quality & the construction contractor
TRANSCRIPT
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Quality & the Construction Contractor
Damon P. Schneider – Consultant, Loss Control
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AGENDA
• Overview of changes within functional area.
• QA / QC: what is the difference?
• Why is quality in work process and product important?
• The role of safety and loss control – providing
guidance to the policyholder.
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Southeast Safety & Loss Control
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Something seems different…..
• Ongoing evolution to a consultative service model (e.g. LARC meetings, CSAs).
• Continuous review of asset utilization.
• Willing to assist with “desktop assessments”.
• We are a “man down” so keep this in mind if you have time sensitivity.
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Is quality work product an issue in construction?
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Is quality work product an issue in construction?
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Is quality work product an issue in construction?
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Is quality work product an issue in construction?
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Is quality work product an issue in construction?
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QA…? QC…? WTH?
• Quality Assurance (QA): the continuous proactive management of the construction process designed to reduce rework & increase productivity.
• Quality Control (QC): the review of installed products / workmanship.
• What is the difference?– QA is used to manage quality throughout the
construction process. QC is inspection-based, after the fact….whoops too late!
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Bad quality is bad business
• Lack of controls in approach to the project: – Viewed as reflective of overall company culture.
• Culture is the foundation of worker behavior.
• Rework, customer complaints, product recalls & returns, warranty claims, lawsuits & lost revenue represent 5-15% of total business costs (Boston Consulting Group, 2007).
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Bad quality is bad business
• The BCG figure does not factor in financial impact of reputation risk:– Bad “rep” in the industry can impact the
sustainability of the company. – “We should not take peace for granted” (Angela
Merkel, Chancellor of Germany).
• Minimizing rework will reduce the use of material resources and the exposure of human resources to injury.
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Benefits to having a quality orientation:
• Do the job once: – Increase efficiency.– Reduce variation in outcome.– Reduce the potential for injury.– Reduce the potential for property damage.
• Proper tools used on the proper materials.• Reduce cost associated with rework.
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Benefits to having a quality orientation:
• Leverage “quality” as a business development tool.
• Assemble a project portfolio:– Defect free.– Under budget.– Zero accidents / property damage.– GC / Sub references.
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Continuous Process Improvement
• Review specifications.• Plan the job.• RFIs? Change orders? Are they tracked?• Need for coordination when on site?• Create QA requirement lists specific to the
trade.• Train your people:
– Don’t assume they have a clue.
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Challenges in this class of business
• Many of our PHs are in “survival mode”.• Get the job even if they are losing $$:
– Margins are otherwise in 3%+/- range.
• Safety and QA factors are the first to be cut:– CFO is now the “Safety Director”.
• Our efforts face some headwinds in this environment.
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What should we look for?
• Does the PH have a “system”?• Proper specifications? • Member of industry association(s)?• Aware of industry best practice?• Do they pre-plan?• Any planning for the staging of materials?• Use of accepted contract forms for
delineating responsibility (e.g. AIA A401).
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What should we look for?
• The right person for the right job?
• Is there a reliance on punch lists, architect reports or the county inspector for their “quality control”?
• Do they perform an “after action” report on completed projects?
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What should we look for?
• Work from plans developed by a licensed architect / engineer?– Not from napkins!
• Maintenance of job files?• Review / assist with QA requirement lists:
– Address items that are “specification-specific”.– Common items from punch lists.– Signed copy for CM / GC / Sub.– Keep it to one page!
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What should we look for?
• Discontinued products / operations.• Acquired products / operations.• Understand the extent of “design” exposure:
– This includes value engineering!
• Identify emerging risks:– Energy performance & code requirements for
projects funded by federal “stimulus”.– Possibly a “green” construction exposure to
liability.
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Off on the horizon ….
• If we seek to target the “middle market”:– We should expect more formal processes.
• These processes can include:– Root cause analysis (which has safety and quality
applications).
– Six Sigma.– ISO-9001.– Lean construction– IPD and BIM.
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Southeast Safety and Loss Control
• We are here as a resource to you, our agents and our policyholders…. Please feel free to lean on us for counsel.
• We work cheap! Pizza and tips!– I will accept coffee in lieu of food.
• Our expanded pool of resources includes our leadership team and safety professionals in nine states!
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Any questions?