Application in Construction Industry

As projects get larger and more complex, clients are also increasingly demanding higher standards for their delivery. Significant expenditures of time, money and resources, both human and material, are wasted each year as a result of inefficient or non-existent quality management procedures. In an attempt to improve their market competitiveness, by limiting the extent of non-value-adding activities, some organizations are beginning to monitor the performance of internal and external engineering and construction processes.

To achieve these bold aims, these organizations are looking to other industries such as manufacturing to examine the effectiveness of measuring and monitoring superior guiding tools. Total quality management has been recognized as a successful management philosophy in the manufacturing and service industries. TQM can likewise be embraced in the construction industry to help raise quality and productivity.

The benefits experienced include reduction in quality costs, better employee job satisfaction because they do not need to attend to defects and client complaints, recognition by clients, work carried out correctly right from the start, subcontractors with proper quality management systems, and closer relationships with subcontractors and suppliers. TQM performance measures are also reflected through top management commitment, customer involvement and satisfaction, employee involvement and empowerment, customer–supplier relationships, and process improvement and management.

The objectives of this paper are: 1. To address the issue of applying TQM in the construction industry; 2. To examine possible steps for restructuring an organization for TQM; and 3. To study the emergence of an improved concept called “Six-Sigma”. Introduction TQM is often termed a journey, not a destination. Much research has been done with regard to the implementation of TQM and it is believed that the benefits of higher customer satisfaction, better quality products, and higher market share are often obtained following the adoption of TQM.

It requires a complete turnaround in corporate culture and management approach as compared to the traditional way of top management giving orders and employees merely obeying them. It is believed that the single most important determinant of the success an organization in implementing TQM is its ability to translate, integrate, and ultimately institutionalize TQM behaviors into everyday practice on the job. TQM is a way of thinking about goals, organizations, processes, and people to ensure that the right things are done right the first time.

TQM is an approach to improving the competitiveness, effectiveness, and flexibility of the whole organization. It is essentially a way of planning, organizing, and understanding each activity that depends on each individual at each level. Ideas of continuous learning allied to concepts such as empowerment and partnership, which are facets of TQM, also imply that a change in behavior and culture is required. For eg. the electrical and electronic engineering industry in Malaysia has widely adopted TQM and the main benefits that resulted were improved customer satisfaction, teamwork, productivity, communication, and efficiency.

Mc-Cabe in 1996 reported a study of UK companies from different industries which have already implemented TQM. The results showed that a majority had achieved greater success against performance indicators than was the average for their respective industries. Culp in 1993 cited an example of HDR Inc. , Omaha, Nebraska, and a large engineering firm that had implemented TQM. The experience of applying TQM concepts provided the organization with improvements, information, and learning that occurred only because of the TQM process.

This is in addition to positive customer responses and client referrals that the organization received as a result of implementing TQM. Benefits of TQM Organizations experience a reduction in quality costs by ensuring that the defect cost indices meet the requirements stated in the project quality manual. Employees can achieve job satisfaction as they do not have to attend to defects or complaints from clients. The greatest benefit is recognition by clients. Clients are aware that organization has implemented TQM and subsequently recommends it to other clients.

The Management Representative feels that top management commitment is essential for the decision to implement TQM. Top management should not create an impression of placing an additional burden on the employees. Firms should convince staff that TQM would be beneficial because everything will be done correctly right from the start. Restructuring for Total Quality Management TQM is generally perceived to de-emphasize status distinctions while emphasizing employee empowerment. TQM gurus preach horizontal coordination based on the flow of work processes and linkages with suppliers and customers.

A TQM-oriented organization focuses on having process rather than function as the basic fundamental unit of analysis. Each person within the organization must consider the needs of the next person in line who uses his output. Measurements must be made to find out how well the organization is meeting its customer needs and expectations. Without upper-management involvement, commitment and leadership, a TQM program cannot succeed. Teams should consist of employees from various parts of the company to work together to improve processes.

The organization should always look toward 100% customer satisfaction and error-free performance. Employees need to be trained and shown how to reallocate their time and energy to studying their processes in teams, searching for causes of problems, and correcting the causes, not the symptoms, once and for all. Quality improvement teams should be set up to ensure that the quality mentality is instilled in everyone within the organization and that there is continuous improvement in the quality systems. The organization should also integrate suppliers into its TQM process.

In summary, the requirements for restructuring for an organization wanting to implement TQM would include consideration to be given to the following: customer focus, continuous improvement, leadership, employee involvement, teamwork, customer–supplier relationship, and process improvement. Organizations should realize that results cannot be gained overnight and that an organization needs time to adapt, change, and learn. The biggest hurdle for the organization is to change its status quo and develop a culture that will support TQM.

It is clear that implementing TQM requires a major organizational change that would transform the culture, processes, strategic priorities and beliefs of an organization. Apart from commitment, top management must educate its employees on the need for TQM and communicate clearly to them that TQM is not an additional burden to the organization. Instead, TQM will help to reduce the amount of work for employees if they no longer need to attend to customer complaints and defect problems. Implementing Total Quality Management in Construction The construction industry is a business sector that plays a substantial role in many economies.

However, the attainment of acceptable levels of quality in the construction industry has long been a problem. Significant quantities of resources, both human and material, are wasted each year as a result of inefficient or non-existent quality management procedures. There exists great potential for quality improvements in the construction industry; its importance cannot be understated, regardless of a nation’s primary business, and organizations will always require interaction with the construction industry to source physical assets to house operations.

In recent years, globalization and deregulation of markets has led to increased foreign participation in domestic construction, placing further pressure on leading firms for major reforms. The cause of many problems lies in the organization of the industry and associated processes. Firms need to build on their competitive strengths through a deliberate and managed process to improve the capacity and effectiveness of the industry and to support sustained national economic and social objectives. This development, in part, can be achieved by learning how to increase efficiency and productivity through process improvement.

In developing a total quality culture in construction, one important step is to develop a construction team of a main contractor and subcontractors who would commit to the quality process and develop a true quality attitude. Thus, the main contractor should only select subcontractors who have demonstrated quality attitude and work performance on previous jobs. The following basic steps should be followed to implement TQM in construction projects: 1) Obtain the commitment of the client to quality; 2) Generate awareness, educate, and change the attitudes of staff; 3) Develop a process approach toward TQM;

4) Prepare project quality plans for all levels of work; 5) Institute continuous improvement; 6) Promote staff participation and contribution using quality control circles and motivation programs; and 7) Review quality plans and measure performance. In recent years, a number of structured performance improvement methods have been adopted on construction projects. However, their degree of success has been somewhat less than that experienced in manufacturing industry. The following paragraphs provide a critical review of these models and examine their fitness-for-purpose for the construction sector.

A number of techniques and tools can be found under the TQM/Continuous Process Improvement (CPI) umbrella, including the process cost model, standardized process improvement for construction organizations, the balanced scorecard, Kaizen and statistical process control. Traditionally, businesses have tended to measure performance using only financial measures. As a result, organizations adopted techniques similar to the process cost model (PCM). This concept was developed in manufacturing industry and has been moulded into a workable strategy suitable to construction applications.

The PCM is a process-orientated approach that values client satisfaction and continuous process improvement. PCM uses financial theory to analyze and direct efforts for improvement; this has its advantages and disadvantages. Use of a single measure clearly illustrates the tangible benefits in a compatible format that is easy to interpret. However, the weakness of financial metrics stems from their failure to measure and monitor multiple dimensions of performance. Additionally, financial measures used in isolation create problems in that they are characterized as lagging measures, i. e. they are the result of past events.

Consequently, PCM is a reactive approach, because waste and associated non-value adding activities have already transpired. To look beyond financial measures, Sarshar et al. (2000) developed the standardized process improvement for construction enterprises (SPICE) framework. This framework was founded on the principles of the capability maturity model (CMM) and argues that the outcome of a process is a function of the maturity of the organization and its associated processes. The philosophy of this framework is that a process becomes more predictable and reliable as the organization and its processes simultaneously mature.

SPICE provides a structured framework with a definite starting point that assists the process improvement teams to prioritize areas for improvement. The SPICE framework provides a good process diagnostics tool with a strong process focus. Although the two previous techniques provide an indication as to the success or failure of a project, they do not provide a balanced view of a project’s performance. Kaplan and Norton (1992) developed the Balanced scorecard (BSC) to capture both the tangible and intangible perspectives of performance.

The BSC provides information on four perspectives, including customer perspective, internal business perspective, learning and growth perspective and financial perspective. However, this approach is far from simple and requires a comprehensive understanding of the fundamental characteristics of performance measurement as well as a significant commitment from top management and employees. Another process improvement technique that was developed by the Japanese and was a contributor to their economy’s rapid growth in the second half of the twentieth century was Kaizen.

This technique was formed from a quality culture that emphasizes continuous process improvement through standardization – i. e. establish a standard, maintain it and then improve it. However, the technique tends to be difficult to adopt for firms that have already implemented the TQM culture. In view of this, the authors do not believe that Kaizen can offer the construction industry substantial benefits since it merely promotes similar ideals already created through TQM. What the industry needs is a structured data driven approach to direct its efforts.

A more data-driven technique is statistical process control (SPC), which has an emphasis on numbers, fact-based analysis and tangible decision-making. Consequently, due to its technical nature, it has never been fully embraced. With managements becoming more interested in performance and profitability, they are beginning to divert attention back to the analysis of process variation and elimination through root cause analysis and problem solving. Use of SPC identifies overall process capabilities and areas that need improvement.

Although SPC equips the users with an extensive array of measurement techniques, it appears to lack a strong organizational supportive framework. The tools employed by SPC have, to a large extent, fuelled the development of the latest addition to the TQM/CPI umbrella. TQM & Six-Sigma: The basic tenants of TQM include strong customer focus, elevated employee involvement, continuous improvement, enlightened leadership, and management by fact. There is a concern, however, that TQM has lost its luster and has become less effective under the pressures of competing business priorities.

This paper examines the problems associated with total quality management and suggests a revival under a newer name, the rather odd reference to a statistical feature of the normal distribution known as ‘six-sigma. ’ Total Quality Management is thus undergoing a revival under a new name. Many organizations have discovered that such methodologies under appropriate leadership can be applied in such a way as to restore the strength of quality initiatives. Six-sigma provides a highly disciplined approach to quality improvement, assures follow-through using a five step process, and clearly assigns personnel responsibility.

Specific customer oriented metrics are identified and tracked until a control system is in place to maintain the improved processes. All required features of TQM are found in the correct application of six-sigma. Problems Associated with TQM TQM has been defined as ‘managing the organization so that it excels in all dimensions of products and services that are important to the customer’ (Chase et al. , 2004: 274). To be effective, it is generally agreed that TQM requires an organizational effort that includes continuous improvement, teamwork, and a customer focus.

But Chang in 1993 referred to its failure in many companies as being due to the onset of ‘excessive activity syndrome. ’ He argued that, too often, companies tended to implement a wide range of activities without focusing on the outcomes achieved. There are at least ten reasons why TQM doesn’t work. Quality operations often become so cumbersome that they overshadow the real reason a company is in business. Among the other reasons cited for TQM failure are excessive bureaucracy, focus on internal processes, avoidance of genuine organizational reform, faddism, and lack of innovation within the corporate culture.

Kolesar (1995) referred to a gap between what TQM practitioners espoused and what was actually being implemented. He identified a number of shortcomings that left many firms practicing only partial quality management. Many of the perceived failures of TQM, it is believed, stem from the incorrect implementation of appropriate principles. TQM continues to be an elusive goal that leads to unrealistic organizational expectations, false promises, impatience, and the desire for immediate results. The Emergence of Six-Sigma

Six-sigma began as a process design or process improvement goal stated in terms of the properties of a normal distribution. The six-sigma approach provides with a structured process improvement strategy to reduce waste and other non-value adding activities. Efforts were made to improve quality to such an extent that no more than 3. 4 defects per million opportunities (DPMOs) would occur. When it became obvious that quality was dependent on the involvement of multiple functional areas, six-sigma provided a common metric around which the efforts of other functions could be aligned.

The natural limits of separate organizational functions, often characterized by different outlooks, agendas and approaches provided resistance to quality initiatives when organizational boundaries were crossed. Thus, over time, six-sigma expanded into a methodology or framework for assuring that cross-functional quality improvement efforts could be successful. In fact, business leaders today think of it as being a way to increase profits through improvements in current processes. How does six-sigma resolve the shortcomings and problems associated with TQM?

Is it in fact, a replacement for total quality management, or do its methods and approaches support the goals and activities that once made TQM a popular improvement methodology? To answer this question, it is helpful to examine the five major features of TQM. Strong Customer Focus TQM places extraordinary emphasis on customer needs, both internal and external, seeking to determine what consumers desire in products and services. Six-sigma formalizes this approach by specifically identifying critical-to-quality requirements (CTQs), which are characteristics that customers consider to have the most impact on quality.

Such characteristics could be a key dimension in a part or product, the time to process a transaction, the ability to deliver a service, or the response to an internal process. A defect is then defined as any failure to meet the expected criteria, such that data can be collected to determine how many defects occur over a given number of opportunities. This constitutes the first step in a structured methodology that begins with ‘define’ to assure that customer needs and requirements are foremost.

Achieving the goal of meeting customer expectations is further demonstrated by strict adherence to a five step process in which define is followed by measure, analyze, improve and control (DMAIC), all performed by a project team with the requisite training. Elevated Employee Involvement TQM seeks to expand the training and involvement of employees, often with the formation of self-directed work teams empowered to make changes and improvements in their work areas. Six-sigma formalizes this approach with the development of green-belt and blackbelt team leaders.

Green belts typically receive one to two weeks of training and learn project management, quality management tools, meeting facilitation, problem solving, and exploratory data analysis. They serve on project teams and sometimes lead teams through the five DMAIC steps to completion. Black belts have more specialized training in statistical process control techniques, often five weeks or more, and usually possess a background in college-level mathematics Continuous Improvement TQM brings about improvements in quality and process, typically by encouraging a series of relatively small gains that evolve into larger gains over time.

Taken as a strategy, this has been described as ‘a vague notion of improving everything we do forever’. Six-sigma achieves its gains more by compartmentalizing the quality pie so that projects are selected with the overall goals of the organization in mind. Six-sigma, according to one author, is most successful when incorporated as a business strategy. This is one of the reasons that six-sigma requires each project to follow the five-step DMAIC procedure and maintain the potential for financial improvement.

The last of the five steps assure that control methods are put in place to monitor the improvements that have been implemented. This step was not a clear requirement under TQM, which meant that some gains would be lost over time. Under six-sigma, institutionalizing the improvements may involve modifying compensation and incentive systems, policies, procedures, budgets, operating instruction and other management systems. Enlightened Leadership TQM calls for a style of management that is committed, participative, and capable of creating a climate for cultural change.

Managers are expected to be resource people, motivators, and leaders who can engender trust within and among the people in the organization. Under six-sigma, the CEO is usually the driving force, and a champion for each project is selected from an executive management team. A champion is responsible for the success of the project and helps by providing resources and bridging the gap between functional interests. Typically, a portion of the champion’s compensation depends on the successful achievement of six-sigma objectives. Upper management is heavily involved in project selection and has a stake in the outcomes.

The important point here is that management actions are focused, strategic goals are considered, compensation is involved, and the duties of a champion are clearly delineated. Fact-based Decision Making TQM makes use of several quality control tools and various statistical methods for evaluating and improving quality. Key performance indicators (KPIs) are required to assure that quality improvement initiatives are sustained. It is in this area that TQM often breaks down. Alternatively, six-sigma is unquestionably data oriented.

Every project requires the selection of one or more key process output variables as primary project metrics. The measure step in six-sigma makes it essential that key variables are tracked over time. These leads to the step in which various statistical techniques are applied to analyze which factors are causing a process to vary in quality. Ultimately, the improve step calls for deciding what may be done to reduce variability and promise consistent results in the future. Throughout these three steps and others in the DMAIC process, a number of tools are used by the green belts and black belts in charge.

In the measure step, tools may include cause and effect diagrams, process maps, Pareto charts, capability ratios, and histograms. During the analyze step, methods of analysis include t-test, F-test, chi square, multi-variance, regression, interactive plots, Kruskal-Wallis, Mood’s median, and Mann-Whitney. The improve step may well include process modeling, design-of-experiment, response surface diagram, main effects plot, process capability, and mistake proofing. Not every tool is used on every project, but to choose and apply the right tools, the level of training for those on the project team must be extensive.

Summary and Conclusion What the six-sigma process brings to TQM is a methodology for disciplined quality management. Many companies find that when six-sigma is integrated into their current business system, almost all of the elements of TQM are in place. Six-sigma strengthens TQM efforts through a strategic approach that emphasizes strong executive involvement, bottom-line accountability, extensive practical training, and personnel devoted to getting worthwhile improvement projects carried out.

The requirement for high-level champions, black-belt project leaders, green-belt team members, and a five-step solution process puts these elements together. It becomes a comprehensive system with the structure and discipline needed to assure focus and accountability. Six-sigma, however, does not guarantee success. The training is expensive; and the support of full-time, black-belt certified, project coordinators require a serious organizational commitment.

So, we can say that TQM is not dead; it has merely re-surfaced in another form, arguably better and more likely to produce the results anticipated. Bibliography: •Six-Sigma and the Revival of TQM Forest B. Green, Department of Management and Marketing, Radford University, Virginia, USA. •Implementing Total Quality Management in Construction Firms, Low Sui Pheng1 and Jasmine Ann Teo. •Six-sigma as a strategy for process improvement on construction projects: a case study Rodney A. Stewarti and Clinton A. Spencer