The Cost of Quality Reduction on A Cross Country Pipeline Construction Project

Abstract

In today's increasingly fierce market competition, enterprises optimization to maximize profits through continuous innovation and minimization of costs to increase their competitiveness in the market. The Cost of Quality method has been widely used in the manufacturing industry to improve product quality and save the cost of quality since the 1990s, but seldomly used in construction projects. The author introduces the successful application of the Cost of Quality method to a cross country pipeline construction project. After evaluation of the cost of quality of an on-going oversea pipeline project, the attention and commitment of top management of the construction company have been drawn. The author started a campaign to reduce the cost of quality by conducting a root cause analysis to find the root causes of quality failures and applying a brainstorm method to construct preventive actions to utilized them in the construction project. With the use of preventive measures, internal & external failures such as rework and repair at work were significantly reduced. After reassessing the cost of quality at the end of the project, the figure shows the overall cost of quality has been reduced from 15.7% to 9.9% of the contract value. The finding of this study can be a very useful lesson to other pipeline construction projects and at the same time help other quality management peers to continuously improve the quality management programs and to increase the profit of their own projects.

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