Construction Project Management

Lec 7 - Quality Management

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 What is Quality?
Quality may be defined
as the degree to which
a set of inherent
characteristics fulfill
requirements

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PQM Overview

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 Quality Management Processes
Plan Quality Management: The process of identifying
quality requirements and/or standards for the project and
product, and documenting how the project will demonstrate
compliance with relevant quality requirements. The key
benefit of this process is that it provides guidance and
direction on how quality will be managed and validated
throughout the project.

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 Quality Management Processes
Perform Quality Assurance: The process of auditing the
quality requirements and the results from quality control
measurements to ensure appropriate quality standards and
operational definitions are used. The key benefit of this
process is that it facilitates the improvement of quality
processes.

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 Quality Management Processes
Control Quality: The process of monitoring and recording
results of executing the quality activities to assess
performance and recommend necessary changes. The key
benefits of this process include: (1) identifying the causes of
poor process or product quality and recommending and/or
taking action to eliminate them; and (2) validating that
project deliverables and work meet the requirements
specified by key stakeholders necessary for final acceptance.

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Few Concepts
of
Quality

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 Precision & Accuracy
Precision: means the values of repeated
measurements are clustered and have little
scatter.

Accuracy: means that the measured value

is very close to the true value.

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Precision & Accuracy

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Precision & Accuracy

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Precision & Accuracy

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 Modern Quality Management Focus
Customer satisfaction: Understanding, evaluating,
defining, and managing expectations so that customer
requirements are met. This requires a combination of
conformance to requirements (to ensure the project
produces what it was created to produce) and fitness
for use (the product or service must satisfy real needs).
Prevention over inspection: One of the fundamental
tenets of modern quality management states that
quality is planned, designed, and built in—not
inspected in. The cost of preventing mistakes is
generally much less than the cost of correcting them
when they are found by inspection.
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 Modern Quality Management Focus
Continuous improvement: The plan-do-check-act
(PDCA) cycle is the basis for quality improvement as
defined by Shewhart and modified by Deming. In
addition, quality improvement initiatives undertaken by
the performing organization, such as TQM and Six
Sigma, should improve the quality of the project’s
management as well as the quality of the project’s
product. Process improvement models include
Organizational Project Management Maturity Model
(OPM3®), and Capability Maturity Model Integrated
(CMMI®).
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 …… Few Important Terms
Cost-Benefit Analysis: The primary benefits of meeting quality
requirements can include less rework, higher productivity,
lower costs, and increased stakeholder satisfaction. A
business case for each quality activity compares the cost of
the quality step to the expected benefit.
Cost of Quality (COQ): Cost of quality includes all costs
incurred over the life of the product by investment in
preventing nonconformance to requirements, appraising the
product or service for conformance to requirements.
Cost of Failure: failing to meet requirements (rework). Failure
costs are often categorized into internal (found by the
project) and external (found by the customer). Failure costs
are also called cost of poor quality.
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Cost of Quality and Failure cost

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Techniques Used in Plan Quality
Management

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 Benchmarking
Benchmarking involves comparing actual or
planned project practices to those of
comparable projects to identify best practices,
generate ideas for improvement, and provide a
basis for measuring performance.
These other projects can be within the
performing organization or outside of it and can
be within the same or in another application
area.
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 Statistical Sampling

Statistical sampling involves choosing part of a

population of interest for inspection (for
example, selecting ten engineering drawings at
random from a list of seventy-five). Sample
frequency and sizes should be determined
during the Plan Quality process so the cost of
quality will include the number of tests,
expected scrap, etc.

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Techniques/ Tools used In QA and QC

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 Quality Audit
A quality audit is a structured, independent review to
determine whether project activities comply with
organizational and project policies, processes, and
procedures. The objectives of a quality audit are:
⮚ Identify all the good/best practices being
implemented,
⮚ Identify all the gaps/shortcomings,
⮚ Share the good practices introduced or implemented
in similar projects in the organization and/ or industry,
⮚ Proactively offer assistance in a positive manner to
improve implementation of processes to help the
team raise productivity, and
⮚ Highlight contributions of each audit in the lessons
learned repository of the organization. 26
 More on Quality Audit
The subsequent effort to correct any
deficiencies should result in a reduced cost of
quality and an increase in sponsor or customer
acceptance of the project’s product.
Quality audits may be schedule or random and
may be conducted by internal or external
auditors.
Quality audits can confirm the implementation
of approved improvements including corrective
actions, defect repairs, and preventive actions.
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 Process Analysis
Process analysis follows the steps outlined in
the process improvement plan to identify
needed improvements. This analysis also
examines problems experienced, constraints
experienced, and non-value-added activities
identified during process operation.
Process analysis includes root cause analysis—a
specific technique to identify a problem,
discover the underlying causes that lead to it,
and develop preventive actions.
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Seven Basic Quality Tools

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 Cause and Effect Diagrams
Cause and effect diagrams, also called Ishikawa
diagrams or fishbone diagrams, illustrate how various
factors might be linked to potential problems or
effects.

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 Histograms
A histogram is a vertical bar chart showing how often a
particular variable state occurred. Each column represents an
attribute or characteristic of a problem/situation. The height
of each column represents the relative frequency of the
characteristic. This tool helps illustrates the most common
cause of problems in a process by the number and relative
heights of the bars.

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 Quality Checklist
A checklist is a structured tool, usually component-specific,
used to verify that a set of required steps has been
performed.
Checklists range from simple to complex based on project
requirements and practices. Many organizations have
standardized checklists available to ensure consistency in
frequently performed tasks.

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 Pareto Chart
A Pareto chart, also referred to as a Pareto diagram, is a
specific type of histogram, ordered by frequency of
occurrence. It shows how many defects were generated
by type or category of identified cause.
Pareto diagrams are conceptually related to Pareto’s Law,
which holds that a relatively small number of causes will
typically produce a majority of the problems or defects.
This is commonly referred to as the 80/20 principle,
where 80% of the problems are due to 20% of the causes.
Pareto diagrams can also be used to summarize various
types of data for 80/20 analyses.

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Pareto Chart

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SAMPLE DATA SHOWING THE RELATIVE
FREQUENCY OF CAUSES FOR ERRORS ON
WEBSITES. 36
 Control Charts
Control charts are used to determine whether or not a
process is stable or has predictable performance.
Upper and lower specification limits are based on
requirements of the contract. They reflect the maximum and
minimum values allowed. There may be penalties associated
with exceeding the specification limits.
Upper and lower control limits are set by the project manager
and appropriate stakeholders to reflect the points at which
corrective action will be taken to prevent exceeding
specification limits.
A process is considered out of control when a data point
exceeds a control limit or if seven consecutive points are
above or below the mean.
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Control Charts

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Control Charts

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 Quality Control Charts and the Seven
Run Rule
⚫A control chart is a graphic display of data
that illustrates the results of a process over
time. It helps prevent defects and allows
you to determine whether a process is in
control or out of control.
⚫The seven run rule states that if seven data
points in a row are all below the mean,
above the mean, or are all increasing or
decreasing, then the process needs to be
examined for non-random problems.
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 Inspection
An inspection is the examination of a work
product to determine whether it conforms to
documented standards.
The results of an inspection generally include
measurements and may be conducted at any
level. For example, the results of a single activity
can be inspected, or the final product of the
project can be inspected.
Inspections may be called reviews, peer reviews,
audits, or walkthroughs.

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D

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 Six Sigma
Six Sigma is “a comprehensive and flexible
system for achieving, sustaining, and
maximizing business success. Six Sigma is
uniquely driven by close understanding of
customer needs, disciplined use of facts,
data, and statistical analysis, and diligent
attention to managing, improving, and
reinventing business processes.”*

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 Basic Information on Six Sigma
⚫The target for perfection is the
achievement of no more than 3.4 defects
per million opportunities.
⚫The principles can apply to a wide variety
of processes.
⚫Six Sigma projects normally follow a five-
phase improvement process called
DMAIC.

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 DMAIC
DMAIC is a systematic, closed-loop process
for continued improvement that is scientific
and fact based. DMAIC stands for:

⚫ Define: Define the problem/opportunity, process, and

customer requirements.
⚫ Measure: Define measures, then collect, compile, and
display data.
⚫ Analyze: Scrutinize process details to find improvement
opportunities.
⚫ Improve: Generate solutions and ideas for improving
the problem.
⚫ Control: Track and verify the stability of the
improvements and the predictability of the solution.
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Normal Distribution and Standard
Deviation

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 Quality Experts
⚫Deming was famous for his work in rebuilding
Japan and his 14 Points for Management.
⚫Juran wrote the Quality Control Handbook and
ten steps to quality improvement.
⚫Crosby wrote Quality is Free and suggested that
organizations strive for zero defects.
⚫Ishikawa developed the concepts of quality
circles and fishbone diagrams.
⚫Taguchi developed methods for optimizing the
process of engineering experimentation.
⚫Feigenbaum developed the concept of total
quality control.
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 Five Cost Categories Related to Quality
⚫ Prevention cost: Cost of planning and executing a
project so it is error-free or within an acceptable
error range.
⚫ Appraisal cost: Cost of evaluating processes and
their outputs to ensure quality.
⚫ Internal failure cost: Cost incurred to correct an
identified defect before the customer receives the
product.
⚫ External failure cost: Cost that relates to all errors
not detected and corrected before delivery to the
customer.
⚫ Measurement and test equipment costs: Capital
cost of equipment used to perform prevention and
appraisal activities.
PRODUCTIVITY
 PRODUCTIVITY
⮚ There are two definitions of productivity that
relate to construction,
⮚ one that defines productivity in terms of the
amount of work produced and
⮚ one that defines productivity in terms of the
dollar value of the work produced.

⮚ Productivity is output per worker-hour or dollar

value as per worker -hour.
 PRODUCTIVITY

⮚ Contractors usually prefer the work -output-

related definition because they can make
changes to affect the worker-hours of effort.

⮚ They can change crew size or change the mix of

equipment, so they prefer the work –output –
related definition.
 PRODUCTIVITY

⮚ At the same time they recognize that in reality

they are dealing with dollar output because all
output relates to the amount the owner will be
billed.
⮚ The government measures the country’s
productivity in dollar output per worker-hour or
total cost per unit of output.

⮚ Either definition is acceptable.

 PRODUCTIVITY

Labor Productivity = Units of output (or output dollar value)

_______________________________
Worker - hour
 What is total factor productivity?

Total factor productivity, commonly referred to as

TFP, is an equation used in economics to measure
the impact of technological advancements and
changes in worker knowledge. It attempts to
measure the effects that these changes have on
the long-term output of an economic system.
 What is total factor productivity?
Total factor productivity is determined by dividing
the output by the weighted geometric average of
labor. The formula uses the standard weight of 0.7
for labor and the standard weight of 0.3 for capital.
Apply your data to this formula when calculating for
total factor productivity: (Cobb-Douglas formula).
Take the natural log and make the linear
regression equation.
TFP = Output / Combined Input OR
 What is total factor productivity?

Y = Total production: This is the actual value of all goods a company

produces over the course of a calendar year
A = Total factor productivity
K = Total capital input: Total capital input is a measure and value of all
machinery, equipment and buildings, divided by the price of those items.
L = Total labor input: The labor input represents the total numbers of
employees over the course of a calendar year.
α =Total output elasticity: In this portion of the formula, values relating
to elasticity are constants determined by available technology.
β = Total labor: In this portion of the formula, values relating to total
labor are constants determined by available technology.
WHY PRODUCTIVITY IS
IMPORTANT?
 WHY PRODUCTIVITY IS IMPORTANT
⮚ Productivity improvement in construction industry
may have a significant impact on improving GDP
⮚ Productivity growth is the key determinant of
international competitiveness in the long term
⮚ Improving relative productivity growth improves a
country’s competitive position
⮚ The construction industry – most challenging and
demanding, has still many opportunities for
productivity improvement
 FACTORS AFFECTING CONSTRUCTION LABOUR
PRODUCTIVITY

▪ PROJECT UNIQUENESS
▪ TECHNOLOGY
▪ MANAGEMENT
▪ LABOUR ORGANISATION
▪ REAL WAGE TRENDS
▪ CONSTRUCTION TRAINING
PRODUCTIVITY STUDIES
REVEAL…
 PRODUCTIVITY STUDIES

⮚ For many years contractors have sponsored

studies of the impact of OVERTIME on
productivity.
⮚ Most contractors believe that after 40 hr per
week, productivity declines.
⮚ This belief (of lower productivity at the end of the
day) is often stated as the reason for an increase
in the cost of change orders that require work
that must be done on an overtime basis.
 PRODUCTIVITY STUDIES

⮚ It also causes contractors to avoid using over-

time whenever possible.
⮚ Every project manager, superintendent, foreman
and worker knows that crew do not produce the
same amount of work every day.

⮚ Each day is different. So, what makes the

difference ?
 PRODUCTIVITY STUDIES

❖ For that, Consider fol :

• Combinations of labor and equipment.
• Weather.
• Constructability of the design.
• Length of the workday.
• Day shift versus night shift.
• Efficiency of the tools and equipment.
• Effort expended by the labor force.
• Level of training of crews.
• Number of crews working in the same space.
• Government regulations.
PRODUCTIVITY
IMPROVEMENT
What are the Five Greatest Barriers to Productivity
on the Construction Jobsite?

1. Design: specifications, drawings, documents have

to be improved.
2. Field support for timely responses; to have
architect/engineer on site with field
competency.
3. Coordinate Design/Review.
4. Timely RFI’s/RFP’s (Request For
Information’s/Request For Proposal’s).
5. Construction/Project management competency.
 What are the Five Greatest Areas with Potential for
Productivity Improvement?
1. Constructability of the design documents with
input of major contractors on schedule
quality and realism.
2. Coordination among major contractors.
3. Pre-project planning.
4. Communication and teamwork between owners,
design professionals, contractors
and labor.
5. Improvement of the construction management
process.
THANK YOU!

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