IMPLEMENTING ISO 9001:2008 IN THE CONSTRUCTION INDUSTRY:

A GUIDELINE TO THE SMALL AND MEDIUM ENTERPRISE (SME)

CONSTRUCTION FIRMS IN THE PHILIPPINES

Joseph Berlin P. Juanzon, PhD 1 and Manuel M. Muhi, PhD 2

1 Civil Engineering Department, Mapua Institute of Technology at Laguna, M alayan Colleges of Laguna, Pulo Diezmo Road,
Cabuyao, Laguna 4025 Philippines , Email: jbpjuanzon@mcl.edu.ph

2 VP Research and Development, Polytechnic University of the Philippines , Sta Mesa, Manila
Email: manuel_muhi@yahoo.com

Abstract : The imp lementation of ISO 9001:2008, Quality Management System in the construction industry is now an
ongoing trend, more so in the Small and Mediu m Enterprise or the SM Es in the Philippines. Clients are now requiring the
construction industry to adopt a quality management system that will ensure them that the projects are comp leted with in the
constraints of the best quality, stated period of time and min imu m cost possible. The main objective of this research is to co me
up with a step-by-step guideline in implementing ISO 9001:2008 for SME-based construction firms in the Philippines.

Key words : ISO 9001:2008, Quality Management Systems (QMS), Small Medium Enterprise (SME).
1 INTRODUCTION
Management of construction companies are focusing on
quality issues as a co mpetitive edge. Delivering pro jects that
satisfy client requirement has become a main priority in
maintaining good business relationships. Hence, the
construction industry should develop a common standard in
every stage of construction process. The International
Standardization for Organization has been formed to
promote the development of standardization, therefore the
acceptance of ISO standards in the construction industry
should be widely imp lemented in order to achieve high
quality product in every stage of construction process
(Youcef, 2006).
The construction industry has embraced the ISO 9000
standard since its inception. The Quality Management
standard is becoming the benchmark for successful
construction companies. The discipline and systematic
approach has helped many companies to structure their
management and processes to consistently meet the clients
requirements. The revised ISO 9001:2008 standard places
greater emphasis on customer needs and expectations and
improving business performance and is now easily applied
to a construction companies operations. The imp lementation
of QMS in the Construction Industry is meant to assist the
industry to improve the efficiency and effectiveness of the
organization management system in ensuring successful
objectives of company (Said, etal, 2009).
According to Mohammed & Abdullah (2002), QMS is the
interaction of people, process, and documentation to meet
the customers stated and implied needs. The result would be
a reduction in inefficiencies and waste, improved work
practices, increased morale o f the management team, and the
opportunity for a greater market share.
There are at least 2,536 listed construction companies in the
Philippines as of 2009, out of which 2,409 belongs to the
Micro, Small and Medium Enterprise or better known as the
MSMEs (Industry and Trade Statistics Department, 2009).
SMEs play a crucial ro le In the development of the
Philippine economy. They represent 99.6 percent of all
businesses registered in the country and employed 70
percent of the total labor force. In addition, they account for
32 percent of the countrys gross domestic product (GDP)
(Leano, 2006). In Ch ina, the SM Es are the core of the
construction industry development and play main ro le in the
urban and rural building (Yuping et al., 2006).
There is still no specific data or informat ion regarding the
present condition on the imp lementation of ISO 9001:2008
in the construction industry in the Philippines, moreover to
the SME construction firms in the CALABARZON area.
1.1 Research Problem and Objectives
The main objective of th is study was to develop a step-by-
step guideline in imp lementing ISO 9001:2008 for the small
and mediu m enterprise in the construction industry. This will
assist them in attaining its objective o f imp lementing quality
construction projects at stated period of time and min imu m
cost.
2 REVIEW OF PERTINENT LITERATURE
Quality Management Systems (QMS) is the interaction of
people, processes, and documentation to meet both
customers stated and implied needs. The result would be a
reduction in inefficiencies and waste, improved work

1
practices, increased morale, and opportunity for a greater
market share (Mohammed & Abdullah, 2002).The Quality
Management System for the Construction Industry is a
systematic approach for the co mpanies who want to develop
and establish a quality system. The QMS gives guidelines to
the introduction, structure, and contents of quality systems
for the use of all part ies involved in the construction industry.
Plan and building authorities, clients, architects, engineering
consultants, contractors, subcontractors, factories and
suppliers have adopted the system.
Through the use of the QMS, the build ing industry will
achieve a surer and better communication. The system has
through the years, been adapted for use abroad. Up to 1995,
QMS has been introduced and further developed in five
European countries (Sjholt & Berg, 2003). The
implementation programme - the Five Step Model as shown
in Figure 1 is an effective tool for quality management.
Figure 1 Five Step Model for implementing QMS
According to the original 1987 bulletin fro m the
International Organization for Standardizat ion (ISO), ISO
9000 is "a series of international standards dealing with
quality systems that can be used for external quality
assurances purposes." The ISO was founded in 1946 to
develop international quality standards to facilitate
world wide trade and help Western countries regain their
competitiveness. The organizat ion consists of a coordinating
group of members fro m more than 90 countries. The U.S.
representative is the American Nat ional Standards Institute
(Barnes, 2000). Figure 2 shows the framework o f ISO
9001:2008 based on Demings and Shewarts cycle better
known as PDCA (Plan, Do, Check, Act) cycle.
The acceptance of ISO 9000 standards in the construction
industries is not as wide as in other industries such as
manufacturing. There are special features in the construction
industry that limit the implementation of the ISO 9000
standard. One of these features is that a construction project
is usually a unique collection of people, equipment, and
materials brought together at a unique location under unique
weather conditions, while most manufacturing is a system of
mass production wherein all of these factors are consistent
with producing typical products over and over again (Phenol,
1994).
Figure 2 ISO 9001:2008 Framework
Micro, small, and mediu m enterprises (MSMEs) are defined
as any business activity/enterprise engaged in industry, agri-
business/services, whether single proprietorship, cooperative,
partnership, or corporation whose total assets, inclusive of
those arising fro m loans but exclusive of the land on wh ich
the particular business entity's office, plant and equip ment
are situated, must have value falling under the following
categories: By Asset Size, Micro : Up to P3,000,000; Small:
3,000,001 - P15,000,000; Mediu m: P15,000,001 -
P100,000,000; Large: above P100,000,000.
Based on the study conducted by Philippine Institute for
Develop ment Studies, Small and Mediu m Enterprises
(SM Es) have played an important role in industrial
production in particular, and economic gro wth in general in
less developed, developing, and transitional economies
world wide. They have generally provided the bulk of
entrepreneurs and employ ment in these economies, and the
necessary foundations for sustained economic growth and
rising incomes.
The SMEs are the core of the construction industry
development and play a main ro le in the urban and rural
building. With the professional subdivision, the increasing of
professional ability and the improvement of project sub-
contract system in the construction industry, the roles of the
Industry Cluster of SMEs will become mo re and more
obvious, including stabilizing econo mic development,
enlarging employ ment rate in the towns, and pro moting
technology innovation (Liao Yuping, Yao Bing, 2007).
3. IMPLEMENTING ISO 9001:2008
Before an SM E-based construction firm be able to
implement ISO9001:2008 in their organization, they must
first understand the eight quality management principles on
which the quality management system standards of the ISO
9000 series are based. These principles can be used by
senior management as a framework to guide their
organizations towards improved performance.
2
Principle -1 Customer Focus
Organizations depend on their customers and therefore
should understand current and future customer needs, should
meet customer requirements and strive to exceed customer
expectations. The key benefits on this princip le are (1)
increased revenue and market share obtained through
flexib le and fast respons es to market opportunities, (2)
increased effectiveness in the use of the organizations
resources to enhance customer satisfaction, and (3)
improved customer loyalty leading to repeat business.
Principle -2 Leadership
Leaders establish unity of purpose and direction of the
organization. They should create and maintain the internal
environment in which people can beco me fully involved in
achieving the organizations objectives. With good
organization leadership, (1) people will understand and be
motivated towards the organizations goals and objectives ,
(2) activities are evaluated, aligned and imp lemented in a
unified way, and (3) miscommun ication between levels of an
organization will be minimized.
Principle -3 Involvement of people
People at all levels are the essence of an organization and
their full involvement enables their abilities to be used for
the organizations benefit. Involv ing people in the
organization will result to (1)mot ivated, committed and
involved people within the organization, (2) innovation and
creativity in furthering the organizations objectives , (3)
people being accountable for their own performance, (4)
people eager to participate in and contribute to continual
improvement of the system in the organization.
Principle -4 Process approach
A desired result is achieved more efficiently when activ ities
and related resources are managed as a process. A well
define process approach will result to (1) lower costs and
shorter cycle times through effective use of resources , (2)
improved, consistent and predictable results , (3) focused and
prioritized improvement opportunities.
Principle -5 System approach to management
A systematic approach in management will help identify,
understand and manage interrelated processes as a system
which contributes to the organizations effectiveness and
efficiency in achieving its objectives.
Principle -6 Continual improvement
Continual improvement of the organizations overall
performance should be a permanent objective of the
organization. The key benefits in continual improvement of
the organization are (1) perfo rmance advantage through
improved organizational capabilities , (2) Alignment of
improvement activ ities at all levels to an organizations
strategic intent, and (3) flexib ility to react quickly to
opportunities.
Principle -7 Factual approach to decision making
Effective decisions are based on the analysis of data and
informat ion. Wrong informat ion will definitely lead to a
poor management decision, therefore and efficient access to
factual information will increase ability to demonstrate the
effectiveness of past decisions through reference to factual
records.
Principle -8 Mutually beneficial supplier relationships
An organization and its suppliers are interdependent and a
mutually beneficial relat ionship enhances the ability of both
to create value. It also enhances flexibility and speed of jo int
responses to changing market or customer needs and
expectations and optimization of costs and resources.
4. CONCLUSION AND RECOMMENDATION
The follo wing reco mmendations have been formed for
effective imp lementation of ISO 9001:2008 QM S in
construction firms:
1. Creation of Quality Policy
The top management should establish a quality policy that
should be in-line with the needs of the organization and its
clients. The policy should include a commit ment to meet ing
requirements as well as continual improvement. It must e
clearly understood by everyone in the organization and kept
under review by top management for on-going suitability.
2. System Procedures
Manage implementation of system that supports the core
process. System procedures help create the right
environment for quality by supporting, directing and
continually improving the business process. These include
procedures for the control of document and records,
recruit ment, training, control of non-conformances, auditing
for effect iveness, preventing the occurrence and recurrences
of non-conformances, measuring client satisfaction and
improving the system.
3. Process Procedures
The process procedures describe how the core processes are
managed. They are useful to define the business cycle wh ich
fro m the clients needs and stop once the project is
completed. It also helps to manage and measure value that is
added to achieve client satisfaction. Core processes of a
contractor are captured in the process procedures to achieve
consistent operations in meet ing client requirements.
Contractors are also required to set-up a project quality plan
for each project to be able to customize the relevant
procedures as necessary.
4. Documenting a Quality System
Documents are information and its supporting mediu m. The
ISO9001:2008 standard does not specify how a quality
management system should be documented. The level and
number of documents needed in a contractors system will
largely depend on the size and structure of the organizat ion
itself. To further ease the documentation and imp lementation,
the system and process procedures can be flowcharted to
show who does what, when and how as shown in Figure 3.0
3
and Figure 4.0 of Appendix 1. These procedures will also
provide a lin k to the forms, checklists and method
statements in the organization.
ACKNOWLEDGMENT
The Authors would like to acknowledge the members of
committee of the Inter-Specialty Group especially to its
chairman Mariano R. A lquiza, to Eng r. Eustaquio T. Coronel,
Jr., chairman, Pro ject Management and Construction
Engineering Specialty Div ision and of course to the
incumbent President of PICE National Eng r. David Sanchez
for giv ing us this opportunity to present this paper in the 40th
PICE National Convention.
APPENDIX 1.0 QMS MODEL
Figure 3.0 QMS Model Part A
Figure 4.0 QMS Model Part B
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