W13_IQB_TQM and Quality Gurus

I have no answer when mentor gave me question about Deming, Juran and Crosby. This is what I summarize about them and their legacy to Total Quality Management in order to answer and raise my odds to pass the AACE certification.

Total Quality Management is method to manage the quality by continually improve the process and produce the product exceed the customer’s expectations. The improvement shall implemented by every level in the organizations and the management shall be the role model in this process. Total Quality Management offer the concept of strong focus in process measurement and control as means of continuous improvement.

This concept were develop from a long experience and dedication from individuals which known as “Quality Gurus”. There are three (3) well known among them.

1. Deming: W. Edwards Deming was famous in Japan in years after WWII since he assisted many Japanese Company in improving their Quality. The Japanese establish The Deming Prize, for the most improving Firms in quality aspect, to show their respects to this NYU professor back in 40’s. His legacy in quality management is the 14 points in quality improvement. They are:

  1. Create constancy of purpose toward improvement of product and service.
  2. Adopt the new philosophy.
  3. Cease dependence on inspection to achieve quality
  4. End the practice of awarding business on the basis of a price tag.
  5. Improve constantly and forever the system of production and service.
  6. Institute training on the job.
  7. Institute modern methods of supervision and leadership
  8. Drive out fear.
  9. Break down barriers between departments.
  10. Eliminate numerical goals for the work force.
  11. Eliminate work standards and numerical quotas
  12. Remove barriers to pride of workmanship
  13. Institute a vigorous program of education and training for everyone
  14. Create a structure in top management that will push everyday on the above 13 points.

Deming also introduce the “a vs. b” philosophy, said:

  1. When organization focus primarily on quality then the quality tends to increase and cost on the contrary.
  2. When organization focus primarily on cost then the quality will decline and conversely cost will raise

2. Juran: Joseph M. Juran was known in the 50’s era after publishing his book “Quality Control Handbook”. With his definition of quality as fitness for use, he said that quality is not always about conformity to specifications but also knowing what the customer intention in using the products. Juran also known for his Quality Trilogy: Quality Planning, Quality Control, and Quality Improvement.

3. Crosby: Philip B. Crosby’s concept is Zero Defect. This concept stated that no amount of defect shall take into account. Crosby snubbed the idea to allow minor defects in a process. He emphasized to prevent any possibility of defects. With his book “Quality is free”, he promotes his concept that quality is quantifiable. Cost of quality such as waste of labor, scrap, lost sales, even organizational cost are costs that should be prevented in order to improve quality.

Similarity from these 3 gurus is that the role of management and use of statistical control tools are the key factors to achieve the definition of Quality “Meet and Deliver the Customer’s Expectation”.

Here I attach the comparison between these 3 gurus which I retrieve from my partner blog, Ramzi Quzwain, and zulqarnain.us/files/tqmphilosophies.doc.

Bibliography:

Total Quality Management retrieved from http://www.wiley.com/college/sc/reid/chap5.pdf

Shyam, Radhey. and yadavrsyadav@gmail.com, Total Quality Management, retrieved from http://www.scribd.com/doc/38331105/2/The-Crosby-philosophy

Total Quality Management (TQM)  retrieved from http://managementhelp.org/quality/total-quality-management.htm

Zulkarnain, tqmphilosopies retrieved from zulqarnain.us/files/tqmphilosophies.doc

Disraeli, Benjamin, Deming’s 14 Points for Management, 1987, retrieved from http://www.stat.auckland.ac.nz/~mullins/quality/Deming.pdf

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W19_SRN_Estimating Cost Savings using Learning Curves

Opportunity Recognition:
Using the case in W18 Blog, I’d like to estimate cost saving of the project.

Feasible Alternatives:

  • Unit Learning Curves: Linear or Cumulative Average Linear
  • Proper Slope: 80%, 85%, 90%, and 95%
  • Cost of first km pipeline

Tools and Techniques:
Learning Curves using Microsoft Excel spreadsheet and Goal Seek option in the Data/What If Analysis menu.
Selection Criteria:
Management will use cost savings profile to commence the project.

Calculation and Analysis:
Following are parameter used for this Learning Curve:

  • Cumulative Average Method, it is much easier to calculate total cost for conceptual estimate stage.
  • 90% slope, it requires manual effort to support project during installation stage (machine-controlled with some manual).
  • $100 as cost of first km pipeline, for easy checking in Step-1.
  • Very few line items are likely to experience learning curves. Labor should benefit from it, but the only other area that will surely benefit is engineering. Use of very similar drawings will obviously be a cost savings for series of installation. While material costs may also experience cost savings because of a larger order, that is not a learn savings; it is a volume purchase savings.

 

Cost Savings:


Conclusion:

There will be cost saving of $ 1.3 million from learning curve process in this project. I suggest the management to consider this potential opportunity to make decision of approval.

Performance Monitoring and Post-Evaluation:
There would be additional savings because the location adjustment and material volume purchasing would be applied to a smaller total base.

References:

  1. Humphreys, Gary C. (2011). Project Management Using Earned Value Second Edition, Section 3 – Estimating. USA, CA: Humphreys & Associates, Inc.
  2. AACE International. (2010). Skills and Knowledge of Cost Engineering 5th Edition Revised – Section 2 – Cost Estimating. USA, Morgantown WV: AACE International Inc.
  3. Sullivan, William G., Wicks, Elin M. & Koelling, C. Patrick. (2012). Engineering Economy 15th Edition, Chapter 14 – Decision Making Considering Multiattributes. Singapore: Prentice Hall, Inc.
  4. Paul D. Giammalvo. (2012). AACE Certification Preparation Course (2012, 16 – 20 January). Indonesia, Jakarta: PT. Mitratata Citragraha.
  5. Liu, Henry (2003). Pipeline Engineering. Boca Raton, Fla: Lewis Publisher

W18_SRN_Conceptual Estimate for Pipeline Project

Opportunity Recognition:
A 8-km long, 12″ pipeline is being installed. It requires pipe and a control valve at each end. It assumes 5% allowance of total direct costs for project construction indirect cost. The project will be in North Sumatera.

I’d like to develop a quick conceptual estimate of project cost.

Feasible Alternatives:

  • Pipe only
  • Pipe with Control Valve w/ Isolation Valve and Hydrostatic testing
  • Cost risk allowance

Tools and Techniques:
Parametric Estimating Methods
Selection Criteria:
Management will use cost profile reasonable to continue the project.

Calculation:
1. Pipe only

2. Pipe with Control Valve w/ Isolation Valve and Hydrostatic testing

3. Cost risk allowance

Management did not mention an allowance for cost risk. Then I should aware that a conceptual estimate contains significant uncertainty. Therefore, I assume an assumption of at least 20% for cost risk allowance would be appropriate.

Conclusion:
I recommend Option-2 since it provides company a wider technical scope of work and cost estimate the conceptual estimate for this option is US$ 2,700,000.

Performance Monitoring and Post-Evaluation:
I should consider company assets strategy based on actual and future business condition.

References:

  1. Humphreys, Gary C. (2011). Project Management Using Earned Value Second Edition, Section 3 – Estimating. USA, CA: Humphreys & Associates, Inc.
  2. AACE International. (2010). Skills and Knowledge of Cost Engineering 5th Edition Revised – Section 2 – Cost Estimating. USA, Morgantown WV: AACE International Inc.
  3. Sullivan, William G., Wicks, Elin M. & Koelling, C. Patrick. (2012). Engineering Economy 15th Edition, Chapter 14 – Decision Making Considering Multiattributes. Singapore: Prentice Hall, Inc.
  4. Paul D. Giammalvo. (2012). AACE Certification Preparation Course (2012, 16 – 20 January). Indonesia, Jakarta: PT. Mitratata Citragraha.
  5. AACE International Recommended Practice (2003). Recommended Practice No. 16R-90 Conducting Technical and Economic Evaluations – as Applied for the Process and Utility Industries. AACE International.
  6. Liu, Henry (2003). Pipeline Engineering. Boca Raton, Fla: Lewis Publisher.

W12.0_RQ_Simple Case of Progress Measurement

PROBLEM STATEMENT

There are six most common methods to measure progress : units completed, incremental milestone, supervisor opinion, cost ratio, and weighetd or equivalent units. In order to get clear understand of those method, this blog will try to analys which method will be suitbale to be used to the following simple case.

Image

Figure 1 : Cross Section CSP

The works is construction of Corrugated Steel Pipe [CSP] 1800 Dia L 8m. The works consist of : excavation, sand bedding, laying CSP, and backfilling. Pay item will be only laying CSP, no separate pay items for sand excavation, sand bedding, and backfilling. Client will require contractor to produce daily report which shall clearly report daily progress work achievement. The following table are estimated by Contractor to complete the works.

Image

Figure 2 : BAC, Duration, and  Men Hours

 The Question is : How to measure daily achievement of works as required to be reported to Client.

FEASIBLE ALTERNATIVES

As mentioned above, there are six most common methods to measure progress :

  • Units completed
  • Incremental milestone
  • Start finish
  • Supervisor opinion
  • Cost ratio and
  • Weighted or equivalent units

TOOLS AND TECHNIQUES

Conclusion will be made by comparing suitability of each method

SELECTION of PREFERRED ALTERNATIVE

Image

Figure 3 : BAC, Duration, and  Men Hours in percentage

Assessment to the feasible alternatives can be explain as the following :

Alternative 1 Units Completed : Each subtask can not be accomplished simulatenously thus this alternative is not applicable.

Alternative 2 Incremental Millestone : Subtask is handled in sequence thus this alternative migh be applicable.

Alternative 3 Start Finish : Effor time required for each subtask is not very difficult to estimate thus this alternative is not applicable.

Alternative 4 Supervisor Opinion : This method might be applicable however, this is subjective approach. The major problems is that some superviors are optimists and some are pessimists thus this method is not recommended.

Alternative 5 Cost Ratio : Tasks does not involve a long period of time thus this method is not applicable.

Alternative 6 Weighted or Equivalent Units : Tasks does not involve a long period of time thus this method is not applicable.

CONCLUSION

Based on the aforementioned selection therefore it can be concluded that Alternative 2 is applicable method to be used. Therefore, progress can be measured Excavation : 11% in total, sand bedding 33% in total, laying CSP 56% in total, and  back filling 100% in total.

MONITORING & POST VALUATION

Daily report can be presented to Client using incremental milestone method as described in alternative 2.

REFERENCES

  1. Giammalvo, P.D. (2012). AACE Certification Preparation Course Handouts.
  2. Humphreys, G.C. (2011). Project Management Using Earned Value Second Edition. Humphreys & Associates, Inc.
  3. The Education Board of AACE International.(2010). Skills & Knowledge of Cost Engineering 5th Edition Revised. AACE International.

W16_EDN_Control Chart

1.       Problem Definition

This week is 18th week; 5 more weeks to finish all promised deliverables. Since I am behind schedule on blog posting, I would like to evaluate and accelerate the performance of blog posting.

Problem Statement:  I would like to monitor, control, and improve the blog posting performance by studying the variations of actual hours to produce blog posting using control chart.

2.       The Feasible Alternatives

Based on the problem, I identify that there are two feasible alternatives:

  1. The result shows there is indication that the process performance is out of control.
  2. The result shows there is no indication that the process performance is out of control.

3.       Tools and Technique

To answer the problem, several steps to solve the problem:

  1. Collect sample data from weekly report: ACWP
  2. Calculate the appropriate statistics
  3. Calculate the control limits
  4. Construct the control chart
  5. Interpreting the control chart to find out if the process is out of control due to external and special causes.
  6. Removing any data points which fall outside the upper/ lower control limits and special causes.
  7. Redraw the control chart after the removal of outliers
  8. Comparing the result prior and after the removal.

4.     Selection of the Acceptable Criteria.

Table 1 below shows the ACWP of preparing blog postings.

 

 

 

 

 

 

 

 

 

 

Table 1: ACWP of Blog Posting

Then, calculate the appropriate statistics and control limits

 

 

 

 

 

 

 

 

Table 2: Statistical Value

Next step, construct the control chart, and interpreting the control chart to find out if the process is out of control due to external and special causes.

Figure 1: Control Chart

Figure 1 shows that there is no indication that the process performance is out of control. Since the process is in statistical control, I did not continue with step 6, 7 and 8 which are remove any data points which fall outside the upper/ lower control limits and special causes, redraw the control chart after the removal of outliers and compare the result prior and after removal of outliers.

Based on trend-line’s result in black line, the actual time to produce blog posting is decreasing. It proves that working with classmates to produce blog posting and using the same raw materials in different tools and techniques will help to decrease the actual time to produce blog posting.

5.       Post-Evaluation of the Result

Based on the calculation above, the result shows there is no indication that the process of preparing blog posting is out of control. To catch up the delay blog posting, I should work smart and allocate at least 8.25 hours to produce 3 blogs. If not, I will be in a danger zone where I cannot recover.

6.       References