SYNOPSIS

General
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 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.

Background of the Issues

Figure 1.1: Cost Time and Quality triangle (source: http://www.millardlatimer.com/archives/822 accessed on 17 February 2013) As shown in Figure 1, in any project time and cost are the main determinants of project, 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. Reducing time can have consequences on quality. Similarly, if quality and time are the focus, costs are bound to suffer.

Construction Process Efficiency

In general, 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 produces less or eliminate construction waste with a good quality, no redundancy of activities, good construction management and good monitoring and controlling construction process.

Quality cost and Lean Principles for construction Quality cost

There are numerous definitions on quality Cost or cost of quality. It started with the founder of quality cost Juran (1951) and Feigenbaum (1956) classifies quality cost into prevention, appraisal and failure costs. Prevention costs are associated with actions taken to ensure that a process provides quality products and services, appraisal costs are associated with measuring the level of quality attained by the process and failure costs are incurred to correct quality in products and services before (internal) and after (external) delivery to the customer. Crosby (1979) defines the cost of quality as the sum of cost of conformance (COC) and cost of non-conformance (CNOC). The cost of conformance is the cost involved in making certain things that are done right the first time and the cost of non-conformance is the money wasted when works fails to conform to customer requirements (Schiffauerova and Thomson, 2006).

Quality Cost as defined in PMBOK

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. Figure 2 presents the breakup up of Cost of Conformance and Cost of Non Conformance.

Figure1. 2: Components of Quality cost as per PMBOK (source: PMBOK)

Misconception for quality cost

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 non achievement of quality include the costs of rework, correcting errors, reacting to customer complaints, having decient 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, the costs incurred from not achieving quality can cost owners upto 12% of the total project cost.

Approach for quality cost implementation

Owners are beginning to see how their own approaches to construction can actually foster inefficiency and raise costs -- or, in contrast, how the right strategy can create the kind of collaborative and open working environment in which jobs are done quickly and done right CMAA Executive Director Bruce DAgostino

Lean construction practices

The development and application of lean principles in manufacturing have had a dramatic impact in that industry on product costs, capital requirements, quality, cycle times, inventory, and space needs. The construction industry, where significant waste can be identified in the processes of designing and constructing facilities, could perhaps reap similar rewards if the lean principles similar to those in manufacturing could be applied. Major differences exist in the two industries, but constructions processes could no doubt be improved. Therefore Lean can be defined as, 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 Lean is about designing and operating the right process and having the right systems, resources and measures to deliver things right first time. Essential to this is the elimination of waste - activities and processes that absorb resources but create no value. Waste can include mistakes, working out of sequence, redundant activity and movement, delayed or premature inputs, and products or services that dont meet customer needs. The primary focus is on moving closer and closer to providing a product that customers really want, by understanding the process, identifying the waste within it, and eliminating it step by step.

Application of Lean Principles in Construction industry

The results and benefits of applying Lean production principles have been proven worthy whenever implied correctly. Consequently, it has always been a goal for other fields to modify the tools and techniques of Lean production to be able to start applying Lean principles in other fields. In the early 1990s, the term Lean Construction appeared. It was an effort of researchers trying to introduce Lean

production principles to the construction industry. Generally speaking two main hurdles stood in the way of transferring Lean production principles to the construction industry. The first hurdle was the difference between production and construction fields. Howell (1999) mentioned that the construction industry has rejected many ideas from manufacturing because of the belief that construction is different. Manufacturers make parts that go into products, but the design and construction of unique and complex projects in highly uncertain environments, which are carried out under great time and cost pressure, is fundamentally different from typical production. This difference made some researchers start comparing construction to production and listing the differences, others took some Lean production techniques and tools and started modifying them to be applicable in the construction field, while some started from the Lean production principles and tried to develop new techniques and tools for the construction field. The second hurdle was the fact that the construction industry is famous for rejecting change and resisting alterations. This industry is known for having a strong tendency to follow the same well known procedures and steps throughout every project course. This second hurdle highlights the importance of relying on simulation whenever experimenting with newly suggested tools or techniques in the construction industry, as simulation enables building models for existing processes and experimenting and reviewing results and outputs of different scenarios before committing resources to modify an existing process. These two hurdles clearly point out the importance of using simulation whenever attempting to change the construction industry through applying Lean principles and techniques.

Need for integration of quality cost and lean construction

Understanding the investment put by developers and expectations 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. This study aims at integrating and applying these principles in management processes for construction efficiency referred in figure 3.

Hypothesis:
The study would be based on major hypothesis: 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.

Validation of the proposed study:

The proposed approach would integrate lean principles and cost of quality indicators to be applied in different project management processes for an efficient construction process.

Study barriers and drivers for implementation of the proposed integrated approach.

Figure 1.3: Integration of Lean principles and Cost of Quality indicators (source: Author)

Aim and objectives of study

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

The objectives of the study are:

Study of concepts of Quality cost and lean construction principles to understand and explain them as qualifiers for integration Appraisal of cost of quality and principles of lean construction for application in construction activities and identify the drivers and barriers for their application Define construction process efficiency Converge the principles of lean construction and indicators of cost of quality to develop a approach for construction process efficiency

Methodology
Proposed methodology is as follows:
Literature study to Understand Concept of Cost of Quality and lean principles Integrating both the concepts for an efficient construction process

Developing Questionnaire survey and case study for identifying drivers and barriers to applications of Cost of Quality and Lean Principles Analyze the questionnaire and case study propose methodology of implementation of Lean Principles and Cost of Quality in an integrated approach Literature survey to Understand Concept of Cost of Quality and lean principles

Study of concepts of cost of quality and lean construction principles and explain them as qualifiers for integration for construction process efficiency. Converge the principles of lean construction and indicators of cost of quality Appraisal of cost of quality and principles of lean construction for application in construction activities and identify the drivers and barriers for their application

Integrating both the concepts for an efficient construction process

Developing Questionnaire survey and case study for identifying drivers and barriers to applications of Cost of Quality and Lean Principles

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OUTCOME OF THE STUDY

Analyze the questionnaire and case study

Propose methodology of implementation of Lean Principles and Cost of Quality in an integrated approach

Figure 1.4: Proposed methodology for the study (source: Author)

Outcome of the study

The study would entail delivering an approach for efficient construction process using integration of lean principles and Cost of Quality indicators.
Table 1.1 Measures for construction process efficiency as an outcome from integration of lean principles and cost of quality indicators (source: author)

Design stage

Planning stage

Execution stage

Execution and Closure control

Measures from integration of lean principles and cost of quality for efficient process

Proposed Methodology
Steps to be included during different project management processes for construction process efficiency.

Summary
With increasing demand for construction activities for developing infrastructure and decreasing efficiency in the industry it is important to review the deficiencies in the processes and develop an efficient construction process taking into account the time efficiency, cost efficiency, quality measures, safety and health measures and environment. This study is based on developing a methodology for efficient construction process using lean construction principles and cost of quality indicators.