Total Quality Management : a management philosophy for providing high quality construction

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TOTAL QUALITY MANAGEMENT

A Management Philosophy for Providing High Quality Construction

By: Paul D. Beckwith

/

MASTER OF SCIENCE IN CIVIL ENGINEERING

A Scholarly Paper Submitted To:
Professor William Maloney

of

THE UNIVERSITY OF MARYLAND

for

ENCE 689

Spring 1992

T257697

I,

ABSTRACT

Total Quality Management (TQM) is not a new concept. However,
its use in my construction company is. Only recently (within the
past ten years or so) have American companies started to realize
the potential of TQM as a means of ensuring high quality products
and services. With this realization has come implementation in
manufacturing and service companies.

A commercial construction company, like any other business, must
provide a top quality finished product to its customer if it
intends to stay in business. TQM is one way to work to that end.
This report explores the quality problems facing my fictitious
construction company, which I believe are fairly typical among
the commercial construction industry, existing management
methods, and the TQM method to ensure top quality production.

It will be shown why I believe TQM or a variation thereof is the
best method for controlling the quality of products and service
during the construction process. Under the philosophy of TQM, we
build quality into the finished product.

OBJECTIVE

Total Quality Management is a management philosophy that is
enjoying a great deal of notoriety these days. Its emphasis on
the importance of customer satisfaction, continuous improvement,
and problem prevention is catching the attention of many
companies. The guiding principles of TQM does not concern
themselves with any particular type of application and should
therefore be applicable to any type of business.

The objective of this report is to focus on the TQM philosophy as
a means of solving the construction quality problems facing my
commercial construction operations.

INTRODUCTION

One of the problems facing my construction company is a seeming
lack of cost effective quality control. I believe other
contractors experience similar problems. All too often defective
concrete assemblies need to be repaired or replaced, activities
finish late causing a delay to the project, assemblies fail
inspection which requires rework, poor quality construction leads
to premature failure of subassemblies like roofs or slabs, and
improper construction processes and other causes lead to
accidents and injuries. Typically we have attempted to control
quality through final inspection. These inspections point out

defective work only after it has been completed. At that point
costly labor and materials have already been expended. Expensive
rework is then required to bring the construction up to an
acceptable level of quality. In reality we have paid to do the
work more than twice (we must demolish the non-compliant work
before we can rebuild) . We intuitively believed it would be
better to ensure we do it right the first time and every time.
As a result, we began to wonder whether there was an existing
management style or technique that would move us toward that
goal? We learned Total Quality Management can do just that.

TQM is the only management system that focuses on the product and
systematically builds quality into every product or service a
company provides. Effective employment of the TQM philosophy and
its variations is what makes a Honda one of the most trouble-free
automobiles in the world. It is also noteworthy that Honda also
maintains one of the highest levels of owner loyalty. Honda
owners keep going back to buy Hondas again and again because they
like them and they work. Typical building owners and developers
do not go buy a new building every three or four years, but
imagine the business potential for the construction company that
commands that degree of customer loyalty. TQM focuses on
customer satisfaction and will ultimately lead to lower
production costs, increased profits, and repeat sales.

To date most implementations of TQM have been in the
manufacturing arena. Some would argue that TQM is not
appropriate for a service industry such as construction. We
believe that is a misguided belief. We will see that it is not
only applicable, but also why, and how we should implement TQM in
a construction company.

WHAT IS THE PROBLEM?

Our problem, which I believe also faces other commercial
construction companies, is: How to construct a high quality
finished product that satisfies the needs of the owner (our
customer) at a cost effective price that ensures we remain in
business. To solve such a problem is difficult since the various
goals often seem to be inconsistent with one another. High
quality is usually synonymous with high cost. Low quality
usually results in owner dissatisfaction. The owner wants to
spend the least amount possible for the highest quality end
product. How do we provide high quality at the lowest cost
particularly in a time of extensive competition? Our specific
problem is that a seeming lack of comprehensive quality control
is costing us time and money. We feel that effective
implementation of TQM will provide the means of meeting these
conflicting goals.

Background

We are a mid-sized commercial contractor involved in both private
and government work. We bill about $6 million worth of work in
place per year. All project management staff are our employees
and we usually perform about sixty percent of the work with our
own labor. For the past three years we have had to provide a
Contractor Quality Control (CQC) representative on at least one
government job per year.

Specific Problem

Historically we have experienced real costs associated with lack
of quality control amounting to about three percent of project
costs. That amounts to nearly $180,000 per year spent to correct
quality failures. These costs have primarily resulted from
rework. Typical failures would include such things as a void in
a concrete wall, leaking roofs, out of plumb structural members,
material cost overruns due to waste, accidents, and poor
equipment production rates. This list is by no means all-
inclusive but rather is intended to be illustrative.

Causes

Most of the problem causes seem to be rooted in either a lack of
training or procedure. For instance concrete voids and
segregation problems have resulted from improper vibration, hot
concrete, or dropping the concrete. Such a situation involves
both lack of training (on the part of the vibrator operator) as

well as lack of an effective procedure. The crew foreman should
be checking the height of the concrete drop, the batch time of
the concrete prior to placing it, and should be ensuring the
vibrators are operated properly.

RESEARCH METHODOLOGY

The approach utilized to research the problem of controlling the
quality of construction products and services and the adaptation
of TQM to my construction company consisted of three phases. The
first phase of research consisted of a text review. I explored
various texts to get the basic understanding of the assorted
management techniques as well as the fundamentals and principles
of TQM and its diverse adaptations. Next I reviewed journal
articles covering all aspects of TQM implementation and
applicability to construction and engineering. The third and
final phase consisted of an interview with representatives from a
national construction company actively engaged in implementation
of a Strategic Quality Management process1.

1 "Strategic Quality Management" is the terminology utilized
by the Ryland Group, Inc. to describe their quality control efforts
that incorporate customer satisfaction concerns into every business
decision.

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DISCUSSION
ALTERNATIVE METHODS

In the beginning there was the whip. Workers were often
motivated to "work harder" and "do better" by fear of actual
physical and emotional pain. Sadly, examples of that management
style, or variations thereof, are still used today. We have
never used those techniques but have tried encouraging employees
to work harder and do better. Fortunately we realized from the
beginning that workers motivated by the simple fear of losing
their jobs are little concerned with providing a top quality
product or service. What motivation they have stems from a fear
of doing it wrong rather than an interest in doing it right.

Fortunately other management techniques have evolved. Perhaps
the first of these was Scientific Management which focused on
using labor more effectively. Under Scientific Management we
determine the one best way to perform the work, the optimum pace,
provide training to perform the task, and reward successful
performance through pay. The Behavioral Approach is another
management technique. This management method focuses on the
realization that managers must get work accomplished through
others. Hence managers are concerned with the work behavior of
their subordinates and what motivates them as individuals to
perform work. The Management Science approach, yet another

method, utilizes mathematics and statistical tools to aid in
solving production and operating problems (Ivancevich, 1989) .

Along with these management techniques come all the motivation
theories. That is; how can a manager start, direct, and maintain
physical performance. These include such things as Needs Theory,
Achievement Motivation Theory, Two Factor Theory, Expectancy
Theory, and the Reinforcement Theory. As a group, these are
approaches which attempt to maximize the performance of
individual workers through motivation (Ivancevich, 1989) .

To attempt to increase worker motivation we tried implementing
Quality of Work Life (QWL) programs. They were geared toward
improving productivity through greater work involvement and
increased job satisfaction. Perhaps the most closely related
QWL program to the issue at hand are Quality Circles (QCs) .
Unfortunately though, we implemented QCs with the focus on
increasing the feeling of involvement and participation in the
decision making process rather than on quality improvement
through process refinement. In addition, our project managers
and superintendents were not ready for participative management.
They seemed to feel threatened by workers who had better ideas on
how to do the work than they did and consequently never acted on
the suggestions. After about six months there was no enthusiasm
for QCs whatsoever. During the period after the QCs died, we
suffered some of the lowest company moral I've ever experienced.

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For the most part, the aforementioned management techniques
narrowly focus on only one aspect of the management issue and
fail to even mention the importance of quality or the customer.
Some techniques focus on work methods while others focus on
worker enthusiasm and motivation. We discovered, however, TQM is
an all-encompassing management philosophy that focuses on
continuously improving customer satisfaction through employee
involvement and process control. We also felt that to
successfully implement TQM requires addressing all the issues
studied by the aforementioned management techniques. In other
words, work definition and worker enthusiasm and motivation all
need to be addresses to effectively implement TQM. It recognizes
the importance of employees satisfaction, and stresses
participative management and employee empowerment. TQM stresses
simplification and continuous improvement of the process.
Employee motivation and work definition are both important parts
of the TQM system. For those reasons, TQM seems to be the most
appropriate management technique for construction companies
today.

WHAT IS TOTAL QUALITY MANAGEMENT?

According to the DOD Total Quality Management Guide (5000. 51-G) ,
"Total Quality Management (TQM) is both a philosophy and a set of
guiding principles that represent the foundation of a
continuously improving organization. TQM is the application of

quantitative methods and human resources to improve the materials
and services supplied to an organization, all the processes
within an organization, and the degree to which the needs of the
customer are met, now and in the future. TQM integrates
fundamental management techniques, existing improvement efforts,
and technical tools under a disciplined approach focused on
continuous improvement."

The TQM philosophy can be broken down into three fundamental
concepts. The first is a focus on the customer, both internal
and external. The second is the idea of continual improvement
forever. No matter how much improvement you make there is still
room for more. The third concept is to focus on problem
prevention instead of problem solving (Simon, 1991) . Fighting
fires is a wasteful approach to problem resolution. Building a
fire prevention system is a much more effective system.

As developed by Dr. Demming, TQM consists of fourteen points,
seven deadly diseases, and some obstacles. A simple listing of
those points are as follows:

Point 1. Create constancy of purpose for improvement of
product and service.

Point 2. Adopt the new philosophy.

Point 3. Cease dependence on mass inspection.

Point 4. End the practice of awarding business on price tag
alone.

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Point 5. Improve constantly and forever the system of
production and service.

Point 6. Institute training.

Point 7. Institute leadership.

Point 8. Drive out fear.

Point 9. Break down barriers between staff areas.

Point 10. Eliminate slogans, exhortations, and targets for
the workforce.

Point 11. Eliminate numerical quotas.

Point 12. Remove barriers to pride in workmanship.

Point 13. Institute a vigorous program of education and
retraining.

Point 14. Take action and accomplish the transformation.

These points are fully described by Dr. Demming and M. Walton and
nearly every other text that addresses TQM along with the deadly
diseases and obstacles. They are mentioned here for ready
reference purposes only.

WHY IMPLEMENT TOM

Unlike the automobile industry, the construction industry in the
United States has yet to experience substantial competition from
foreign constructions firms. However, we do feel substantial
competition from local American firms. They are reducing bids by
cutting profit margins and other tactics in the hopes of winning
the few jobs being offered. We have found our quality problems
increase when we try cutting corners in an effort to be more

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competitive. That has resulted in a double whammy; increased
corrective costs as well as reduced profits. We are concerned
that the long term effects of reduced quality, whether through
rework, latent defects, communication difficulties, customer
complaints, late delivery, increased litigation associated with
claims, or simply damaged reputation may ultimately drive us out
of business.

We engage in TQM in order to manufacture products that meet or
exceed the quality requirements of the customer (Ishikawa, 1985) .
Effectively implemented, the TQM philosophy will improve
corporate health and the character of the company. It leads to
the establishment of a management system that can secure profits
even in times of slow growth while providing job security and a
fulfilling and stimulating work environment. TQM stresses
respect for fellow workers and nurturing of the human resource
which leads to greater job satisfaction and productivity.
Together these benefits should ensure the continued profitable
operation of the company.

Benefits

With effective implementation of TQM comes improved company moral
and a company-wide spirit of teamwork. Perhaps more importantly
comes a heightened sensitivity to the market and customers. This
increased sensitivity and team spirit makes it possible to build
quality into every step of the construction process and to ensure

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defect-free production. It is not just enough to find defects
and flaws and correct them after the fact. It is essential to
determine the cause of the construction defects. Once the cause
is determined and corrective measures are instituted, future
defects can be prevented (Ishikawa, 1985) . Hence quality is
built-in. TQC helps workers locate and identify the defect
causes. The TQM philosophy opens channels of communication
within companies that permit ready defect detection and
correction. TQM enhances the companies ability to discover
potential failures before they turn into disasters because
everyone is used to talking to one another truthfully. In a very
real sense, the TQM philosophy fosters an environment for probing
minds that seek out causes of failure and can determine
appropriate corrective measures.

COST

Before we go too far in our discussion of the merits of TQM and
its implementation as a management system, we need to address the
issue of cost. It goes without saying that no matter how high
the quality, if the product is overpriced it will not gain
customer support. No one will buy it. For our purposes it is
appropriate to realize that we cannot define quality or a quality
control system without consideration for cost. There can be no
quality control that ignores price, profit, and cost control. In

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other words, regardless of what type of quality control system we
institute, we need to be sensitive to the cost of that system.

It is important however that we recognize what we are truly
talking about when we refer to the "cost of quality". In most
cases the "cost of quality" is really the "cost of low quality".
The expense associated with producing defective work is a cost of
low quality. Defective work that is discovered at the end of the
project by inspection has to be corrected. In such a case, the
lack of quality has cost rework as well as the cost associated
with performing the work incorrectly in the first place. As
mentioned previously, we determined that our low quality costs
amounted to about $180,000 per year. If quality is build into
the production process, there would be no defective work, no
scrap, and no need for inspectors.

The implementation of TQM will cost money. It costs money to
establish steering committees and quality circles. There are
appraisal costs, costs of inspection, quality audits, and the
cost of overseeing the TQM development program. These are the
costs associated with defining, creating, and controlling
quality, as well as the monitoring of conformance to the quality
standards (Sugg, 1991) . Hopefully these costs lead to the
elimination of defective products, and increased efficiency in
performing every process throughout the business. We are

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reducing failure cost by investing in ways to effectively control
the process to produce a high quality product every time.

In actuality, while the implementation of quality control
programs represents an expense, the resulting production of high
quality products pays. According to the research of the
Strategic Planning Institute, companies that produce products
perceived as high quality by their customers enjoy a larger
market share and higher profits than those companies who do not
(Sugg, 1991) .

WE ARE BEHIND BEFORE WE START (Japan does it better)

For American management to engage in the concept of TQM now is
almost like starting a football game after half-time. Our
competitors have been running with the ball for two quarters
while we stood by the side line and watched. It is not fair to
say that we have just been standing still. However, it is fair
to say that the perception of the quality of American products
has been declining. The longer we wait to revitalize the quality
spirit the more difficult it will be. After all, the Japanese
have been working at TQM and its various offspring philosophies
for forty years. They are not going to take a time out while we
try to catch up. As mentioned previously, the construction
industry so far has been relatively insulated from foreign

15

competition. But with advances in technology, like robotics
applications for construction, being pursued by other countries,
it seems only a matter of time before foreign construction firms
are successfully bidding work in our own backyard.

IMPLEMENTATION

We realized that once we decided to embark on the implementation
of TQM perhaps the most important thing we had to keep in mind
was that it would not be an instant fix. Successful
implementation of TQM takes time and lots of it. As one of the
guiding principles states, "continuous improvement forever". TQM
is of itself nothing more than another management system. The
heart of TQM, the three basic principles further outlined by the
fourteen points, involves a new way of thinking that is usually
quite different from previous experience. Conversion to the TQM
management philosophy requires a tremendous effort that many
companies are unwilling to expend. It involved giving up the way
we conceived of things in the past and replacing that with a more
logical and simplistic way of quality production. We learned to
build quality into a product rather than inspect out bad quality.

While the Demming methods of TQM are universally applicable, they
cannot simply be superimposed on your organization (Walton,
1986) . The guiding principles are much the same, but the methods
of quality production of an automobile manufacturer or electric

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utility will be different from those of a commercial construction
company. Hence, every application is unique. Each company must
develop its own approach to the implementation of TQM and stick
to it. Adjustments will, of course, be necessary as learning
takes place and suppliers and customers start to understand your
new way of doing business.

Support From The Top

Absolutely essential to the successful implementation of TQM is
the unwavering commitment of top management. Only top management
can create and foster an atmosphere that encourages innovation,
pushes down problem solving responsibility, and accepts mistakes.
Our first step (in accordance with Walton's recommendations) was
to establish a TQM steering committee to develop the initial
goals for the TQM application. Top management, along with the
steering committee, is working to develop a critical mass of TQM
support within the organization. This critical mass will be the
core of support for initial TQM efforts and will demonstrate by
example the benefits of the new way.

This principle of top management support has been instrumental to
the success of the Japanese TQM efforts. The Japanese have
insisted on the participation by all, from the CEO to the line
worker. They realized early on that only top management could
instill the company-wide total quality atmosphere required to
make it work (Ishikawa, 1985) . Too often the QC efforts in U.S.

17

companies like ours have been delegated down to QC specialists or
consultants who lack the authority, vision, and leadership
capabilities of the chief executive. Without the commitment of
top management, the TQM effort will fail.

The Ryland Group, a national residential home builder and
mortgage finance company, first explored the implementation of
TQM about five years ago. The new philosophy was brought into
the company by consultants hired by the Chief Executive at the
time. Initial TQM efforts brought quality circles and other TQM
activities but failed. The failure resulted from management
being ill-prepared to handle the output of the quality groups,
the CEO's lack of a complete understanding of TQM, and his
failure to spearhead the implementation process. The workers
involved in quality circles saw the lack of management support
for TQM efforts and quickly lost interest. When that CEO retired
he was replaced by a senior Vice President from General Electric
who brought with him a thorough understanding of the TQM
philosophy and the difficulties and benefits of implementation.
Under his leadership, Ryland has adapted the TQM philosophy to
suit their own particular needs and is aggressively moving
forward with its implementation.

Commitment of Management

As previously stated, Dr. Demming realized that top management
must be committed to the TQM effort for it to succeed. Part of

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that commitment means to take responsibility for their own
actions. Dr. Demming believes that 85% of all production and
quality problems are the fault of management (Walton, 1986) .
When things go wrong, we managers must be willing to take
responsibility. An important example of this is the bead
experiment (Walton, 1986) . The bead experiment illustrates how
management holds workers to quality and productivity
specifications which are impossible while at the same time
illustrating that variation is part of every process. It is
futile and disheartening for managers to tell workers to increase
quality or productivity within an out of control system without
providing them the tools or training needed.

One of the biggest problems we face, especially during the
implementation phase of TQM, is convincing workers that
management is serious. Two of the biggest indicators of
seriousness are time and money. How much of the our time is
dedicated to the quality effort? Is management committing money
to training and implementation that is required to support TQM
implementation? The typical worker has been around long enough
to tell by our actions whether or not TQM will be just another
temporary management fling like Management By Objective or Zero
Defects.

To be effective management needs to have a thorough understanding
of TQM ahead of everyone else in the company. We need to be

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familiar with all the issues involved and how other companies
(particularly the Japanese) have implemented TQM effectively.
Only then can we custom tailor our companies approach to quality
(Ishikawa, 1985) . More than any one else in the company,
management needs to go through a thought revolution process.
Management needs to think in the following way to make TQM
successful; first, we need to realize the importance of the
happiness of the people connected with us. If people are not
happy in their work, they will not produce. Second, quality
drives everything. Producing poor quality products will drive us
out of business. Third, the customer is the reason we are in
business. Without them there is no business. That is not to say
that the customer is necessarily always right, but that the needs
of the customer are. The Ryland Group places all their focus on
the concerns of the external customer. They make decisions based
on whether or not the particular action or revised method will be
of value to the customer. The customer must be satisfied with
the goods and services they buy. Forth, the next process is your
customer. This focuses on the important concept of both internal
and external customers that will be discussed in greater detail
later. Fifth, using facts and data to make decisions. Hunches
and gut feelings may be used as a check but are no longer the
basis for making important business decisions (Ishikawa, 1985) .

Management needs to realize that with TQM comes enlightenment and
empowerment of subordinates as well as open channels of

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communication that are fostered by the company leadership. New
ideas will flow up from workers and quality circles that require
action from management. When we fail to act on improvements,
they will be criticized and the workers faith in the new way will
be harmed. Management may view this as a potential threat but
must keep the good of the company in mind and remember that they
are all working toward the same goals.

Start Up

One of the toughest hurdles of TQM implementation is getting

started. As noted previously, top management needs to be fully

committed before the effort starts. Top management along with

the steering committee must start looking at ways to tailor the

TQM philosophy, within the guidelines of the fourteen points, to

their particular company. Ryland does not follow the fourteen

points directly, but customized their approach to focus on what

adds value to the customer. Once that effort is under way,

senior management needs to start putting the TQM approach to

work. We followed the 1985 Philadelphia Area Council for

Excellence outline of a nine phase approach to TQM

implementation. It goes as follows:

Phase One; Education and/or reeducation of top management in
the Demming method.

Phase Two: Systematic review of targets of opportunity.
target area for improvement and decide how to expend those
efforts throughout the company.

Phase Three: Planning for the first project. Pick one that
is small and achievable. Set up and educate a team to make
it happen.

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Phase Four; First project is carried out. Team studies and
defines project and reports to steering committee on regular
basis.

Phase Five: Other preliminary implementation projects are
planned and carried out. Repeat Phases Three and Four for
other project.

Phase Six: Top management develops a comprehensive plan, a
major escalation, especially in terms of the number of
people who will be affected.

Phase Seven: The first large-scale wave of projects is
begun.

Phase Eight: Succeeding waves of projects are done.

Phase Nine: Institutionalization. This occurs when all
Fourteen Points are the natural way to carry out operations.
Constant improvement is a way of life.

Defining Quality and Quality Control (for Your industry)

One of the first things that must be done during the start-up
stage is to determine what guality means to your company. What
is a minimally acceptable level of quality. You need to know
where you are now so that you can determine where you can start.
This determination can be made by conducting a quality audit.
You may utilize the checklist for the Demming prize application,
hire a consultant to conduct the audit, or perform a presidential
audit (Ishikawa, 1985). We followed Sproles' example of a Self-
Audit Checklist which is included as appendix a. Whichever
method is utilized, you must determine to what degree your
present system assures quality in all products so that a customer
can buy them with confidence and use them for a long period of
time with confidence and satisfaction.

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However defined, quality must be designed into the product or
service to be provided and it must be assured through quality
control. Quality control is done for the purpose of realizing
the quality which conforms to the customer's requirements. To
determine what those requirements are we must define what the
"true quality characteristics" are for the customer (Ishikawa,
1985) . Once we determine the true quality characteristics we can
deal with how to measure such characteristics. The
specifications may indicate the owner wants one thing or another,
but what does final product performance need to be? What is
necessary is that the final product be fully functional in the
way the customer expects. Our quality control standard should
not seek merely to fulfill national standards and company
standards, but set to meet the quality requirements of the
customer. Effective quality control then "...is to develop,
design, produce and service a quality product which is most
economical, most useful, and always satisfactory to the consumer"
(Ishikawa, 1985) .

To buy with confidence a customer must have a sense of trust in a
particular product from a particular company that has a record of
having provided reliable products for a long period of time. To
establish such a reputation is not an overnight process and takes
years of dedication to the quality effort. Continuous
improvement forever. The only way for that to happen is for
everyone in the organization to participate and promote quality

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control, including especially top executives, all divisions
within the company, and all employees.

To stay abreast of the quality concerns of its customers, Ryland
has adopted an aggressive customer survey system. Ryland
conducts a comprehensive survey of new home owners at 3 0 days,
120 days, one year, and soon, three years after closing. These
surveys provide Ryland with feedback about what they are doing,
right or wrong, as viewed by their customers. They use the
results to change designs, materials, or other factors to better
suit the needs of their customers. In addition, Ryland surveys
consumers who have looked considered a Ryland product but buy
from another home builder. This provides insight to what they
may not be doing that causes a loss of customers.

Determining Problem

Once you have determined the quality control standard, accessed
the current quality levels, and decided on an initial project,
you must get down to the business of determining specific
problems. Before you can hope to find a remedy you must
determine a cause. Remember, TQM involves problem prevention
vice problem solving. That means we design problems out of the
manufacturing or production process. We want people performing
error free work. Here is where statistical methods can be
helpful.

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System Variability, the Importance of Statistics

The reason for utilizing statistical methods is that making
business decisions on assumptions or incomplete information
causes trouble. Remember the parable of the red beads? Workers
cannot perform the impossible. Even with the same tools, task,
and talent output varies. Only proper use of statistical methods
brings a process under control.

If we're going to use statistics, we must figure out what to
measure. Start with flow charts and cause-and-ef feet diagrams.
Flow charts describe exactly how a process takes place so that
everyone understands it. Analysis of the flow chart indicates
where problems may take place. We should eliminate any activity
in the process flow that does not add value to the process. The
cause-and-ef feet diagram is used to examine factors that may
effect a given situation. The effect being the desired or
undesired outcome produced by a system of causes (Walton, 1986) .
From these we can determine what data we need to collect. With
the collected data we can prepare a Pareto Chart. The Pareto
Chart is used to establish priorities. We naturally want to
correct the item or situation causing the most problems or the
one that is most frequently contributing to a defect.

A construction example of the use of these methods could be the
process of placing a concrete beam. The flow chart describes the
entire process, in proper sequence, from ordering the material,

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to removing the fins from the completed beam. The cause-and
effect diagram may focus on, among other things, cost overruns or
delays. For a cause-and effect diagram covering costs, some of
the causes producing the undesired outcome of cost overruns may
be late materials, material waste, under-productive labor, loose
forms, or rework. After data is collected for the occurrence
frequency and or associated cost of each of the identified
causes, a Pareto Chart can be developed. The Pareto Chart
identifies which cause is producing the greatest amount of cost
overruns. It may be that late materials is causing fifty percent
of all cost overruns. That being the case, we would endeavor to
correct the late materials problem first. That correction alone
should cut our beam placement cost overruns in half.

The other types of charts typically used in the TQM process are
Run (Trend) Charts, Histograms, Control Charts, and Scatter
Diagrams. The Run Chart is used to chart data over a period of
time to look for trends. For example: the construction time for
a "standard" beam form. The Histogram is used to chart the
frequency of occurrence. For example: how often is material one,
two, three, or more days late. The Scatter Diagram is a method
of charting the relationship of two variables. For example: how
many days late is form material that is scheduled to be delivered
on Monday, Tuesday, Wednesday, and so on. Finally, the Control
Chart is simply a run chart with statistically determined upper
and lower control limits. This chart illustrates the fact that

26

all processes contain variation. There are common causes for
variation such as machine limitations and worker's ability, but
there are also special causes for variation. These could include
late materials, an untrained worker, a machine breakdown, or many
other factors. Once the special causes have been eliminated and
the system has been brought into statistical control, management
can begin to address and reduce the common causes and reduce the
system variation (Walton, 1986) .

Each of these charts or diagrams have special applications that
can be employed when needed to help solve a particular problem.
But it is very important to realize that use of statistical
methods and charting should only be undertaken when the results
can be used to add value to the product or for the customer
(Wisda & Davis, 1992) . Collecting data and making charts for
their own sake is wasteful.

Problem Solution
Once a solution for a particular construction problem is
determined, it should be standardized to ensure every crew
engaged in the same activity is using the same method. The whole
point of TQM is to design quality into the construction
(manufacturing) process. In other words, a top quality product
will be the result of a construction process that is in control
and has had all the potential causes for defects eliminated from
the process. Once such a defect-free system is established it

27

should be adopted company wide, where appropriate, so that all
crews engaged in similar work can take advantage of it (Simon,
1991) . However, this again can not be done without full
consideration of the situation. Often problems exist that are
unique to a given location or application. Solutions to these
problems should only be applied to similar situations or, where
adaptable, to other situations.

Start Up Problems

Many companies experience trouble implementing the TQM
philosophy. Much of this difficulty comes during the start-up
phase and is due to employee disbelief and lack of support by
management. If employees detect that we do not take TQM
seriously they will not either. That happens when workers make
viable suggestions that are not implemented and when we talk
about implementation but spend all of our time on other
activities. This supports the belief that you cannot motivate
people to work, you can only create an environment that is going
to make them want to perform better and is consistent with the
Expectancy Theory of Motivation. If management does not provide
this atmosphere during the implementation phase, TQM is doomed to
failure.

A good example of this is the Quality Circle concept. Not many
years ago, many companies embarked on the quality circle method
of building quality products. The idea was that the circles of

28

workers would trouble shoot problems and recommend solutions.
The typical circle was lead by a line manager. What happened all
too often was that viable suggestions were in fact developed but
management failed to act. Often free expression of ideas failed
to materialize because of the power structure and inequities
within the quality circle itself. The circle leaders/managers
spent most of their time concerned with production issues and
viewed the quality circles as a burden. Consequently, workers
quickly realized that senior company management did not take
quality circle seriously and lost interest in them. They simply
fell by the wayside (Waddell, 1981 and Wisda & Davis, 1992).
This is the very thing that Ryland suffered during their initial
experience with implementing TQM.

Some of the start-up difficulty is that it is disheartening to
realize there is so much room for improvement. Under the old
system we simple rejected end products that failed to meet
requirements (those that failed inspection) or reworked them.
That was easy. TQM requires us to design defects out of the
process. Once we start to examine the process as previously
described, we start to appreciate just how many causes there
really are for low quality. Particularly in the construction
industry where each new project represents a host of new and
often unique problems. Only then do we grasp the magnitude of
the undertaking before us. Many companies will quit right there.
They fail to realize that TQM is not a miracle drug (Ishikawa,

29

1985) . Successful implementation of the TQM philosophy takes
years of continuous hard work.

MORE DETAILS AND GUIDANCE

The following discussion is intended to provide some additional
thoughts on the implementation of the TQM philosophy. The areas
discussed are based on the Fourteen Points and the deadly
diseases.

Focus

In order for TQM to work in a company, the company must remain
focused on the long term. While it is true they must do what is
needed to stay in business today, the company must look to the
future and produce a product that will have markets down the
road. The company must develop a reputation for high quality and
customer service that surpasses the competition and keeps
customers coming back. A construction company must be actively
exploring ways that innovative technology can be utilized in the
construction environment rather than waiting until a potential
technological advantage passes them by. Japanese construction
companies are actively pursuing the use of computer simulation
and robotics for their work while little has been accomplished in
the U.S. along those lines.

30

One management tool utilized by many companies that hampers the
ability to focus on long term goals is the annual performance
appraisal system. It focuses on short term goals and individual
performance. Workers learn what is necessary to maintain their
rating and have no incentive to go beyond that. Top ranked
workers tend to remain on top regardless of performance.
Performance appraisals may lead to individual recognition when,
most often, many people have contributed to the effort. TQM
calls for the implementation of a new rating system. One that
focuses on the long term goal, recognizes the contributions of
all employees, as well as the imperfections in the productive
process itself.

Continual Improvement

As mentioned previously, TQM involves continual improvement
forever. This causes a chain reaction. As we improve the
process, we make fewer mistakes, there is less waste, we improve
the quality, costs go down, we tighten the control limits and
continue to improve the process (Walton, 1986) . Continual
improvement focuses on what went wrong when a problem occurs,
rather than who did it. We should not be interested in placing
blame, but rather in correcting the cause so that the problem
does not happen again.

TQM is a continuous process. We cannot adopt TQM methods only
when we need them, nor can we drop them and revert to the old way

31

of fighting fires when times get tough. Even though we make
substantial strides toward improved quality, it is never "good
enough". We might say 99.9% defect free is acceptable quality
until we realize that a 99.9% standard would leave us without
electricity for nine hours per year, two unsafe landings per day
at O'Hare Airport, or 22,000 checks deducted from the wrong bank
accounts each hour (Simon, 1991) . The belief is that current
performance can always be improved upon no matter how good it
already is. Once we meet our current goal, we set an even higher
standard and start to work toward that goal (Sproles, 1990) . We
will never reach perfection but we will continually try.

Utilize Worker Knowledge

One of the primary guiding principles of TQM is that employees
want to do a good job. The employees of a company are their
source of strength. Field workers have the construction
experience and usually know how to do the work better. Much like
a ship at sea that would go dead in the water without the crew,
so too would a construction company cease to operate without the
skilled tradesmen. Many company officers do not know the first
thing about placing formwork. How then can they effectively
solve formwork problems?

TQM stresses a management philosophy that nurtures human
resources and shows a respect for humanity. We must go beyond
viewing workers as simply a pair of hands by trying to win their

32

minds and hearts. Gone are the days when the Taylor Method of
Scientific Management can be considered for the construction
industry. Taylor did not recognize the hidden potential that all
workers possess. His method ignored humanity and treated workers
like machines. When this happens in practice today, work becomes
uninteresting and unsatisfying. Absenteeism and turnover
increases and moral decreases (Ishikawa, 1985) .

We can begin to encourage and harness worker "intrapreneurism" ,
the independent entrepreneurial spirit, of employees through
empowerment. We empower workers by tapping into their knowledge
for improvement and executing their suggestions (Greenwald,
1992) . We encourage them to think for themselves and to discover
better ways to perform the work. This is a shift from the top-
down management approach which may be unsettling for middle
managers. Managers may resist this action because they view it
as a threat to their security. We must realize we are working
together with the tradesmen to increase our competitive position
in the marketplace. To be effective, the company needs to remove
barriers to full employee utilization.

One effective method of increasing employee involvement and
tapping into the workers knowledge and skill is through the
establishment of management teams. Teams are set up at each
level in the construction organization from the crew level to top
management. The team leaders for a particular team can

33

themselves be members of teams at the next higher level. This
forms a network of interlocking teams that are responsible for
improving the operations over which they have responsibility
(Sproles, 1990) .

A construction organization may have up to three different types
of teams. The first is an organizational team which is made up
of individuals who have similar jobs. The masons on a given
project may form this type of team. The second is a process team
which is made up of workers with different skills but who are
working on the same process. An example of this type of team
might include the carpenters, laborers, masons, and rebar workers
on a concrete crew. The third type is a task force or problem
solving team. These teams are established on an as-needed basis
to focus on a specific problem, and make recommendations for
improvement. Once the assignment is completed, the team is
typically disbanded (Sproles, 1990) .

Working With Suppliers

The basic tenant behind working with your supplier is that you
can not build a top quality product with defective materials no
matter how hard you try. The quality of the finish product is
only as good as the quality of the materials that are used to
build it. It is the suppliers responsibility for the assurance
of quality that will give satisfaction to the customer. To
obtain continued high quality from our suppliers we must work

34

with them. They need to understand what we need. It is our
responsibility to provide the supplier with clear and detailed
information regarding our material requirements so that he or she
can know precisely what to manufacture. This means more than
just giving them a copy of the specifications. Just like we have
customers who have specific needs, we are the customer of our
supplier. In both cases the customer and supplier must agree on
the meaning of quality and how it will be determined beforehand.
(Ishikawa, 1985) .

One of the biggest steps we can make is to begin quality control
education of our subcontractors and suppliers. We work with them
for continual improvement of material quality while we also work
toward one or few suppliers. Only through nurturing of the
relationship with one or two suppliers can we hope to maintain
the quality and service that we require. Just because we, as the
Prime Contractor, are often required to work in the competitive
bidding environment does not mean that we have to treat our
suppliers likewise. If we instead choose suppliers and
subcontractors on the basis of quality, service, and price, we
can possibly prevent defective work later on that may require
rework and increase project costs (Sugg, 1991) .

Ryland, in many cases, provides exclusive contracts with
subcontractors and suppliers. For instance, they may contract
with one subcontractor to construct all the foundations in a

35

giving geographic area for a period of three years. As part of
the contract, the subcontractor or supplier must become actively
involved in Ryland's quality process. Such involvement includes
internal quality improvement, participating in Ryland's quality
training program, and participating in Ryland's quality
improvement process. Selection of contractors for such exclusive
relationships is partially based on the subcontractor's internal
quality activities like those listed below.

As a guide for selecting and maintaining a relationship with a
supplier we should consider the following points (Ishikawa,

1985) :

1. Does the supplier know our TQM management system?

2. Does the supplier has a stable management system that is
well respected by others?

3. Does the supplier maintains high technical standards?

4. Can the supplier deliver those materials required?

5. Does the supplier have the ability to control the amount
of production to meet delivery requirements?

6. Is there any danger of the supplier breaching corporate
secrets?

7. The price is right and the delivery date can be met
precisely.

8. The supplier is sincere in meeting contract provisions.

Focus on Customer

As mentioned previously, the customer is the most important part
of our business. His or her satisfaction is instrumental to our
success. What many fail to realize is that we have not only the

36

traditional customer, those outside the company, but also
internal customers. The first of those is the one that buys our
finished product. To meet the needs of those customers, which is
essential if we hope to have them return, we must find out what
they think is right or wrong with what we do.

However, to use them as our quality control system is the wrong
approach. More often than not they will let us know of their
dissatisfaction with their money. They simply will not buy from
us again and we might not even know they are gone or why
(Pouskouleli, 1991) . In the construction industry one lost job
could represent a loss of thousands to hundreds of millions of
dollars in gross revenues. Worse yet, a dissatisfied owner may
tell his friends and associates about his dissatisfaction with
our product. The result would be a potential multiplication of
our missed opportunities. We therefore should treat the end
customer as the most important part of our production process.
We must make sure we know what the customer wants before we build
it and the customer knows what he wants when ordering. We must
always be keenly attentive to the owners requirements, and must
anticipate the opinions of the owner as we establish our own
construction standards.

The second type of customer is the internal one. Every person
who performs value added work has a customer. Here a good
definition of customer is the person who is next in the chain of

37

work development that must take the previous person's output and
add value to it to produce a product for their customer (Sproles,
1990) . This emphasizes the supplier/ customer chain relationship
of value added work. Work comes to one person from the person
ahead of him or from the preceding process. His or her task is
to add his work and then transmit it to the person following him.
The next process is our customer (Ishikawa, 1985) . Just like
with material supplied by an external firm, an individual in the
production chain cannot build high quality into his portion of
the work if he was supplied with defective materials to work
with. Understanding of this relationship ensures that everyone
becomes geared toward the "customers" requirements. Whether we
are speaking of internal or external customers, it is most
important that we direct much of our efforts to listening to,
understanding, and exceeding their requirements (Allbregtse,
Hejka, & McNeley, 1991) .

As stated previously, Ryland focuses on value added for the
external customer only. Their belief is that process or product
improvements that add value for the customer will necessarily
cause improvements in the internal supplier/customer chain
relationship. But perhaps more importantly, focusing on the
external customer creates increased customer awareness by
employees and increased customer satisfaction that leads to a
better reputation and ultimately more business.

38

Dealing With Complaints

Equally as important as the quality of the product itself is the
quality of service that the customer receives. One area where
service is particularly important is dealing with a customer's
dissatisfaction. How does the company respond to a complaint?
Here the attitude and direction of top management is essential.
The guiding principle of all employees regarding customer
complaints must be to resolve the problem quickly and with good
faith. Defective material or products must cheerfully be
replaced immediately to keep the customer happy. Perhaps more
importantly, the cause of the complaint or defective product must
be determined so that it will not happen again. We must correct
the cause of the complaint rather than just fix the complaint.

CONCLUSION

A commercial construction company can no more stand still, in
their development, than can any other type of service or supply
company. To do so means they will fall behind their competitors.
Just as companies upgrade their equipment to new and more
efficient models, and adopt new technologies, so too must they
change their management style to better meet the needs of their
customer. The Total Quality Management philosophy is the only
management style which focuses on high quality and ever-
increasing customer satisfaction through employee involvement and
continuous process improvement.

39

Appendix a.

SELF-AUDIT CHECKLIST

1. Leadership

a) Are senior executives personally involved
in:

Goal Setting?

Planning?

Reviewing quarterly plans?

Recognizing and rewarding successes?

Meeting with customers' suppliers?

b) Does the organization:

Have a written set of values?

Communicate values throughout the

organization?

Have evidence that values have been
adopted (surveys, data, etc.)?

c) Do strategies exist to:

Involve all levels of management on

quality improvement?

Promote cooperation among units?

Review quality plans and assist units
that are not performing according to
plan?

2. Information and Analysis

a) Scope and types of data that exist for:
Customers

Internal process

Employees

Health and safety

Benchmark

Quality results

Supplier quality

b) Data analysis

Does analysis support key objectives?

Does analysis lead to changes in types of

data collection?

Is data readily accessible to those who
need it?

3. Strategic Quality Planning

a) Data used in planning includes:

Customer requirements

Prices capability

Competitive/benchmark data

Supplier data

b) Contributors to planning:

Employees

Suppliers

Customers

c) Planning process is:
Systematically evaluated and improved

d) Implementation:

-Projects Implemented

-Resources Committed

-Requirements deployed to work units and
suppliers

4. Human Resource Utilization

a) Human resource management:

-Plans integrated with quality

requirements of business plans

-Key strategies exist for increasing the
involvement and effectiveness of all

employees

-Employee- related data used to evaluate
and improve human resource management

b)

c)

d)

e)

Employee Involvement:
Teams exist:

Functional units

Cross- funct i ona I

Customer

Strategies exist for:

Empowerment

Innovation

Increased employee

respons i bi lit i es

Quality education and training:
-Strategies exist for determining
training requirements by category of

employees

-Knowledge and skills are reinforced

-Training is evaluated for effectiveness.

Employee recognition:

-Key strategies exist for recognizing

groups and individuals

-Recognition reinforces quality

Employee well-being and moral:
-Health, safety, and employee
satisfaction are included in quality

improvement activities

-Underlying causes of accidents or
dissatisfaction are analyzed

5. Quality Assurance of Product and Services

a) Design and introduction of quality
products and services:
-Customer requirements are converted into
product/process requirements

-Control plans exist for:

Key product processes

Key services processes

Process and quality control:
-Strategies exist to ensure that

processes are adequately controlled

-Focus is on identifying root causes of

process upsets

-Statistical thinking and analysis are
used in process control and improvement.

b)

c)

Continuous improvement of processes,

products, and services:

-Approaches include:

-Evaluation of process steps

-Assessment of alternative

processes

-Evaluation of new technology

-Use of benchmark data

-Continuous improvement process is

integrated with daily operations

Quality assurance and quality

improvements of suppliers

-Prices exists to assure that suppliers

meet quality requirements

-Strategies exist to improve the quality

and responsibilities of suppliers

6. Quality Results

a) Quality of products and services

d)

40

-Key product and service measures show

i mpr ovement

-Comparisons are made with industry world

leaders

-Key quality measures in place for
business processes, operations, and

supplier services

b) Supplier quality

-Key measures in place for supplier

qua I i ty

-Suppliers demonstrate quality
improvement_

7. Customer Satisfaction

a) Knowledge of customer requirements

-Process for identifying customers

-Prices for identifying products and
service quality features to meet
customers needs

-Process to ensure that requirements are

known throughout the company

-Follow up to determine customer
satisfaction

-Well-defined objective measure of
customer satisfaction are in place

b) Complaint resolution

-Process exists to ensure that customer
complaints are evaluated and acted upon

-Complaints are handled properly

c) Customer satisfaction determination
-Customer satisfaction information is

used on quality improvement

-Process exists to evaluate customer
satisfaction

41

Appendix b. References

Aalbregtse, R. J., Hejka, J. A., & McNeley, P.K. (1991). "TQM:
How do you do it," Automation. Vol. 38 (8), 3 0-3 2.

"AGC promoting quality," Engineering News Record. (1991) Vol. 226
(12)

Allen, L. G. (1990) . "Costs & Inspection Time Nosedive As Quality
Takes Off," Automation. Vol. 37 (12)

Dehmlow, L. (1991). "Is Total Quality the Answer," Construction
Quality Management.

Evans, F. W. (1991). "Looking Out For Number One," Public Power.
Vol. 49 (5), 27-28

Greenwald, J. (1992). "Is Mr. Nice Guy Back?," Time. Vol. 139
(8), 42-44.

Ishikawa, K. (1985) . What is Total Quality Control? The Japanese
Way. Prentice-Hall, Inc. Englewood Cliffs, N.J.

Ivancevich, J. M. (1989) . Management Principles and Functions. R.
R. Donnelly & Sons Co. 8-14, 368-385

Maloney, W. F. (1990). "Framework for Analysis of Performance,"
Journal of Construction Engineering and Management, Vol. 116,
(3) ,405-415

McKenna, J. F. (1991). "Excellence in Government," Industry Week.
Vol. 240 (21)

"Performance contract calls for high level of quality,"
Engineering News Record. (1990), Vol. 225 (23)

Pouskouleli, G. (1991) . "Total quality management and
competitiveness," Engineer Digest, Vol. 37 (6), 14-17.

"Quality Examples," Engineering. (1991), Vol. 231 (5)

Rosenfeld, Y., Warszawski, A., Laufer, A. (1992). "Using Quality
Circles To Raise Productivity And Quality Of Work Life," Journal
of Construction Engineering and Management, Vol. 118 (1)

Simon, R. C. (1991) . "Total Quality Management: A Formula for
Success," American Consulting Engineer. 15-21.

Sproles, G. W. (1990) . "Total Quality Management Applied In
Engineering and Construction," Engineering Management Journal,
Vol. 2 (17), 33-38.

42

Sugg, D. (1991) . "Focus on Quality Management, Does Quality
Cost," Plating and Surface Finishing. Vol. 78 (7,8,9), 10 & 32,
17 & 91, 58 & 65.

"Total Quality Leadership Update," Navv Civil Engineer. Vol. 300
(3)

Waddell, H. H. (1981). "Quality Circles in the Construction
Industry," Proceedings of a "Quality Circles Users Workshop" held
by the Manufacturing Industries Division of the Institution of
Manufacturing Engineer in Association with the Institution of
Quality Assurance, Mechanical Engineering Publications LTD,
London, 16-19.

Walton, M. (1986) . The Demming Management Method. The Putnam
Publishing Group, New York, NY, xi-249.

Wisda, A., Davis, B. J. (1992). Personal interview 28 February,
Ryland Group, Inc. Columbia, MD

43

"MM* "'^Quality Hana8aKnt' — t-

Thesis

B337 Beckwith

c.l Total Quality Management.