TQM Makes Inroads in Construction
by David W. Wood
Few industries have shown greater resistance to change than the construction
industry. The old "we've always done it this way" attitude is
pervasive in the hands-on business that, when compared to others, has changed
little since God contracted with Noah to build the ark.
Take computers, for example. While the rest of the world saw them as an
opportunity to increase productivity, all but a few contractors saw them
as expensive paperweights. Even after being exposed to the magic they could
perform, many continued to distrust their capabilities, running dual systems
(computer and the old "manual" way) for such functions as estimating
until they were convinced of the machines' reliability.
When TQM began to gain widespread recognition in the early 1990s as a process
offering financial and cultural benefits, once again the construction industry
sneered. "That may work for people like manufacturers, but not in construction,"
they said. "Ours is a totally different animal."
Fortunately, not all contractors bought in to that philosophy. A few, having
read of the great success experienced by firms implementing TQM, wondered,
"What makes us so different that it can't work for us?" They accepted
the fact that modifications to the process would be necessary for it to
work in the building business but believed that pioneering the effort would
be worth the investment.
One contractor that said "Why not?" was Sylvan Industrial Piping
of Pontiac, Michigan. They recently became the first U.S. mechanical contractor
to be awarded Q1 status by Ford Motor Co. This achievement elevates Sylvan
to the level of "preferred provider" for the automaker.
Sylvan's quality journey began in the spring of 1991 in Atlantic City, New
Jersey, where CEO Mike Morrissey attended one of Anthony Costonis' TQM seminars.
Costonis is president of Corporate Development Systems Inc. of Lynnfield,
Massachusetts. The firm has been a construction industry strategic planner
for more than 25 years.
During the early part of the presentation, Morrissey had difficulty seeing
how the process could apply to construction, but early the first afternoon
the fog began to lift.
"All of a sudden, things started to fall into place," recalls
Morrissey. "I saw the possibilities, knew that TQM could do nothing
but make us a better company, and I became enthusiastic."
Bringing that enthusiasm back to company headquarters in Pontiac, Morrissey
talked with others on his management team and decided to enlist CDS' help
in putting together a quality program. CDS conducted quality orientation
programs with administrative and field staff, after which weekly sessions
were held to begin the problem-solving and team-building processes. They
formed a steering committee, chaired by estimator/project manager Terry
McKinnon.
While TQM may have been new to Sylvan, its customers in the automotive industry
had been involved in the process for decades. Ford, for example, was one
of the first U.S. firms to involve itself in the quality movement, beginning
in the late 1950s.
In 1979, with foreign competition beginning to make inroads, Ford brought
in TQM guru W. Edwards Deming, who had revolutionized Japanese industry
as a consultant.
Deming overhauled the company's quality system, moving it away from military
specifications and in-house quality procedures that were detection-oriented
to a mode that stressed prevention. Since then, Ford's top management has
demonstrated its strong commitment to TQM.
Today, Ford is in the midst of a convergence that will reduce its supplier
list by 90 percent. Companies that haven't achieved Q1 status by the end
of 1997 won't be allowed to work for Ford. As part of that effort, in January
1993 Ford informed Sylvan, which had done work for Ford for 20 years, that
it would be coming in and conducting on-site audits of all suppliers for
the purpose of supplier reduction. Those audits would focus on four areas:
quality, commercial, delivery and technical.
Though its TQM program was beginning to take shape, Morrissey understood
that no company passed the first audit, and Sylvan was no exception. The
initial audit simply helped Ford identify those areas that required improvement.
Eight months after the first audit, Ford returned for a second audit. This
time, the results were better, just slightly below the Q1 certification
level. Three months later, at the third audit, Sylvan passed with flying
colors, achieving passing grades in all four categories.
Then, in March, Ford brought all the parties together, plus some plant-level
customers, for Sylvan's final presentation. Sylvan's people delivered a
three-hour presentation, after which Ford executives deliberated less than
10 minutes before informing Sylvan it had been awarded the Q1 flag.
"They told us it was the quickest caucus that had ever taken place,"
says Terry McKinnon.
Sylvan is justifiably proud of having been the first to achieve Q1 status
of the eight mechanical contractors who had initially been prequalified
to attempt the challenge.
"This certifies to the world that we offer the customer more than just
the low dollar," says Morrissey. "Ford established a benchmark
with its program, one that allows other customers to know how well we perform.
We expect to benefit from that by attracting additional work."
There are additional benefits for Sylvan, according to Morrissey: "Q1
not only fortifies our relationship with Ford, but it has been a tremendous
boost to the morale and pride within our company. Our people are extremely
proud of our accomplishment because they know, firsthand, the effort that
it required."
John Hruska, Supplier Quality Engineering-Facilities, Materials and Services
Purchasing for Ford Quality Division, is quick to credit Morrissey and his
staff for their contribution. "Senior management's commitment was the
key to Sylvan's success," he says. "Achieving Q1 is a very intensive,
demanding process that can only be reached with support at that level."
Sylvan began as a residential plumbing and heating contractor in 1954. It
began doing some small automotive work for GM in 1959, and in the 1970s
got into process work. Today, the company, with offices in Tennessee and
New Jersey, and more than 200 employees, specializes in automotive-related
work, dealing with pneumatics, hydraulics, paint systems, robotics and conveyors.
Sylvan works throughout North America and has even traveled to the Far East
while working with Ford, GM, Chrysler, Honda and Nissan.
Being able to hang the Q1 flag outside its offices is not the end of the
line for Sylvan. Semi-annual self-surveys are required, and every two years
Ford comes in and does a maintenance survey. The process is never-ending,
according to Morrissey.
Further long-term goals include determining how his company can work with
the automotive industry to develop ISO 9000 training that would apply to
construction. "We just continue the problem-solving process and go
on to create new teams to work on them," he says.
"In essence, a quality program points out the obvious things that a
company should be doing that are sometimes overlooked," says McKinnon.
"The other thing it does is combat the tendency that businesses have
to raise volume at the expense of reduced profits. That causes everyone
to get older quicker."
Costonis, who has viewed Sylvan's entire TQM effort, is understandably proud
of his client's achievement. "This shows that TQM really makes a difference,
that it really works, and does so in construction, an industry where it
has been met with a high degree of skepticism," says Costonis.
About the author
David W. Wood is a Weare, New Hampshire-based copywriter, publicist
and marketing consultant specializing in the construction industry.
The Nuts and Bolts of Ford's TQM Evaluation Process
Ford Motor Co.'s TQM program-the Construction Rating Standard for Contractors-is
specifically designed for the construction industry. Using this standard,
Ford's quality experts visit the offices of contractors wanting to do business
with Ford. They conduct exhaustive and detailed two-day, on-site audits,
labeled Ford's Construction Supplier Quality Evaluation.
The SQE contains four components: quality, technical, delivery and commercial.
Each component divides into subcategories-each of which is assigned a maximum
point value. Each contractor's points are tabulated so the contractor can
be ranked.
Although the process is quite detailed, it's worth looking at what Ford
evaluates.
Quality
In this category, auditors examine a contractor's commitment to quality.
They rate planning programs, review processes, written procedures, training
and education, team organization, statistical analyses of performance, monitoring
and improvement systems, and customer liaison.
In addition, they look at internal and external indicators of the quality
operating system, the commitment of the contractor's leadership and human
resources, and the company's innovative approaches to procedures and documentation.
Technical
This category explores design in detail. Components that are examined include:
staffing, specific technical expertise, project management, the use of value
engineering, project coordination, regulatory compliance, system design/installation,
the design and review process, scheduling, budgeting, problem solving, construction
planning, dispute resolution, safety policies, CAD capabilities and serviceability.
Next, the SQE examines the development-improvement initiatives, specification
standards and updating procedures, service operating and repair procedures,
programs to keep pace with new technologies, continuous improvement practices
in staffing and support, and post-project evaluation.
Lastly, project execution/construction is examined, including: the process
flow for problem resolution and changes, how project owners are handled,
how operations and maintenance manuals are developed and as-built conditions
are determined; safety procedures; labor relations; scheduling; review-the
tracking and coordination of shop drawings, materials and equipment; subcontractor
coordination; architectural/engineering liaison; and punch-list processes.
Delivery
In this category, once again, it's a detailed evaluation. How does the contractor
ensure that customers' specifications are met? How does senior management
communicate with employees? Is the company fully computerized? How are project
milestones tracked against the schedule? How are critical schedule components
expedited? What system is used to resolve customer problems? What about
records maintenance and tracking?
Commercial
In the final SQE category, auditors examine the contractor's cost competitiveness,
management and financial strength, and other business issues. They want
to know how price competitiveness is ensured and what cost-saving steps
are being taken. They look at corporate mission statements, operating policies,
business plans, organizational charts and financial statements.
Lastly, the auto manufacturer explores integrity, minority and legal issues,
and responsiveness to problems.
