Quality is key to Lean’s success

May 3, 2013
Lean is about finding ways to deliver more value with less waste.

Lean is about finding ways to deliver more value with less waste. One of the seven basic wastes Lean seeks to eliminate or reduce is rework or poor quality. One definition of waste is anything that consumes resources, but does not produce value as seen by the customer. It does no good to reduce waste so work flows faster if the product is defective. That doesn’t surprise anyone, yet, just like when Lean was first introduced in manufacturing, there needs to be a paradigm adjustment in construction regarding quality. Construction workers, and especially managers, need to change their thinking. While poor quality happens during building facilities — it doesn’t have to!

The old paradigm in manufacturing was that defects and errors were a natural part of the production process. They added lots of QC inspectors to try to catch defects before the customer did. They also used warranty as a way to make it up to the customer for bad products. In many cases when they had little competition, they were still profitable with high levels of rework. One manufacturer of sheet metal cases for copier and computers had an “unofficial” saying: “We make it nice because we make it twice.” They had almost 50% rework and still made money. They reduced the percent of rework to nearly zero and made a whole lot more money.

Construction is not manufacturing, yet many contractors could easily say, “We build it nice because we build it twice!” I have seen studies putting the level of rework in construction as high as 40% and some say these studies did not capture all of it.

How to change the quality paradigm in construction? It starts with an understanding quality. Philip Crosby was one of the leading quality leaders of the last century. His four basics of quality are still applicable today.

Quality is conformance

Quality is conformance to customer requirements. This is very important to understand and apply. The customer, not contractor, determines if it is quality or not. Too often we assume we know what the customer needs and fail to meet the real requirements. A few weeks ago, I heard the construction manager for a large electronics chip manufacturer, who is currently building several large plants, say that construction workers do not understand this customer’s requirements. That the customer wanted the installed system to work as designed is clearly understood, but the customer does not want the piping and HVAC systems to last 30 or more years. They will be tearing out whatever is installed within a few years to upgrade their systems, so why make it to last 30 years? For example, he questioned the need for a polished weld. Functional yes, but the polished weld added no value in the operations and would be covered up anyway.

We should not assume we know what the customers require, but learn to listen and then meet their needs.

Zero defects

The standard for quality is zero defects. This is one of the most misunderstood parts of what Mr. Crosby taught. It is not about being perfect, but about setting the right expectation. We will never have defect free or punchlist free jobs in construction unless we start setting the standard and managing to it. The old way of thinking in manufacturing was that defects were a way of life and to set a low acceptable limit on how many defects would be allowed. How many defective iphones or computers or dishwashers do customers want? Companies in manufacturing have achieved what was previously thought to be impossible levels of defect free products once they realized the right standard to shoot for. 

This same incorrect thinking still exists in construction. First consider safety — what is the goal for how many accidents are acceptable? Do we set a goal to only have few cut hands, only one or two injured backs and no more than one lost eye? Clearly, the only target in safety performance is zero accidents. Most construction managers will agree to this safety standard, but will still accept many defects in construction work. The only true target in construction is no defects, no rework, no punch-lists. Is it possible? Yes, if we start shooting for it. We get what we manage.

Curiously, the biggest non-believers are managers not the workers. When management sets the expectations bar, the workers will come around.

Achieving quality

Prevention is the way to achieve quality. QA/QC is not the answer to achieving zero rework. Value is not added when we add more inspectors and checkers, however more resources are consumed as we increase inspection. That makes the practice of doing QA/QC “waste” by definition! It may be necessary to do per the contract or because we have no better quality management system in place, but it adds no value and is still waste!

Defects and errors happen while we are fabricating and/or installing product not while it is being inspected. The way to prevent errors from happening is to look at the steps in the process that produce the product and the defects. We need to make sure we have skilled workers who know how to do the work correctly and know when they have done it right. This may sound impossible or too expensive. It is neither. It will save money. Managing the process steps and the requirements takes work, but is possible. We can do it, however, most managers are just too busy (maybe lazy) to do it.

Anciently the Chinese had a simple test for insanity. They would take the person suspected of being insane to a small pond of water and tell them to drain the pond. If the person did not first divert the source of water coming into the pond, he or she was judged insane. Many companies only find and repair defects. They do not seek to get to the root cause and prevent it. Insanity still happens. A way to prevent poor quality is to collect data on the types of defects and work to eliminate them by root cause analysis.

Lean is all about creating a Lean thinking culture. One will not be successful in improving quality or implementing Lean without the help of the front-line workers. They are not the enemy of management; workers are part of the team. The front-line workers see more errors and rework and see more barriers to quality work than middle or senior managers ever see or think happens. The late Dr Deming, a key quality thinker, said that only 8% of all defects are actually caused by the front-line workers, the rest are caused by poor or non-existent processes and systems and only managers hold the keys to changing these processes.

Some construction managers act like they expect the workers to leave their brains in their trucks as they enter the jobsite each day and just do what they are told. The Lean thinking manager will engage the workers in identifying problems that cause poor quality, so they can be prevented at the source, not discovered by QA/QC later. Lean managers will apply the Lean principle of go and see and will find much success as they spend more time observing (not spying) how work is done; the barriers that happen; and by asking their front-line workers.

Are we improving?

We measure the cost of quality to see if we are improving. Senior managers mostly understand making money and not losing money. We need to measure the cost of poor quality and prevention in dollars to get and hold their attention. In the best selling book “Quality is Free”Mr. Crosby wrote that it is a false assumption to believe higher quality means higher cost. If the only way one attempts to improve quality is by adding more QA/QC, it can cost more and will still not achieve even close to zero rework. Prevention will require some investment in training workers and managers, and in doing process and root cause analysis. However, this is a small investment compared to the cost of poor quality.

There is a rule of quality cost called 1–10-100. It states that it only cost a unit of one if a quality defect is identified in the design phase. It will cost ten times that amount if the defect is surfaced during the fabrication and installation phase. It will cost 100 times that amount if it is caught after the product is installed and in the customer’s hands. Most QA/QC efforts are focused towards the end product, resulting in higher costs.

What is your cost of poor quality and rework? Most construction managers have no idea of the full costs because we don’t measure it. Managers need better systems to help them see what quality costs they are leaving on the table.

We might well say we build it nice because we build it twice! Quality improvement requires an understanding of its meaning, the standard, the prevention focus and the cost of quality performance measure.  As the commercial asks, “What’s in your wallet? It could be a lot more with better quality performance. 

Dennis Sowards is an industry consultant and guest writer for Contractor. He is the author of “Lean Construction Pocket Guide: Ideas and Tools for Applying Lean in Construction.” His company is Quality Support Services, Inc. He is currently serving an 18 month mission in Thailand for the LDS church. He may be contacted at [email protected].

Voice your opinion!

To join the conversation, and become an exclusive member of Contractor, create an account today!