Quality & Risk Management in Construction Industry

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Quality & Risk Management in Construction Industry
Temitayo Lewis
University of Maryland University College
PMAN 639
Dr. Eva B. Cruz Morel
Date: 11/28/2010

University of Maryland University College

Executive Summary………………………………………………………………………...3 Introduction………………………………………………………………………………...4 Quality Management and Overview…………………………………………...………….. 5
Quality Assurance…………………………………………………………………..7
Quality Control……………………………………………………………………..7 Total Quality Management………………………………………………………………...8 Six-Sigma in Construction Industry……………………………………….………………10 Risk Management and Overview…………………………………………………………………..11

Risk Management Best Practices………………………………………………………….13
Risk Assessment Matrix…………………………………………………………………..14 Conclusion…………………………………………………………………………………………14 References …………………………………………………………………………………………16

Executive Summary
This paper touches on the findings of the adoption of quality and risk management into the construction industry. There is great potential for quality improvement and risk management in the construction process. As building projects get larger and more complex, clients are also increasingly demanding higher standards for their delivery. Quality management has been recognized as a successful philosophy in the manufacturing and service industries but the construction industry is still confused on the role of quality management which encompasses quality assurance and quality control. The industry is subject to more risk and uncertainty than perhaps any other industry. Yet, managerial techniques used to identify, analyze, and respond to risk are not been applied efficiently. This paper discusses how quality and risk management can be embraced in the construction industry to help raise quality and productivity to meet customer’s expectation. It also discusses tools that could be used to implement total quality and risk management principles in the construction industry because the recognition of the long-term nature of both principles is essential.

Introduction
The construction industry sector plays a substantial role in the overall economy. It is a major worldwide industry accounting for approximately $3.4 trillion USD. In 2008, with 7.2 million wage and salary jobs and 1.8 million self employed and unpaid family workers, construction was one of the Nation’s largest industries. In America alone, it is reported to be annually responsible for nearly four percent of the nation’s gross domestic product (GDP). As the industry experience growth and projects get larger and more complex, demands by clients for higher standard products and services increases and so are the challenges of increased project complexities and risks. In the 1800s, the industry recognized the essential of the quality of management in its business processes and tried to adopt the total quality management (TQM) notion. In the same period, it also attempted to attain managerial techniques used to identify, analyze and respond to risk. However, the attainment of acceptable levels of quality in the construction industry is low and has long been a problem because it is still confused on the role of quality control(QC), quality assurance (QA) and TQM in improving production (Arditi & Gunaydin, 1997). As a result of inefficient or non-existent quality management approaches, significant quantities of resources (human and material) and time are wasted each year. The focus to improve operational efficiencies and reduce transactional time and cost is also not fully recognized by the industry. There exists great potential for quality and risk management improvements in the construction industry. Their importance cannot be understated regardless of a nation’s primary business, and organizations will always require interaction with the construction industry to source physical assets to house operations (Cox and Ireland, 2002). In recent years, globalization and deregulation of markets has...
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