1) Quality assurance involves proactive management of the construction process to reduce rework and increase efficiency, while quality control is inspection-based and occurs after work is completed.
2) Lack of quality controls can cost a construction business 5-15% of revenues due to rework, complaints, recalls, and lawsuits.
3) Implementing quality processes like planning, training, inspections, and after-action reviews helps contractors complete jobs right the first time, improving efficiency, safety, and profitability.
2. 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.
4. 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.
10. 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!
11. 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).
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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).
18. 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?
19. 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!
20. 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.
21. 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.
22. 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!
