Cost Management in Construction Industry

Construction Cost Management Strategies for Controlling Commodities Market in Rapidly Development Nations

Abstract

While conforming on the findings of prior researches regarding quality cost system in building companies, current research will successfully illustrate the contractors' perceptions on the importance of the quality cost system and the barriers that may constrain the implementation of the system for recording and collecting quality cost data. A postal and email surveys will be undertaken on Malaysian building companies, focusing on the benefits and difficulties associated with the implementation of quality cost system. Statistical analyses based on Chi-Squared test and Relative Importance Index techniques will be used to investigate the significance of the findings and determine the relative importance of the factors. The most important benefit of measuring quality costs is "getting management attention and increase quality awareness" as perceived by the objective of the study. The possible barriers that may affect the management's decision to implement quality cost system will be identified and grouped into three categories, which are culture and knowledge; system; and company. The study will attempt to suggest that the level of the site staff's knowledge should be as important as that of the management to successfully collect and record quality costs data. The findings of this research will raise the level of awareness and sensitize managers and those involved with building industry about the importance of quality cost system and collecting quality costs data.

Table of Contents

CHAPTER 1: INTRODUCTION1

Problem Statement3

Aims and Objective of the Research4

CHAPTER 2: LITERATURE REVIEW5

The Significance of Cost of Quality7

Barriers to Cost of Quality System Implementation9

COQ as a Quality Improvement Tool10

CHAPTER 3: METHODOLOGY13

Sample size14

Questionnaire Development16

Literature Search17

Qualitative Research18

Confidentiality19

Reliability/Dependability19

Validity19

Limitation of the Study20

CHAPTER 1: INTRODUCTION

The main purpose of project management is to address the stakeholder needs and expectations; thus, dissatisfactions of a project's stakeholders lead to extra time and cost . In addition, the successful companies must deliver projects on time and within budget, and meet specifications while managing project risk (Abdelsalam, 2009).

Achieving the stakeholder's satisfaction and the completion of project within predefined time, cost and quality constraints is not an easy task in building construction. Likewise, the process of measuring quality costs is often difficult due largely to the complexity of construction processes. Hence, many economic and mathematical models have been developed to track quality costs; for example: Quality Performance Management System; Quality Performed Tracking System; Quality Cost Matrix; Process Cost Model; and Construction Quality Costs Quantifying System. Unfortunately, these models have been of little use and many companies still do not have a quality cost system in place (Abdelsalam, 2009).

The importance of quality management is quite noticeable in project management literature. Also the need for companies to capture and assess quality costs data has been well-established in previously published literatures. Several researchers stated that many companies appreciate the necessity of the quality cost system; however, they continue to lack one. As a result, the companies are not able to recognize how much they lose because of poor quality (Schiffauerova and Thomson, ...