School of Planning and Architecture, Delhi

Integration of lean construction approach and cost of quality indicators for construction process efficiency
Project Seminar-I Class review-I
Meenakshi Goyal BEM 550 Semester II
Henry Ford once said, Its all about efficiency.

Construction is peculiar industry which bears upon management principles specific to service and manufacturing industry
Construction cannot be categorized as being strictly either a service or a manufacturing industry (Kubal, 1996), therefore the construction industry must combine quality concepts from both the service and manufacturing industries. The process itself is a transformation that adds value.

Construction industry currently is facing with a lot of problems mainly associated to its inefficient work process. This phenomenon has been manifested by frequent news and critics about project delay and inferior quality. Therefore there is an urgent need for construction industry to improve this situation. Many efforts have been done to improve the performance of the construction industry reputation such as using alternative procurement system, adoption of tools and management philosophy from other industry and using to new technological advancement such as the use of modular construction. In view to these problems face by the industry, this study has been undertaken with the aim to determine the strategies to improve the efficiency in construction process.

THE SCENARIO

WHAT ARE WE LOOKING FOR?

CONSTRUCTION PROCESS EFFICIENCY Efficiency in construction process can be defined as the project constructed within time scheduled and cost budgeted. It is also were defined as process that produced less or no construction waste with a good quality project, no redundancy activities, good construction management and good monitoring and controlling construction process

THE TERMS

With the continuous decline in profit margins and increased competition in construction projects, construction contractors are continuing to search for ways of eliminating waste and increasing profit (Mastroianni and Abdelhamid 2003). The ultimate aim is to reduce the level of defects to zero. However, this may not be possible and in practice and what it means is that everything possible will be done to eliminate the likelihood of errors or defects occurring Cost of quality (COQ)
Cost of quality (COQ) refers to the total cost of all efforts related to quality throughout the product life cycle. It includes all costs incurred over the life of the product by investment in preventing nonconformance to requirements, appraising the product or service for conformance to requirements, and failing to meet requirements (rework). Failure costs are often categorized into internal (found by the project) and external (found by the customer). Failure costs are also called cost of poor quality

Lean construction practices

A way to design production systems to minimize waste of materials, time, and effort in order to generate the maximum possible amount of value." Wlabridge Aldinger defines LC through its features and requirements. LC is a process that: Reduces Waste Saves Money and Reduces Cost Creates Higher Quality Creates Flexible Delivery Systems to Match Owner Requirements Creates Stable Schedules Reliable Material Deliveries and Reliable Workforce Promotes Employee Participation, Which Leads to Satisfaction Improves Customer Satisfaction

Any project can be measured according to the time-cost-quality triangle, and its an equation that contractors know very well. They also know that in every traditional, site-built construction project, its virtually impossible to improve all sides of the triangle. Save on time to decrease costs, and quality suffers. Similarly, if quality and time are the focus, costs are bound to rise.

Understanding the investment put by developers and expections of a user from a construction project, it is necessary to find out an approach for an efficient construction practice taking into account time, cost and most importantly the quality. The study not only aims at studying the concept of quality cost and lean principles but also integrating both concepts for an approach towards construction process efficiency.
The lean principles can only be applied fully and effectively in construction by focusing on improving the whole process. This means all parties have to be committed, involved, and work to overcome obstacles that may arise from traditional contractual arrangements. In this study we aim at applying these principles for construction efficiency and evaluating the performance by cost of quality indicators as referred in figure 3.

NEED

Lean and Cost of Quality can be integrated Lean and Cost of Quality will help in approach for an efficient construction process and has potential to reduce wastage due to drivers that can be identified through a survey of industry. Barriers for effective implementation can be eliminated through management strategies.

HYPOTHESIS

Cost of Quality indicators

Appraisal cost(do things right at fist time) Preventive cost(avoid mistakes) Failure cost(due to mistakes)

Lean principles
Eliminate waste Precisely specify value from the perspective of the ultimate customer Clearly identify the process that delivers what the customer values (the value stream) and eliminate all non value adding steps Make the remaining value adding steps flow without interruption by managing the interfaces between different steps Let the customer pull dont make anything until it is needed, then make it quickly Pursue perfection by continuous improvement

Reduce waste Do things right at the first time

INTEGRATION OF COST OF QUALITY INDICATORS AND LEAN PRINCIPLES

To study lean principles and Cost of Quality indicators and converge them to make an approach towards efficient construction process

AIM..

OBJECTIVES

Study of concept of Quality cost for quality management Understand the application of this concept in industry Study the lean construction practices Converge the principles of lean construction and indicators of cost of quality to develop a approach for construction process efficiency

Aims and objectives of the study

METHODOLOGY

Literature survey
Understanding the concept of Cost of Quality and lean principles Integrating both the concepts for an efficient construction process- Hypothesis Questionnaire survey for identifying drivers and barriers to applications of Cost of Quality and Lean Principles
Analyze the Cost of Quality in the project executed using lean principles propose methodology of implementation of Lean Principles and Cost of Quality in an integrated approach

Conclusion/Inferences

LITERATURE REVIEW
Site Implementation and Assessment of Lean Construction Techniques
Authors: O. Salem, J. Solomon, A. Genaidy, and M. Luegring This paper has been written to analyze the effectiveness of some lean construction tools, in particular, those tools that can be applied in medium size construction firms. Due to the success of the lean production system in manufacturing, the construction industry has adapted lean techniques to eliminate waste and increase profit. A field study was conducted by the authors to evaluate the effectiveness of some lean construction techniques including last planner, increased visualization, daily huddle meetings, first run studies, the 5s process, and fail safe for quality. The data collection methods included direct observations, interviews, questionnaires, and documentary analysis. The effectiveness of the lean construction tools was evaluated through the lean implementation measurement standard and performance criteria. It was found that last planner, increased visualization, daily huddle meetings, and first run studies achieved more effective outcomes than expected. This paper helped to understand some basic lean techniques including last planner, increased visualization, daily huddle meetings, first run studies, the 5s process, and fail safe for quality and how did they effect the efficieny of the construction process in the case study.

Benchmarking System for Evaluating Management Practices in the Construction Industry Authors: Ricardo R. Ramrez; Luis Fernando C. Alarcon; and Peter Knights This paper has been written to analyze the performance of different construction companies over some performance indicators and aims at standardizing a benchmarking system to evaluate the performance of the construction process. Benchmarking is an important continuous improvement tool that enables companies to enhance their performance by identifying, adapting, and implementing the best practice identified in a participating group of companies. Benchmarks serve to motivate employees by establishing realistic goals demonstrated to be achieved. This paper helped at identifying the performance indicators over which the efficiency of a construction process may be analyzed.

Managing Cost of Quality: Insight into Industry Practice Authors: Andrea Schiffauerova, Vince Thomson cole Polytechnique de Montral, Department of Mathematics and Industrial Engineering, Montreal Department of Mechanical Engineering, McGill University, Montreal, Canada
This paper reports on the study of the quality costing practices at four large successful multinational companies. All four companies use systematic quality initiatives; however, a formal cost of quality (CoQ) methodology was only employed at one of them. This is in agreement with the literature findings arguing that a CoQ approach is not utilized in most quality management programs. The article discusses and compares the quality programs of all four companies and explains the benefits of the eventual adoption of a CoQ approach in each case. This paper helps in understanding the application of Cost of Quality in the construction industry and the impact of this quality management tool in real construction practice. No matter which quality costing approach is used, the main idea behind the CoQ analysis is the linking of improvement activities with associated costs and customer expectations, thus allowing targeted action for reducing quality costs and increasing quality improvement benefits.

Lean supply: cost reduction or waste reduction

Authors: Richard Johns, school of Management, University of Bath The author has studied the lean principles and practices and the expectations of customers from these principles and how these are reflected in the supply management specially with the low tier suppliers. the approach of lean has been studied in relation to the issues of the traditional approach and how lean principles help to mitigate the problems. According to the author, the lean approach moves away from the traditional approach where the contract is awarded on the basis of price, by thinking in terms of reduction of wastage from the main value stream. The main driver for such an approach is the need to gain improvements in quality, cost and delivery and also improve the relationship with the suppliers. the various tools from the lean toolkit used by the customers are Kanban, change over reduction, visual control, inventory and scrap reduction, 5Ss, Kaizen, quality failsafing were identified by the customers.

An important point raised in the paper was to quantify the impacts of the lean principles in terms of financial gains. Unless the accounting system can provide a full cost profile for a product or operation, it is difficult to target the most significant regions of waste, which are the root causes of cost.

Efficiency versus effectiveness in construction supply chains: the dangers of "lean" thinking in isolation Authors: Andrew Fearne, Nicholas Fowler
The construction industry is arguably the least integrated of the all the major industrial sectors, characterised by adversarial practices, disjointed supply relationships and a lack of trust between clients, main contractors and subcontractors. The paper has been written to illustrate the potential danger of applying lean thinking discretely and indiscriminantly in a project environment with high levels of complexity and uncertainty. Insights are presented from two case studies of private residential construction projects which the authors believe are indicative of recent efforts to reduce the cost of construction activities. Evidence was found of attempts to remove capacity in transportation, stockholding and on-site labour. Some of these attempts were logical and resulted in cost-savings but others were illogical and resulted in reduced levels of responsiveness and flexibility to respond to the uncertainty which is a characteristic of most construction projects. This paper helps in identifying some shortcomings of the lean approach in the projects studied and hence it becomes important to quantify the impacts of this construction efficieny techniques to understand their applicability on the project.

Analysis and utilization of quality cost in construction projects

Authors: Sang-Hoon Song and Hyun-Soo Lee Department of Architecture, Seoul National University, Seoul, Korea In the customer-focused paradigm, high quality products or services can strengthen competitiveness, raise market-share, and provide a basis for long-term relationship with owners. But in most cases, the lack of quantitative data makes it difficult for managers to judge the current status of quality appropriately during a construction phase. Although quality is one of the critical success factors for evaluating a construction project, there is no practical guideline for measuring quality. As a solution to this problem, this study proposes a method to measure and analyze quality cost in construction projects. Quality cost plays an intermediate role in managing quality from a cost perspective and consequently contributes to the success of the construction project. This study aims at identification of the cost of quality as a parameter to quantify the quality of the project and suggest measures for improvement in construction process.

A new framework for determining critical success/failure factors in projects

Authors: Walid Belassi(Faculty of Commerce, College of Business Administration, Cairo University, Cairo, Egypt) Oya Icmeli Tukel(Operation Management and Business Statistics Dept., Cleveland State University, Cleveland, Ohio 44115, USA) Only a few studies in the project management literature concentrate on the critical factors that affect project success or failure. Whereas many of these studies generate lists of critical success factors, each list varies in its scope and purpose. The success factors are usually listed as either very general factors or very specific factors affecting only a particular project. However, lacking a comprehensive list makes it difficult not only for project managers but also for researchers to evaluate projects based on these factors. In this study, we suggest a new scheme that classifies the critical factors, and describes the impacts of these factors on project performance. Emphasis is given to the grouping of success factors and explaining the interaction between them, rather than the identification of individual factors. These factors studied in the study would help to frame the indicators for the construction process efficiency.

Seminar report:

Cost of Quality
Author: B.R. Pradeep (December 2009) Defects in construction process are persistently worrying problem despite continually improving technology and education. In the present scenario, the developers are not giving importance to the quality but the time and cost are becoming governing factors. If studied closely quality cost indicators can help identify the rework issues which are a reason for time wastage and also induces extra cost to the project. In this seminar, the author has identified various indicators of the cost of quality, and analysed the impact of Cost of Quality on a project through a case study of Yamuna Sports complex, Indoor tennis court. The quality cost has been modeled using PRRT model and hence the impact of Cost of Quality has been studied on the overall cost of budget. The report helps in identifying the various indicators of cost of quality and understand the impact over the project. Also the various models of cost of quality studied helps in identifying the various indicators of quality cost which would help to determine the indicators for approach for efficient construction process.

STUDY OUTLINE

Introduction 1.General 2.Background of issues 3.Hypothesis 4.Validation of the proposed study 5.Aims and objectives 6.Methodology 7.Outcomes of study 8.Summary Literature Review 1.General 2.Study of research papers 3.Study of codes and standards 4.Review of reference books 5.Inferences 6.Summary Lean Construction Principles and Cost of Quality 1.Introduction 2.Concept of Lean 1.Principles of lean construction 3.Cost of Quality-Concepts and Models 1.Introduction 2.Models for Cost of Quality 1.PAF Model 2.Process Cost Model 3.Cost benefit Model 4.Cause and effect diagram Fishbone diagram 3.4 Summary

STUDY OUTLINE

Concept of construction process efficiency 1.Introduction 2.Wastage of material 3.Time efficiency 4.Cost efficiency 5.Opportunity loss 6.Summary Convergence of lean approach, cost of quality and construction process efficiency Study of construction process efficiency in construction process 1.Introduction 2.Objective of survey 3.Design of questionnaire survey study 4.Questionnaire survey 1.Efficiency as parameter 2.Barriers and drivers of lean process and cost of quality in construction process 5.Inferences of the survey 6.Discussion 7.Summary 8.Conclusion of the questionnaire survey Approach for lean construction and cost of quality in construction process efficiency Conclusion/results 1.Introduction 2.Proposed approach 3.Discussion of validity of approach 4.Summary References

REFERENCES

PMBOK The Challenge Of Measuring The Cost Of Quality; by Dr. Alexandros Antonaras, Dr. Chrysi Memtsa, Hellenic American University, Greece,Dr. Melpo Iacovidou, University of Nicosia,Cyprus. Managing Cost of Quality: Insight into Industry Practice: by Andrea Schiffauerova, Vince Thomson cole Polytechnique de Montral, Department of Mathematics and Industrial Engineering, Montreal(Department of Mechanical Engineering, McGill University, Montreal, Canada) Implementing Total Quality Management in Construction Firms: by Low Sui Pheng and Jasmine Ann Teo Lean Construction Principles and Methods- Tariq S. Abdelhamid, Ph.D.-Associate Professor School of Planning, Design and Construction, Michigan State university