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Full text of "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 process 1 . 



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. 

6 



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. 

8 



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. 



10 



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 

11 



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 

12 



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 



13 



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 



14 



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 

16 



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 

18 



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 

19 



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 

20 



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. 

21 



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 Y our 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. 



22 



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 

23 



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 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. 



24 



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, 

25 



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.