ESTABLISHING & INSTITUTIONALIZING

COST OF QUALITY PROGRAM

MBA ZG623T: Project Work

By

VISWANATH S K

2016HB74003

Project Work Carried Out at

HILAL BIL BADI & PARTNERS CONTRACTING CO.WLL, ABU DHABI-UAE

BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE

PILANI (RAJASTHAN)

April 2018

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 ESTABLISHING & INSTITUTIONALIZING
COST OF QUALITY PROGRAM

MBA ZG623T: Project Work

By

VISWANATH S K

2016HB74003

Project Work carried out at

HILAL BIL BADI & PARTNERS CONTRACTING CO.WLL, ABU DHABI-

UAE

Submitted in partial fulfillment of

MBA Quality Management degree Programme

Under the Supervision of

Eng. Ajantha Yapa, Project Manager, Hilal Bil Badi & Partners
Contracting Co. WLL, Abu Dhabi, UAE

BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE

PILANI (RAJASTHAN)

April 2018

2
 TABLE OF CONTENTS

Project Work Outline .....................................................................................................................................4

Background....................................................................................................................................................5
Objectives ....................................................................................................... Error! Bookmark not defined.
Scope of Work ...............................................................................................................................................6
Plan of Work ................................................................................................... Error! Bookmark not defined.
Literature References ....................................................................................................................................7
Particulars of the Supervisor and Examiner ..................................................................................................7
Remarks of the Supervisor ............................................................................................................................7

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 Birla Institute of Technology & Science, Pilani
Work-Integrated Learning Programmes Division
Second Semester 2017-2018

MBA ZG623T Project Work Outline

ID No. : 2016HB74003________________________

NAME OF THE STUDENT : VISWANATH S K ______________________

EMAIL ADDRESS : 2016hb74003@wilp.bits-pilani.ac.in_______

STUDENT’S EMPLOYING : HILALCO, ABU DHABI, UAE ______________

ORGANIZATION & LOCATION

SUPERVISOR’S NAME : ENG. AJANTHA YAPA _

SUPERVISOR’S EMPLOYING : HILALCO, ABU DHABI, UAE ______________

ORGANIZATION & LOCATION

SUPERVISOR’S EMAIL ADDRESS: yapa.ajantha@hilalco.com __ ___

PROPOSED PROJECT TITLE : ESTABLISHING & INSTITUTIONALIZING

COST OF QUALITY PROGRAM

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BROAD ACADEMIC AREA OF WORK: TOTAL QUALITY MANAGEMENT

BACKGROUND

In current global market, contractors are bidding tenders with very low profit margin and are
committed to complete the project within in stipulated time & cost. Any lapses in the product
delivered with respect to the design specifications or on completion time will affect the relationship
with the customers as well as have financial impacts on them.

HILALCO – Hilal Bil Badi & Partners Contracting Company (WLL) is a fully locally owned Company in
Abu Dhabi since 1996. HILALCO has emerged to be one of the leading Roads, Infrastructure and Civil
Works Contractors in the region with more than 1000 km of Roads completed as well as many major
Bridge Structures, Underpasses and major Infrastructure works for townships.

Presently, as the competition has increased in the market, HILALCO has initiated various methods to
increase the productivity, reduce the cost and increase the quality of product delivered to the
customer to continue as one of market leaders in Roads & Infrastructure construction works. Doing
the work & getting the work approved right first time can reduce cost substantially and also the
product delivery time. The cost involved in reworks, repairs, preventive actions etc. needs to be
accounted, analyzed for process improvement.

OBJECTIVES

The primary objective of the project is to Initiate COQ approach, establish & track various costs of
quality and to institutionalize a Cost of Quality Program in the organization.

This project aims at developing a COQ program which can be used for decision making for
continuous improvement & strategic planning. Responsibilities for and the format for collecting &
reporting the information will be defined as well as the frequency and agenda where it will be used
for decision making will be established. It also aims at educating work force to make a permanent
connection between quality performance and cost performance

The Cost of Quality (COQ) program will help to show the financial impact of quality activities and
also the cost of quality related activities clarifies where there is significant opportunity for process
improvement. Once recognized, process improvement efforts can be focused on those with higher
potential payoff.

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SCOPE OF WORK

By applying the concept of cost of quality, a meaningful measurement tool/system shall be

developed that can report on and highlight quality issues, and will help the company undertake
meaningful process improvement activities

The importance & benefits of using Cost of Quality program will be presented to the higher
management first for their approval. After getting the management’s consent to implement COQ, a
pilot program will be used to help demonstrate the process & benefits without fully involving the
entire organization & extensive resources. Once the organization is convinced and fully committed
in using cost of quality, a more detailed COQ base line will be established to know where it is and
this will allow tracking of overall improvement. When the organization is comfortable with the
concept & usefulness of COQ, a formal reporting process will be developed.

The project deliverables will be

1. Document the various direct & indirect costs incurred like for reworks, repair etc. &
categorize under internal failure cost, external failure cost, preventive cost & appraisal
cost.
2. Relation of Quality cost to business measures as percentage of sales, as compared to
profit to demonstrate the importance of COQ to management.
3. Analyze the costs incurred using quality tools for initiating improvement actions.
4. Using root cause analysis, develop specific improvement actions to reduce the costs
incurred by internal & external failures.
5. Develop preventive and inspection plans to reduce repairs & reworks.
6. Trend analysis in monitoring the progress of improvement actions.

PLAN OF WORK

Sl No. Details of work Start Date End Date

1 Document the various cost incurred 15-01-2018 31-01-2018
2 Establishing relation of COQ with other business measures 01-02-2018 05-02-2018
3 Analyze the costs incurred using quality tools 06-02-2018 08-02-2018
4 Develop improvement actions to optimize costs spend 08-02-2018 15-02-2018
5 Mid-semester review 17-02-2018 24-02-2018
6 Implement the improvement actions developed 15-02-2018 15-03-2018
7 Trend analysis after the implementation of improvement 16-02-2018 16-03-2018
action
8 Documenting the implementation of COQ program & its 18-03-2018 24-03-2018
effects
9 Summary and result conclusion 25-03-2018 31-03-2018
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LITERATURE REFERENCES

1. Total Quality Management Revised Third Edition by Dale H. Besterfield, Carol

Besterfield, Glen H. Besterfield, Mary Besterfield, Hemant Urdhwareshe, Rashmi
Urdhwareshe, Pearson
2. Handbook on “The Certified Manager of Quality/Organisational Excellence” Fourth
Edition by Russell T.Westcott

PARTICULARS OF THE SUPERVISOR AND EXAMINER

Supervisor Additional Examiner

Name Eng. Ajantha Yapa Eng. Shahul Hameed N P

Qualification Master of Science(DS) M Tech in Structural Engineering

Management-MSc(DS) Mgt

Designation Project Manager Project Engineer

Employing Orgn HILALCO, Abu Dhabi, UAE HILALCO, Abu Dhabi, UAE
and Location
Phone No.
(with STD Code) +971-507416553 +971-502507140

Email Address yapa.ajantha@hilalco.com shahul.hameed@hilalco.com

REMARKS OF THE SUPERVISOR

Developing and Implementing Cost of Quality Program will create more awareness among the
employees to execute the work as per the design standards right first time thereby reducing the
repair & reworks. COQ program will help to reduce the cost, time and improve quality of product.
In this current global market, delivering product to the customers meeting their technical
requirements at lower price will make them delight & help to build a long term relation with
them.

Signature of Student Signature of Supervisor Signature of Additional

Examiner

Name VISWANATH SK Name AJANTHA YAPA Name SHAHUL HAMEED