There is an old project management proverb that says: “Fast, cheap, or good—you can only pick two.” In other words, you cannot optimize cost and speed without negatively impacting quality.
To many, delivering a construction or maintenance project on-time and on-budget may seem like the gold standard. After all, we are living in a world where over 90% of construction projects are completed late or over budget. While there’s no arguing that a timely and cost-effective project is something to be celebrated, there’s a more important factor that the industry should be talking about: Work Quality.
Quality is the cornerstone of any successful project, because the safety of workers and the surrounding communities relies upon it. When subpar work quality occurs, severe consequences, such as the infamous 2023 Ohio train derailment, can negatively impact thousands of people. Your company’s reputation may never be the same.
Unfortunately, stories like this are all too common. We are dealing with an epidemic of poor work quality. In the United States alone, a new chemical accident occurs every other day, and Boeing has been making headlines for loose bolts on many aircrafts. In fact, rework accounts for 5% of U.S. overall construction spending, which works out to be over $65 billion annually.
This astounding number can be classified as the Cost of Poor Quality (COPQ). In this blog post, we will delve into the concept of COPQ, explore its profound impact on projects, draw insights from the medical industry’s Quality Management System (QMS), and discuss the role of ISO 9000 in ensuring construction and maintenance quality.
What is Cost of Poor Quality (COPQ)?
Six Sigma defines COPQ as the financial losses incurred by a company due to errors and subpar work in producing products or services for the customer. This includes costs associated with scrap, rework, repair, and warranty failures. Essentially, it represents the expenses arising from the need to correct poor-quality output.
For the construction and maintenance industries, the main element that contributes to the COPQ is rework. Rework is defined as “an action performed upon a non-conforming product or service that, when completed, makes it conform to its requirements.” This can include disassembling system components, replacing equipment and materials, reconfiguring major portions of critical systems, additional inspections, and other critical work activities.
But the question remains: what exactly is the cost of poor quality? Recent studies indicate that correcting poor work quality costs construction companies and their customers a staggering $625 billion annually. In the manufacturing industry, unplanned downtime results in losses exceeding $50 billion each year, with just one hour of downtime potentially costing a facility over $100,000. These figures underscore the critical need to address and mitigate the impact of COPQ in the construction and maintenance sector.
It’s clear that poor work quality is an expensive problem. But how do we fix it?
The Medical Industry and Quality Management System (QMS)
The medical industry provides a valuable model for managing and maintaining quality. Given the life-critical nature of healthcare, the industry places utmost importance on quality control systems with four pillars: patient safety, clinical effectiveness, patient satisfaction, and equity. These pillars guide healthcare providers in prioritizing quality and gathering feedback for continuous improvement.
If you haven’t already, we highly recommend checking out the Dr. Nina Dadlez episode of the Work Done Right podcast to learn more about how the medical industry approaches quality.
Project owners, general contractors, and subcontractors in the construction and maintenance sector can draw valuable lessons from the medical industry by implementing a robust Quality Management System. Defined by the American Society for Quality as “a formalized system that documents processes, procedures, and responsibilities for achieving quality policies and objectives,” a QMS provides a systematic approach for projects to improve quality.
ISO 9000 for Construction and Maintenance Quality
When identifying the right features to prioritize in a QMS, ISO 9000 serves as an excellent guide. As the international standard for quality management and assurance, ISO 9000 offers guidelines to help companies document the necessary quality system elements for maintaining efficiency. The core recommendations can be broken down into three essential steps for maintaining work quality:
- Write down what you do: Clearly document processes and procedures to provide a comprehensive understanding of the quality system.
- Do what you write down: Consistently execute the documented processes to ensure adherence to quality standards.
- Make sure you are doing it: Regularly assess and verify that the documented processes are being effectively implemented.
While these steps may seem straightforward, their effective execution requires a well-implemented Quality Management System. When seeking a QMS for construction and maintenance projects, look for features that:
- Seamlessly incorporate procedures into work processes.
- Administer training and manage permissions for staff.
- Ensure full historical tracking of all activities.
- Adhere to a predetermined audit schedule for consistent quality checks.
Final Thoughts
In conclusion, the Cost of Poor Quality (COPQ) should not be the hidden force derailing construction and maintenance projects. Implementing a robust Quality Management System (QMS) is crucial for ensuring high standards and mitigating the impact of poor quality.
By adopting principles from the medical industry and adhering to ISO 9000 standards, construction and maintenance projects can navigate challenges effectively, delivering results that stand the test of time.
Interested in seeing if a QMS is the right technology for your company? Set up a free demo to evaluate whether the Cumulus QMS can meet your project’s quality management needs.
