71332 Quality Management

ASSIGNMENT 2

TRIMESTER 3, 2020

Prepared by Ansell, Ruth Marie; Student ID 4201600

30 December, 2020
Table of Contents

1. Introduction ........................................................................................................................................ 3
2. Analysis ............................................................................................................................................... 4
2.1 Suggested Quality Management Strategies.................................................................................. 4
2.2 Justification ................................................................................................................................... 4
2.3 Quality Systems & Strategies ........................................................................................................ 5
2.3.1 TQM ....................................................................................................................................... 5
2.3.2 Other Strategies ..................................................................................................................... 6
2.3.2.1 Quality Culture & TQM ................................................................................................... 6
2.3.2.2 Quality Leadership .......................................................................................................... 6
2.3.2.3 Partnership Management ............................................................................................... 6
2.3.3 Tools & Techniques ................................................................................................................ 7
3. Conclusion & Recommendations ........................................................................................................ 9
3.1 Closing Remarks ............................................................................................................................ 9
3.2 Summary of Recommendations for Improvement ....................................................................... 9
3.2.1. Applied System of Quality Commitment .............................................................................. 9
3.2.2 Knowledge............................................................................................................................ 10
4. References ........................................................................................................................................ 10

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1. Introduction
The issue I have selected to report on is that of sub-par steel being certified to be safe and
compliant. This steel is then used in all kinds of projects, from foundations of new home
builds, to government agency roading programmes. The specific example mentioned
involves NZTA's knowledge of the steel supplies being of insufficient standard.

When describing quality failures, we think of two kinds. One is internal failure and the other
is external. Internal failures have not reached the customer, but cause delays and additional
resourcing as they are fixed internally before leaving company doors. External failure is
when products below the intended quality reach the customer. In this example, there are two
main "customers" involved. There is the NZTA and there are the road users.

The manufacturers producing steel of subgrade quality are in the awkward position of
knowingly doing so. The quality is not to the standard required by any New Zealand
customer and therefore, this would be considered an external quality failure for the overseas
steel manufacturers, regardless of the fact that they are aware of the issue. The deliberate
dubiousness around this supply suggests that it couldn't be an "internal quality failure"
because the low grade of the material is intentional.

Secondly, NZTA's customers (which are also the end customers in the chain) are road
users, most of whom pay taxes, a portion of which are then allocated toward transport
infrastructure. The customer in this case expects safe, durable infrastructure which cannot
be provided with questionable steel. The fact that NZTA became aware of the issue, but
went ahead with the use of the potentially dangerous materials suggests the additional layer
of internal quality failure. The agency did not intend to produce unsafe infrastructure, but its
systems and accountability structure allowed dangerous construction to go ahead, after the
entity received knowledge of this fact.

Finally, in terms of consequences for stakeholders, there have been many. The people who
work for the manufacturer (both staff and management), responsible parties of NZTA and
their staff, and of course the end customer of road user are all affected. Staff and
management working for both the manufacturer and NZTA have brought about a loss of
external confidence in their abilities due to the debacle of unacceptable delivery. Road users
have not only lost trust in NZTA but are now also inconvenienced by either rework, delayed
work or finished products containing untested materials. Of course, redesign by engineers to
work around material issues has been noted. Nonetheless, the untested material have still
not met building code standards and have therefore not met deliverables requirements.

(Free to use, no attribution required)

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2. Analysis

2.1 Suggested Quality Management Strategies

I think the quality issues which arose in this situation could have been avoided using one
key prevention stratagem, along with two sub-stratagems, and one further sub-
requirement.

1. NZTA must apply total quality management (TQM) to the entirety of its organisation.

1.1. NZTA must practice TQM in the handling of all its building projects, including
material supplier selection, contractor vetting process and project management process.

1.2. The NZTA must require its material suppliers and contractors to be certified as a
minimum to the standard ISO 9001:2015.

1.2.1. The ISO 9001:2015 certified material suppliers and contractors must have the
experience of running the accredited system and have been re-approved following the
expiry of their first 3-year ISO certification period.

2.2 Justification

Let's discuss why these would be workable solutions for the entities involved and how
this might play out. When the overseas material suppliers and contractors are held to
the standard of ISO 9001:2015, there is almost no way for such unacceptable materials
to end up on New Zealand soil tied up in a government agency project.

Specifications for a QMS under ISO 9001:2015 require the qualifying entity to
demonstrate its ability to consistently meet statutory & regulatory requirements
(International Organization for Standardization, 2015). The independent certification
process and maintenance required to retain certification will force contracted entities to
uphold the required safety standard. Not only would the involved suppliers and
contractors be required to prove their ability to meet statutory & regulatory requirements
but the system required under ISO 9001:2015 would also be a further safeguard
preventing a lack of the necessary checks and balances which keep poor quality choices
at bay.

ISO 9001:2015 takes a risk-based approach to quality management, necessitating that

certified operations will consider four categories of risk, being organisational risk,
strategic risk, compliance risk and operational risk (Open Polytechnic, n.d.-a). The most
important and pertinent portion of these requirements is the compliance risk which ISO
9001:2015 certified enterprises will be mandated to consider.

The best step for NZTA would be to investigate and vet the suppliers used by their
contractors. Only experienced certified suppliers should be considered. When a new
organisation has just been certified, it will still need time for adjustment of company
culture, time to "find its feet", so to speak. An organisation that has been re-certified at
least once upon expiry of its certification, will have had experience in running its ISO
certified systems and carrying out full assessment and review of its systems and
processes for recertification. The same approach can be taken towards the on-shore
construction contractors used.

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2.3 Quality Systems & Strategies

2.3.1 TQM

In terms of the NZTA itself, a TQM approach would demand accountability of every staff
member or manager involved in construction projects and other roles across the
organization alike. To clarify what is meant by TQM and why it is important, TQM is
differentiated from quality assurance (QA) and/or a quality management system (QMS).
QA is a preventative stance toward quality management and considered to be the
primitive starting place to tackling quality concerns. Quality theory has long since
evolved to suggest that true quality success in an organization comes from a much more
holistic and process focused approach. W. Edwards Deming called for improvement of
the system and workers in order to lift quality outputs while Armand V. Feigenbaum
suggested quality endeavours must extend throughout the entire organization (Open
Polytechnic, n.d.-b).

With the issue at hand, we have the case of NZTA knowingly allowing dangerous
materials to be used within a public construction project. How could TQM have
circumvented this? If the NZTA had adopted TQM, the project manager, the
development overseer, the contract owner, the public engagement manager and
countless other roles that could have been connected to the infrastructure development
project would have all been actively pursuing quality through an iterative improvement
process. There may have been cross-functional quality improvement workshops
throughout the project, starting with the pre-planning phase, running through the
contractor vetting process and the construction period. At any stage, the issue of
material standards would have been under scrutiny and would have been flagged and
forced into compliant standards by any number of cross-functional parties. Regular
quality reporting could have documented such issues and left them on an internal
register accessible across the organization to ensure resolve.

Contrasting TQM with a QMS, ISO9000 is a QMS. A set system--such as ISO--calls for
a given level of standardisation. There is a basic level of accountability and service that
third parties can be assured that they will be able to rely on, but the accountability can
tend to stop at the required level. TQM does not stop, but continually requires all players
in the business operation, from staff through to all levels of management, to actively
commit to and continually pursue quality improvement with the goal of perfection.

If the NZTA were to have applied TQM whilst maintaining a minimum requirement of all
external collaborators and suppliers being ISO-certified, the combination of
accountability across the value chain would have guaranteed that materials, construction
methods and deliverables are all safe, of strict conformity to customer-expected quality
and completely statutorily & regulatorily compliant.

Now let's move into the further specific strategies, tools and techniques which NZTA
could have utilized and should utilize in the future to prevent any such case ever
occurring again.

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2.3.2 Other Strategies

The top strategies I recommend to combat the situation described are building a quality
culture under a TQM approach, demonstrating quality leadership and committed
partnership management.

2.3.2.1 Quality Culture & TQM

We have presented the importance of TQM and how this could have been an excellent
preventative measure of quality issues. We now go in-depth to describe the importance
of quality culture, which is an expression of TQM. I believe a part of the systemic failure
of NZTA to prohibit the untested, unapproved materials from being used, was a failure of
culture. Quality culture would have greatly increased the chances of this issue being
flagged and circumvented by any number of staff or managers along the way.

How can a quality culture be established and what does it look like? Let's return to the
basics of TQM of which a quality culture is simply an indication of successful
implementation. Two key principles are that 1. each member of the organization is
involved & 2. cycles of continuous improvement (CI) are carried out (Open Polytechnic.,
n.d.-c). A quality culture would also involve each person in the organization taking
personal ownership of quality in the areas of the business they have access to and
influence over. To implement such a quality culture will require commitment from
management, frequent communication, including storytelling of successful quality
outcomes for the organization, rewards and recognition based on quality, establishing
processes which focus on problem-solving over seeking blame and training advocates
across the organization to champion the changes (Goetsch, D., & Davis, S., 2013).

2.3.2.2 Quality Leadership

Quality leadership is another strategy which goes hand-in-hand with establishing a quality
culture. It's quality leadership that will fuel such changes. When discussing quality
leadership, we mean that management and team leaders are not speaking empty words, but
they actually practice what they preach. So, if CI processes have been established as part of
routine work, then management will be applying this in their work processes as well.
Furthermore, there must be militant follow-through on each new change, whether the initial
implementation of a new quality commitment or regular changes as a result of CI. As
management paint a vision and share values which tie into quality goals, the organization
will move into the TQM modus operandi.

2.3.2.3 Partnership Management

Because no man is an island and no organization is a desert, NZTA must engage in

deliberate partnership management. Haphazard selection of collaborators will result in
more scandals as the one discussed. To ensure the right partners are chosen, active
management of partners must take place under the guidance of proper processes and
policy. It is suggested that a stringent partner selection policy and process be designed
and implemented. Such mechanisms must require suppliers and building contractors to
hold appropriate ISO quality certification, have had at least one successful renewal of
their ISO certification so that their experience in working under a quality system is
established, and--for example--have an ethics policy or review system which checks and
balances against corruption and abuse of power. These could be the minimum

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requirement for partners and further vetting tools could be developed such as quality
review scorecards, integrity level auditing checklists, etc.

2.3.3 Tools & Techniques

In terms of tools & techniques, there are seven common recommendations for quality
improvement. These are 1. Check sheets, 2. Pareto analysis, 3. Run charts, 4. Scatter
diagrams, 5. Histograms, 6. Cause and effect analysis, and 7. Control charts ( Open
Polytechnic., n.d.-d). In this case, the issue is not just sub-par materials being provided
for construction, but also the system failure of there being allowance for staff and
management to find non-compliant materials to be acceptable. Therefore, more than
there being the requirement to control deliverables output quality, there need to be
controls which capture and hold accountable decisions around legal compliance. This is
the way future system failure can be avoided.

As the issue is a larger system issue, I would recommend the tool cause & effect
analysis which is from the list of seven common tools above and two other tools we have
not yet mentioned--flow charting and quality function deployment.

One form of cause & effect analysis is to ask "5 whys". The idea is that by the 5th
question, the root of the problem may be uncovered. This information can be used in the
design of the new safeguards to prevent reoccurrence of the quality issue examined.

The flow chart created should map out the vetting and selection process NZTA goes
through to select and contract with their partners and then the project management
process during partnership. Flow-charting is a data-organisation tool and also the first
step to gaining visibility over the steps in the decision-making processes, to locate where
controls need to be set in place for accountability (Open Polytechnic., n.d.-e). All teams,
staff and managers involved in the abovementioned processes must contribute to the
information which builds up the flowchart. This will tell the story of where individuals and
teams contact and guide the process flow (Oakland, J., 2000). This may lead to the
revelation that all potential partner meetings must be documented and vetting checklists
to be completed and signed by multiple parties in both organizations, maintaining
visibility and accountability of those in decision-making positions.

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(Dikmen, I., Birgonul, M. T., Kiziltas, S., 2005)

Finally, quality function deployment (QFD) analysis builds a map which addresses the
needs and satisfactions of the customers by creating a visual representation of the
answers to these questions (Open Polytechnic., n.d.-f). If NZTA would have used this
technique to balance conflicting customer demands, surely sub-standard materials could
not possibly be sacrificed against other expectations.

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3. Conclusion & Recommendations

3.1 Closing Remarks

In conclusion, any organization which fails to make quality a priority through such an in-
depth, committed approach as TQM is in danger of internal systems and processes
falling over to the point that major quality issues tiggering internal &/or external quality
failures or worse--non-compliance become(s) an unfortunate and disappointing reality. It
is not a guarantee that such quality issues will arise for sure, but the enterprise has no
way of ensuring such concerns have been safeguarded against.

NZTA in the case study and the building material non-compliance question in the
industry in general have demonstrated just such a concern. Without a stringent,
committed approach to both management of the organization in question and a broader
quality management of the value chain through auditing of external partners and the
selection process, there is just no assurance that quality--which is really simply
conformance to customer expectations coupled with alignment with intended design or
offering--can and will be protected through the operational and trading processes.

The lessons are that--firstly--all of commitment, knowledge, approach, technique,

design, planning, strong leadership, culture and incessant application of review and CI
(continuous improvement) must be forefront, to ensure systems are on track to produce
conforming offerings. And furthermore, full organisational involvement from every level is
necessary to check and balance outcomes as no individual component of decision-
making and/or production can be relied upon for consistent uniformity with intended
standards. Then finally, tunnel vision such as is common in "big corporate"
environments, where "the right hand doesn't know what the left is doing" or external
providers which subcontract may fail to take suitable ownership and responsibility for
distant "business cousins" whose decisions will make just as great of an impact on
quality--such tunnel vision--is absolutely unacceptable. The contributory significance of
partners must be considered in the quality puzzle to ensure both adherence to promised
standards and legal compliance.

3.2 Summary of Recommendations for Improvement

The recommendations for preventing such a scandalous debacle as had occurred with
the NZTA and its attempted cover-up of steel quality issues in the Huntly section of the
Waikato Expressway can be boiled down to two main points (Pennington, 2018):

3.2.1. Applied System of Quality Commitment

A system of commitment means that, beyond the basic scope of ISO 9001:2015
certification, every level of the company is trained to prioritise quality, systems and
exercises document and drive continuous improvement, and management leads by
example, propelling a devoted quality culture which is possibly even able to transcend
paper requirements. These are the ideals of TQM in action.

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3.2.2 Knowledge

It is not beyond the realm of possibilities to understand that the issue with NZTA's quality
approach has arisen not purely from nonchalance, but, rather, from lack of
understanding. In the past, even when there was an earnest desire to produce quality
outputs for the customer, thinking around this was undeveloped and approaches
included quality inspection (QI), quality control (QC) and quality assurance (QA), all of
which are limited in their comprehensiveness, focusing on areas ranging from
goods/waste/trade-offs to after-the-fact error detection, to preventative measures
involving management-level role modelling, respectively (Open Polytechnic., n.d.-g).
However, TQM was a later development in quality thinking which brought in a greater
people involvement and the added lens of continuous improvement.

This approach, coupled with skilful and appropriate quality management techniques
such as the aforementioned cause & effect analysis, flow charting and quality function
deployment. With a more effective knowledge base to arm the organisational position
and informed management techniques under the belt, NZTA, its partner vetting & review
process, and other similar organisations, finally stand a chance at powerful and valid
quality management which can seal and satisfy customer expectations that have been
promised by the provider.

4. References
Dikmen, I., Birgonul, M. T., Kiziltas, S., (2005) Strategic use of quality function deployment
(QFD) in the construction industry, Building and Environment (Volume 40, Issue 2,
Pages 245-255), ISSN 0360-1323

Goetsch, D., & Davis, S. (2013). Quality management for organizational excellence:
Introduction to total quality. (7th ed.). (pp. 82-95). Upper Saddle River, NJ: Pearson.

International Organization for Standardization. (2015, September 01). ISO 9001:2015.

Retrieved December 06, 2020, from https://www.iso.org/standard/62085.html

Oakland, J. (2000). Total quality management: tools and techniques. (2nd ed.). Oxford, UK:
Butterworth-Heinemann.

Open Polytechnic. (n.d.-a). Welcome to Open Polytechnic. Retrieved December 06, 2020,
from https://openpolytechnic.iqualify.com/course/-

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 MJeFg02jfXUr2sD6JPs/#/page/p196?keywords=and%7Cstrategic%7Crisk%7Corgani
sational%7Ccompliance%7Coperational

Open Polytechnic. (n.d.-b). Welcome to Open Polytechnic. Retrieved December 06, 2020,
from https://openpolytechnic.iqualify.com/course/-
MJeFg02jfXUr2sD6JPs/#/page/p121

Open Polytechnic. (n.d.-c). Welcome to Open Polytechnic. Retrieved December 07, 2020,
from https://openpolytechnic.iqualify.com/course/-
MJeFg02jfXUr2sD6JPs/#/page/p157?keywords=tqm

Open Polytechnic. (n.d.-d). Welcome to Module 4: Tools and techniques for quality
improvement. Retrieved December 11, 2020, from
https://openpolytechnic.iqualify.com/course/-
MJeFg02jfXUr2sD6JPs/#/page/p230?keywords=tools%7Cand%7Ctechniques%7Ctec
hnique

Open Polytechnic. (n.d.-e). Seven tools of quality management. Retrieved December 11,
2020, from https://openpolytechnic.iqualify.com/course/-
MJeFg02jfXUr2sD6JPs/#/page/p224

Open Polytechnic. (n.d.-f). House of quality. Retrieved December 11, 2020, from
https://openpolytechnic.iqualify.com/course/-MJeFg02jfXUr2sD6JPs/#/page/p245

Open Polytechnic. (n.d.-g). Quality inspection, quality control and quality assurance.
Retrieved December 18, 2020, from
https://openpolytechnic.iqualify.com/course/-MJeFg02jfXUr2sD6JPs/#/page/p95

Pennington, P. (2018, June 06). Docs reveal lack of independent testing on highway steel.
Retrieved December 17, 2020, from
https://www.rnz.co.nz/news/national/359056/docs-reveal-lack-of-independent-testing-
on-highway-steel

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