A Case Study of Evaluating the Impact of Cost of Quality for Civil Engineering Design Services in a Small Corporation

Abstract

This case study evaluated the cost of quality (CoQ) for Civil Engineering Design Services (CEDS) in an Alaska based firm. The firm currently lacks a mature Quality Management System (QMS), which is needed to control and measure CoQ. As a means to justify the implementation of a QMS Feigenbaum quality costs were captured from historical job data and used to develop a Juran and Gryna Optimum Quality Cost Model. During the model development non-parametric testing was performed to determine the following; does the overall job budget size have an effect on quality cost, is there a correlation between appraisal and failure cost, and is the firms CoQ performing at an optimum level as defined by the quality models constructed. The non-parametric testing indicated that budget size did not have an effect on CoQ, appraisal cost are related to failure cost, and the firms CoQ was not optimized in its current state. The firms CoQ, per job, without an active QMS was determined to be 8.9% of the job cost with failure cost accounting for 5.2% of the total cost. By implementing a QMS such as ISO 9001 the firms CoQ, per job, is predicted to reduce to 6.1% of the job cost. This reduction could be achieved by increasing appraisal cost to 4.5% of the total budget, which is predicted to decrease the failure rate to 0.5% of total job cost.