Impact of knowledge management on the cost of poor quality

Abstract

Knowledge management (KM) implementation strategies on construction projects can reap benefits such as improved performance and continuous improvement, yet many projects are plagued with inefficiencies, repetition of mistakes and lack of lessons learnt. Poor skills, design changes, errors and omissions contribute to the internal failure cost element of cost of poor quality (COPQ) while the resultant effect of client dissatisfaction contributes to the external failure cost. COPQ is prevalent regardless of project type and has been found to be over 10% of total project cost in certain cases. While the need to reduce COPQ is definite, it is uncertain what impact KM has in its reduction. This study investigated the impact of KM in reducing COPQ. Semi-structured interviews were conducted with 25 industry experts involved in formulating and implementing KM strategies for large construction organisations across the UK. It was found from thematic analysis of the data that KM has a positive impact but has not been optimised to reduce COPQ due to barriers such as the lack of performance metrics, time and budget constraints. Optimisation, therefore, entails overcoming the barriers. The findings presented in this paper will benefit construction organisations in the areas of KM optimisation and COPQ reduction strategies.