Identification of Critical Success Factors for Minimization of Cost of Poor Quality from the Construction Projects

Abstract

Cost of Poor Quality (COPQ) or cost of failure gets inducted in construction projects during work execution due to failure in preventing defects, reworks and wastage of resources. Poorly defined project objectives, inadequate feasibility studies coupled with poor project planning and designing lead to revision of designs and reworks at later stage during project execution, causing cost and time overrun. Losses of construction companies on this account can go up to 40% of revenues. Since these losses (reworks and wastage of resources etc.) are normally not measured and recorded in the accounting system, therefore, they mostly remain hidden and the management does not know its gravity. Therefore, there is a need for reconnaissance and finding solution to minimize the losses of construction industry. Construction industry has a significant share in the socio-economic development of any country and provides employment to skilled/unskilled labor/poor masses and helps to alleviate poverty. Success of construction industry is dependent on performance of construction companies. The performance of construction companies can be improved by minimizing the COPQ. Completely eliminating COPQ might not be possible being uneconomical, however, it can be minimized with a proactive approach and effective management of Critical Success Factors (CSF), which were yet unknown. This study was therefore taken up to identify the CSF that can help the project management to reduce or minimize COPQ. This research study was successful in exploring and identifying forty (40) CSF falling in five areas of project management (Planning, Organizing, Executing, Monitoring and Controlling) that have the potential to decrease the losses on account COPQ from construction projects. Since it would not be possible for the project management to address and tackle all the forty CSF at the projects therefore, ranking in terms of criticality has been carried out for all the identified CSF. The analysis have revealed that 17 CSF fall in the list of top ten (some CSF have equal scores). It has also be identified that Planning is the most critical stage of any project because six of the top ten CSF pertain to Planning stage. According to ranking of top ten CSF, project Planning is at the top followed by Organizing, Controlling, Monitoring and Executing. It highlights the importance of Planning in any project; therefore, project planning may be completed very carefully so that no revision is needed during the project execution stage and COPQ remains at the lowest possible level.