UPGRADING A CONSTRUCTION QUALITY SYSTEM

USING THE PROCESS APPROACH

John R. Broomfield Lisa A. Parsley

President and CEO Teamwork System Administrator
Quality Management International, Inc. Performance Site Management, Inc.
Exton, PA 19341 Columbus, OH 43207
jbroomfield@aworldofquality.com lisa.parsley@p-s-m.com

KEY WORDS

construction, system, teamwork

SUMMARY

This paper outlines an increasingly common project to solve a problem of ten years in the making.
That is to bring quality systems out of the shadows of being done mainly to conform to ISO 9002 for
certification purposes.

Instead, you will be able to explain to your colleagues how this traditional system was transformed to
serve the organization, its customers and other interested parties. You will see how it was explained,
designed and rebuilt so managers understood the benefits, enthusiastically made it happen and enjoyed
using it.

You will also understand the process approach and be ready to transform your organization's
management system so it translates customer needs into satisfied customers while conforming to ISO
9001-2000.

A COMMON PROBLEM

The "quality manual" told most of the story. It was a rewrite of ISO 9002:1994 comprising 18
sections and written early in the "ISO project" as a solemn promise to conform to the standard except
where it made no sense at all. Procedures were written around the standard and not around the way the
business actually operated.

The workers thought that this was only to win a glittering prize. Still the message lingered, "ISO
registration will show that we are better than all of the other site development contractors around here".

An accredited registrar certified the quality system early in 1999. After a short celebration, the
frustration deepened.

Thank goodness for the persistence of the president (Dan), a senior manager (Steve) and the quality
system administrator (Lisa). Had it not been for them, the system of procedures written around the
standard would have remained an expensive mistake.

This trio (DSL) could see the sense of a system but not one that treated the workers as if they were
idiots feeling they were unable to make a move or a decision without reading a procedure or becoming a
nonconformity.

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 So, while the rest did their best to ignore the system, DSL decided to cull the unnecessary detail and
get some expert help from a specialist on making management systems work effectively in the
construction industry.

SENIOR MANAGEMENT BUY-IN

All of the senior managers (no exceptions) participated in a workshop to discover how systems can
enable them to hasten the rate at which their processes add value.

They could see that, if they made it happen, their system could more effectively translate the needs
of clients into cash in the bank. This liberated them from thinking mainly in terms of conforming to ISO
9002. Indeed, this session hardly mentioned ISO and certification.

The emerging ISO 9001-2000 was however taken as an opportunity to get the Teamwork System
right. The so-called ISO System was renamed to become the Performance Teamwork System. (See
Exhibit A.) The management team emerged convinced with a fresh understanding for aligned objectives
and sharing a common purpose.

The senior managers approved the upgrade plan from a position of understanding so they could
begin to seriously commit their time and resources to making the Teamwork System an effective reality.

CAPTURING THE KEY PROCESSES

Most important to the transformation from ISO System to Teamwork System was the shared
determination to capture the processes for converting customer needs into cash as they are. Not as we
would like them to be!

The core process had already been analyzed, defined, presented and explained to the senior managers
using a poster-sized display of exactly how the company converted customer needs into cash in the bank.
(See Exhibit B.)

The format used was a deployment flowchart in color showing the company's interaction between its
clients and subcontractors. Many ribs or enabling processes support this backbone or core of the
company. These are shown as icons representing linked documents.

The core process and enabling processes comprise many critical or key processes, these were listed
and the process owners were identified with whom deadlines were agreed. (See Exhibit C.)

Just two hours with the process owner was all it took on average to capture each key process. The
process owner identified:

The process objective

The process team

The steps in terms of:
• Actions (with drilldowns for more detail as necessary)
• Meetings
• Decisions
• Documents/records

Arrows linked the steps to show the flow of information or material

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 We recorded each process using a deployment flowcharting package called TeamFlow. Rarely is a
file larger than 10kB with this simple and effective process/project management software. Note how it
links to other system documents on the server for ease of viewing around the network (except when the
document management software did its best to thwart this feature!).

Process owners obtained review comments from their process teams in answer to their question, "Is
this the way it is?" This reinforced buy-in and confidence in the system through its flowcharted and user-
friendly color procedures.

Process owners had the authority to approve their flowcharts for issue as procedures after they had
reconciled review comments from the process team and their boss.

Every process team now knows the objectives of their processes. They also know what to do if a
process is less than fully effective.

LISTENING TO THE SUPERVISORY TEAM

After ten months of working with the process owners to capture the existing PSM processes and
controls, Dan was ready to invest in a winter week of learning for 30 managers, supervisors and team
leaders. A five-day tailored workshop (modeled on the ISO 9001-2000 lead auditor course) was held to
provide a rigorous framework for discussing the merits and problems of the Teamwork System.

After some trepidation from senior management, the supervisory team responded to the challenge of
preparing for this workshop by completing pre-class work comprising 38 questions to develop some
understanding of ISO 9001-2000. This preparation had been led by Dan and facilitated by Lisa with a
promise from the consultant of $50 cash to anyone who could show that a requirement in ISO 9001-2000
would cost PSM more than it would save. After grading the paper in open forum there were no takers.
The supervisory team developed a keen understanding of exactly what they were being asked to do
and why it was necessary. For example, the team learned that inadequate or unclear requirements lead to
guesswork and poor planning. They also allow subjectivity and waste to go uncorrected.

The team agreed to transform the “Best Practices” from the status of optional guidelines to become
the standard for all jobs. As such they were renamed as “Performance Practices”. While all that we can
expect from an individual is their best, we expect a team to meet requirements.

The team learned the value of audit, where an especially trained and impartial team member studies
evidence of how well the Teamwork System is helping the team to meet its objectives. Corrective action
flows from audit to stop the same problem from causing loss or waste again.

Most important was the learning from listening to the experience and enthusiasm of the supervisory
team in making the Teamwork System even better. All who attended the class are now qualified to
conduct internal audits and the balanced scorecards. Managers now appreciate the value of making their
staff available for auditor training and audits.

AUDITING FOR EFFECTIVENESS

Auditors were retrained to seek objective evidence of effectiveness and to make decisions together
with the auditee as to the merits of a corrective action request.

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 Systems without process objectives make this very difficult to do. Such systems tend to reduce
auditing to looking for conformance only. Indeed, in such situations auditors have been known to spend
their time looking for nonconformance!

MEASURING PERFORMANCE

Process objectives are currently served by measurable objectives for the enterprise, such as these
examples:
Individual Development Effectiveness 85%
Rework (% of cost) .76%
On-Time Completion 100%
Customer Satisfaction 85%

Criteria are being developed for the process objectives to make measurable the rate at which value is
added.

We look forward to the prospect of reporting more fully on the benefits of this company's Teamwork
System at the 55th AQC.

MANAGING CONTINUAL IMPROVEMENTS

Beyond the islands of CARs and PARs is a whole continent of continual improvement.

Recognizing the huge opportunities to increase the rate at which value is added (in $ per
millisecond), senior managers now enjoy greater success by using the flow of information from the
system on a daily, weekly and monthly basis.

The management reviews by top managers are now strategic. The Teamwork System is driven by
PSM’s Strategic Plan so senior managers want to make sure that their system is changing fast enough to
yield yet more opportunities for improving Performance Site Management.

FURTHER INFORMATION

For more on the process approach in use since 1986, please be prepared to invest several hours
studying www.aworldofquality.com.

For more on Performance Site Management, take a look at www.p-s-m.com.

2/20/2001 Page 4 of 7
 Quality Policy and Objectives
Our quality policy is:

First in Site Management - Focused on Clients' Needs

We complete construction projects for our clients that fulfill their

performance requirements on time at a low total cost.

We set and measure our performance against measurable objectives for

each project, process and as follows:

building client loyalty;

educating our workforce to prevent rework;

building climate of continuous improvement;

involvement;

engineering solutions for better value.

Our objectives for quality are set each year. They are communicated to
the team via a separate controlled document coded EXE-002-MA.

These objectives and the requirements from clients and regulators drive
the key processes within our Performance Teamwork System.

We educate and inform all employees on critical performance issues so

they understand, implement and continually improve their processes.

We require and help all employees to use our Performance Teamwork

System and to continually improve its effectiveness.

Dan Lorenz
President

EXHIBIT A
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 Clients Performance Site Management, Inc. Subcontractors and Suppliers

To fulfill clients' needs

Strategic and business planning (EXE-001-PR) and reviews of system performance (EXE-004-PR)

N
Need construction work?
Y

Keep informing current and potential clients of capabilities and track record (MKT-002-PR)

RFP and other indications of opportunity

Review opportunity for fit with PSM expertise and capacity

N
Submit proposal?
Y

Decline opportunity (with reasons)

Estimate costs and increase value with PSM Proposal (evaluate reasons for not winning earlier bids)
N
Best value?
Y

PSM Proposal

Evaluate Proposal

N
Negotiate?
Y

Fine-tune proposal for best value solution

N
Form contract?
Y

Contract for signature

N
Sign?
Y

Signed contract

Translate client needs into project requirements

Project Plan
N
Subcontract?
Y

Negotiate agreements with suppliers and subcontractors capable of meeting project requirements (SAL-003-PR)

Subcontract

Complete site development in conformance with requirements

N
Milestone? Deliver conforming work/material
Y

Apply for payment

Invoice

Pay per contract

$$$

Invoice

Pay subcontractors and suppliers

Obtain customer feedback $

Measure performance, learn and use system to improve

EXHIBIT B
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 CODE TITLE OWNER
ACC-002-PR Paying subcontractors and suppliers Kevin Gallagher
ADM-001-PR Filing and archiving records (a matrix) Lisa Parsley
CON-001-PR Joint venturing (internal and external) Linda Peck
CON-002-PR Value Engineering Dan Lorenz
CON-004-PR Managing projects (includes setting objectives and planning) Larry Miranda
CON-006-PR Dealing with nonconforming product (includes rework) Darrell McCoy
CON-007-PR Punching and polishing (handing over the site) Calvin George
CON-008-PR Controlling incoming materials Darrell McCoy
CON-009-PR Monitoring and measuring performance (including site visits) Larry Miranda
CON-010-PR Controlling measuring devices Joe Fitch
DNB-001-PR Coordinating designs of sites (includes erosion control plan) Mike Gates
EXE-001-PR Strategic business planning Dan Lorenz
EXE-002-PR Obtaining and using client feedback Randy Loebig
EXE-003-PR Analyzing data on the effectiveness of the Teamwork System Rick Levy
EXE-004-PR Reviewing system performance Rick Levy
EXE-005-PR Developing leaders at all levels Dan Lorenz
EXE-007-PR Preparing, using and updating scorecards Dan Lorenz
FLM-001-PR Providing and maintaining equipment Steve Hazelbaker
LRN-001-PR Meeting learning requirements Andy Motil
MIS-001-PR Maintaining the computer network Mike Parsley
MKT-001-PR Designing the PSM services/brands (can record validation) Dan Lorenz
MKT-002-PR Marketing and selling value Linda Peck
MKT-003-PR Promoting team understanding Linda Peck
MSV-001-PR Analyzing and maintaining built facilities J.D. Chalfant
PRS-001-PR Recruiting and hiring JoAn Thompson
SAL-001-PR Estimating and preparing winning proposals Randy Loebig
SAL-002-PR Reviewing and controlling contract documents Teresa Tuggle
SAL-003-PR Subcontracting and purchasing Teresa Tuggle
SAL-004-PR Securing timely payments Teresa Tuggle
SAL-005-PR Translating client needs into project requirements Brian Mayfield
SFT-001-PR Planning and auditing safety performance Tom Obert
STA-001-PR Stabilizing and reclaiming Ace Wise
TWS-002-PR Planning and implementing continual improvement Lisa Parsley
TWS-003-PR Updating and controlling system documents Lisa Parsley
TWS-004-PR Auditing processes and the Teamwork System Lisa Parsley
TWS-005-PR Removing root causes to stop recurrence of nonconformance Lisa Parsley

EXHIBIT C
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