Ribeiro, F.L.; Curado, M.T. (2000), "How ISO 9000 Standards are being used by Construction Companies in Portugal", in Proceedings of the International Conference "Implementation of Construction Quality and Related Systems - A Global Update", pp. 73-84, CIB TG-36, IST, Lisbon.
How ISO 9000 Standards are being used by Construction
Companies in Portugal
Francisco Loforte Ribeiro
Miguel Torres Curado
ABSTRACT: ISO 9000 compliance is rapidly becoming a prerequisite for construction companies seeking contracts and a competitive position in the construction market. This paper examines the use of ISO 9000 standards in Portugalís construction industry by investigating theory and practice. A survey was conducted in the beginning of 1999 of the largest construction companies working in Portugal to investigate the use of ISO 9000 standards and the implementation of ISO 9000-based quality systems. The survey indicated that 71% of the respondents use ISO 9000 standards and some are using them for 100% of their projects. The reasons why 29% of the respondents did not use ISO 9000 standards include the lack of formal guidelines and "not required" by their clients. Most organisations assessed their implementation of ISO 9000 standards has a successful or a somewhat successful operation.
Keywords: ISO 9000, quality assurance, quality management, quality
The implementation of ISO 9000 based quality assurance and quality management systems have received high level of attention in several countries and industrial sectors including construction industry (Serpell, 1999; Watson and Chileshe, 1998; Nee, 1996; Ashford, 1990). ISO 9000 compliance is rapidly becoming a prerequisite for construction companies seeking contracts and a competitive position in the construction market. In addition, owners are increasingly transferring the responsibility for quality assurance to contractors. This situation has forced construction companies to implement ISO 9000-based quality systems and in several cases to seek ISO 9000 certification.
The ISO 9000 conformance standards (ISO 9001, 9002 and 9003) are being used by construction companies seeking ISO 9000 certification. Nearly 35% of the largest construction companies in Portugal are using ISO 9000-based quality systems for 100% of their projects.
A fundamental requirement of ISO 9000 quality management/quality assurance standards is that a documented quality system must be present.
Each of the ISO 9000 conformance standards requires the consideration of a number of requirements that form the contents of the standard. The most comprehensive model, ISO 9001 requires the consideration of twenty requirements.
The quality management standards (ISO 9004-1, ISO 9004-2, ISO 9004-3) are being utilised to assist in the organisational understanding of each quality assurance requirements. However, in the construction industry the application of the quality management requirements and quality management guidelines has been more difficult due to its nature and complexities of organisations and project. Very few studies have examined the application of the ISO 9000 quality assurance requirements in construction projects (Pheng, 1999). As stated by McGeorge and Palmer (1997) the criticism that have been made of ISO 9000 certification may not relate to the systems themselves but to the way they are implemented in construction industry. This paper addresses how ISO 9000 standards are being applied by construction companies by investigating theory and practice the Portugalís construction industry. It examines the impact that ISO 9000-based quality system had on the procurement of construction projects. Finally, it addresses how each requirement is implemented in the ISO 9000-based quality systems for construction organisations and projects.
2 RESEARCH METHODOLOGY
The objectives of the research were met through an intensive literature review, an in-depth research survey, and a number of case studies.
Thus, a research survey was conducted in the middle of 1999 covering those organisation. The data collected through the survey were enhanced through further interviews with the original respondent.
In order to make an appraisal of the implementation process of the ISO 9000 quality assurance requirements in the construction organisations and projects and how ISO 9000 based certification affects the procurement of construction projects five construction companies were observed and its personnel were interviewed. These five companies were those which the in-depth survey indicated that are applying the ISO 9000 standards for more than three years, i.e., organisations with previous experience with these standards.
3 RESEARCH SURVEY
The appraisal of ISO 9000 in construction was undertaken using an in-depth survey. Thus, a questionnaire was designed and mailed to 50 construction companies.
These 50 companies represent the largest construction organisations in the nation according to their annual turn-over. The primary aim of the survey was to investigate the use of ISO 9000 standards in construction, discover which system is being followed to implement ISO 9000-based quality systems, and to examine the impact of ISO 9000 quality assurance requirements in the performance of the construction projects. The questions were based on the existing theory and schools of though of how ISO 9000 standards should be implemented. The questionnaire includes four parts. The first part includes question 1 which inquires whether ISO 9000 standards is used in the respondent organisation. If ISO 9000 standards are not used, only part two is to be answered. If ISO 9000 standards are used, parts three and four are to be answered. The second part includes questions 2, 3 and 4. They inquire about the reasons why ISO 9000 standards is not used, whether there are any plans to use them in the near future and the reasons why are impelling the respondent to use them in the future. The third part includes questions 5 to 7. They are open-end questions regarding ISO 9000 standards implementation, i.e., the reasons why the respondent is using ISO 9000 standards, the criteria used in selecting projects to apply the ISO 9000 standards, extent of use of ISO 9000, the length of time since a quality system has been formally implemented. The fourth part relates to the implementation of ISO 9000-based quality systems and includes questions 8 to 14. They enquire whether the respondent had implemented a ISO 9000-based quality system, and about the type and scope of the quality system, factors which led to the implementation of the quality system, percentage of projects with quality plans, the cost of implementing and managing the quality system and the barriers and limitations to the implementation of ISO 9000 based quality systems. The fourth part includes question 15. Question 15 was intended to measure, on a subjective basis, the success of these organisations in implementing ISO 9000-based quality systems. Respondents were asked to rate success in ISO 9000 based quality systems implementation by indicating whether it is successful, somewhat successful, neither successful nor unsuccessful, somewhat unsuccessful, or unsuccessful. The responses are quantified into success rates by the author on a scale of 1 to 5, where 1 is unsuccessful and 5 is successful. Success indicators are calculated for each group of companies that share common aspect such as reason to use the ISO 9000 standards or quality system type, by taking the weighted average of success rates for this group of companies. Success indicators also range between 1 and 5.
4 ANALYSIS OF RESULTS
The analysis of survey results is based on 26 positive responses, constituting a 52% response rate. This level of response is not unexpected considering that construction industry has lagged behind other industrial sector in Portugal. Some of the questionnaires were returned uncompleted by some organisations for various reasons, including lack of knowledge about ISO 9000, lack of time, etc. Uncompleted questionnaires were not included in the analysis.
4.1 Characteristics of the respondents
Tables 1 and 2 respectively show the category and the position held
by the respondents, and distribution of their experience. The majority
of respondents held a position of seniority within their employerís organisation.
Table 1: Position held by the respondents
The majority of the respondents are directors, head of departments and
project managers responsible for strategic decisions, policy development,
resources and production. 80% of the respondents are responsible for quality
and safety in their organisations. In terms of the experience of the respondents,
majority of respondents are well experienced experts in construction.
Table 2 - Experience of the respondents
4.2 Use of ISO 9000 standards
Table 3 shows how respondents answered to question 1.
Table 3 - Use of ISO 9000 standards
The reasons for not using ISO 9000 standards in their organisations
and projects, are shown in figure 1. It appears that organisations that
do not use ISO 9000 standards now, did not formally tried using them before.
Out of the respondents who indicated that their organisation does not use
ISO 9000 standards, the majority (8 respondents) indicated that they intend
to use them in the near future. Only two respondents have no plans to use
them. These respondents indicated that the reason why they do not use ISO
9000 standards is "their application have high costs".
Figure 1 - The reasons for not using the ISO 9000 standards (question #2); (LFG = Lack of formal guidelines: 70%; HC = The application of the ISO 9000 standards has high costs: 20%; U = Not required by their clients: 14%.
4.3 The reasons leading to the use of ISO 9000 standards
Figure 2 shows the main reason why impelled the respondents to use the ISO 9000 standards in their organisations. As shown in figure 2 the most common reason to use the ISO 9000 standards is for third part certification. This is followed by "the need to implement quality plans in their projects". In later interviews with these respondents it was found that majority of those looking for third part certification start by implementing a quality assurance system.
Respondents that are not using now the ISO 9000 standards but have plans
to use in the future have indicated that the main reasons to use them are:
75% for external quality assurance; 63% for third part certification; 63%
to improve market position and 88% to reduce quality costs.
Figure 2 - The reasons why impelled the respondents to use the ISO 9000 standards (question # 5): (PC = For product certification; EQA = For external quality assurance; RCC = For Third part company ISO-9000 based certification; QS = To implement a quality system without looking for certification; QP = To implement quality plans in their projects; RQC = To reduce quality costs: IMP = To improve market position).
Table 4 shows the distribution of the respondentsí success rates (from question # 15) when using the ISO 9000 standards in different ways (Question #5). Success indicators for each reason are calculated as described above and arranged in descending order.
From table 4, it appears that the perception of the success is marginal stronger when ISO 9000 standards are used to improve market position, reduce quality costs and implement quality systems as opposed to use them to implement quality plans in their projects and for product certification. The overall perception of success appears to be little better than "somewhat successful".
4.4 ISO 9000 standards implementation criteria
According to figure 3, "external quality assurance" criterion is most
commonly considered by construction companies in the selection of projects
for ISO 9000 standards (55%). The second most common criterion is "contractual
requirement" (27%). This is followed by the "reduce quality costs" criterion
(14%). Finally, the least common criterion is the "duration of project
greater than" alternative (4%).
Table 4- Success indicators for reasons to use the ISO 9000 standards
A rating system of 5 for "successful," (S) 4 for "somewhat
successful," (SS) 3 for "neither successful," 2 for "somewhat successful"
(NSU) and 1 for "unsuccessful" (U) is used in calculating the success indicator.
Figure 3 - The ISO 9000 standards implementation criteria (question # 6): RQC = reduce quality costs; . EQA= External quality assurance; CR = Contractual requirement; DPGT = Duration of the project greater than
4.5 Length of time ISO 9000 standards have been formally used
Figure 4 shows that ISO 9000 standards are rather new tools for 94%
of the respondents, since they had started using them only in the last
five years (question #7). Forty four percent (44%) of the respondents had
started using ISO 9000 standards only one or two years ago. Only one respondent
had started using ISO 9000 standards for more than six years ago.
Figure 4 - Length of time ISO 9000 standards has been formally used
When examining the results of question #15 (measure of success) its is found that all respondents who had been using ISO 9000 standards for more than 3 years, with exception of one company out of 7, considered ISO 9000 standards implementation in their organisation as either successful or somewhat successful.
4.6 Quality system implementation
As shown in figure 5 most of the respondents who had been using ISO 9000 standards have implemented a quality system in their organisations (69%). However, 38% of the respondents in this group have implemented non third-part certified quality system in their organisation. Nineteen percent (19%) of the respondents who had been using ISO 9000 standards have only implemented quality plans in their projects. Finally, only 12% have not implemented neither quality system/quality plans.
When examining the results of question # 9 (what type of quality system)
it was found that 13% of the respondents who had been using ISO 9000 standards
have implemented a quality assurance system whereas 56% have implemented
a quality assurance/quality management system.
Figure 5 - Implementation of quality systems: QSNC = With a no certified quality system; QSC = With a certified quality system; QP = Only quality plans; Neither Quality system/quality plans
Table 5 shows the distribution of the respondentsí success rates (from
question 15) when using ISO 9000 standards in different applications: quality
assurance systems. quality management/quality assurance systems; and quality
Table 5 - Success indicators for type of ISO 9000 standards application
A rating system of 5 for "successful," (S) 4 for "somewhat successful," (SS) 3 for "neither successful," 2 for "somewhat successful" (NSU) and 1 for "unsuccessful" (U) is used in calculating the success indicator.
Success indicators are calculated as described in methodology and area arranged in descending order. The differences in the success indicators are marginal. However, respondents have indicated a higher success rate in implementing quality management/quality assurance system compared with just implementing a quality assurance system or quality plans.
4.7 Extent of use of ISO 9000 standards
Ninety three percent (94%) of the respondents clearly indicated the
percentage of projects where ISO 9000 standards are used (question 11)
as a percentage of the EUR value of all projects, whereas 6% either indicated
that this percentage is not known. There is a big range variation in the
range of projects where ISO 9000 standards are (figure 6).
Figure 5 - Extent of use of ISO 9000 standards
On the other hand, when examining the answers to question # 7 "length of time ISO 9000 standards" it is found that two of the three respondents in the (81-100%) group have been using ISO 9000 standards for three to ten years. Answers to question # 12 indicate that nearly all organisations (90%) used ISO 9000 standards in new projects.
4.8 Cost of implementing a quality system
Amazingly, only 6% of the respondents were able to indicate the cost incurred in implementing a quality system (question # 13). Most of the respondents (94%) have no idea of how much it costs to implement a quality system. One respondent indicated that it costs between 0,6% to 1,5% of companyís total cost.
4.9 Impact of quality systems on the relationship between the contractor and client
Respondents considered the impact of ISO 9000-based quality systems
on the relationship between the contractor and clients. A three point score
system, comprising high, medium and low levels of impact with respective
scores of three, two and one respectively was used. For each factor a total
score was obtained from the sum of the individual scores given. Therefore,
the maximum score possible would be where all respondents (26) considered
there to be a high impact. Table 6 presents these scores and rankings.
Table 6 - The impact of quality systems on the relationship between contractor and client
For contractors, certified quality system are clearly considered to have most impact, followed by non certified quality assurance system. This my in part due to an increasingly competitive international construction market where a reliable certified quality system is frequently the crucial factor in landing a contract. In other part, clients are increasingly keen to work with certified contractors.
4.9 Importance of quality assurance requirements for a contractor
The ISO 9001 standard is the most comprehensive model for developing a documented quality system. It requires the consideration of 20 quality assurance requirements. As previously mentioned, one of the major objectives of this study was to find the perceptions of the importance and impact of the twenty quality management requirements in construction.
Perceived importance of all quality assurance requirements was measured on a five-point Likert scale ranging from unimportant to very important. Table 5 presents these findings.
On the basis of very important responses, process control (75%),
management responsibility (66%), quality system and corrective and preventive
actions (50%), purchasing and internal quality audits (44%), contract review
(38%), inspection and testing, and control of non conforming product and
training (31%), inspection and testing results, control of quality records
and servicing, (19%), design control (13%), document and data control,
control of inspection, product identification and traceability measuring
and test equipment (6%), control of customer-supplied product, handling,
storage, packaging, preservation, and delivery, statistical techniques
Table 5: The importance of quality assurance requirements in construction
4.10 The impact of quality assurance requirements on product quality
Respondents indicated perceived impact of quality assurance requirements on product quality (question #14) by using the same scoring system as described previously (i.e. scores of three, two and one represent high, medium and low levels of impact respectively. Total factor scores were used to rank the impact factors. Table 7 demonstrate that have the most impact on project quality
4.11 Measure of Success
Fifty percent of respondents (50%) in the group belonging to organisation
that used the ISO 9000 standards indicated that the success rate of using
them ranges between successful and somewhat successful (figure 7). This
result confirms that ISO 9000 standards are new for contractors. Thirty
one percent 31% of the respondents feel their organisation is neither successful
nor unsuccessful and 19% have no opinion. In further contacts with those
organisations in the group that indicated a success rate of successful,
they were asked how they measure the success of the ISO 9000 standards
implementation in their organisations. Majority of these respondents answered
that they measure the success of ISO 9000 standards in terms of cost savings.
Others answered that measure the ISO 9000 standards in terms of getting
a better product.
Table 7: The impact of quality assurance requirements on product quality
Figure 7- Extent of use of ISO 9000 standards
At the beginning of the present study, it was expected that contractors in Portugal would be increasingly using ISO 9000 standards for different purposes. However, the survey showed that 62% of the respondents are using ISO 9000 standards, either on a limited or an extensive scale. The most common purpose for using ISO 9000 standards is "third part company certification". Contractors in Portugal have been using ISO 9000 standards for less than six years.
Most of the organisations had been used ISO 9000 standards have implemented a quality system in their organisations. However, only 38% of them have obtained the certification of their company. Fifty percent of respondents (50%) assessed their ISO 9000 standards process as a successful or somewhat successful operation. This finding could be interpreted as a good indication that much research work is need on the implementation of ISO 9000-based quality systems. Contractors have indicated a higher success rate in implementing a quality management/quality assurance system compared with just implementing a quality assurance system or quality plans. For contractors, certified quality systems are clearly considered to have most impact on the relationship between a contractor and clients. Respondents have indicated a higher success when using the ISO 9000 standard for improving the companyís market position.
Forty percent (40%) of the organisations that took part in the survey do not use the ISO 9000 standards. These organisations indicated that they need standard or formal guidelines for implementing ISO 9000 standards.
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