observations, trends and other information. Such approaches
continue to provide useful information that might support
topics such as handling of complaints, quality defects,
deviations and allocation of resources etc., but does not depict
the prioritization of various quality issues, so that more focus
can be put on those particular activities. Apparently, quality
decisions are often divorced from risk evaluation while more
prominence is given to the adherence to filing commitments.
This calls for the need to mitigate the risks leading to poor
quality requiring a more structured approach wherein the
current quality management system can be reinforced using
the Risk management methodologies, whereby it is believed
that effective risk management can facilitate better and more
informed decisions, providing greater assurance of a
company’s ability to deal with potential risks by better Fig.5 (Source: BSI(2000))
utilizing resources through the optimization of risk
management techniques. It is recommended that the responsibility of implementing
the Quality risk management activities are undertaken by
interdisciplinary teams headed by respective process owners
III. PROPOSED METHODOLOGY FOR DEVELOPMENT under the guidance of the Quality Manager. These teams need
AND IMPLEMENTATION OF QRM FRAMEWORK to be trained adequately about the quality risk management
A. Development of QRM framework process. Decision makers(implies process owners) should take
Further to the discussions in the previous sections, the QRM responsibility for coordinating quality risk management across
model as shown in Fig.4 is the proposed solution believed to various functions and departments of their organization; and
enhance the proactive approach of the QMS by identifying and assure that a quality risk management process is defined,
handling risks in a structured manner thereby enabling to take deployed and reviewed and that adequate resources are
preventive actions to avoid failures. The RM methodology as available. Quality risk management should be integrated into
explained in Fig.1 & Table-3 shall be applied on each of the existing operations and documented appropriately. It is
QM processes and the identified risks shall be addressed to recommended that QRM register be reviewed/updated
minimize the obstacles to achieving quality objectives and periodically at least twice in each phase of the projects as
shall be recorded in the Quality Risk Management Register for below.
monitoring and as a reference for future projects as well.
Quality risk management methodology supports a scientific IV. CONCLUSION
and practical approach to decision-making while providing The repetition of quality failures clearly exposes the
methods to accomplish steps of the quality risk management deficiencies in the current Project Quality System with regards
process based on current knowledge about assessing the to lack of proactive approach in predicting the failures in order
probability, severity and detectability of the risk on a case-by- to apply preventive actions to reduce the risks to quality. To
case basis. overcome the setbacks, this paper has suggested the adoption
of the RM methodologies into QM wherein the proposed
Risk Quality Management Quality Risk resultant QRM model is expected to facilitate a transformation
Management Quality planning Management from the traditional reactive approach to a more proactive
Risk Inspection Project Quality Plan
assessment Testing Processes/methods approach in addressing/controlling of quality issues in
Risk Corrective/Preventive QRM Register
identification actions QRM Records projects, while enhancing continual improvement. As the
Risk analysis
Risk evaluation
Training
Auditing, Etc.
QRM Logs nature of construction is relatively more dynamic and
susceptible to quick changes, it is suggested that future studies
Risk Treatment
can consider the possibility of linking the Quality risk register

Statistical tools (use as applicable)

Basic 7 QC tools(flowcharts, check sheets etc.)


Failure Mode Effects Analysis (FMEA)
Fault Tree Analysis (FTA)
Risk ranking and filtering
Supporting statistical tools etc
to the Construction programme(Primavera P6) so that tracking
can be done in a responsive to change manner, activity-wise
even to the lowest level of the WBS, especially as the
planning programme is updated periodically(Generally on a
bi-weekly/monthly basis).

Although the concept of QRM is still at a dormant stage by


large, attempts of implementation have been initiated in the
healthcare/pharmaceutical industries. However the same needs
to be tried & tested for validation in the construction industry
over a period of time across multiple construction projects
whose average life cycle generally lasts around 2 years. The
author being a PhD student intends to carry out the research in
this topic and expresses optimism of a valuable contribution in
this specialized area, in the near future.

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