Do I really need Quality Control?

 

You would think the answer to the question would be obvious.  After all, quality products mean; less rework, increased productivity, lower costs per unit, elimination of most warranty problems, enhanced market reputation, better relationships with your regulators and, perhaps most important, respect from your clients and the general contractors that are you life blood.  Right?

 

The major hurdle then, is not the desire for companies to have effective quality control within their organization; it is one of Stream of Consciousness.  My experience has demonstrated to me that often quality systems are often not considered a primary function and given a high level priority within a company.  In fact, I have found that often times there is active resistance to Quality Control because it  tends to cause friction within an organization with  production personnel, an authority issue, and Project Managers, a cost issue.

 

In the many years I have worked in the mechanical contracting and construction trades I have attended a variety of classes and training sessions dedicated in fine tuning and adding value to the industry and the companies sponsoring such classes.  All were good and all added to my knowledge base.  Unfortunately, seldom do any address where quality control fits, and if mentioned, it is generally in passing.   I have a BS in Business Administration and I do not recall any instruction in the need for and potential effects of quality issues on the health of companies as being any part of my curriculum.  I have attended formal training sessions on tracking and scheduling, purchasing, and project management training.  It those highly developed training venues hardly a mention of the need for or importance of Quality Control.   Yet, serious QA/QC problems can very much affect the health of your company and can cost you many times the cost of maintaining your system.  Often those costs are hidden and hard to identify.  For instance, the real cost of “rework”, and outright act of self abuse or needless delays because of non-conformities that need not happen.

 

Why is this?  Well, once again, it is seldom in the “Stream of Consciousness” of business managers.  May I attempt to penetrate your “Stream of Consciousness” and try to create a culture that enhances your awareness of how Quality Control affects your business operation?

  

The $100,000 Dollar Mistake

A few years ago a major mechanical contractor landed a large and profitable project consisting of installation of a Steam and Hydronics system in a hospital.  A profitable contract turned into a nightmare. 

 

The Company did not practice ongoing, active Quality Control, relying on the Project Manager to be his own Quality Representative. The Project Manager assisted in preparation of a bill of material.  The bill of material called for approximately 5000 lineal feet of A-53 pipe.  The bill of material went to the purchasing manager, who, armed with the cost estimated sent out an inquiry to all the local supply houses.  The project manager and purchasing manager were delighted when the prices came in because an opportunity presented itself to obtain the needed pipe at a price that was 30% less that the estimate that had been prepared by the estimating department using national material pricing.

 

The Purchasing Manager eagerly bought the pipe and had it shipped to the jobsite.   The field superintendent received the material, assured that the pipe was marked A-53 and, comparing it to the PO, found it in compliance and accepted the shipment.

 

The company proceeded to install the piping.  The pipe was cut, pre-spooled, fabricated and installed.  When the project was complete the project manager, who had filed the proper permit with the State, called the inspector to witness the leak test on the system.

 

The inspector arrived on the site and within one hour a profitable project turned in to a nightmare.   Why?

 

• Although the pipe was ordered to the A-53 specification, it was grade “F”.  Grade F pipe in not acceptable in the State of Oregon because it is the “sausage” of the pipe world; it is made up of many different and changing chemical properties and stress values vary.  Therefore, you cannot get a material test report for Grade “F” and because the pipe is not traceable, you cannot use it in the State of Oregon.  The Project Manger did not notify the inspector when work began, only when he was ready for the leak test;  therefore the inspector did not have the opportunity to inspect the project in-process which would have caught the error early before it was too late to salvage.

              Root Cause

The Project Manager and Purchasing Manager knew just enough to get in trouble.  They knew the material had to be “Code” and that A-53 was code pipe.  The Purchasing Manager was merely trying to save the company money by accepting the low bid.  The supply houses furnished the best price possible, which was for Grade F.  The Superintendent also knew just enough, he noted that A-53 was stamped on the pipe prior to unloading it and felt he was in complete compliance.  The Project Manager also knew “just enough.”  He knew he was required to file a permit and that he had to notify the inspector when it was time for the leak test, but failed to notify the inspector when work was to begin.  A costly mistake because the inspector would have caught the error before the project was lost.

 

Fallout

 

The State rejected the installation and ordered the complete removal and replacement.  Had the material been acceptable, perhaps the State would have required a less costly alternative.  Everyone lost:

 

• The owner/user lost his completion schedule and was furious with the General Contractor.
• The General Contractor took a financial and credibility hit with the owner/user, his peers and the community as a whole.
• The Regulatory Agencies developed a skeptical view of the company and put them on the “Watch List.”
• The Mechanical Contractor faced state compliance issues and took a devastating hit with the “community”, the “regulators” and a fatal economic hit.  The total rework was in excess of $100,000.00

 

If quality control had been an integral part of the operations of this company the outcome would have been very different.  First, the Quality Control Manger would have reviewed the specifications and informed the Project Manager of the “issues” involved in the project.  He would have reviewed the bill of material and caught that the specification error before the material was purchased.  He would have rejected grade “F” material in the field, having been alerted by the superintendent, who have had some formal training by the Quality Control Manager,  that the pipe did not have a “Heat Number” (You cannot get a MTR for Grade F, hence there is no Heat Number).  He would have informed the inspector when work began at the site and visited the site during the installation to assure the entire code requirement and state requirement were met.  In other words, Quality Control was not in this company “Stream of Consciousness.”

 

Did you know?

 

• The Oregon Revised Statues lists causes for a revocation or suspension for an individual or company that installs boilers, pressure vessels, or pressure piping systems.  Among the deadly sins is “Failure to follow your Quality Control System.”  Did you know the State has a copy of all approved Quality Control Manuals for companies doing business in Oregon and issues that manual to the Inspector of Record to assure compliance?
• That the major causes for compliance cases in the State of Oregon are for:
  • Not following your approved quality control system
  • Not having tracability for material and filler metals
  • Not having currently qualified welders or braziers on the job
  • Not having welds and brazements identified  with welder ID
  • Not having a permit posted on the jobsite
  • Not notifying the Inspector when work begins
  • Not having properly licensed employees working within their license scope
• That fines are no longer stayed, you pay the full amount.
  • $1000.00 first offense, $3000.00 second offense and $5000.00 third offense.
  • That under our revised matrix after three offenses your license may be suspended or revoked
  • That we fine both the company and the individual doing the work
• That suspension or revocation of license means:
  • You must cease all regulated work immediately
  • In all likelihood you will be forced to sub-contract obligated projects to your competitors
  • You cannot petition for reinstatement for ninety (90) days, and then you must go in front of the Boiler Board with a plan of corrective action which requires board approval.  You must re-submit a manual, reapply for new licenses and re-qualify your welders.  Probably, you will in affect, be out of the game for six months.
  • Try and get your client base back.
• That in the case of a catastrophic accident in which there is loss of human life and you have not complied with the requirements of the applicable codes and state licensing requirements you can be indicted and tried.  In short it is a felony.

 Will they really do that?

 

The short answer is yes.  During the hot economy of the nineties the State lost control of their regulatory responsibilities.  Accidents made a dramatic upswing, incidents more than tripled.  Out of state contractors engaged in illegal operations within the State of Oregon and caused Oregon firms that were following the “rules”, to lose business.  Two (2) new codes were adopted for the State (B31.3 Process Piping and B31.5 Refrigeration Piping).  Mandated inspections of boilers and pressure vessels declined because of an unattainable workload for existing inspectors and a hesitancy to enforce the law by the Building Codes Division.  The response?  We have a new Director of Business and Consumer Affairs, a new Building Codes Administrator, a new Chief Boiler Inspector and a new Compliance Officer (a former District Attorney.)  We have increased the fines, added a three strike and you’re out rule and formed a permanent Compliance Sub-Committee on the Boiler Board to review all compliance cases.  The State is looking “for a few good examples” to send a clear message.  Oregon is determined to have a level playing field.

 

OK, what is the bottom line

 

Simple, Quality Control is an ongoing, necessary component of your organization if you engage in the business of installation of boilers, refrigeration units, pressure vessels, and pressure piping systems.  It is ever bit as important as compliance with safety regulations, tax laws and the uniform commercial code.  It is no longer a luxury.

 

A few simple recommendations

 

• Your Quality Control Manager, by Oregon Administrative rule, is required to answer only to top management so he can do his/her job free of undue pressure from other business elements.  Make sure you empower him to answer directly to a senior manager.  This places him in the loop and keeps you informed of what issues will affect you.
• Stress Quality Control awareness to your management (especially Project Managers) through training and updating and by demonstrating your interest and commitment.  Include Quality Control in your companies “Stream of Consciousness.)
• Place Quality Control review in the estimating and bid process.  Let QA/QC review the specifications and offer comments on costs, level of surveillance required for individual projects and specific quality requirements for the project.
• Make your Quality Control Manager is a player in your projects.  Make him aware of the projects and provide for him to be involved in on-going inspection, maintenance of welding documents, material identification and compliance to the requirements of the appropriate code.  Remember, out of sight, out of mind. 
• QA/QC is habit forming.  Create an atmosphere and environment conducive to quality procedures and soon they become redundant.
• Make QA/QC part of your on-going project review process.  Review, and monitor your system and insist that your personnel view it as a necessary and worthy component that is an asset to the successful completion of your mission.

 Remember, Quality Control has to be proactive, not reactive, if it is going to be effective. If you’re Quality Control Manager does not know, or is not informed, of what is going on, if he out of your loop (Stream of Consciousness), then it will be too late to help you when Quality Issues arise that will cost you in, both in profit and in market esteem.  If the regulators do not believe you take your program serious they will increase their vigilance on your projects.  In large part they take their cue from your Quality Control Manager.

 

Summary

 

Ah, again we are at the bottom line.  Have I answered the question “Do I really need Quality Control?” I will leave that to you to decide.  Remember, Companies generally take on the personality of their leader, so you will set the tone.  How much of a risk are you willing to take?