1.

2 Objectives of the Study

This research is the preliminary study of a doctorate research on overcoming the problems of implementation of quality management in construction projects in Malaysia. It is an exploratory study in nature aimed to ascertain perceptions and experiences of practitioners in the industry in the below: (1) Practices of quality management in construction projects from the perspective of tools and techniques applied; (2) Level of commitment of management towards the implementation of quality management in construction projects; (3) Problems in relation to the implementation of quality management in construction projects.

1.6 Limitations of the Study

Research findings are dependent upon a valid choice of research methodology, the reliability of the data gathered, and the applicability of the statistical tools used (Walker, 1997). The authors are aware of the limitations of this study and would like to highlight as below: (1) The sample is too small for quantitative analysis using statistical tools; (2) The sample was obtained through convenience sampling approach which has no controls to precision (Cooper et al., 1998); (3) The authors had no control to ensure the most appropriate person was assigned by each company to be interviewed although they had done their best; (4) The willingness of the respondents to reveal weaknesses in their respective organization was uncertain; (5) Due to work commitment, some respondents could not fully concentrate on during the interview sessions, this caused the intended in-depth interview could not be fully achieved.

3.1 The Need for a New Approach uality in construction results from many factors such as dedication to service in construction, qualified people trained in design, inspection and modern construction techniques, but the single most important factor that affects the overall quality in construction is the organizational integrity of the industry. Traditionally, the design firms have had little or no organizational interaction with the general contractors during the design phase of the project, and the general contractor usually arrives on the scene long after the design work is started, or most frequently, after the design work is completed. Generally, the lack of input from the contractor's viewpoint results in drawings that are released with design uncertainties. This margin of uncertainty embodies such factors as incomplete information about certain performance characteristics of components, construction methods and techniques, which directly affects the quality and performance of the project. The degree of uncertainty is related to the cultural tolerance for errors that have developed in the construction industry, and accompanies an

unwittingness about the high cost and quality consequences of incomplete or unclear designs. However, as the surging technology rapidly generated an immense variety of novel construction material and construction techniques, and as the economic conditions required larger and more complex projects, quality and high costs are increasingly becoming a concern. Recognizing the potential for problems, many design firms and construction companies have begun to review their quality assurances procedures and are rethinking their approach to quality in the construction industry. Currently, new approach of organizational management is being promoted within the construction industry in general and high-use building construction in particular to achieve high quality in design and construction of a project, which is called Construction Management Approach. With this approach, development of good quality culture will be possible. Owners, designers and contractors will take quality seriously, preventive disciplines will be widely used and camaraderies will be observed throughout the industry. This paper will discuss this approach in organizing for and managing quality during design and construction phases of a project. 3.2 The Investment Required: 2012-2017 Indian planners have rightly realised that development of physical infrastructure will boost the economy as well as the image of the country. The 12th Five Year Plan (2012-17) has allocated around Rs 60 lakh crore to the overall development of construction sector. Out of this huge investment, private sector also is supposed to play a major contributory factor and almost all infrastructure projects are supposed to be executed under PPP model. The current economic scenario in India is not very positive due to various domestic and external factors. The slowdown of economy has naturally affected the growth of construction industry also. Many mega projects involving huge investments have been held up due to delay in getting clearances for environmental issues, land acquisition, forest clearances, funding issues and so on. Adding fuel to the fire, Government of India, has also banned sand dredging. 3.3 Current Status of Construction in India After recording a spectacular growth of over 12%, more than the countrys GDP in the past half decade, the Indian construction sector all of a sudden lost stream in last fiscal largely due to global financial turmoil. Not just this, the turmoil tremors created multiplier impact across sectors including steel, cement, power, petroleum, aluminum, IT and ports, besides badly Bruising the Indian economy. But few sectors such as telecom, urban infrastructure, railways, oil and gas, which are also generating large share of construction activities have not been affected badly. These segments have registered a noticeable growth in project orders from centre, states, and local firms. However, orders from overseas firms have drastically dwindled.

Current Global Scenario

Currently, the global economy is in severe slowdown mode amidst deepening credit crunch and upsetting developmental targets of economies across the world. In the prevailing scenario, infrastructure remains a top priority for addressing developmental gaps as it is considered omnipotent with potentials of lifting economies out of the financial turmoil. The governments around the world are pumping money to generate demands for goods and services by creating jobs through higher spending into physical and social infrastructure. Likewise, the Indian government on its part is not lagging behind on this score and has taken concrete steps to revive the sector to regain its past glory. 3.1 2 Railways Indian Railways is rapidly consolidating its position and staging a spectacular turnaround largely due to an efficient utilization of resources through increased wagon-loads strictly sticking to its time schedules, and more rational pricing. An investment outlay of Rs. 2,510 billion has been proposed for the Eleventh Plan period, of which around 67% is proposed to be mobilized through internal generation and extra-budgetary resources. Huge opportunities are in the offing in the form of upcoming dedicated freight corridor (DFC) and the Delhi-Mumbai Industrial Corridor running along with it, as well as the metro rail projects in about a dozen selected cities of the states.

Infrastructure is being upgraded by way of new railway line projects, gauge conversion,

doubling, construction of terminals and logistic parks. As per the eleventh Five Year Plan Working Group Report, the total fund required for capacity enhancement projects during the plan period is Rs. 544 billion, apart from Rs. 70 billion for national railway projects. In addition, huge construction opportunities are also available for rail-road connectivity and other capacity augmentation projects being undertaken by the Rail Vikas Nigam Limited (RVNL). Major opportunities opened up in the modernization projects of 26 railway stations, including those of Delhi and Mumbai to be upgraded on the PPP model. The Indian Railways has decided to attract private investments by allowing areas around stations and above platforms to be commercially developed. This includes separation of operational passenger handling areas from the proposed commercial space as is the case in airports with an estimated investment of about $500 million each. Vitally, this segment has not been affected by the ongoing global financial crisis because they are funded by the government directly from its own resources. The only noticeable impact can be seen in the segment is the slowdown in freight traffic, which may affect the internal resources of Indian Railways. That apart, the Dedicated Freight Corridor (DFC) is said to be the biggest venture of Indian Railways to date, envisaging construction of dedicated freight lines on the eastern and western sides of the country, covering 2,729 km through seven states. The two corridors will be interlinked at Khurja and will require a total investment of Rs. 372.18 billion. A special purpose vehicle (SPV), DFC Corporation of India (DFCIL) was set up in 2006 to implement the project with a paid up capital of Rs. 500 million.

Ports
Size of the Initiatives
With 12 major ports and 187 minor ports, 7,517 km long Indian coastline plays a pivotal role in the maritime transport helping in the international trade. Traffic handled at major ports during April 2008 to January 2009 is recorded to be 436686 units. The ports in India offer tremendous scope for international maritime transport both for passenger and cargo handling.

Target
The Government of India targets to increasing the cargo handling capacity of major ports by two folds to reach 1.5 billion metric tonnes (MT) by the year 2012. This will be achieved at

an investment of around USD 25 billion through public-private partnerships. A Crisil research on Indian ports and maritime transport estimates that ports will grow by 160 per cent over the 201112 period. Cargo handling at the major ports is projected to grow at 7.7% per annum (CAGR) till 2011-12 and the cargo traffic is estimated to reach 877 million tonnes by 2011-12, whereas the containerized cargo is expected to grow at 15.5% (CAGR) over a period of 7 years. The New Foreign Trade Policy envisages doubling of Indias share in global exports in next five years to Rs.675000 crores (USD 150 billion). A large portion of the foreign trade to be through the maritime route: 95% by volume and 70% by value

Approach
Indian Government plans to bring a new orientation to encourage the private sector to come forward in developing port activities and operations. The goal is planned to be achieved through numerous initiatives and policies. Many international port operators are invited to submit competitive bid for BOT terminals on a revenue share basis, which has attracted foreign players, such as Dubai Ports International (Cochin and Vishakhapatnam), Maersk (JNPT, Mumbai) and P & O Ports, (JNPT, Mumbai and Chennai), and PSA Singapore (Tuticorin). The National Maritime Development Plan (NMDP) has been set up by the Indian government to improve facilities at all the 12 major ports in India. At an investment of about US$ 12.4 billion, by November 2009, many projects are expected to be completed. This includes ambitious projects, such as the first phase of the international container transshipment terminal (ICTT) at Vallarpadam. Kochi port is being developed as a transshipment hub for India.

Policy
The government has established firm policies, such as 100% FDI under the automatic route is permitted for port development projects, 100% income tax exemption for a period of 10 years. A comprehensive National Maritime Policy is being formulated that will lay down the vision and strategy for development of the port sector in India till the year 2025. The ceiling for tariffs charged by Major ports/port operators will be regulated by Tariff Authority for Major Ports (TAMP).

Initiatives

Government Initiatives The Government of India has undertaken the the expansion and modernization of ports on a priority basis as part of its initiatives in the up gradation of Indias infrastructure achieving the targeted growth rate. The government has initiated numerous plans, which includes;

Formulation of a National Maritime Development Policy to facilitate private investment, improve service quality and promote competitiveness, and US$ 11.33 billion has been allocated for the same. An investment of more than US$ 9.07 billion will be made by 2015 for 111 Shipping Sector Projects. In 200809, the Ministry of Shipping is going to launch 10 major expansion projects at an estimated investment of US$ 1.06 billion, 60% of which is allocated for the Chennai mega container terminal. Permission for 100 per cent foreign direct investment (FDI) for port development projects under the automatic route. 100 per cent income tax exemption is provided for a period of 10 years for port developmental projects. Opened up of all the areas of port operation for private sector participation. Increase in the rail connectivity of ports with the domestic market. The experience of operating berths through PPPs at some of the major ports in India has been quite successful. It has, therefore, been decided to expand the programme and allocate new berths to be constructed through PPPs. A model concession agreement is being formulated for this purpose. The Government has also decided to empower and enable the 12 major ports to attain world-class standards. To this end, each port is preparing a perspective plan for 20 years and an action plan for seven years. A high level committee has finalized the plan for improving rail-road connectivity of major ports. The plan is to be implemented within a period of three years. Further, changes in customs procedures are being carried out with a view to reducing the dwell time and transaction costs. The government has also delegated powers to the respective Port Trusts for facilitating speedier decision-making and implementation. At the same time, several measures to simplify and streamline procedure related to security and customs are been initiated. The National Maritime Development Programme is expected to bring a total investment of over Rs.50,000 crore in the port infrastructure. Such improvement in the scale and quality of Indian port infrastructure will significantly improve Indias competitive advantage in an increasingly globalized world.

Private Participation

A leading private shipyard, ABG Shipyard has decided to set up a greenfield shipyard in south Gujarat with an investment of USD 255.58 million. The new shipyard will be set up over 300 acres. Gujarat-based Adani group is setting up a ship building and repair yard at about USD 212.98 million. Larsen and Toubro Ltd has chosen Kattupalli port, in Thiruvallur district, near Chennai, as the location to build the over USD 425.97 million mega- shipbuilding yard. Major shipping companies, such as Shipping Corporation of India (SCI), Great Eastern (GE) and Essar have placed orders worth USD 3.3 billion for 58 ships in Korea and China. SCI has placed orders for 32 ships worth USD 1.87 billion and will be further welcoming bids for its USD 3 billion order of 40 ships. GE has placed an order worth US$ 780 million for 14 ships, while Essar has ordered 12 ships worth US$ 630 million. The ships are to be delivered during 200912.

Structure

Government of India dominated maritime activity in the past. Policy direction is now oriented to encouraging the private sector to take the lead in port development activities and operations Many Major ports now operate largely as landlord ports - International port operators have been invited to submit competitive bid for BOT terminals on a revenue share basis Significant investment on BOT basis by foreign players including Maersk (JNPT, Mumbai) and P & O Ports (JNPT, Mumbai and Chennai), Dubai Ports International (Cochin and Vishakhapatnam) and PSA Singapore (Tuticorin) Minor ports are already being developed by domestic and international private investors: Pipavav Port by Maersk and Mundra Port by Adani Group (with a terminal operated by P & O)

Policy

100% FDI under the automatic route is permitted for port development projects 100% income tax exemption is available for a period of 10 years Tariff Authority for Major Ports (TAMP) regulates the ceiling for tariffs charged by Major ports/port operators (not applicable to minor ports) A comprehensive National Maritime Policy is being formulated to lay down the vision and strategy for development of the sector till 2025.

Railways
Indian Railways is the backbone of the socio-economic growth of India. World's fourth largest rail network and the second largest in Asia, Indian Railways has recently attracted immense global attention due to its successful turnaround to profitability. Indian Railways has been consistently recording impressive growth rates for the last few years. The cash surplus before dividend and net revenue are estimated at US$ 6.17 billion and US$ 4.53 billion, for 2007-08 respectively. This has placed Indian Railways in a much better position ahead of many of the Fortune 500 companies. India Railway has taken up one of the most ambitious annual plans for 2008-09 with huge investment of about USD 7.91 billion. The plan includes a total budgetary support of USD 1.66 billion that includes USD 163.33 million from the Central Road Fund. This much ambitious plan is eying a massive profits of more than USD 20.447 billion for the year2008-09 .

Initiatives
The Indian Railways has initiated one of the most challenging growth targets for the coming year. This has been claimed on the basis of the most innovative plans and initiatives thought out by the ministry. Over past few years Indian Railways has remarkably transformed itself to set a bench mark in the global level.

increase in income through advertising on all Rajdhanis, with the cost of advertising being around US$ 1.26 million per train. Introduction of new generation trains that would be fuel-efficient, recyclable and have low-emission to generate certified emission reduction credits. Construction of a dedicated freight corridor, with an investment of US$ 81.92 million slated for 2008-09 and US$ 614.40 million for 2009-10.

Renewal of 44.5 million of PSC sleepers has been set for open line works. Technological up gradation and modernization for higher operating efficiency Development of PPP envisaged in new routes, railway stations, logistics parks, cargo aggregation and warehouses etc. Development of 100 budget hotels with private participation in the vicinity of railway stations. Installation of Wi-Fi for providing wireless access at 500 stations. Introduction of marketing rights for advertising on railway tickets and reservation charts. Establishment of integrated logistic parks on unused lands. Development of agri-retail hubs, cold storage houses, multi-purpose warehouses on surplus land with the Railways. Training of railway managers to meet future challenges, Indian Railways is planning to set an international management institute in New Delhi. Renewal over 2941 kilometres (kms), which will require 3,39,288 tonnes of rail steel, and sleeper renewal over 2382 kms. Implementation of Dynamic Pricing Policy, Tariff Rationalization, Non-Peak Season Incremental Freight Discount Scheme, Empty flow Direction Freight Discount Scheme, Loyalty Discount Scheme and Long-term Freight Discount Scheme among others to boost its capacity utilization levels.

The rapid rise in international trade and domestic cargo has placed a great strain on the Delhi-Mumbai and Delhi-Kolkata rail track. Government has, therefore, decided to build dedicated freight corridors in the Western and Eastern high-density routes. The investment is expected to be about Rs. 22,000 crore (USD 4.525 billion). Requisite surveys and project reports are in progress and work is expected to commence within a year. With increasing containerization of cargo, the demand for its movement by rail has grown rapidly. So far, container movement by rail was the monopoly of a public sector entity, CONCOR. The container movement has been thrown open to competition and private sector entities have been made eligible for running container trains. 14 applicants have submitted the application seeking permission for container train operation, which have been approved. ( Exchange rate used: 1 USD = 48.9060 INR )

Airports
Size
Of a total number of 454 airports and airstrips in India, 16 are designated as international airports. The Airports Authority of India (AAI) owns and operates 97 airports. A recent report by Centre for Asia Pacific Aviation (CAPA), Over the next 12 years, India's Civil Aviation Ministry aims at 500 operational airports. The Government aims to attract private investment in aviation infrastructure. India has been witnessing a very strong phase of development in the past few months. Many domestic as well as international players are showing interest in the growth and development of the aviation sector with immense focus on the development of the airports. Indian private airlines Jet, Sahara, Kingfisher, Deccan, Spicejet - account for around 60% of the domestic passenger traffic. Some have now started international flights. For the next years to come India is poised with strong focus on the development of its airport to meet the international standards. The government is planning modernization of the airports to establish a standard. The newly developed airports will help releasing pressure on the existing airport in the country.

Plans
A projected investment of USD 8.5 billion has been planned for the development of Indian airports during the 11th plan. Mumbai and Delhi airports have already been privatized. These two airport are being upgraded at an estimated investment of US$ 4 billion for the period 200616. Development of airport infrastructure is a focus area for the Government. There has been a significant uptrend in domestic and international air travel. AAI has planned a heavy investment of USD 3.07 billion over the next five years. Out of it 43 per cent will be for the three metro airports in Kolkata, Chennai and Trivandrum. The rest will be invested in upgrading other non-metro airports and in the modernization of the existing aeronautical facilities.

Passenger traffic is projected to grow at a CAGR of over 15% in the next 5 years. It is estimated that the data will cross 100 million passengers per annum by 2010 Cargo traffic to grow at over 20% per annum. over the next five years, crossing 3.3 million tonnes by 2010

Major investments planned in new airports and up gradation of existing airports 100% FDI is permissible for existing airports; FIPB approval required for FDI beyond 74%. 100% FDI under automatic route is permissible for greenfield airports. 49% FDI is permissible in domestic airlines under the automatic route, but not by foreign airline companies. 100% equity ownership by Non Resident Indians (NRIs) is permitted. AAI Act amended to provide legal framework for airport privatization. 100% tax exemption for airport projects for a period of 10 years. Open Sky Policy of the Government and rapid air traffic growth have resulted in the entry of several new privately owned airlines and increased frequency/flights for international airlines.

Initiatives
The Committee on Infrastructure has initiated several policy measures that would ensure timebound creation of world-class airports in India. A comprehensive civil aviation policy is on the anvil. An independent Airports Economic Regulatory Authority Bill for economic regulation is also under consideration.

The policy of open skies introduced some time ago has already provided a powerful spurt in traffic growth that has exceeded 20% per annum during the past two years. Major airports such as Chennai and Kolkata are also proposed to be taken up for modernization through the PPP route. To ensure balanced airport development around the country, a comprehensive plan for the development of other 35 non-metro airports is also under preparation. These measures are expected to bring a total investment of Rs. 40,000 crore (USD 8.312 billion) for modernization of the airport infrastructure. A Model Concession Agreement is also being developed for standardizing and simplifying the PPP transactions for airports, on the analogy of the highways sector. This would include upgrading of the ATC services at the airports. Issues relating to customs, immigration and security are also being resolved in a manner that enhances the efficiency of airport usage. A greenfield airport is already operational at Bangalore and the one at Hyderabad, built by private consortia at a total investment of over USD 800 million, will be operational soon. A second greenfield airport being planned at Navi Mumbai is planned to be developed using public-private partnership (PPP) mode at an estimated cost of USD 2.5 billion. 35 other city airports are proposed to be upgraded through PPP mode where an investment of USD 357 million is being considered over the next three years.

Potential

High demand for investments in aviation infrastructure. Favorable demographics and rapid economic growth point to a continued boom in domestic passenger traffic and international outbound traffic. Greenfield airport projects planned in resort destinations and emerging metros such as Goa, Pune, Navi Mumbai, Greater Noida and Kannur. International inbound traffic will also grow rapidly with increasing investment and trade activity and as Indias rich heritage and natural beauty are marketed to international leisure travelers. Modernisation / upgradation of metro airports induction of partners for Chennai, Kolkata expected subsequently SME lending, a largely untapped market, presents a significant opportunity. This accounts for 40% of the industrial output and 35% of direct exports.

Power
Size
The total installed capacity in India is calculated to be 145,554.97 mega watt, out of which 75,837.93 mega watt (52.5%) is from State, 48,470.99 mega watt (34%) from Centre, and 21,246.05 mega watt (13.5%) is from Private sector initiative.

Generation capacity of 122 GW; 590 billion units produced (1 unit = 1kwh) CAGR of 4.6% over the last four years India has the fifth largest electricity generation capacity in the world Low per capita consumption at 606 units; less than half of China Transmission & Distribution network of 5.7 million circuit km the 3rd largest in the world Coal-fired plants constitute 57% of the installed generation capacity, followed by 25% from hydel power, 10% gas based, 3% from nuclear energy and 5% from renewable sources

Structure

Majority of Generation, Transmission and Distribution capacities are with either public sector companies or with State Electricity Boards (SEBs).

Private sector participation is increasing especially in Generation and Distribution. Distribution licences for several cities are already with the private sector Many large generation projects have been planned in the private sector

Policy

100% FDI permitted in Generation, Transmission & Distribution - the Government is keen to draw private investment into the sector. Policy framework in place: Electricity Act 2003 and National Electricity Policy 2005. Incentives: Income tax holiday for a block of 10 years in the first 15 years of operation; waiver of capital goods import duties on mega power projects (above 1,000 MW generation capacity). Independent Regulators: Central Electricity Regulatory Commission for Central PSUs and inter-State issues. Each State has its own Electricity Regulatory Commission.

Major Players and Presence in value chain

Public Sector

NTPC National Hydro Electric Power Corporation Nuclear Power Corporation

Domestic Private Sector

Tata Power RPG Group - CESC Reliance Energy

International Private Sector

China Light and Power (CLP)

Marubeni Corporation

Opportunity
India possesses a vast opportunity to grow in the field of power generation, transmission, and distribution. The target of over 150,000 MW of hydel power germination is yet to be achieved. By the year 2012, India requires an additional 100,000 MW of generation capacity. A huge capital investment is required to meet this target. This has welcomed numerous power generation, transmission, and distribution companies across the globe to establish their operations in the country under the famous PPP programmes. The power sector is still experiencing a large demand-supply gap. This has called for an effective consideration of some of strategic initiatives. There are strong opportunities in transmission network ventures - additional 60,000 circuit kilometers of transmission network is expected by 2012 with a total investment opportunity of about US$ 200 billion. The implementation of key reforms is likely to foster growth in all segments:

Unbundling of vertically integrated SEBs Open Access to transmission and distribution network Distribution circles to be privatised Tariff reforms by regulatory authorities

Opportunities in Generation for:

Coal based plants at pithead or coastal locations (imported coal) Natural Gas/CNG based turbines at load centres or near gas terminals Hydel power potential of 150,000 MW is untapped as assessed by the Government of India Renovation, modernisation, up-rating and life extension of old thermal and hydro power plants

Over 150,000 MW of hydel power is yet to be tapped in India

India requires an additional 100,000 MW of generation capacity by 2012

Initiatives

Allowing foreign equity participation up to 100 per cent in the power sector under the automatic route. Encouraging the private sector to set up coal, gas or liquid-based thermal projects, hydel projects and wind or solar projects of any size. Constitution of Independent State Electricity Regulatory Commissions in the states. Deregulation of the ancillary sectors such as coal. Introduction of the Electricity Act 2003 and the notification of the National Electricity and Tariff policies. Provision of income tax holiday for a block of 10 years in the first 15 years of operation and waiver of capital goods' import duties on mega power projects (above 1,000 MW generation capacity). Un-bundling of the State Electricity Boards (SEBs) into generation, transmission, and distribution companies for better transparency and accountability.

Outlook

Over 90,000 MW of new generation capacity is required in the next seven years o A corresponding investment is required in transmission and distribution networks Power costs need to be reduced from the current high of 8-10 cents/unit by a

combination of lower AT & C losses, increased generation efficiencies and added low cost generating capacity

Potential

Large demand-supply gap: All India average energy shortfall of 7% and peak demand shortfall of 12% The implementation of key reforms is likely to foster growth in all segments: o Unbundling of vertically integrated SEBs o Open Access to transmission and distribution network o Distribution circles to be privatised o Tariff reforms by regulatory authorities Opportunities in Generation for: o Coal based plants at pithead or coastal locations (imported coal) o Natural Gas/CNG based turbines at load centres or near gas terminals o Hydel power potential of 150,000 MW is untapped as assessed by the Government of India o Renovation, modernisation, up-rating and life extension of old thermal and hydro power plants Opportunities in Transmission network ventures - additional 60,000 circuit km of transmission network expected by 2012 Opportunities in Distribution through bidding for the privatisation of distribution in thirteen states that have unbundled/corporatised their State Electricity Boards expected to take place over the next 2-3 years Total investment opportunity of about US$ 200 billion over a seven year horizon

Telecom
Size
The past few years have been experiencing a steady growth in the spread and reach of the telecommunication services in India. The Department of Telecommunication (DoT) has been much active in policy formulation, planning, executing, and implementation of in its initiatives. The year 2007-08 has recorded a remarkable growth in the field of telecommunication. The

targeted growth of 250 million for the year 2007 was already achieved in the month of October 2007, which in itself is a great achievement. The year recorded the total number of 156.55 millions of telephone connection. The department is eying a total number of 500 million new connections by the end of 2010. Telecom market has grown at about 25% per annum over the last 5 years. Wireless segment subscriber base grew at 85% per annum; fixed line segment at about 10% per annum.

Structure

The Department of telecommunication (DoT) has been focusing on all areas in the sector, such as basic telecommunication, mobile telephony, Internet service, broadband connections, and many more. The strong vision and active initiatives of the government is bearing fruits and the policy framework for the coming years is going to provide a better telecommunication infrastructure in the country. The department has decided to introduce Mobile Number Portability (MNP) in, keeping in view the interest of the consumers at large. These four metros include; Delhi, Mumbai, Chennai, and Kolkota. This will be the initial phase of the programme. This will enable the consumers to retain the same number irrespective the service provider, in the same area. A regulation has been implemented with a view to regulating the unsolicited calls from the telemarketers. This has put in force the introduction of "National Do Not Call Registry (NDNC) ". The latest TRAI statistic reports a total number of 7.2 million subscribers being registered on the NDNC so far. The latests and the new being offered by the government is the broad guidelines for the third generation (3G) mobile service and broadband Wireless Access.

Policy

74% to 100% FDI permitted for various telecom services FIPB approval required for foreign investment exceeding 49% in all telecom services. 100% FDI permitted in telecom equipment manufacturing.

India has a Telecom policy that aims to encourage private and foreign investment, such as;

An independent regulator the Telecom Regulatory Authority of India (TRAI) Revenue-share model for licences issued by the Government for telecom services in

India. Unified access licenses are available for providing telecom services on a pan-India basis Planned opening up of National Long Distance (NLD), International Long Distance (ILD) and other value added services.

Major players and presence in value chain

Company

Services
Cellular Basic NLD1 ILD2

Investor

1. Bharti Televentures 2. Reliance Infocomm 3. Tata Indicom 4. BSNL 5. Hutchison Essar 6. IDEA Cellular

Vodafone, SingaporeTelecom, Warburg Pincus

Reliance Group

Tata Group Government of India Hutchison Whampoa,Essar Group AT&T, Tata Group,Birla Group

Note: 1 National Long Distance, 2 International Long Distance

Source: TRAI, DoT, TSMG Analysis

Opportunity

Over 150% projected growth in telecom services. India will require large investments in network infrastructure.

A vast FDI in the sector. More competitiveness in the industry means more benefits to the end users. The process will bring more transparency in the approach. More number of foreign players will directly venture into as active participants bring in new technology and equipments.

Over 150% growth in telecom services is projected in 5 years

India will require large investments in network infrastructure

Outlook

India expected to be among the fastest growing telecom markets in the world. Projected growth of 40% per annum to reach 250 million subscribers by December 2007. Over 4 million new users are added every month mostly in wireless.

Potential

Favorable demographics and socio economic factors leading to high growth:

Growth of disposable income combined with changes in lifestyle Increasing affordability - low tariffs, easy payment plans and handset financing Increased coverage and availability of mobile services

Investment opportunity of $22 billion across many areas:

Telecom Devices and Software for Internet, Broadband and Direct To Home Services. Set Top boxes, Gateway exchange, Modem, Mobile handsets and consumer premise equipments, Gaming devices, EPABX, Telecom Software. Telecom Services for voice and data via a range of technologies. Applications and Content development ranging from gaming to education.

Highways
Size of the Initiatives
With an extensive road network of 3.3 million kilometers, India is the second largest in the world. Indian roads carry about 61% of the freight and 85% of the passenger traffic. All the highways and expressways together constitute about 66,000 kilometers (only 2% of all roads), whereas they carry 40% of the road traffic. To further the existing infrastructure, Indian Government annually spends about Rs.18000 crores (USD 3.704 billion).

Target

Developing 1000 km of expressways Developing 8,737 km of roads, including 3,846 km of national highways, in the North East Four-laning 20, 000 km of national highways Four-laning 6,736 km on North-South and East-West corridors Six-laning 6,500 km of the Golden Quadrilateral and selected national highways Widening 20,000 km of national highways to two lanes

Approach

National Highways Authority of India (NHAI) is the apex Government body for implementing the NHDP. All contracts whether for construction or BOT are awarded through competitive bidding Private sector participation is increasing, and is through construction contracts and BuildOperate-Transfer (BOT) for some stretches based on either the lowest annuity or the lowest lump sum payment from the Government

BOT contracts permit tolling on those stretches of the NHDP A large component of highways is to be developed through public-private partnerships and several high traffic stretches already awarded to private companies on a BOT basis.

Policy

100% FDI under the automatic route is permitted for all road development projects 100% income tax exemption for a period of 10 years Grants / Viability gap Funding for marginal projects by NHAI. Formulation of Model Concession Agreement

Opportunity
Road development is recognized as essential to sustain Indias economic growth. Road development is a priority sector and the ongoing focus on the highway infrastructure development is targeted to projected annual growth of 12-15% for passenger traffic and 15-18% for cargo traffic. The project has been attracting huge Direct Foreign Investment (FDI).

Road development is a priority sector

Outlook

Annual growth projected at 12-15% for passenger traffic, and 15-18% for cargo traffic Over $5060 billion investment is required over the next 5 years to improve road infrastructure

Potential

Road development is recognised as essential to sustain Indias economic growth

The Government is planning to increase spends on road development substantially with funding already in place based on a cess on fuel

A large component of highways is to be developed through public-private partnerships o Several high traffic stretches already awarded to private companies on a BOT basis o Two successful BOT models are already in place the annuity model and the upfront/lumpsum payment model Investment opportunities exist in a range of projects being tendered by NHAI for implementing the NHDP contracts are for construction or BOT basis depending on the section being tendered. A Rs.41,200 crores (US $ 5 billion) project plans to lay 6 lane roads over 6,500 kms of National Highways on the Design Build Finance and Operate (DBFO) basis in Golden Quadrilateral and other high traffic stretches.

India has the second largest road network in the world

An annual growth of 12-15% for passenger traffic has been projected

Government Initiative
For a country of India's size, an efficient road network is necessary both for national integration as well as for overall socio-economic development. The National Highways (NH), with a total length of 65,569 km, serve as the arterial network across the country. The four-laning the 5,900 km long

Golden Quadrilateral (GQ) connecting Delhi, Mumbai, Chennai and Kolkata is on the verge of completion. The ongoing four-laning of the 7,300 km North-South East-West (NSEW) corridor is scheduled to be completed by December 2009. The Committee on Infrastructure adopted an Action Plan for development of the National Highways network. An ambitious National Highway Development Programme (NHDP), involving a total investment of Rs.2,20,000 crore (USD 45.276 billion) up to 2012, has been established. The main elements of the programme are as follows: Steps Taken

100 per cent FDI under the automatic route in all road development projects. 100 per cent income tax exemption for a period of 10 years Cabinet Committee on Economic Affairs (CCEA) has agreed upon the National Highways Fee (Determination of Rates and Collection) Rules, 2008 to establish uniformity in fee rate for public funded and private investments projects. An increment in the overseas borrowing amount of infrastructure sectors, to US$ 500 million from US$ 100 million. Offering cheaper loans for highway projects that will speed up the projects worth more than US$ 12. 70 billion under separate phases of the NHDP. The Ministry of Shipping and Road Transport is considering a green corridor' highway project solely for farmers with no toll' charges that would link rural roads with National Highways. This is likely to be developed along with the six-lane project under the NHDP.

NHDP Plan: At a Glance

NHDP Phase-II - December, 2009 NHDP Phase-III - December, 2013 NHDP Phase-V - December, 2012 NHDP Phase-VI - December, 2015 NHDP Phase-VII - December, 2014

Four-laning of the Golden Quadrilateral and NS-EW Corridors (NHDP I & II) The NHDP Phase I and Phase II comprise of the Golden Quadrilateral (GQ) linking the four metropolitan cities in India i.e. Delhi-Mumbai-Chennai-Kolkata, the North-South corridor connecting Srinagar to Kanyakumari including the Kochi-Salem spur and the East-West Corridor connecting Silchar to Porbandar besides port connectivity and some other projects on National Highways. Fourlaning of the Golden Quadrilateral is nearing completion. The contracts for projects forming part of NS-EW corridors are being awarded rapidly for completion by December 2009. Four-laning of 10,000 kilometers (NHDP-III) The Union Cabinet has approved the four-laning of 10,000 km of high density national highways, through the Build, Operation & Transfer (BOT) mode. The programme consists of stretches of National Highways carrying high volume of traffic, connecting state capitals with the NHDP Phases I and II network and providing connectivity to places of economic, commercial and tourist importance.

Two laning of 20,000 kilometers (NHDP-IV) With a view to providing balanced and equitable distribution of the improved/widened highways network throughout the country, NHDP-IV envisages up gradation of 20,000 kilo of such highways into two-lane highways, at an indicative cost of Rs.25,000 crore. This will ensure that their capacity, speed and safety match minimum benchmarks for national highways. Six-laning of 6,500 kilometers (NHDP-V) Under NHDP-V, the Committee on Infrastructure has approved the six-laning of the four-lane highways comprising the Golden Quadrilateral and certain other high density stretches, through PPPs on BOT basis. These corridors have been four-laned under the first phase of NHDP, and the programme for their six-laning will commence in 2006, to be completed by 2012. Of the 6,500 kilometers proposed under NHDP-V, about 5,700 kilometers shall be taken up in the GQ and the balance 800 kilometers would be selected on the basis of approved eligibility criteria. Development of 1000 kilometers of expressways (NHDP-VI) With the growing importance of certain urban centers of India, particularly those located within a few hundred kilometers of each other, expressways would be both viable and beneficial. The Committee on Infrastructure has approved 1000 kilometers of expressways to be developed on a BOT basis, at an indicative cost of Rs.15,000 crore. These expressways would be constructed on new alignments. Other Highway Projects (NHDP-VII) The development of ring roads, bypasses, grade separators and service roads is considered necessary for full utilization of highway capacity as well as for enhanced safety and efficiency. For this, a programme for development of such features at an indicative cost of Rs.15,000 crore, has been mandated.

Private Sector Participation

A KPMG report titled 'Opportunities in Infrastructure and Resources in India' reveals that investments of the order of US$ 500 billion are expected to take place in the coming years. This development would call for increased resource requirement, consumer responsiveness, and concern for managerial efficiency. The private sector will be largely involved both at construction contracts and(BOT levels. Some major private participation in this initiative includes.

Reliance Energy Three contracts to four-lane 400 kilometers of highway and four-laning of five national highway projects in Tamil Nadu that covers 400 kilometers and at an estimated cost of more

than US$ 762.42 million.

L&T inter-state Road Corridor Limited Four-laning of the 76 kilometers highway between Palanpur and Swaroopgunj on the EastWest Corridor. Jaiprakash Associates Ltd (JAL) Implementing the 165 kilometers long Taj Expressway project, which connects Greater Noida to Agra at a cost of US$ 554.93 million. Lanco Infratech four-laning of two highways in Karnataka at an estimated cost of US$ 247.41 million. DS Construction Development of the Gwalior-Jhansi section on NH-75 that includes four-laning at a cost of US$ 159.9 million. Maytas Infra Private Limited and Nagarjuna Construction Company Ltd (Joint Venture) Four-lane the highway from Tindivanam and Pondicherry, at an estimated cost of US$ 70.09 million. Era Constructions India Limited and Karam Chand Thapar & Bros Limited Construction of a section of the Delhi-Haryana Border to Rohtak and four-laning of Gwalior by-pass at a cost of US$ 73.8 million. Madhucon Projects Executing ongoing BOT projects with four toll-based road projects.

Public Private Partnership

Since January 2006, the Public-Private Partnership Appraisal Committee (PPPAC) has granted approval to a total of 87 projects including 77 highway projects. The PPPAC approves the infrastructure projects worth US$ 5.98 billion on November 2008 . This includes 21 highway projects to be taken up under NHDP Phase III and V.

International Participation
Many international player have joined the league in the growth and reform of the highway infrastructure in India. Indian road construction projects have become a lucrative and emerging investment opportunity for numerous international giants. The various international companies to

join the league are Berhad (Malaysia), Deutsche Bank, Emirates Trading Agency (Dubai), the Isolux Corsan Group (Spain), Italthai (Thailand), Baelim (Korea), Dyckerhoff (Russia), Widmann AG (Germany), IJM Corporation, SDN and Road Builders (Malaysia), Kajima and Taisei (Japan). These companies acquire equity stakes between 10 to 51 per cent in various highway projects floated by the National Highway Authority of India (NHAI) and other state governments.

The Golden Quadrilateral and NSEW projects

For additional information: Department of Road Transport and Highways, Ministry of Shipping, Road Transport and Highways (http://morth.nic.in), National Highways Authority of India (http://www.nhai.org) ( Convention Rate at USD 1 = 48.5904 INR ) Content Source: www.ibef.org

4.6 Total Quality Management

Total Quality Management As discussed earlier, building services maintenance involves a long chain of activities which requires input, involvement and commitment from many participants in order to meet the needs and satisfaction of the customer (whether internal or external). If this is to work at its best, there should be a sense of teamwork among all parties associated with the whole maintenance process. Most importantly, customer satisfaction and quality/performance of product or service are the fundamental goals in every participants business. Teamwork enhances the interdependence through improved communications, trust and exchange of ideas between the participants. Surely, the team would follow Demings Plan Do Check Act problem solving process for continuous improvement. When properly managed, this integrated team improves the whole design, installation and maintenance more effectively and economically. In the main, we are talking about a fresh management paradigm using a more rational project oriented team based approach for the maintenance process which is depicted as: Quality Control + Quality Assurance + Joint Management Team + Continuous participation + Co-operation + Collective improvement + Customers satisfaction = Total Quality Management Total quality management (TQM) is a corporate business management philosophy which recognizes that customer needs and business goals are inseparable. It ensures maximum effectiveness and efficiency within a business and secures commercial leadership by putting in place processes and systems which will promote excellence, prevent errors and ensure that every aspect of the business is aligned to customer needs and the advancement of business goals without duplication or waste of effort. Thus, TQM would be seen as: Definitely customer focused Integral to company strategy Philosophy, concepts, tools and techniques focused Emphasis on employee involvement and empowerment Continuous improvement Organizational wide, everyone responsible for quality Involves process and culture change It is envisaged that using both BS 5750/ISO 9000 and TQM will yield better quality management in each of the responsible parties within the project team. For the client, his responsibilities are: Meeting the building users (business organizations) needs first by providing the most appropriate M&E services systems Defining clearly his maintenance requirements and communicating them to all providers Providing resources to support maintenance Selecting a provider to meet maintenance requirements Improving building in order to satisfy customer requirement from time to time The scope of quality system should be organized, documented and reviewed. The client should prepare the maintenance policy/statement with details on planning, authority and responsibility/organization, maintenance requirements and benchmarks, document control and process control regarding maintenance, selection of maintenance provider/ contract review, control of maintenance, corrective action, quality records and feedback, quality/maintenance cost and management review similar to those quality system standards as stipulated in BS 5750 as a basis.

For the client, he must see that a QA system can in large measure be: An answer to many of the management problem pertaining to running and maintaining the building services Not at all the generator of paperwork imagined Placing maintenance responsibility on all both building design and construction team in addition to his involvement For the designer/contractors, their responsibilities are: Establishing the clients requirements Making adequate provisions to meet that requirement and maintenance will be designed/incorporated into each M&E services systems Verifying requirements have been met and are cost effective and reliable Demonstrating that the customers requirements have been met Responding to feedback Implementing planning of services maintenance with M&E services contractors and clients maintenance provider well before using the building Reviewing the building performance Improving the building services Both designers and contractors must, of course, provide a quality system by referring to BS 5750 but with necessary modifications to suit the building services design and construction. In general, the quality system should again be properly organized, documented and reviewed. In brief, the system should incorporate design and maintenance policies, planning, management responsibility, design and maintenance input/output requirements, evaluation of design and installation, control and review (including feedback), planning and management of inspection/testing and commissioning for compilation of O&M manuals, planning of maintenance details, programmes, issues like plans, organization, and review of performances of M&E services against design and users feedback. For the maintenance provider, his responsibilities are: Understanding what is required of him by the client and the building users and business organizations that operate from the building Making provisions to meet that requirement Implementing those provisions based on the users needs Using strategic maintenance rather than tactical Verifying requirements have been met (performance based rather than task based) Being prepared to demonstrate that the customers requirements have been met Responding to feedback, users changes and the ever increasing building standard Ensuring effective management, resources allocation and training of staff Providing sufficient operating and maintenance audits Providing continuous improvement Again, the maintenance engineer should organize, document and review his maintenance system in pursuit of a successful management of building services maintenance. Similar to other parties of the quality chain, he should make good use of BS 5750. He must understand and evaluate the maintenance needs of the client and those organizations within the building, and select the best maintenance technique to support the business function of all these organizations. Of course, he would still handle a great deal of quality system work such as management policy, responsibility, planning, maintenance documents/procedures, control of operation and maintenance data (O&M manuals, drawings, asset registers, schedule, programmes, maintenance tasks/work instructions, records, spare parts control, maintenance view, training, etc.), inspection/tests, corrective action, handling, storage, etc., audits and training as quoted in BS 5750. Having gone through all the quality systems that would be carried out by each member of the

maintenance project team, it is quite clear that in order to achieve the high quality of building services maintenance, both the client, designer, contractor and the ultimate maintenance provider should all: Understand and plan the work Know what the responsibilities are Know what their duties are Know what to do Know how to do it Know whether it is cost-effective Want to do it Be able to do it Know that it is done Record that it has been done See whether they can do better (with benchmarks!) Last but not least, the project team will have to remember the seven Ps of quality: 1. Positive commitment to maintenance 2. Planning of maintenance from the very beginning to the end of the project 3. Participation by all people 4. Process control with BS5750/ISO9000 5. Problem identification 6. Problem elimination 7. Permanence (stick to the established system but keep on improving) It must be borne in mind that BS 5750 must be used intelligently. We need the concept but not necessarily all rigid procedures that can sometimes be cumbersome. Most importantly, we have to identify our customer needs and expectations, and use the best engineering and managerial techniques to meet the customers requirements in the most cost-effective way.

2.2 Evolution of ISO 9000

The International Organization for Standardization (ISO) began operations in 1947. ISO's mission is: To promote the development of standardization and related activities throughout the world, with a view to facilitating the international exchanges of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological and economic activity. In 1987, the ISO released its first core series of five standards on quality assurance: ISO 9000, ISO 9001, ISO 9002, ISO 9003, and ISO 9004. Soon after, countries throughout the world began adopting these standards as their own. Today, more than 150 countries have adopted the ISO 9000 series as national standards. The ISO series of standards are subject of continuous review and development. The objective is to globally review these standards, internationally approve and re-issue as appropriate approximately every 5 years.

The series received its first thorough revision in 1994, including such activities as harmonization the Quality System Elements, introducing requirements to refocus systems on supplier-customer relationships, and addressing the issues as a more user friendly language and the `manufacturing only' stigma within the series. Organizations registered to the obsolete 1987 version were required to upgrade their Quality Management Systems to satisfy the revised 1994 version or risk having their certification removed. Year 2000 The ISO 9000:1994 series changed from the former 3 quality system models (ISO 9001, ISO 9002, ISO 9003) to one model (ISO 9001). This newly revised version was released on December 15, 2000. Many companies as well as government require that their suppliers be registered to a quality system such as ISO 9001 - as a result, registered companies find increased market opportunities. A company exhibiting compliance with 9001-2000 assures that it has a sound quality management system. In addition, ISO 9000 registration is rapidly becoming a must for any company wishing to do business in Europe. There is a growing trend toward universal acceptance of ISO 9000 as an international standard. IS0 9001:2000 allows the Company to decide on what paperwork it retains as "objective evidence" to prove that the Quality System is alive and well. Smaller Companies were previously excluded from Registration to ISO 9000:94 because of the need to have a "Quality" organization established. ISO 9001:2000 is based on a simpler system of setting business goals including customer expectations and measuring them. Suppliers seeking to meet Certification are companies: Who adopt the Business approach of the new revision Planning to improve through setting and measuring goals Seeking a competitive edge Wishing to improve Customer Satisfaction With facilities in the European Union (EU) Wishing to manufacture in the European Union (EU) Planning on exporting to the European Union (EU)

2.1 0 Benefits of ISO 9000

Companies become registered to ISO 9000 to meet customer demands and expectations, achieve increased quality levels, obtain market advantage over competitors and meet the European Union's regulation requirements. Benefits of ISO 9000 registration include higher perceived quality, improved customer satisfaction, competitive edge and reduced customer quality audits. Internally, ISO 9000

registration brings better documentation, greater quality awareness, positive cultural change and increased efficiency and productivity. Meeting requirements alone cannot guarantee the quality of a product or service. Every supplier must implement an overall quality management system, covering every aspect throughout the entire life cycle of a product or service. Lack of management commitment, lack of procedures and documentation, and not following set procedures prevents organizations from achieving ISO 9000 registration. ISO 9000's focus is conformity to practices specified in a registrant's own quality system. Its purpose is to enhance and facilitate trade. Registration means conformity to documented practices. ISO 9000 is not an award. ISO 9000 provides a foundation and complementary approach to quality by focusing on process documentation and maintaining appropriate records. The standards lay the foundation for a total quality management program by concentrating on three fundamental aspects: implementing quality controls, documenting the various processes and procedures, and ensuring that the appropriate quality emphasis is established and followed by everyone in the organization. ISO 9000 standards form a template for the creation of a sound quality process. ISO 9000 enables suppliers to provide assurance that they have established an operational quality system. International customers have started to make ISO 9000 compliance an integral part of their purchase agreements. Customers use the standards as a way to differentiate the offerings of various suppliers, particularly when products and services are substantially similar. Customers see compliance as a way to gain a degree of assurance that suppliers are doing what they say they are doing. The organization seeking registration has a great deal of flexibility in deciding on the scope of the registration. Individual product lines or functional entities can be registered separately, a single site can be registered or a division with multiple sites/locations can be registered.

2.6 Steps to ISO 9000 Registration

hese eight steps--along with their sub-steps--are based on what many major companies have followed to achieve their own ISO 9000 registration. These steps are also useful for companies simple seeking to conform to the ISO 900 standards, but not formally become certified. These steps are a good guide for establishing a timeline, schedule, and potential costs for the process of becoming ISO 9000 certified. (NOTE: Also see Simple Plan for ISO 9000 Certification for another outlook on this process.)

1. Get top management commitment

1. Top management considers ISO 9000 registration 2. Quality steering committee meets to evaluate process 3. Committee informs top management of ISO 9000 costs, schedule, etc.

4. Top management commits to pursue ISO 9000 registration

2. Train personnel
1. Hold basic quality and ISO 9000training for all employees 2. Select and train personnel to be internal auditors

3. Prepare Quality Policy Manual

1. 2. 3. 4. 5. Study and understand ISO 9000 requirements as they apply to your company Write (or re-write) company Vision and Mission statements Write basic Quality Policy Manual outline Complete first draft of Quality Policy Manual Send copy of manual to customer desiring ISO 9000 compliance (if necessary)

4. Prepare Operating Procedures

1. 2. 3. 4. Define responsibilities, using Quality Manual as a guide Have those responsible for functions outline their procedures Interview managers and fine-tune procedures Compare Operating Procedures with Quality Manual for consistency

5. Hold internal audit

1. Hold internal audit of ISO 9000 manual vs. ISO 9000 compliance 2. Implement corrective action items from audit

6. Select registrar
1. Research registrars and their cost 2. Qualify possible registrars 3. Select third party registrar

7. Go through registration process

1. 2. 3. 4. 5. 6. 7. 8. Apply for registration and audits Agree to audit process etc. with registrar Hold pre-assessment audit Take any needed corrective action Have ISO 9000 registration audit Take any needed corrective action Re-audit as needed Take any needed corrective action

8. Obtain ISO 9000 registration

This verifies that you operate your business in compliance to the ISO 9000 requirements.

5.5 Quality System Requirements

The following sections list the policies or commitments of Kurtus Technologies to design, manufacture, deliver, and service our quality products and services using quality methods. What we mean by quality products and services are those products and services that meet the contracted specification, including those specifications that are "reasonable assumed." (By quality methods we mean those methods that result in quality products and services.)

Rationale
We believe that companies that follow what are considered "good practices" or adhere to accepted standards of quality usually operate their businesses in an effective and consistent manner. They also deliver a product or service of the quality expected by their customer. We believe that following such good practices will result in reduced costs by helping eliminate waste and will also result in repeat and new business due to customer satisfaction from getting quality goods.

Policy
Thus, it is the policy of Kurtus Technologies to follow the ISO 9001 standards for the effective operation of our business and the delivery of quality product and service, as stated in the following sections.

4.10 Inspection and Testing

In our company, we receive parts and supplies, integrate them into our product, and then ship finished product to our customer. It is important that all parts and supplies we receive meet specification, in order that we get our money's worth from them. It is also important that our product meets specification, in order to satisfy our customers.

Rationale
Thus, we believe it is important for us to properly inspect and test parts and supplies received, inspect and test our product in process, and inspect and test our product before delivery to verify they meet specification. This is to avoid the risk of using out-of-specification parts and supplies and delivering out-of-specification product. We believe that effective inspection and testing will result in reduced costs due to eliminating wasted effort and material. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy

Thus, it is the policy of this company to adhere to the ISO 9001 section 4.10 standard on Inspection and Testing, as follows.

4.10.1 Receiving Inspection and Testing

To avoid using out-of-specification parts and supplies, it is our policy to ensure that incoming product is not used or processed (except in the circumstances described in 4.10.1.2) until it has been inspected or otherwise verified as conforming to specified requirements. It is also our policy to verify those parts and supplies have been inspected in accordance with the quality plan or documented Procedure 4.10. Where incoming product is released for urgent production purposes, it is our policy to positively identify and record the product (see section 4.16) in order to permit immediate recall and replacement in the event of nonconformance to specified requirements. NOTE: In determining the amount and nature of receiving inspection, consideration should be given to the control exercised at source and documented evidence of quality conformance provided.

4.10.2 In-Process Inspection and Testing

It is our policy to: 1. Inspect, test, and identify product as required by the quality plan or documented procedures 2. Establish product conformance to specified requirements by use of process monitoring and control methods 3. Hold product until the required inspection and tests have been completed or necessary reports have been received and verified except when product is released under positive recall procedures (see 4.10.1). Release under positive recall procedures shall not preclude the activities outlined in 4.10.2 a) 4. Identify nonconforming product

4.10.3 Final Inspection and Testing

To assure that final inspection and testing be done properly, it is our policy to always require that: 1. All specified inspection and tests, including those specified either on receipt of product or in-process, have been carried out 2. The data meets specified requirements within our quality plan or documented procedures for final inspection and testing

To complete the evidence of conformance of the finished product to the specified requirements, it is our policy to always carry out all final inspection and testing in accordance with the quality plan or documented procedures. To avoid delivery of nonconforming product, it is our policy to always assure that no product is dispatched until all the activities specified in the quality plan or documented procedures have been satisfactorily completed and the associated data and documentation is available and authorized.

4.10.4 Inspection and Test Records

To avoid questions about the validity of our inspection and test, it is our policy to always keep and maintain records that give evidence that the product has passed inspection and/or test with the defined acceptance criteria (see section 4.16).

4.4 Design Control

In our company, we design the product according to the contracted requirements or specification. That design sometimes may change due to evolving technical improvements and/or revised design requirements.

Rationale
We believe it is important for us to maintain control over how our products are being designed and over the possible changes in the design. This is to make sure the product not only fulfills customer requirements but also stays within contracted features. We believe that effective design control will result in reduced costs by helping eliminate wasted effort and material due to incorrect or unauthorized design changes. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, it is the policy of this company to adhere to the ISO 9001 section 4.4 standard on Design Control, as follows.

4.4.1 General
To ensure that the contracted requirements are met, it is our policy to always maintain control of the design of the products we make and to verify that design. It is also our policy to use and maintain Procedure 4.4 to control and verify the design of our product.

4.4.2 Design and Development Planning

To effectively coordinate the design effort and avoid misdirection or areas of work not covered, it is our policy to always have plans that identify the responsibility for each design and development activity. To maintain the management of the project, it is also our policy to always use these plans to describe or reference these activities. These plans are always updated as the design evolves. 4.4.2.1 Activity Assignment To ensure the design and verification activities are done correctly, those activities are planned and assigned to qualified staff equipped with adequate resources. Details are provided in Procedure 4.4. 4.4.2.2 Organizational and Technical Interfaces To avoid poor or incomplete communications that could result in lack of design coordination and even cause mistakes, it is our policy to always identify the organizational and technical interfaces between different involved groups and to document, transmit, and regularly review the necessary information concerning these interfaces. The identification and documentation details are provided in Procedure 4.4.

4.4.3 Design Input

To avoid confusion about the inputs to the design and to ensure complete understanding of what the customer wants, it is our policy to always identify, document and review the selection by our engineering staff for adequacy of the design input requirements relating to the product. It is also our policy to always resolve incomplete, ambiguous, or conflicting requirements with those responsible for drawing up these requirements. This is done during the design review, as per Policy paragraph 4.3.

4.4.4 Design Output

To ensure the design conforms to the goal of satisfying customer requirements, it is our policy to always document our design output and express it in terms of requirements, calculations, and analyses. It is also our policy that our design output always: 1. Meets the design input requirements; 2. Contains or references acceptance criteria; 3. Conforms to appropriate regulatory requirements whether or not these have been stated in the input information; 4. Identifies those characteristics of the design that are crucial to the safe and proper functioning of the product.

4.4.5 Design Verification

To avoid careless or incomplete verification of our design, it is our policy to always plan, establish, document, and assign to competent personnel functions for verifying that design. By design verification we mean the activity that establishes that design output meets the designinput requirement (see 4.4.4) by means of design control measures such as: 1. 2. 3. 4. Holding and recording design reviews (see section 4.16); Undertaking qualification tests and demonstrations; Carrying out alternative calculations; and Comparing the new design with a similar proven design, if available.

It is our policy to always follow Procedure 4.4 for verification of our design.

4.4.6 Design Changes

To avoid unauthorized, unnecessary, or incorrect changes and modifications to the design of our product, as well as to avoid the risk of losing track and control of changes, it is our policy to always have design changes and modifications identified, documented, and reviewed and approved It is also our policy to maintain Procedure 4.4 for the identification, documentation, and appropriate review and approval of design changes and modifications.

4.12 Inspection and Test Status

In our company, we perform many tests on our product.

Rationale
We believe it is important to keep records of those tests. This is to ensure the tests were done correctly, to use the records as reference, to verify the completion of the tests, to use in case of audits and to issue for statistical studies. We believe that effective recording of inspection and test status will result in reduced costs due to eliminating wasted effort and material. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order to avoid duplication of efforts or missed inspections or tests, it is the policy of this company to adhere to the ISO 9001 section 4.12 standard on Inspection and Test Status and always identify the inspection and test status of our product. This is done by using markings, authorized stamps, tags, labels, routing cards, inspection records, test software, physical location,

or other suitable means, which indicate the conformance or nonconformance of the product with regard to inspection and tests performed. It is our policy to maintain the identification of inspection and test status, as necessary, throughout production and installation of the product. We do this to ensure that only the product that has passed the required inspections and tests is dispatched, used, or installed. It is our policy to keep records to identify the inspection authority responsible for the release of conforming product (see section 4.16).

4.5 Document Control

In our company, we write numerous official documents, including plans, procedures, contracts, drawings, and such.

Rationale
We believe it is important for us to maintain control over the distribution, updating, and storage of these various documents. This is to make sure workers receive and use proper and the latest drawings, references and related material. We believe that effective document control will result in reduced costs by helping eliminate wasted effort and material due to the use of improper documents. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, it is the policy of this company to adhere to the ISO 9001 section 4.5 standard on Document Control, as follows. 4.5.1 Document Approval and Issue To avoid using documents that are incorrect, inadequate, or unauthorized, it is our policy that authorized personnel always review our documents for adequacy and approve them prior to issue. To avoid any forms of miscommunication concerning our drawings, it is always our policy that the review for adequacy and approval by our authorized personnel will ensure that: The pertinent issues of appropriate documents are available at all locations where operations essential to the effective functioning of the quality system are performed, and obsolete documents are promptly removed from all points of issue or use. It is also our policy to use and maintain Procedure 4.5.1 to control all documents and data that relate to the requirements of this Quality Policy Manual and the ISO 9001 standard.

4.5.2 Document Changes or Modifications To avoid lack of consistency of document reviews, and thus prevent possible mistakes, it is our policy to always have the changes to documents reviewed and approved by the same functions or organizations that performed the original review and approval, unless specifically designated otherwise. To facilitate the review and approval process, it is our policy to always make sure that the designated organizations have access to pertinent background information upon which to base their review and approval. To properly track changes, it is our policy to identify in the document or the appropriate attachments the nature of the change, where practicable. To preclude the use of non-applicable documents, it is our policy to always maintain a master list or equivalent document control procedure to identify the current revision of documents. To avoid cluttered and confusing documents, it is our policy to always re-issue documents after a practical number of changes have been made, as determined by the authorized personnel.

4.6 Purchasing
In our company, we purchase many items from our suppliers for integration into our final product.

Rationale
We believe it is important to only purchase quality parts and supplies for our product. (By quality parts and supplies, we mean those that are delivered on time, at the agreed cost, and to our specification). This is to make sure our product will be delivered on time, at the agreed cost, and to our customer's specification. We believe that effective purchasing will result in reduced costs by helping eliminate wasted effort and material due to purchasing parts that do not fulfill our specifications and/or are delivered late. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, it is the policy of this company to adhere to the ISO 9001 section 4.6 standard for Purchasing, as follows.

4.6.1 General

To make sure we purchase the correct parts and supplies for our product, it is our policy to always check that the purchased goods conform to our specified requirements.

4.6.2 Assessment of Subcontractors

To avoid the possibility of selecting subcontractors that are inexpensive but unable to deliver, it is our policy to always select subcontractors on the basis of their ability to meet subcontract requirements, including our requirements on the quality of their product or service. To make sure we select subcontractors that are able to delivery the quality product or service we require, it is our policy to always use criteria for the selection of subcontractors that is dependent upon the type of product andwhere appropriateon records of the subcontractor's previously demonstrated capability and performance. Also, to make sure we select subcontractors that are able to delivery the quality product or service we require, it is our policy to always use criteria for the type and extent of control we exercised on subcontractors. This must be dependent upon the type of product and, where appropriate, on records of subcontractor's previously demonstrated capability and performance. To make sure we keep track of good suppliers, it is our policy to always establish and maintain records of acceptable subcontractors (see section 4.16). It is also our policy to ensure that these quality system controls are effective. Procedures for these policies are listed in Procedure 4.6.2.

4.6.3 Purchasing Data

To make sure information related to purchasing is accurate, it is our policy that all purchasing documents always contain data clearly describing the product ordered, including, where applicable:

The type, class, style, grade, or other precise identification The title or other positive identification and applicable issue of specifications, drawings, process requirements, inspection instructions, and other relevant technical data, including requirements for approval or qualification of product, procedures, process equipment and personnel The title, number and issue of the quality system Standard to be applied to the product

To avoid unauthorized purchases, it is our policy to always review and approve purchasing documents for adequacy of specified requirements prior to release.

4.6.4 Verification of Purchased Product

To assure our customer/purchaser that we are using quality parts and supplies, it is our policy to always allow the purchaser or the purchaser's representative the right to verify at source or upon

receipt that the purchased product conforms to specified requirements, when this is specified in the contract. Also, to assure our customer/purchaser that we are using quality parts and supplies, it is our policy that verification by the purchaser does not absolve us of the responsibility to provide acceptable product nor shall it preclude subsequent rejection. It is also our policy that when the purchaser or the purchaser's representative elects to carry out verification at the sub-contractor's plant, such verification will not be used by the us as evidence of effective control of quality by the sub-contractor.

4.8 Product Identification and Traceability

In our company, we often have a number of different products in house, as well as many units of single products.

Rationale
We believe it is important for us to properly identify and keep track of our product. This is to avoid the risk of mix-ups or lost products. We believe that effective product identification and traceability will result in reduced costs by helping eliminate wasted effort and material due to mix-ups or lost products. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order to avoid product mix-ups or confusion, it is the policy of this company to adhere to the ISO 9001 section 4.8 standard on Product Identification and Traceability and always identify our products from applicable drawings, specifications, or other documents, during all stages of production, delivery, and installation, where appropriate. It is also our policy, where appropriate, to use and maintain Procedure 4.8 for identifying the product from applicable drawings, specifications, or other documents, during all stages of production, delivery, and installation. To avoid confusion in orders, it is our policy to always use a unique identification for an individual product or batches, where, and to the extent that, traceability is a specified requirement. It is also our policy to always record this identification (see section 4.16).

4.11 Inspection, Measuring, and Test Equipment

In our company, we use equipment to inspect, measure and test parts, supplies and product.

Rationale
We believe it is important for us to keep that equipment calibrated. This is to avoid the risk of faulty inspection. We believe that effective inspection, measurement, and use of calibrated test equipment will result in reduced costs due to eliminating wasted effort and material due to faulty inspection. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order for inspectors to know what to measure, it is the policy of this company to adhere to the ISO 9001 section 4.11 standard on Inspection, Measuring and Test Equipment and always state the required measurement accuracy in the design. To demonstrate the conformance of product to the specified requirements and show that measurements are completely accurate, it is our policy to always control, calibrate, and maintain inspection, measuring, and test equipment. This is true whether the equipment is owned by us, on loan, or provided by the purchaser. To make sure measurements are done correctly, it is our policy to always use equipment in a manner that ensures that measurement uncertainty is known and is consistent with the required measurement capability. To make sure measurements are done correctly, it is also our policy to:

Identify the measurements to be made, the accuracy required, and select the appropriate inspection, measuring, and test equipment Identify, calibrate, and adjust all inspection, measuring and test equipment, and devices that can affect product quality at prescribed intervals, or prior to use, against certified equipment having a known valid relationship to nationally recognized standards - where no such standards exist, the basis used for calibration shall be documented Establish, document, and maintain calibration procedures, including details of equipment type, identification number, location, frequency of checks, check method, acceptance criteria, and the action to be taken when results are unsatisfactory Ensure that the inspection, measuring, and test equipment is capable of the accuracy and precision necessary Identify inspection, measuring, and test equipment with a suitable indicator or approved identification record to show the calibration status Maintain calibration records for inspection, measuring and test equipment (see section 4.16) Assess and document the validity of previous inspection and test results when inspection, measuring, and test equipment is found to be out of calibration;

Ensure that the environmental conditions are suitable for the calibrations, inspections, measurements, and tests being carried out Ensure that the handling, preservation, and storage of inspection, measuring, and test equipment is such that the accuracy and fitness for use is maintained Safeguard inspection, measuring, and test facilities, including both test hardware and test software, from adjustments that would invalidate the calibration setting

Where test hardware (e.g., jigs, fixtures, templates, patterns) or test software is used as suitable firms of inspection, they shall be checked to prove that they are capable of verifying the acceptability of product prior to release for use during production and installation and shall be rechecked at prescribed intervals. It is our policy to establish the extent and frequency of such checks and shall maintain records as evidence of control (see section 4.16). Measurement design data shall be made available, when required by the purchaser or his representative, for verification that it is functionally adequate.

4.17 Internal Quality Audits

In our company, we use a system of policies and procedures for our management and workers to follow.

Rationale
We believe it is important that we regularly check or audit our quality system to make sure everyone is following company policy, procedures, and work instructions. This is done in order to avoid risk of losing control of our quality system operations. We believe that effective internal quality audits will result in reduced costs by helping to eliminate wasted effort and material. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order to verify that our quality activities comply with planned arrangements and also to determine the effectiveness of the quality system, it is the policy of this company to adhere to the ISO 9001 section 4.17 standard for Internal Quality Audits and always carry out a comprehensive system of planned and documented internal quality audits. To make sure we take care of important business first, it is our policy to schedule audits on the basis of the status and importance of the activity. It is also our policy to carry out the audits and follow-up actions in accordance with our Procedure 4.17. To make sure that we respond to the results of audits, it is our policy to always document the results of those audits and to bring them to the attention of the personnel having responsibility in the area audited.

To make the audits effective and worthwhile, it is our policy that the management personnel responsible for the area always take timely corrective action on the deficiencies found by the audit (see paragraph 4.1.3).

4.13 Control of Nonconforming Product

In our company, even though we normally make high quality products that fulfill the customer's specifications, it is possible some items do not conform to specification. These are called nonconforming product.

Rationale
We believe it is important to control parts, supplies, and products that do not conform to specification. This is to avoid the risk of having those items improperly used in their final product. We believe that effective control of nonconforming product will result in reduced costs due to eliminating wasted effort and material. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order to avoid using product that does not conform to specified requirements, it is the policy of this company to adhere to the ISO 9001 section 4.7 standard on Control of Nonconforming Product and always ensure that such nonconforming product is prevented from inadvertent use or installation. It is our policy to use and maintain Procedure 4.13, explaining what we do to ensure that product that does not conform to specified requirements is prevented from inadvertent use or installation. Our control provides for identification, documentation, evaluation, segregation (when practical), disposition of nonconforming product, and for notification to the functions concerned.

4.13.1 Nonconformity Review and Disposition

To make sure there is someone responsible for controlling non-conformities, it is our policy to always define the people responsible for review and who have authority for the disposition of nonconforming products. Nonconforming product shall be reviewed in accordance with documented procedures. It may be:

Reworked to meet the specified requirements or Accepted with or without repair by concession or Re-graded for alternative applications or

Rejected or scrapped

Where required by the contract, the proposed use or repair of product (see 4.13.1.b) which does not conform to specified requirements shall be reported for concession to the purchaser or the purchaser's representative. The description of nonconformity that has been accepted, and of repairs, shall be recorded to denote the actual condition (see section 4.16). It is our policy that repaired and reworked product be re-inspected in accordance with documented procedures.

4.14 Corrective Action

In our company, it is possible that mistakes or problem areas can be found among our processes.

Rationale
We believe it is important to take corrective action on any mistakes and formalize an action to correct problem areas. This is to avoid the risk of having those problems repeat or grow. We believe that effective corrective action will result in reduced costs due to eliminating wasted effort and material. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order to avoid recurrence of problems, it is the policy of this company to adhere to the ISO 9001 section 4.14 standard on Corrective Action and always: 1. Investigate the cause of nonconforming product and the corrective action needed to prevent recurrence 2. Analyze all processes, work operations concessions, quality records, service reports, and customer complaints to detect and eliminate potential causes of nonconforming product 3. Initiate preventative actions to deal with problems to a level corresponding to the risks encountered 4. Apply controls to ensure that corrective actions are taken and that they are effective 5. Implement and record changes in procedures resulting from corrective action It is also our policy to always use, document and maintain Procedure 4.14 for: 1. Investigating the cause of nonconforming product and the corrective action needed to prevent recurrence 2. Analyzing all processes, work operations concessions, quality records, service reports, and customer complaints to detect and eliminate potential causes of nonconforming product

3. Initiating preventative actions to deal with problems to a level corresponding to the risks encountered 4. Applying controls to ensure that corrective actions are taken and that they are effective 5. Implementing and recording changes in procedures resulting from corrective action

4.15 Handling, Storage, Packaging, and Delivery

In our company, we handle, store, package, and deliver numerous products.

Rationale
We believe it is important to take care in handling, storing, packaging, and delivering product. This is to avoid the risk of damaged or lost goods. We believe that effective handling, storage, packaging, and delivery will result in reduced costs by helping to eliminate damaged or lost goods and wasted effort and material in replacing those goods. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, it is the policy of this company to adhere to the ISO 9001 section 4.15 standard on Handling, Storage, Packaging, and Delivery, as follows.

4.15.1 General
It is our policy to always use and maintain Procedure 4.15 for handling, storage, packaging, and delivery of product.

4.15.2 Handling
To ensure delivery of a product in the same condition we received it, it is our policy to always provide methods and means of handling that prevent damage or deterioration.

4.15.3 Storage
To prevent damage or deterioration of product, it is our policy to always provide secure storage areas or stock rooms pending use, or delivery. Appropriate methods for authorizing receipt and the dispatch to and from such areas shall be stipulated. To detect deterioration, it is our policy to always assess the condition of product in stock at appropriate intervals.

4.15.4 Packaging
It is our policy to control packing, preservation, and marking processes (including materials used) to the extent necessary to ensure conformance to specified requirements and shall identify, preserve, and segregate all product from the time of receipt until the supplier's responsibility ceases.

4.15.5 Delivery
To assure an undamaged product is delivered, it is our policy to always arrange for the protection of the quality of product after final inspection and test. It is also our policy, where contractually specified, to extend this protection to include deliver to destination.

4.16 Quality Records

In our company, we perform various tests, checks, and such on our products.

Rationale
We believe it is important to keep records that document and verify the quality (adherence to specification and contract) of our product. This is to make sure we deliver quality product, as well satisfy customer expectations. We believe that effective quality records will result in reduced costs by helping eliminate wasted effort and material. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order to demonstrate the achievement of the required product quality, it is the policy of this company to adhere to the ISO 9001 section 4.16 standard for Quality Records and establish and maintain quality records. This also verifies the effective operation of our quality management system. We include pertinent subcontractor quality records as an element of these data. All quality records are legible and identifiable to the product involved. It is our policy to use Procedure section 4.16 to explain how we identify, collect, index, file, store, maintain, and perform disposition of our quality records. It is also our policy to store and maintain our quality records in such a way that they are readily retrievable. They are stored in facilities that provide a suitable environment to minimize

deterioration or damage and to prevent possible loss, as per Paragraph 4.16 on Storage. It is our policy to establish and record retention times of our quality records. Where agreed contractually, it is our policy to make our quality records available for evaluation by the purchaser or the purchaser's representative for an agreed period. It is our policy to have records stored by the department that is responsible for their establishment.

4.20 Statistical Techniques

In our company, we have various repetitive processes used in the manufacture of our product.

Rationale
We believe it is important to use statistical techniques to measure and validate our processes and to make sure our product characteristics are as stated. This is to avoid the risk of having incorrect information on our product's quality and on the effectiveness of its work processes. We believe that effective use of statistical techniques will result in reduced costs due to eliminating wasted effort and material. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order to verify the acceptability of our process capability and our product characteristics, it is the policy of this company to adhere to the ISO 9001 section 4.20 standard on Statistical Techniques and always use adequate statistical techniques. It is also the policy of this company to use our Procedure 4.20 for identifying those adequate statistical techniques required for verifying the acceptability of our process capability and our product characteristics.

4.19 Servicing
In our company, the products we deliver may occasionally need servicing.

Rationale

We believe it is important to provide support for the products we sell. This is to avoid the risk of unhappy customers and product returns. We believe that effective servicing of our products after delivery will result in reduced costs due to eliminating wasted effort and material. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services. NOTE: Even when not stated in the contract, some form of product service is expected. When it goes beyond what is expected, the customer can be delighted.

Policy
Thus, in order to keep our customers satisfied, it is the policy of this company to follow the ISO 9001 section 4.19 standard on Servicing and always perform servicing that meets the specified requirements, where servicing is specified in the contract. Where servicing is specified in the contract, we maintain our Procedure 4.19 for performing servicing and verifying that it meets the specified requirements.

4.2 Quality System

In our company, we have a system of policies, procedures and instructions to guide our work in a quality manner.

Rationale
We believe it is important for us to follow these policies, procedures, and instructions. This is to have some sort of system to assure the quality of their products and services quite and being able to deliver what we promise. We believe that using such a quality system will result in reduced costs by helping eliminate wasted effort and material that could come from disorganized efforts. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services. (By quality system we mean documented policies, procedures, and work instructions that lead to and guide the delivery of quality products and services, as promised to the customer.)

Policy
Thus, to make sure we have a guide to operate the company and ensure that our products are high quality, it is the policy of this company to adhere to the ISO 9001 section 4.2 standard on Quality System and have a documented quality system.

The establishment of a documented quality system includes the preparation of documented quality system procedures and instructions in accordance with the requirements of the ISO 9001 standard and the effective implementation of the documented quality system procedures and instructions. It is also our policy to maintain that documented quality system. In meeting specified requirements, timely consideration is given to the following activities: 1. The preparation of quality plans and a quality manual in accordance with the specified requirements 2. The identification and acquisition of any controls, processes, inspection equipment, fixtures, total production resources, and skills that may be needed to achieve the required quality 3. The updating, as necessary, of quality control, inspection, and testing techniques, including the development of new instrumentation 4. The identification of any measurement requirement involving capability that exceeds the known state of the art in sufficient time for the needed capability to be developed 5. The clarification of standards of acceptability for all features and requirements, including those that contain a subjective element 6. The compatibility of the design, production process, installation, inspection and test procedures, and the applicable documentation 7. The identification and preparation of quality records (see section 4.16)

4.7 Purchaser-Supplied Product

In our company, we sometimes receive and use parts and supplies provided by our customer (purchaser).

Rationale
We believe it is important for us to protect those customer-provided parts and supplies. This is to avoid the risk of losing or damaging those items. We believe that effective control of purchaser supplied product will result in reduced costs by helping eliminate wasted effort and material due to having to replace those items. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order to avoid possible loss or damage of purchaser-supplied product, it is the policy of this company to adhere to the ISO 9001 section 4.7 standard on Purchaser-Supplied Product and

always verify the incoming condition, properly store, and maintain those products that are supplied by the purchaser and provided for incorporation into our supplies. It is our also our policy to follow and maintain Procedure 4.7 for verification, storage, and maintenance of purchaser-supplied product provided for incorporation into the supplies. To keep our customer aware of any problems, it is our policy to always record and report to the purchaser any such product that is lost, damaged, or is otherwise unsuitable for use. (See paragraph section 4.16). NOTE: Verification by the supplier does not absolve the purchaser of the responsibility to provide acceptable product.

4.3 Contract Review

In our company, we use contracts to define what we are to make and deliver to our customer, when it is to be delivered, what the price will be, and other sundry considerations.

Rationale
We believe it is important to review a contract with both the customer and the people doing the work before it is finalized. This is to make sure we understand what the customer wants and that we are able to make a product that fulfills what those desires. We believe that effective contract review will result in reduced costs by helping eliminate contractual misunderstandings that cause wasted effort and material. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, in order to make sure there are no contractual misunderstandings, it is the policy of this company to adhere to the ISO 9001 section 4.3 standard on Contract Review and always review each contract before it is finalized to see that: 1. The requirements are adequately defined and documented; 2. Any requirements differing from those in the tender are resolved; and 3. We have the capability to meet contractual requirements. Also, to make sure there are no contractual misunderstandings, it is our policy to always coordinate with the purchaser's organization, as appropriate, our contract review activities, interfaces and communication.

1. To make sure we can check and verify what transpired at our contract review meetings, it is our policy to always maintain records of those contract reviews, as per Policy paragraph section 4.16 Document Control. 2. To make sure we properly implement this contract review policy, it is our policy to always use Procedure 4.3 for the review of contracts and for the coordination of these activities. 3. It is also our policy to maintain that procedure, as per Policy paragraph section 4.16 Document Control.

4.2 Quality System

In our company, we have a system of policies, procedures and instructions to guide our work in a quality manner.

Rationale
We believe it is important for us to follow these policies, procedures, and instructions. This is to have some sort of system to assure the quality of their products and services quite and being able to deliver what we promise. We believe that using such a quality system will result in reduced costs by helping eliminate wasted effort and material that could come from disorganized efforts. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services. (By quality system we mean documented policies, procedures, and work instructions that lead to and guide the delivery of quality products and services, as promised to the customer.)

Policy
Thus, to make sure we have a guide to operate the company and ensure that our products are high quality, it is the policy of this company to adhere to the ISO 9001 section 4.2 standard on Quality System and have a documented quality system. The establishment of a documented quality system includes the preparation of documented quality system procedures and instructions in accordance with the requirements of the ISO 9001 standard and the effective implementation of the documented quality system procedures and instructions. It is also our policy to maintain that documented quality system.

In meeting specified requirements, timely consideration is given to the following activities: 1. The preparation of quality plans and a quality manual in accordance with the specified requirements 2. The identification and acquisition of any controls, processes, inspection equipment, fixtures, total production resources, and skills that may be needed to achieve the required quality 3. The updating, as necessary, of quality control, inspection, and testing techniques, including the development of new instrumentation 4. The identification of any measurement requirement involving capability that exceeds the known state of the art in sufficient time for the needed capability to be developed 5. The clarification of standards of acceptability for all features and requirements, including those that contain a subjective element 6. The compatibility of the design, production process, installation, inspection and test procedures, and the applicable documentation 7. The identification and preparation of quality records (see section 4.16)

4.9 Process Control

In our company, we have numerous processes in the operation of the business and the manufacture of our goods. (By process we mean a systematic series of actions directed to some end or goal.)

Rationale
We believe it is important for us to maintain control over these various processes and to document those processes. This is to make sure the product is made correctly and consistently. We believe that effective process control will result in reduced costs by helping eliminate wasted effort and material due to making the product incorrectly or inconsistently. It will also ultimately result in increased business due to customer satisfaction from getting expected goods and services.

Policy
Thus, it is the policy of this company to adhere to the ISO 9001 section 4.9 standard on Process Control, as follows.

4.9.1 General
To avoid inconsistencies, it is our policy to always identify and plan our production and installation processes that directly affect the quality of the goods we produce.

To avoid poor decisions, it is our policy to always ensure that these processes are carried out under controlled conditions by following Procedure 4.9. Controlled conditions shall include the following:

Documented work instructions defining the manner of production and installation, where the absence of such instructions would adversely affect quality Use of suitable production and installation equipment, suitable working environment, compliance with reference standards / codes, and quality plans Monitoring and control of suitable process and product characteristics during production and installation The approval of processes and equipment, as appropriate

Criteria for workmanship that shall be stipulated to the greatest practicable extent in written standards or by means of representative samples.

4.9.2 Special Processes

In our work there are some special processes, of which the results cannot be fully verified by subsequent inspection and testing of the product and wherefor exampleprocessing deficiencies may become apparent only after the product is in use. Accordingly, continuous monitoring and/or compliance with documented procedures are required to ensure that the specified requirements are met. These processes shall be qualified and shall also comply with the requirements of 4.9.1. Records shall be maintained for qualified processes, equipment and personnel, as appropriate.

Step 11. Management Review

When the installed quality management system has been operating for three to six months, an internal audit and management review should be conducted and corrective actions implemented. The management reviews are conducted to ensure the continuing suitability, adequacy and effectiveness of the quality management system. The review should include assessing opportunities for improvement and the need for changes to the quality management system, including the quality policy and quality objectives. The input to management review should include information on: Results of audits, Customer feed back, Process performance and product conformity, Status of preventive and corrective actions, Follow-up actions from previous management reviews, Changes that could affect the quality management system, and Recommendations for improvements. Management reviews should also address the pitfalls to effective implementation,

including lack of CEO commitment, failure to involve everyone in the process, and failure to monitor progress and enforce deadlines.

Comparing ISO 9000 and TQM

by Ron Kurtus (revised 11 March 2001) Although Total Quality Management (TQM) came on the scene first as a method for companies to improve profits and repeat business, complying to the ISO 9000 standards is the first thing a company should consider to improve the way it does business. Questions you may have include:

Why should ISO 9000 be used first? What is the role of using TQM concepts? What are the benefits of using the two together?

This lesson will try to answer those questions.

Using ISO 9000 first

ISO 9000 consists of a set of international standards for running a business in an effective manner. These standards require a business to document their plans, specifications, procedures, activities, and such.

Like planning household finances

Using ISO 9000 is analogous to planning your household finances and keeping your records straight for paying your bills and taxes. Keeping your records straight, as recommended in the ISO 9000 standards, is the first step in effectively running a business.

Organizes business
Getting your house in order is the very first thing a company should do in order to run effectively. You must make sure you know where your money and goods are going. You need records for paying your bills and taxes. You need your employees to do consistent work.

A business that follows the ISO 9000 standards will usually eliminate wasteful and careless practices that can drain their profits.

Verify following standards

By becoming registered in ISO 9000, a company is verifying that it is fulfilling the general requirements for operating a business in an effective manner. It is also possible for a company to simply comply to the standards, as a business strategy, without formally becoming certified.

TQM enhances good company

On the other hand, TQM is a way of running a business that concentrates on satisfying the customer. Its use will result in repeat and continued business. TQM should usually be started after a business properly documents its activities, as per ISO 9000. Besides satisfying the customer TQM also is concerned with empowering the workers, This will ensure that their skills are effectively used and that they feel they have a stake in the success of the organization. A final aspect of TQM is the use of statistics to determine the correct areas to make changes and improvements.

Companies use both to their benefit

Companies that have effectively implemented ISO 9000 standards and TQM concepts have dramatically improved their profits and customer retention.

Can be misused
Unfortunately, both of these methods have been misinterpreted and misused by many companies. Some companies have simply paid lip service to ISO 9000 and schemed to find ways to get around the requirements and to fool the auditors. They see ISO 9000 as an intrusion to the way they prefer to do business, instead of a good method to reduce costs in the long run. Many companies have used TQM as an excuse to downsize and pressure their workers to produce more for less money. Downsizing was later taken over by the re-engineering movement. Customer satisfaction became more of a buzzword than a practice.

Proves beneficial
In general, companies that have honestly employed ISO 9000 and/or TQM have been proven to be better run, have fewer problems, have less waste, get more repeat business, and have increased profits.

Of course, having a well-run company is not the only thing that results in success. A good product line, effective marketing, and being able to beat out the competition are very important factors. But by employing first ISO 9000 and then TQM methods, a company can get a leg up on its competition.

Summary
ISO 9000 standards are concerned with effectively documents the way you run your business, in order to improve your profit margin. TQM concerns customer satisfaction and worker effectiveness, in order to increase business and cut costs. A business should first follow ISO 9000 standards and then implement TQM practices to improve their profits and customer retention.

Internal ISO 9000 Audits

by Ron Kurtus (11 December 2006) Companies seeking ISO 9000 certification or those simply wishing to be compliant to the standards should have internal quality audits to make sure all documentation is complete and in place. This is especially important before calling in the Registrar. Once a company becomes registered or certified, it should perform periodic audits to verify their continual adherence to the ISO 9000 standards. Discrepancies should be documented and corrected. The auditing process protects an organization from procedural slippage and misdirection of effort. It assures a company that the quality management system is functioning effectively and as required. Questions you may have include:

What are the requirements for internal auditors? What is the auditing process? What should be done in case of an audit discrepancy?

This lesson will answer those questions.

Requirements on internal auditors

Your company management should assign qualified and responsible individuals to perform internal audits. These people should be trained and certified in auditing techniques. Often internal auditors are volunteers who are interested in company improvement. To prevent possible conflict of interest or questions on the validity of the audit, as well as to maintain complete objectivity, internal auditors should never audit areas in which they work. They should also not be assigned to audit areas where they know any of the workers. Objectivity may be questioned if the audit is in an area where a friend or rival is working.

Auditing process
The person in charge of performing an ISO 9000 internal audit in a specific company area should gather an audit team and have them develop an audit checklist. In some cases, this person may be the only one involved in the particular audit. The lead auditor should notify the department manager at least two weeks in advance of the visit and ask to be assigned a guide. The auditor should state what he or she is looking for and ask what areas are off-limits to auditors. The auditor should ask for permission to talk to the people who do the work and then politely introduce him- or herself to the workers and state the reason for being there. The purpose of the audit is to see whether the workers are following written procedures in their tasks. If there are apparent discrepancies where workers are not following written procedure or there are no procedures to follow, the auditor should verify those discrepancies before leaving the area. Then all the auditors in this area will conduct a closed door meeting to discuss their findings. A post-audit meeting is then held with department management and a a follow-up audit is conducted, if necessary.

Filling audit discrepancy reports

If discrepancies were found during the audit, they should be documented. Typically an Audit Discrepancy Form is used. When filling out a discrepancy form, the auditor should try to stick to the facts, writing in conversational language that is easy to understand. A good method to use is to answer the "five Ws":

Who did you talk to? Who was involved? What was found? When was it found? Where was it found? Why was it a discrepancy?

The auditor should use terminology that is relevant to the department being audited. It is also important to make the data retrievable by using names, numbers and such. Finally, the auditor should not make suggestions. Instead, he should let the department find its own solutions.

Summary
Internal quality audits are important to companies seeking to follow the ISO 9000 standards. Auditors should be trained and objective, they should be courteous and fair in the auditing process, and should be complete in filling out any discrepancy form.

Step 7. Develop Quality Management System Documentation

Documentation is the most common area of non-conformance among organizations wishing to implement ISO 9000 quality management systems. As one company pointed out: "When we started our implementation, we found that documentation was inadequate. Even absent, in some areas. Take calibration. Obviously it's necessary, and obviously we do it, but it wasn't being documented. Another area was inspection and testing. We inspect and test practically every item that leaves here, but our documentation was inadequate". Documentation of the quality management system should include: Documented statements of a quality policy and quality objectives, A quality manual, Documented procedures and records required by the standard ISO 9001:2000, and Documents needed by the organization to ensure the effective planning, operation and control of its processes. Quality documentation is generally prepared in the three levels indicated in the box that follows. Use ISO 10013:1995 for guidance in quality documentation. Level A: Quality manual States the scope of the quality management system, including exclusions and details of their justification; and describes the processes of the quality management system and their interaction. Generally gives an organization profile; presents the organizational relationships and responsibilities of persons whose work affects quality and outlines the main procedures. It may also describe organization's quality policy and quality objectives. Level B: Quality management system procedures

 Describes

the activities of individual departments, how quality is controlled in each department and the checks that are carried out. Level C: Quality documents (forms, reports, work instructions, etc.) Work instructions describe in detail how specific tasks are performed; include drawing standards, methods of tests, customer's specifications, etc. Presents forms to be used for recording observations, etc. In small companies, the above levels of documentation could be presented in one manual; otherwise, separate manuals should be prepared. 8 A list of the documents to be prepared should be drawn up and the responsibility for writing the documents should be assigned to the persons concerned in various functional departments. They should be advised to prepare the drafts within a specific time frame.

Misconception of the Cost of Quality Baden-Hallard ~1993! defined the cost of quality as costs associated with conformance to requirements and costs associated with nonconformance to requirements. Costs in the construction industry are being compounded by prevention and appraisal costs coupled with nonconformance costs. Contractors often perceive TQM as an extra cost, but they do not realize that it is not the quality that costs but rather the nonconformance to quality that is expensive. The sources of costs associated with the nonachievement of quality include the costs of rework, correcting errors, reacting to customer complaints, having deficient project budgets due to poor planning, and missing deadlines ~Culp 1993!. Biggar ~1990! argues that the costs associated with implementing a TQM system could be substantial, depending on the size and nature of the company. However, Biggar ~1990! pointed out that the costs incurred from not achieving quality can cost owners up to 12% of the total project cost. Cost of quality The cost of quality is considered by both Crosby 22 and Juran 5 to be the primary tool for measuring quality. In their approach, it is used to track the effectiveness of the TQM process, select quality improvement projects, and provide cost justification to doubters. By bringing together these easily assembled costs of review, inspection, testing, scrap, and rework, one can convince management and others of the need for quality improvement." Cost of quality has received increasing attention in recent years. It

is effective in its intended purpose of raising awareness about quality and communicating to management the benefits of TQM in terms of dollars. Quality costs consist of the cost of prevention, the cost of appraisal, and the cost of deviation. Prevention costs are those resulting from activities used to avoid deviations or errors, while appraisal costs consist of costs incurred from activities used to determine whether a product, process, or service conforms to established requirements. 23 The cost of design or constructability reviews, as well as the cost of modifying work procedures to adhere to quality standards might be considered prevention costs, while inspection is an example of an appraisal cost. A survey of US firms indicates that the major obstacle to using the ISO 9000 standards is the additional cost of modifying work procedures and the additional cost of revising standardsfl 4 Deviation costs are those resulting from not meeting the requirements. Some deviation costs are incurred on the project site due to scrap, rework, failure analysis, reinspection, supplier error, or price reduction due to nonconformity. Other deviation costs are incurred once the owner takes possession of the constructed facility. These include costs for adjustment of complaints, repair costs, costs for handling and replacing rejected material, workmanship or equipment costs for correcting errors, and litigation costsfl 5 In the construction industry, contractors are selected by owners on a competitive basis. Even though the bid is considered to be the major criterion of selection, especially

private owners also consider the contractors' safety record, technical support, equipment capabilities, and especially reputation regarding the quality of the work performed. Contractors with a reputation for poor quality are not likely to be awarded many projects in the existing competitive marketplace. It therefore pays for contractors to invest in measures to achieve high work quality in order to increase chances of winning contracts.