Tomsk Polytechnic University International Management Institute

1. Tomsk Polytechnic University International Management Institute Project Management Prof. Dr.-Eng. А.А. Dulzon

2. Project Quality management • 7.1 Introduction • 7.2 Quality management as a concept • 7.3 The quality gurus • 7.4 The quality management “Six pack” • 7.5 Total quality management • 7.6 Configuration management • 7.7 Concurrent engineering and time-based competition

3. Project Quality managementIntroduction • ISO9000 defines quality as: The totality of feature and characteristics of a product or service that bears on its ability to satisfy stated or implied needs. • Quality control is just as important as time and cost control. There is no point in completing a project early, or under the cost limit, if the end product is defective or does not meet the specification or minimum standards that apply. • Projects are by definition non-repetitive, and is therefore not possible to apply standard sampling techniques on batches of outputs (as it used in the industry). • Quality cannot be considered in isolation from time and cost. There is always a trade-off to be made in setting standards for one or more of these variables.

4. Quality management as a concept • The traditional Japanese view considered the following main areas: • the overall value of quality; • the overall cost of defects; • quality dividends; • involving people; • proactive planning; • involving the whole organization; • educating the customers to expect quality. • The Japanese recognized at an early stage that quality management is expensive. As organization increase the quality standard, the cost per unit tends to increase. • Acceptable defect rates will vary depending on the product and the industry concerned.

5. Quality management as a concept Defect rate versus manufacturing cost

6. Quality management as a concept • There are two ways of defining the quality. There is an apparent value of quality and there is also a true value of quality. • The apparent value of quality is what people will pay to get a good-quality product. This can be regarded as being equal to the cost of producing the product plus the cost of replacing a defective version, multiplied by the probability of a defect arising. • True value of quality acts over and above the apparent value. This represents the premium that people will pay, and the goodwill and prestige that is formed by a company selling a reliable-quality product.

7. Quality management as a concept Apparent and true value of quality

8. Quality management as a concept • The overall cost of defects. • The true cost of a defect can be far greater than the apparent cost of fixing it. Products that are seen to have a high failure rate can lose customer confidence, and customers will change suppliers or providers. • Generally, a bad reputation builds up over time. However, in some cases, even one incident of a defect can jeopardize the profile of the product or even the position of entire company. • Traditional economic analysis of production processes dramatically underestimate the true cost of poor quality. • The overall cost of defects is not simply the apparent cost of correcting defects but also includes the cost of the loss of reputation.

9. Quality management as a concept • Quality dividends include: • improved company status and image; • improved performance based demand from customers; • increased respect by competitors; • increased share price stability (perhaps); • improved staff attitudes and motivation; • improved sales (perhaps); • better industrial relations; • improved and more stable risk profile; • improved goodwill; • improved prospects in potential mergers and acquisitions; • improved prospects in potential alliances and partnership.

10. Quality management as a concept • Involving people. • Reliable and powerful quality-management systems are expensive, both to design and to implement. • The Japanese developed close links between the company and the employee, always ensuring that the interests of the employee coincided as far as possible with the interest of the company. There is less need for rigid and expensive quality control and assurance systems if you can trust the workforce to do their best to produce quality products as standard. • The Japanese culture allowed companies to guarantee quality at a lower overall cost, and this gave them a significant advantage in their competition with European and US organizations.

11. Quality management as a concept • Proactive planning. • The retrospective approach involves current testing of existing production. The defects cannot be detected until they have occurred. • The Japanese realized early on that the costs of improving quality could be significantly reduced if more was given to product development. This produced a higher quality of product with fewer inherent defects and a corresponding reduction in the demand for responsive maintenance later in the process. • Involving the whole organization. • Improving quality requires an improvement in the quality attitude of people at all levels. • The quality efforts of the production workers would be wasted or diluted if other parts of the organization failed to adopt the same high quality standards.

12. Quality management as a concept • Educating the customers to expect quality. • The traditional Western view of quality has assumed that the customers’ views of quality and quality demands were fixed and did not very over time. • The Japanese took the approach that quality should be constantly improved and engineered. By doing this, the customers could be educated and programmed to expect innovations, new products and higher standards of quality as a matter of course. • In effect, Japanese companies educated the customer to demand higher standards than the competition could supply, and they then put themselves in a unique position of being the only supplier able to supply to that standards and cost. This allowed them to effectively take over a particular market and then charge a premium.

13. Quality management as a concept • Quality standards. • Quality standards are one of the earliest forms of standards known to humanity. In 2000 BC, the ancient Egyptians had a system of quality control for funeral goods. • BS5750 was until recently an important British standard for quality management. It has now been superimposed by ISO9000. This is the latest attempt at a generic international quality standard that is applicable throughout Western Europe. • ISO9000 is basically a never-ending cycle including planning, controlling and documentation. However, as with the formerBS5750 , the fact that a company is ISO9000-accredited does not mean that the company produces only high-quality products. It merely shows that the necessary procedures are in place – or at least were at the time that the appropriate inspections were carried out. • The main drawbacks with the standard are that, like BS5750, it is bureaucratic and only measures performance at one point in time.

14. 7.3 The quality gurus • There are five main areas where the main quality gurus (W. Edwards Deming, Joseph M. Juran, Philip B. Crosby and Imai) all agree to some extent: • Quality processes must be enterprise-wide. Effective quality management has to apply to everything from the production process to administrative support. • Process defects should be considered before employee defects. People tend to operate processes correctly provided they have adequate training and motivation and so long as the system operates correctly. • Quality processes must be structured. Quality management systems should operate on the same principle as WBS. The process should be broken down into elements so that the performance of each element can be controlled and managed.

15. The quality gurus • Quality processes must ensure that the product exceeds customer demands. The most satisfied customers are those who receive a product that offers them more than they actually demanded in the first place. • Quality processes must be able to relay on commitment. Greater commitment gives the possibility of reduced formal (expensive) quality control system. • The Deming approach suggested that better quality-management allows a company to produce equal-quality goods at a lower cost, or better-quality goods at the same cost. He believed that operatives basically want to do a good job and will do so if given the right equipment and processes.

16. The quality gurus • Deming’s underlying philosophy was that company managers tend to be too interested in what is happening today and not enough on what may happen tomorrow. • The Deming approach is very much worker-oriented and appeals to the democratic type of manager. It has a core of statistical analysis, supporting a fourteen-point plan for managers: • Create common sense of purpose. • Create a new mind-set. • Build quality into system. • Review procurement strategy. • Research and innovate. • Invest in staff development.

17. The quality gurus • Enhance supervision. • Develop a system of open communication. • Encourage enterprise-wide open communication. • Avoid the use of output standards. • If standards are used, use them carefully. • Encourage pride. • Invest in training. • Encourage commitment. • Juran is famous for his ten steps to quality improvement and for the Juran trilogy. The ten steps are to: • Develop an awareness that products must evolve and improvement is necessary. • Establish a strategic plan for improvement and establish goals for improvement at different position within the strategy.

18. The quality gurus 3. Plan an operational system that allows the goals for improvement to be achieved. 4. Provide adequate staff training and development as required. 5. Where there are major problems, treat them as projects and set up a project team to resolve them. 6. Establish a regular and detailed reporting system. 7. Recognize good performance and reward it. Take appropriate corrective action in the case of poor performance. 8. Develop an open communication system and communicate results. 9. Maintain performance records and publish results. Use “league tables”. 10 Drive the system maintaining momentum and constantly introducing improvements and innovations.

19. The quality gurus • Juran’s approach suggests that senior management must establish top-level strategic and annual plans for improvement in quality. It is a highly structured and coordinated approach. It tends to appeal more to boss-type managers who identify with a rigid control system. • Juran’s philosophy is basically to plan improvement, control implementation and then improve. It is the most scientific and highly structured of the approaches. • The Juran trilogy comprises the following: • Quality planning. • Quality control. • Quality improvement.

20. The quality gurus • Quality planning is analogous to cost and schedule planning. It includes: • identifying and ranking all existing customers; • identifying individual customer demands and requirements; • developing a solution (product) that meets and exceeds these demands and requirements; • planning the development and implementation of this product; • establishing goals for achieving the product; • implementing the production process; • ensuring that the system is accurate and reliable. • These steps are similar to the standard approach to TQM planning and now usually form part of any quality management.

21. The quality gurus • Quality control. The process is usually based on standard statistical techniques using meaningful sample sizes. • Quality improvement. The objective is to improve the system so that the end result is a procedure that operates at a measurable higher level of quality performance than it did before. • The Juran approach, like Deming’s , stresses the need for open communication and the involvement of people from all levels of the organizational breakdown structure.

22. The quality gurus • P. B. Crosby’s approach is based on the philosophy that quality has to become the universal goal of the organization and that senior management must provide the leadership to drive the organization forward in which quality is paramount and is never compromised. The Crosby approach is more aimed at the human-resources type of manager. • The Crosby approach is based on preventing defects, rather than setting up systems to check products and detecting errors and defects. • The Crosby approach encourages a performance standard of zero defects.

23. The quality gurus • Crosby, like Deming, also produced a fourteen-stage process for quality improvement: • Establish commitment of all levels of management. • Establish specific quality teams. • Establish measurement and evaluation systems. • Establish cost implications. • Promote awareness of quality. • Establish appropriate corrective action. • Establish plans for zero-defects. • Initiate education programs. • Initiate zero-defect day. • Establish achievable quality improvement goals. • Remove the sources of defects. • Recognize good performance and reward it. • Establish quality forums. • Ensure evolution and feedback.

24. The quality gurus • Imai’s approach became known as the ‘P’ approach (the process approach). It concentrate on the process rather than the results. • The idea is that the organization should concentrate on making sure that the production system is exactly aligned to the characteristics and demands of the environment. • The production system should then be continuously assessed and evaluated and improvements should continuously be made to each part of then system where there are any problems or areas where improvement potential exists. • By continually improving the process the product itself must improve as a direct consequence.

25. 7.4 The Quality Management ‘Six Pack’ • In a competitive environment, quality is the level of performance required in order to win more of the same type of work and to acquire new customers. • Quality management is the process of managing quality in order to ensure that certain established standards are achieved. • There are six primary areas that should be established and performed in order to support any project: - quality policy; - quality objectives; - quality assurance; - quality control; - quality audit; - quality assurance plan and review.

26. The Quality Management ‘Six Pack’

27. The Quality Management ‘Six Pack’Quality policy • The quality policy is a statement of the overall organization vision on quality. It does not specify individual performance requirements or the mechanics required to achieve the objectives. • The policy should have the full support of senior management and this support should be advertised and communicated around the organization. • The primary components of the quality policy are: - clearly stated organizational quality objectives; - established measurable minimum performance level; - a clear reconciliation of the quality policy with the established strategy objectives of the organization; - clear and unambiguous senior management support; - stated penalties or consequences for non-compliance; - reference to any central or statutory restrains; - some form of measurement and evaluation procedure; - stated responsibility and ownership (where appropriate).

28. The Quality Management ‘Six Pack’Quality objectives • The quality objectives represent individual performance-control elements. They are analogous to work breakdown structure (WBS) elements and cost accounting code (CAC) elements. • The objectives should be: - clearly achievable and in context; - linked to organizational and strategic goals; - adequately resourced; - associated with clear and unambiguous relevant operational support; - related to some form of measurement and evaluation procedure; - related to stated responsibility and ownership; - related to any operational and/or statutory standards; - related and apply to all relevant operational units; - stated in the context of specific time scales for implementation; - stated in the context of any implementation cost limits that may apply.

29. The Quality Management ‘Six Pack’Quality assurance • Quality assurance is a general term applied to a wide range of tools and processes that are used as drivers to ensure that the quality management system performs and produces results that comply with what has been specified. • Quality assurance also includes the collection and use of information from outside the manufacturing process, and even outside the organization. This information is used for some kind of benchmarking and as feedback or input for improving the system. • Generally, a good quality-assurance system will identify objectives in relation to workable standards. It will be multifunctional and will operate as part of a continual cycle for system improvement. • Normally the assurances will be backed up by some kind of customer refund or compensation system if the standards are not met.

30. The Quality Management ‘Six Pack’Quality assurance • Generally a good quality-assurance system will: • clearly identify the minimum standards of performance that are acceptable; • be proactive (where possible); • be reactive (where necessary); • apply across all sections that are involved in production; • establish procedures for the collection and analysis of performance data; • be established in the context of any relevant audit and performance review procedures.

31. The Quality Management ‘Six Pack’Quality control • Quality assurance is concerned with proactively established drivers and standards of performance. Quality control is concerned with the evaluation of how well these standards or targets are actually being achieved, and reacting to any deviations. Quality control is therefore based on a retrospective approach. • The process can involve observing, sampling, collecting and processing actual performance data, comparing actual to planned, calculating variances, and identifying reasons for divergences from planned performance. For every divergence identified, the quality control system has to be able to recommend the necessary remedial action in order to correct the situation.

32. The Quality Management ‘Six Pack’Quality control • A quality control system should: • measure and confirm actual performance; • compare target and actual performance and generate performance variances; • identify significant performance variances; • identify the sources of significant performance variances; • initiate suitable corrective actions; • assign ownership and specific responsibilities; • monitor the effectiveness of corrective actions; • generate suitable reports and control outputs.

33. The Quality Management ‘Six Pack’Quality audit • The idea is that an independent check is carried out by impartial personnel in order to ensure that the project’s quality performance standards are being met. • In general terms an audit system should confirm that: • quality assurance procedures have been observed and complied with; • quality control performance figures have been correctly assembled; • all relevant issues have been included; • all processes, all analysis and reporting, all proposed corrective actions, all monitoring and control systems, all reporting systems have complied with any relevant internal standards and with any external statutory regulations; • any appropriate areas for improvement have been identified and correctly addressed; • all plans and strategies for improvement have been correctly assembled and implemented; • any possible areas of misdirection or misinterpretation have been addressed; • the system is free of corruption.

34. The Quality Management ‘Six Pack’Quality Assurance Plan and Review • The quality management plan is analogous to the PMS and project cost plan. It breaks down the quality objectives of the organization and expresses them in terms of individual targets for different sections of the organization. • The quality assurance plan itself can be formulated fairly easily by producing a quality assurance matrix using combined OBS (organization breakdown structure) and WBS elements, broken down into work packages and assigned using a TRM (task responsibility matrix) . • The quality assurance matrix is generally developed by a project quality assurance team or, alternatively, by the project manager. It shows what is required, who is responsible for achieving it and how that person is to achieve his objectives. It is essentially a TRM applied to quality management. • The plan (and review) has to be dynamic. It has to be able to respond to changes in the production system and client base.

35. The Quality Management ‘Six Pack’Quality Assurance Plan and Review • Generally, a good quality plan will: • establish clear targets for the achievement of any stated objectives; • ensure that all targets are achievable; • allow for any interdependencies between activities; • allow reasonable provision for response to change; • include reasonable contingency planning; • clearly specify performance objective success criteria; • establish relevant risk profiles for each affected section and activity; • include provision for all performance variance corrective actions; • include ownership and specific responsibilities; • include provision for the monitoring and control of the effectiveness of corrective actions; • include provision for the generation of suitable reports and control outputs; • be fully accountable for overall performance improvement.

36. The Quality Management ‘Six Pack’Quality Control Tools • The main tools used in quality management concentrate on either identification of a problem, or analysis, or both. • Identification tools: • Data tables; • Pareto analysis; • Brainstorming techniques (including the Delphi Method and Nominal Group Technique): • SWOT Analysis. • Analysis Tools: • Scatter Diagrams; • Control Charts. • Identification and Analysis Tools: • Cause and Effect Analysis; • Trend Analysis; • Decision Analysis.

37. The Quality Management ‘Six Pack’Quality Control Tools • Data tables provide a simple method for collecting and arranging quality data. The main applications are in repetitive operations, where the same materials are being produced by the same suppliers and are being consumed by the same client.

38. The Quality Management ‘Six Pack’Quality Control Tools • A Pareto diagram is a type of histogram. The objective is to produce a graphical representation that identifies problem areas. It also gives an approximation of the relative value or size of the problem area. It isolates area of nonconformity in data presentations and, by doing so, it draws the attention towards the most frequently occurring element. • Scatter diagrams analyze the correlation between two quality variables. They are based on the concept of having dependent and independent variables. • Control charts are an example of a preventive approach. They attempt to prevent defects, rather than detecting and isolating them after they have occurred. Most form of control chart are based upon a standard normal distribution.

39. The Quality Management ‘Six Pack’Quality Control Tools • Cause and effect analysis comprises six major stages: • identify the source of the problem; • establish the problem box and primary arrow. The problem box represents the end result of whatever is wrong with the system. The prime arrow represents the sum total of all the possible factors that could produce the problem; • identify all possible primary causes and effects; • identify all possible primary cause and effect components; • develop a proposed course of corrective action. The analysis is now reversed so that the problem box becomes the “solution box” and the prime arrow now represents a solution strategy.

40. The Quality Management ‘Six Pack’Quality Control Tools Primary causes and effect and components Corrective action from cause and effect analysis

41. The Quality Management ‘Six Pack’Quality Control Tools • Decision analysis includes a number of stages: • identify the problem; • analyze potential consequences; • determine the best course of corrective action; • carry out the corrective action; • monitor to ensure that the corrective action works; • repeat the process as required until the problem is corrected. • The primary decision-analysis tools: • algorithm which is simply a sequence of instructions for diagnosing a problem; • means-end chain; • decision tree; • Monte-Carlo simulation.

42. The Quality Management ‘Six Pack’Quality Control Tools • A means-end chain is a method for laying out and analyzing a chain of events, where the end result depends on the chain of events being successfully completed. A means-end chain is based on the logic that what is an objective at one level within the system might be a starting point for another set of objectives higher up in the system.

43. 7.5 Total Quality Management • TQM is a structured approach to organization-wide quality management. • It has to be continuous and applied throughout the organization in order to produce quality products that exceed the expectations of the customers. • TQM needs committed employees. It is based on the overriding assumption that most quality problems originate from the process rather than from the operatives. • There are some systems where it is easier to achieve high employee commitment than others (for example, aircrew). • High commitment can also be engineered to some extent. In the case of a complex production line, the process may be designed so that human input is relatively small and that, where it occurs, there is no possibility of error or omission.

44. Total Quality Management • A TQM system has to have a formal structure in order to function. Most TQM systems comprise eight major components: - commitment phase (developing internal resolve); - mission phase (defining objectives and strategy); • customer phase (identifying what the customer wants); • process phase (tactical analysis); • vision phase (generation of eventual outcomes); • risk management phase (risk assessment and management strategy); • planning phase; • breakthrough and implementation phase (tactical move and monitoring).

45. Total Quality Management Typical TQM implementation phases

46. Total Quality Management • TQM implementation has three major components: • The breakthrough phaseis the mechanics that allow the strategic and annual plans to be put into operation. The process generally involves section heads in establishing processes for the implementation of the goals that have been set. This is done by the selection of a small number of breakthrough items or activities (quick-win activities); • Daily application management(DAM) relates to the long-term implementation of the system DAM is the process of establishing objectives followed by continual assessment and monitoring and then comparing this with the progress required in the plan to meet the overall goals and end visions. • Interdepartmental (cross-functional) management (CFM) is the control of the TQM system across the different organizational and functional boundaries. It ensures that all groups within the organization are working together towards a common purpose.

47. Advantages and disadvantages of TQM systems • Advantages: - increased organizational awareness; - increased appreciation of the links between processes and performance; - increased efficiency; - improved communications; - improved employee performance; - improved operational systems; - improved external relationships; - improved reputation; - opening potential new markets. • Disadvantages: - cost; - inconvenience; - selling; - distribution; - training; - dilution.

48. 7.6 Configuration Management • Configuration management is a control technique for formal review and approval of change on a project. In particular, it is about controlling the information that relates to change. • If properly executed, a good configuration management system (CMS) provides a comprehensive change-control and management system. It also acts as a focus for change proposal and consideration and as an interface for client and contractor responses and communications. • The main components of a CMS are: • configuration format and layout; • configuration identification specification; • configuration change control system; • configuration status accounting and reporting; • configuration auditing and feedback.

49. Configuration Management • Configuration format and layout is the way in which the CMS is assembled in relation to its environment and the characteristics of the project. The CMS will depend on the limitations that are applied to the project. • Typical configuration item information that might be useful to the project manager might be date of drawing issue, drawing revision number, drawing author and authorizer, data when drawing received by project team members, and similar. • Configuration identification specification comprises the allocation of codes to the identified items. The codes are designed to provide a range of specific information unique to each configuration item. • A configuration change control system typically includes facilities for preparation of change request and management of the implementation of approved changes. • Configuration status accounting and reporting (CSAR) provides for the updated recording of current configuration identification and historical baselines and approved changes. It also acts as a register of pending change and reports on the status of implementation of approved changes. • Configuration auditing and feedback includes a review of development test plans and test results as well as a summary of required tests not yet performed. It also provides details on deviation from plan.

50. 7.7 Concurrent Engineering and Time-Based Competition • Concurrent engineering is basically an approach to support time-based competition, which is about developing new products and then getting them to the market before the competition does. • Concurrent engineering allows the project development and construction phases to develop and run concurrently. The actual phases may not operate in parallel, but the contributions from the various members of the design team are made in parallel as opposed to serially. • Phased concurrent engineering occurs where the project is separated into individual work packages and each package retains a separate design and execution phase. However, the sequential arrangement of the packages is blurred and some overlap takes place between the various packages; in each case, however, package design is complete before package execution commences. • Fast-track concurrent engineering occurs where individual package design and execution overlap and also each individual work package overlaps.