Quality, safety and economics PDF

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Construction Management - Quality, safety and economics...

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Definition of quality Quality can be defined as meeting the legal, aesthetic and functional requirements of a project. Requirements may be simple or complex, or they may be stated in terms of the end result required or as a detailed description of what is to be done. But, however expressed, quality is obtained if the stated requirements are adequate, and if the completed project conforms to the requirements.

Construction quality In the construction industry, quality can be defined as meeting the requirements of the designer, constructor and regulatory agencies as well as the owner. According to an ASCE study, quality can be characterized as follows. • Meeting the requirements of the owner as to functional adequacy; completion on time and within budget; lifecycle costs; and operation and maintenance. • Meeting the requirements of the design professional as to provision of well-defined scope of work; budget to assemble and use a qualified, trained and experienced staff; budget to obtain adequate field information prior to design; provisions for timely decisions by owner and design professional; and contract to perform necessary work at a fair fee with adequate time allowance. • Meeting the requirements of the constructor as to provision of contract plans, specifications, and other documents prepared in sufficient detail to permit the constructor to prepare priced proposal or competitive bid; timely decisions by the owner and design professional on authorization and processing of change orders; fair and timely interpretation of contract requirements from field design and inspection staff; and contract for performance of work on a reasonable schedule which permits a reasonable profit. • Meeting the requirements of regulatory agencies (the public) as to public safety and health; environmental considerations; protection of public property including utilities; and conformance with applicable laws, regulations, codes and policies.

Quality assurance According to the Manual of Professional Practice for Quafity in the Constructed Project, "Quality Assurance (QA) is a program covering activities necessary to provide quality in the work to meet the project requirements. QA involves establishing project related policies, procedures, standards, training, guidelines, and system necessary to produce quality. The design professional and constructor are responsible for developing an appropriate program for each project. QA provides protection against quality problems through early warnings of trouble ahead. Such early warnings play an important role in the prevention of both internal and external problems" Quality assurance is a set of planned and systematic actions to ensure that products and services comply with specified requirements. It not only involves checking the final quality of products to avoid defects, as is the case in quality control, but also checking product quality in a planned way in all the production stages. It is the development of work and product design procedures to prevent errors from occurring in the first place, based on planning backed up by quality manuals and tools.

quality control Quality Control (QC) is the specific implementation of the QA program and related activities. Effective QC reduces the possibility of changes, mistakes and omissions, which in turn result in fewer conflicts and disputes. The terms quality assurance (QA) and quality control (QC) are frequently used interchangeably. Since quality control is a part of quality assurance, maintaining a clear distinction between then is difficult but important. Quality assurance is all planned and systematic actions necessary to provide adequate confidence that a structure, system or component will perform satisfactorily and conform to project requirements. On the other hand, quality control is a set of specific procedures involved in the quality assurance process. These procedures include planning, coordinating, developing, checking, reviewing, and scheduling the work. The quality control function is closest to the product in that various techniques and activities are used to monitor the process and to pursue the elimination of sources that lead to unsatisfactory quality performance. Most design-related quality assurance and quality control activities are covered by a design organization's standard office procedures. Developing and monitoring the activities within the quality assurance program in the construction phase are the responsibility of either the designer or the construction management firm depending on the project delivery system in use. Figure : Total quality control flow chart

Total Quality Management Attainment of acceptable levels of quality in the construction industry has long been a problem. Great expenditures of time, money and resources, both human and material, are wasted each year because of inefficient or non-existent quality management procedures. The manufacturing industry has developed Total Quality Management (TQM) concepts, which have increased productivity, decreased product cost and improved product reliability. These concepts are also applicable to the construction industry.   

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TQM is an effort that involves every organization in the industry in the effort to improve performance. It permeates every aspect of a company and makes quality a strategic objective. TQM is achieved through an integrated effort among personnel at all levels to increase customer satisfaction by continuously improving performance. TQM focuses on process improvement, customer and supplier involvement, teamwork, and training and education in an effort to achieve customer satisfaction, cost effectiveness, and defectfree work. TQM provides the culture and climate essential for innovation and for technology advancement.

Figure shows generally accepted elements of TQM and construction industry-specific factors that affect quality of the process of a building project.

ISO standards The term ISO describes the series of international standards dealing with product design, production, delivery, service and testing. The ISO 9000 series comprises two basic types of standard: those addressing quality assurance and those addressing quality management. The quality assurance standards are designed for contractual and assessment purposes and are ISO 9001, ISO 9002, and ISO 9003. The quality management standard is ISO 9004 and is designed to provide guidance for companies developing and implementing quality systems, A company registered as complying with ISO standards has demonstrated to an accredited third party (an approved outside auditor) that its processes have been documented and that the company is systematically auditing and being audited that they are following the policies and procedures necessary to produce high quality products. ISO standards are directed towards improving a firm's production processes. A TQM system is the big picture and is concerned with customer satisfaction and all activities conducted by a firm. A good way of viewing ISO is that the emphasis in the ISO registration is on the management of process quality. This is not meant to minimize the role of ISO in a TQM system. The ISO standards provide an excellent beginning point for a firm starting a TQM program. ISO 9000: Quality management. The international standards, generically called ISO 9000, are the most widespread and generally accepted in developed countries. The ISO 9000 standards consists of four basic interdependent standards supported by guides, technical reports and technical specifications: ISO 9001: Quality management systems - Requirements. The ISO 9001 standard specifies requirements for a quality management system where an organisation needs to demonstrate its ability to consistently provide products that meet the requirements of clients and applicable regulations requirements. Regulatory requirements focus on the quality management system, management responsibility, resources management, product realisation and measurement, analysis and improvement. ISO 9004: Managing for the sustained success of an organization -- A quality management approach. the objectives of the ISO 9004 standard are broader in scope. The principles that underlie the management of quality in these standards are the following: customer focus, leadership, involvement of people, process approach, system approach to management, continual improvement, factual approach to decision making and mutually beneficial supplier relationships. ISO 19011: Guidelines on internal and external audits of quality management systems.

Standards and procedures When the aim is to guarantee the uniformity of a system, process or product, reference patterns are established in documents called standards or norms. The general objectives of standards are simplification, communication between the parties involved, production economy, safety and health, protection of consumer interests and the removal of trade barriers. In any type of company, the set of tasks carried out is so complex that they have to be written down to ensure internal consistency, to preserve them and to make sure they are methodically applied. These documents are called procedures, and describe the way in which an activity or process must be carried out. Therefore, standards establish the requirements of products or processes. Procedures are documents drawn up by the company itself and take into account the requirements established in the standards. These documents must include the purpose of the procedure, references to other documents, scope, method and sequence of tests, acceptance and rejection criteria, key control points and time of inspection. In all cases the control of a procedure should be documented in the quality records and filed in the quality log at the construction site. Technical or administrative procedures can also be part of a quality management system. In this case, the manual provides a generic description of the company's quality system, while procedures, whether general or specific, establish what is required to attain the objectives listed in the manual. Procedures must link the ISO standards' requirements and the activities of the company. They should include the people involved, information about materials and equipment and a description of key activities. Each organisation should decide which processes should be documented on the basis of client and regulatory requirements, the nature of its activities, and its corporate strategy.

Third party certification: The quality control of a product or process can sometimes be replaced with certification of the quality characteristics by third parties. Products that have received officially recognised quality marks may be exempt from controls and reception tests, increasing batch size and improving safety systems. However, the scope and aim of these quality marks are variable and an in-depth understanding is required to know what they mean. Below are different types of quality certificates, starting with the least reliable: 

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Certificate of origin: in this case the manufacturer states that the product complies with some specifications. Although the certificate might not be very reliable, failure to comply with the specifications can be legally actionable. Accredited laboratory test certificate: the test is performed on a small sample, and therefore cannot guarantee all production. These certificates should be used with caution due to their limited scope. Product type approval certificate: this approves a prototype and therefore does not guarantee the quality of the subsequent manufacturing process.

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Standard compliance seal or mark: its scope includes continual production and therefore it is more reliable than other certificates. When the product is very new and there is no specific standard to regulate it, the certificate is issued in the form of technical suitability documentation.

Safety hazards and cost effectiveness: Various measures are available to improve jobsite safety in construction. Several of the most important occur before construction is undertaken. These include design, choice of technology and education. By altering facility designs, particular structures can be safer or more hazardous to construct. For example, parapets can be designed to appropriate heights for construction worker safety, rather than the minimum height required by building codes. Choice of technology can also be critical in determining the safety of a jobsite. Safeguards built into machinery can notify operators of problems or prevent injuries. For example, simple switches can prevent equipment from being operating when protective shields are not in place. With the availability of onboard electronics (including computer chips) and sensors, the possibilities for sophisticated machine controllers and monitors has greatly expanded for construction equipment and tools. Materials and work process choices also influence the safety of construction. For example, substitution of alternative materials for asbestos can reduce or eliminate the prospects of long term illnesses such as asbestiosis. Educating workers and managers in proper procedures and hazards can have a direct impact on jobsite safety. The realization of the large costs involved in construction injuries and illnesses provides a considerable motivation for awareness and education. Regular safety inspections and safety meetings have become standard practices on most job sites. Pre-qualification of contractors and sub-contractors with regard to safety is another important avenue for safety improvement. If contractors are only invitied to bid or enter negotiations if they have an acceptable record of safety (as well as quality performance), then a direct incentive is provided to insure adequate safety on the part of contractors. During the construction process itself, the most important safety related measures are to insure vigilance and cooperation on the part of managers, inspectors and workers. Vigilance involves considering the risks of different working practices. In also involves maintaining temporary physical safeguards such as barricades, braces, guylines, railings, toeboards and the like. Sets of standard practices are also important, such as     

requiring hard hats on site. requiring eye protection on site. requiring hearing protection near loud equipment. insuring safety shoes for workers. providing first-aid supplies and trained personnel on site

While eliminating accidents and work related illnesses is a worthwhile goal, it will never be attained. Construction has a number of characteristics making it inherently hazardous. Large forces are involved in many operations. The jobsite is continually changing as construction proceeds. Workers do not have fixed

worksites and must move around a structure under construction. The tenure of a worker on a site is short, so the worker's familiarity and the employer-employee relationship are less settled than in manufacturing settings. Despite these peculiarities and as a result of exactly these special problems, improving worksite safety is a very important project management concern.

Safety management in construction industry SAFETY: For many years safety professional have been aware that the majority of workplace accidents are triggered by unsafe behaviors, and that their control is one of the keys to successful accident prevention. However, many organizations, even those companies with low accident rate have been frustrated by their inability to control unsafe acts. Importance of Safety in Construction: The construction industry has traditionally been considered as a hazardous occupation due to the high incidence of occupational injuries and fatal accidents. The number of fatal occupational accidents in construction all users the world is not easy to quantify, as information on this issue is not available for most countries. The outlay on construction in successive live year plans of India has been in the range of 36% to 50%. Need for Safety Management: The construction industry has some special features which have a direct bearing on the accident potential. In this trade the pattern of work is ever changing. The operations and physical circumstances change constantly unlike in the factories where the process, the method and the operations are generally respective. Timings and schedules vary considerably from place to place. The most important changing factor the change of men themselves. The inherent nature of construction jobs combined with the above factors make this industry as one with accident risks. Safety Program: The safety program of a Construction organization is a compact package which comprises a safety policy, safety department to implement the policy, and specially trained personnel to man it. The general safety inspection program that has to be followed in Construction site is shown in figure: SAFETY COMMITTEES: Every establishment wherein 500 or more building workers are ordinarily employed, there shall be a safety committee constituted by the employer which shall be represented by equal number of representatives of employer and the building workers employed in such establishment The main functions of the safety committee, shall be 1. To identify probable cases of accident and safe practice in building or other construction work and to suggest remedial measures. 2. To stimulate interest of employees and building workers in safety by organizing safety weeks, safety competitions, talks and film shows on safety, preparing posters or taking similar other measures as and when required or as necessary. 3. To go round the construction site with a view to check unsafe practices and defect unsafe conditions and to recommend remedial measures for their rectification

Time Value of Money – TVM The time value of money (TVM) is the idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received. TVM is also referred to as present discounted value. BREAKING DOWN 'Time Value of Money - TVM' Money deposited in a savings account earns a certain interest rate . Rational investors prefer to receive money today rather than the same amount of money in the future because of money's potential to grow in value over a given period of time. Money earning an interest rate is said to be compounding in value. Basic Time Value of Money Formula and Example Depending on the exact situation in question, the TVM formula may change slightly. For example, in the case of annuity or perpetuity payments, the generalized formula has additional or less factors. But in general, the most fundamental TVM formula takes into account the following variables: FV = Future value of money PV = Present value of money i = interest rate n = number of compounding periods per year t = number of years Based on these variables, the formula for TVM is: FV = PV x (1 + (i / n)) ^ (n x t) For example, assume a sum of $10,000 is invested for one year at 10% interest. The future value of that money is: FV = $10,000 x (1 + (10% / 1) ^ (1 x 1) = $11,000 The formula can also be rearranged to find the value of the future sum in present day dollars. For example, the value of $5,000 one year from today, compounded at 7% interest, is: PV = $5,000 / (1 + (7% / 1) ^ (1 x 1) = $4,673

Discounted Cash Flow (DCF) A discounted cash flow (DCF) is a valuation method used to estimate the attractiveness of an investment opportunity. DCF analysis uses future free cash flow projections and discounts them to arrive at a present value estimate, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one. Calculated as:

DCF is also known as the Discounted Cash Flows Model. BREAKING DOWN 'Discounted Cash Flow (DCF)' There are several variations when it comes to assigning values to cash flows and t...