Quality Management: The Common Thread of Good Practice (Part 2)-A Quality System That Pays The Business Case for Developing a Quality Management System (QMS) (PDF)

A Quality System That Pays The Business Case for Developing a Quality Management System (QMS) (PDF)

Pdf Summary

The document outlines a presentation given by Samuel Lines at the Concrete Convention and Exposition focused on the economic benefits of implementing a quality system in the construction industry. It emphasizes that improving quality is cost-effective as it reduces costs associated with rework and errors, totaling approximately $95.1 billion or 12% of the cost of poor quality for the U.S. GDP in 2016.<br /><br />The presentation draws on Phillip Crosby’s principle that while quality itself is free, unquality—or the lack of it—incurs significant expenses. Quality-related costs are categorized into prevention, appraisal, and failure costs. Prevention costs involve activities to avert poor quality, while appraisal costs relate to ensuring products/services meet standards. Failure costs are divided into internal (occurring before product delivery) and external (occurring post-delivery) damage, reflecting the need for effective quality management systems.<br /><br />The presentation advocates for a strategic investment in quality systems—such as ISO 9001:2015 and various concrete certifications—which are expected to lower defects, reduce cycle time, enhance customer satisfaction, and boost employee morale. Statistics indicate a potential 60-90% reduction in failure costs with just a 2% investment in quality programs.<br /><br />To achieve optimal quality management, the presentation suggests building a documented quality system, using records to guide decisions, foreseeing failure modes, and communicating the return on investment to management. A significant focus is on the economic value of quality which, according to the document, could result in a greater than 10% savings through waste reduction, decreased variability, and minimized service defects. <br /><br />Therefore, implementing a quality management system not only minimizes unnecessary costs but also streamlines operations, thereby ensuring long-term financial benefits and improved standards in the construction sector.

Keywords

quality system

construction industry

economic benefits

Phillip Crosby

ISO 9001:2015

failure costs

prevention costs

appraisal costs

quality management

cost reduction