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TQM IMPLEMENTAION FOR CAPITAL PROJECTS

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  1. TQM IMPLEMENTAION FOR CAPITAL PROJECTS

  2. OUTLINE • Introduction • Objective & Abstract • Literature Research Analysis • Refinery Project Study • TQM Implementations Strategy for Capital Projects • Conclusion

  3. TQM IMPLEMENTAION FOR CAPITAL PROJECTS • Introduction: Many companies in the private sector of the engineering and construction (E&C) industry have developed models to implement TQM. • These models have achieved improvements in work processes, teamwork, customer satisfaction, and defect-free work for internal operations

  4. TQM IMPLEMENTAION FOR CAPITAL PROJECTS • Objective: To propose an implementation strategy to effectively apply TQM to capital projects. • Key components of the strategy are derived from existing TQM models and through a study of TQM applied to a large refinery expansion project.

  5. Literature Research Analysis: Applicability of TQM Models to Capital Projects: • TQM models for the E&C industry were developed in two phases. Phase#1 Involved adapting manufacturing industry TQM models based on the works of Deming, Juran, and Crosby to E&C applications.

  6. Cont. Phase#2 The E&C industry developed models tailored to a company’s particular needs. Basic principles and essential elements of TQM were presented in construction terms International skills and technical aspects of engineering and construction work were also integrated into these models

  7. Literature Research Analysis: • In an organizational environment: • Managers focus on long-term, continuous business operations with well-defined operating procedures. • Managers are required to meet annual performance objectives while working with a relatively stable workforce. • Capital project environment: Requires managers to plan, organize, staff , allocate , direct, and control company resources for a relatively short-term objective

  8. Literature Research Analysis: • Because of these differences, company –level models must be modified or new approaches developed to implement TQM at the project level.

  9. Literature Research Analysis: • Frame Work of TQM Principles and Concepts for Capital projects: • E&C companies that have successfully implemented TQM have centered on a few key principles and concepts. They are grouped into one of the following five categories: • TQM deployment • Customer focus • Team approach • Work process improvement • Benchmarking and metrics

  10. Literature Research Analysis • Framework for project-management approach: • The proposed TQM implementation strategy adopts four basic life-cycle phases from an owner’s perspective.

  11. Literature Research Analysis: The phases are defined as follows : (1) Concept feasibility phase (2) Preliminary engineering phase (3) Design/ Construction phase (4) Start –Up Phase

  12. Refinery Project Study • Project Study Objectives and Approach: A major expansion to a U.S. Gulf Coast refinery was study focal point. Objective: (1) To observe how TQM was applied to this project. (2) To review existing TQM models. Based on existing work and lessons learned from the project study. (3) to develop a comprehensive model to apply TQM to future capital projects.

  13. Refinery Project Study • This model had three goals: (1) To described a quality improvement strategy for major capital projects. (2) To guide project teams in the application of TQM principles and concepts to project work processes. (3) To understand the link between team building and quality improvement.

  14. Refinery Project Study • Gathering Data: Project information gathering focused on the extent TQM concepts and tools were utilized, how TQM was applied, and opportunities to improve the application of TQM to future projects. Questionnaires and interviews were the data – collection instruments in addition, input was provided directly by project managers representing each participant, a management consultant,and TQMspecialists.

  15. Refinery Project Study • Project study conclusion Findings: Indicate the TQM must be integrated with a project-management approach and focus on a few select improvement areas that offer the most potential benefit to the project.

  16. Cont. • The project –management approach must be defined and understood by all participants. • Capturing lessons learned regarding TQM and team effectiveness is important to future formalization and improvement of the TQM process

  17. Refinery Project Study • TQM should be deployed early in project development and should be deployed in stages. • First, the foundation for the TQM effort must be set. • Next, those vital few areas for improvement must be identified, a project –specific deployment plan must be designed.

  18. Cont. • The deployment plan must be formalized with a specific process improvement methodology for teams to follow the deployment plan should be congruent with project characteristics such as size, complexity, and contracting approach.

  19. Refinery Project Study • Then, all major project participants must be aligned with and committed to the TQM approach as reflected in the deployment plan. • Finally, during project execution, the plan must be initiated evaluated overtime, and improved.

  20. Refinery Project Study • Study findings formed a basis for the propose strategy to implement TQM on future capital projects. • In addition, these findings aided in defining a deployment process for the implementation strategy.

  21. TQM IMPLEMENTATIONS STRATEGY FOR CAPITAL PROJECTS The strategy must integrate • Project Characteristics • Project management approach • TQM approach • TQM concept & principles

  22. TQM IMPLEMENTATIONS STRATEGY FOR CAPITAL PROJECTS • The proposed TQM implementation strategy is as follow: Stage 1- Establish project TQM environment Stage 2- Identify key project pursuits and project TQM plan. Stage 3- Deploy project TQM plan Stage 4- Apply & improve TQM plan

  23. Stage 1: Establish Project TQM Environment • It begins during the concept feasibility phase. • During this phase the owner project-management team has an opportunity to significantly influence the ultimate direction of the TQM effort. • This is accomplished by identifying the project vision, mission, and TQM goals that are aligned with key project objectives and priorities and with TQM principles and concepts.

  24. Stage 1: Establish Project TQM Environment • Purpose: To establish the foundation for the project’s TQM effort. • Output: includes: management commitment to quality concepts and process improvement; project vision statement; preliminary TQM support structure consisting of individual and team roles and responsibilities; proposed project recognition and rewards scheme; and suggested project team building and training requirements.

  25. Stage 2: Identify Key Project Pursuits and Project TQM Plan • It begins during the project’s concept feasibility phase. The primary participant is the owner’s project-management team. • Purpose To help the owner’s project team focus the TQM effort on key project pursuits. Key project pursuits are based on critical success factors and comprise three elements: (1) priority issues; (2) critical work processes; and (3) special value-added projects.

  26. Cont. • Output: The preliminary plan for TQM deployment. • The primary purpose of the preliminary TQM deployment plan is to provide a “path-forward” road map for the project’s TQM effort.

  27. Stage 3: Deploy Project TQM Plan • Typically begins during the project’s preliminary engineering phase but could commence earlier if a designer performs concept feasibility studies. • Purpose: Aligning on the project vision and mission and customer needs and expectations.

  28. Cont. • Output is the project’s formal TQM deployment plan. • All participants on the project team should be in alignment and agreement with this plan. • This plan provides a detailed road map for applying TQM and then improving the TQM effort during the design and construction and start-up phase.

  29. Stage 4: Apply and Improve Project TQM Plan • The project-management team applies the concepts of continuous improvement to the project by deploying the TQM plan. • It is primarily performed during the design and construction phase. • During stage 4 the project-management team is applying and improving the deployment plan.

  30. CONCLUSION • The E & C industry is attempting to extend TQM from internal applications to capital projects. • Current TQM models often fail to address the specific TQM needs of capital projects. • This paper presents an implementation strategy that the E & C industry can use to help apply the TQM approach to capital projects.

  31. Cont. • The adoption of this strategy to formulate a project TQM implementation of critical will lead to the continuous improvement of critical project processes. • As a result, project participants can expect more cost-effective projects and increased satisfaction.

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