Improving Construction Productivity with Quality Management

Managing Construction Quality

Broadly stated, the fundamental principles of quality management affect just about everything an organization engages in and how it goes about achieving it. To excel, the organization must ensure that everyone working on site has a clear understanding of what this means and how it applies to everything to be done. The organization must also ensure that it has policies, procedures, and practices aligned with this thinking.

The traditional approach to organizational management is generally production or cost-focused. Today's business realities have shifted this focus more to customer orientation. This means that the aim of management is to garner customer satisfaction in all aspects of the business relationship. So, to enable employees to achieve the three key organizational expectations, they have to have mechanisms and/or systems in place that enable employees to be able to plan and execute error-free outcomes.

In construction, an important prerequisite to achieving a sustained competitive advantage is a robust quality culture that fosters the continuous delivery of value (quality) to the customer through the project delivery process. This requires a robust quality assurance and control program, as well as a process that is integrated into the project delivery system and diligently followed by all parties involved. Following is a six-step process for the assurance and improvement of the quality of the work put in place.

The quality of production focuses on the means and methods employed by all parties—the general contractor, construction manager, subcontractors, vendors, and suppliers—to perform the work in a way that accomplishes all of the project objectives. The quality of the product relies on achieving the contact promises, and the best way to do that is to do the work efficiently and correctly. The aim of the quality management process is to define the process in terms of value, ensure the creation of value, and deliver value.

Operational Efficiency

Operational efficiency is achieved when an organization is able to deliver products or services in the most cost-effective way possible while meeting commitments. The ultimate goal of operational efficiency is to lower costs without compromising productivity and maintaining quality with an eye on the improvement of profitability. There are myriad ways to accomplish this: by minimizing waste, reducing defects, proper planning, effective selecting of subcontractors and management, etc. For the purposes of this article, we will address the reduction or elimination of defects.

Construction defects may be attributable to the design, last-minute or a large volume of changes, defective or faulty material or workmanship, ineffective oversight and management, misuse during occupancy, improper maintenance practices, natural deterioration over time, or some combination of them. It may also be attributable to acts of vendors, suppliers, subcontractor's management, or personnel. We will address defects resulting from the contractor's project delivery process and, more specifically, the production activities of the contractor's or subcontractor's craftspeople.

It is a fact that some rework or corrective work invariably occurs on every construction project with little or no exceptions. The difference is the amount or extent to which this happens and is dependent on many factors, most of which reside with the construction manager or general contractor's overall control and management of their operations. This phenomenon (defect identification, cause and effect evaluation, correction, etc.) is rarely measured, recorded, and/or reported. Thus, it is not effectively addressed or efficiently controlled. This brings to mind the saying: "You need to measure in order to manage."

Construction Defects

Most defects are structural, nonstructural, or cosmetic. Another way to categorize defects is whether they are patent or latent defects. Patent defects are those that are readily identified or found during routine inspections. They can fall in all categories but are more than likely nonstructural or cosmetic. Patent defects are generally easy and quick to correct. Latent defects tend to be those that may be concealed or just not identified during operational inspections. They may fall in all categories except cosmetic. Latent defects manifest themselves at some later point or date and, as a result, are more problematic to deal with. They may take considerable time and resources and are generally more costly to correct.

Many defects are minor, are easy to remedy, and are fairly inconsequential in respect to the project's progress. More serious ones take time and resources and may impact workflow and the time it takes to complete the project. This will reduce the project's operational productivity, which will create additional costs as well as negatively impact the contractor's bottom line. There is also the potential for litigation, which can negatively impact future business. Significant defects will invariably impact the project owner's overall satisfaction regarding the project.

The regrettable truth is that a number of contractors and owners have been involved in disputes associated with defective construction. A large-scale Dodge study found that over 75 percent of study participants were involved in a dispute or claim in the previous 5 years. And construction defect claims that rise to the level of legal action tend to be more disruptive and expensive.

Generally, the expectation is that the craftspeople are capable of putting the work in place defect free and that the project supervision will catch any defective work as part of their oversight and inspection function. Once discovered, it is expected that defective work will be corrected. However, project supervisors generally do not want to report negative data, so a good number of defects are not reported to or discussed with company management. And some defects are just not identified and thereby not corrected.

The organization's management may indirectly contribute to the problem. There may be a number of reasons why project supervision may not catch all of the defective work. Management employees may understaff the project because they take on more work than they have competent staff to assign to oversee them. They may utilize less-experienced staff to control overhead costs who are more likely to miss some of the defective work. They may hire subcontractors whose capability does not match up with the complexity or difficulty of the work, thereby impacting the site's supervision. And the list goes on.

Even though defective work is somewhat common on construction projects, most organizations do not have systems for collecting data and information on defective work. As a result, they do not specifically know what kinds of defects occur, why they occur, or their potential negative impacts on the project. They also do not know the cost or production impact of defects on the project delivery process. Various studies put the cost of defects in construction to around $150 billion to $200 billion annually.

Depending on which research study one uses, defective work can amount to anywhere from 5–10 percent, and sometimes more, of the cost of the overall project. According to various studies, large or midsize general contractors' net profits hover in the 1–2.5 percent range, with the largest organizations ending up closer to the lower end of this range. So, if a construction firm can improve their project delivery process to produce 25 percent less defective work, they can easily double or even triple their profitability!

The beauty of this approach is that the firm does not need to use more time or resources to implement it; they just have to manage their operation somewhat differently and make sure that the work is put in place correctly the first time out. To achieve this, they need information on their defect types, causes, and the costs and/or time it takes to correct them. This highlights the fact that almost no company routinely collects data on their defects so as to enable them to properly handle their operational management and production activities to minimize their defect rate and improve their bottom line.

Defect Management

To properly manage operations to reduce defects—or better yet eliminate them—the organization requires information. This involves collecting the proper and appropriate data and analyze it. The goal is to obtain pertinent information to be able to devise and implement interventions to effectively eliminate the underlying mechanisms that facilitate the creation of building defects. This approach will to some extent error-proof the project delivery process, thereby enabling the workforce to put the work in place correctly from the outset.

To effectively address and deal with defective work, the organization's quality assurance program must have clearly defined steps for data collection and analysis to identify the underlying causes of the defect. This will allow for an appropriate solution to be devised and deployed in operational systems (means and methods) so as to correct the deficiency. More importantly, the selected corrective method should correct the underlying causation so as to permanently eliminate potential similar future defects from ever occurring.

There are two obvious areas that contribute to construction defects: the people (the workforce and management's potential impact on them) and the systems (means and methods). Management employees play a key role as they devise the systems and employ and oversee the workforce. This covers such areas as planning, organizing, directing, oversight, inspecting, and controlling. For work that is subcontracted, the general contractors and construction managers must ensure the subcontractors' field supervision has similar criteria with which to manage the quality of their workforce's production.

Management/Supervision Contribution

• Assess the risk or likelihood of defective work occurring in various tasks before the commencement of the work. This will ensure that the supervisor has a clear understanding of the task demand as well as any necessary associated resources with which to successfully complete the task.
• Align the worker's capabilities to the task demand and design. This will ensure that the worker has the knowledge and ability to properly perform the work as required.
• Identify factors that may exert demands or pressure on workers leading to potentially causing defects.
• Enable successful accomplishment of the task by the workers by ensuring the sufficiency and availability of appropriate tools, equipment, material, access, and time.
• Ensure each worker has the appropriate and necessary information to complete the task, understands the associated impediments and risks identified, and knows how best to deal with them.
• Discuss expectations related to the task. Allow a reasonable amount of time for the performance of the task.
• At the start of the task, the supervisor should spot-check workers putting the work in place to ensure that they meet the company's expected performance criteria.

Worker Contribution

• Communicate to management that they have a good understanding of the task and the work involved and that they have the appropriate tools, equipment, access, materials, resources, information, etc. to successfully complete the task.
• Voice their concerns to management about any and all deficiencies and discuss and resolve them prior to the start of work.

This process should highlight the potential opportunity for general contractors to use the improvement of their quality management practices to ensure that work put in place is defect free. This will reduce the need for close oversight and inspection of the workforce and thereby free up the supervisor's time for more productive management activities, resulting in opportunities to improve production and, concomitantly, proactively increase the efficiency and effectiveness of operations.

Conclusion

The construction industry as a whole, and particularly innovative construction firms, needs to change the way defective work put in place at worksites is handled. A culture of putting work in place correctly and defect free at every step of the way is needed. Since, realistically, there is the potential that the system may fail and some defective work may be put in place, the organization must have a way to determine what went wrong in order to systematically eliminate such potential occurrences.

This requires that the organization devise a systematic process to collect data on what went wrong, why it happened, and what underlying means, method, process, practice, or procedure facilitated such an undesirable outcome to occur. This process then provides an effective means to structurally eliminate such deviations from ever occurring again. Such an approach will ensure a more robust and efficient means of ensuring high-quality project delivery.

Since in construction much of the work is performed by partners (subcontractors or others), the general contractor or construction manager can ensure superior quality of product and/or services only if all levels of management, personnel, partner companies, and the rest of the supply chain are involved and focused on providing superior quality. Project owners will deem the quality of the product or service to be superior only if it meets, or better yet exceeds, their expectations. To deliver on this, companies must seek partners and suppliers who are like-minded and deliver on their promises.