A Knowledge Management Framework for Reducing the Cost of Poor Quality on Construction Projects

Abstract

Knowledge management (KM) implementation strategies on construction projects can reap benefits such as improved performance and continuous improvement yet many projects are characterised by inefficiencies, repetition of mistakes and lack of lessons learnt. Poor skills, design changes, errors and omissions contribute to the internal failure cost element of the Cost of Poor Quality (COPQ) while the resultant effect of client dissatisfaction contributes to the external failure cost. COPQ is prevalent regardless of project type and has been found to be over 10% of total project cost in certain cases. While the need to reduce COPQ is definite, it is uncertain what impact KM has in its reduction. The aims of the research therefore are twofold (i) to investigate the impact of KM in reducing COPQ on construction projects (ii) to develop a KM framework for reducing COPQ on construction projects. A mixed method approach was adopted for the research with an exploratory sequential research design utilising both qualitative and quantitative inquiries to address the research aims. Semi-structured interviews and questionnaire survey were selected as the method for qualitative and quantitative data collection respectively. The interviews were conducted with 25 industry experts involved in KM strategies for large construction organisations across UK to obtain data, based on their experiences and expertise on projects, which were then analysed using content analysis. The output from the analysis yielded variables and working hypotheses which were tested through the questionnaire survey. Further data were obtained from 114 survey respondents who have iii been mostly involved in KM initiatives for large construction organisations across UK. The data was analysed using descriptive statistics. From the interpretation of the entire qualitative and quantitative data, it was found that KM can be complex and difficult to manage within organisations and on projects. Although KM was perceived to have positive impact in reducing COPQ, organisations did not, and could not quantify COPQ neither could they measure the extent of the impact of KM on COPQ. Causal links were found between COPQ elements i.e. errors and omissions, design changes and poor skills, contrary to the theoretical suggestion of being mutually exclusive. It was found that KM currently has not been optimised to reduce COPQ due to a number of barriers. Optimising KM to reduce COPQ therefore involves overcoming the barriers as follows: develop performance metrics to assess the impact of KM on COPQ on projects; appoint knowledge champions to facilitate KM activities to reduce COPQ; adopt a positive organisational culture towards KM; allocate adequate time and budget for KM activities on projects; select procurement strategies that support and facilitate KM. A KM framework for reducing COPQ on construction projects was developed as an output of the research and evaluated by industry practitioners. It can be concluded that the optimisation of KM can significantly reduce COPQ. A key recommendation for industry practitioners therefore is to adopt a holistic approach to quantifying COPQ and assessing the impact of KM in reducing COPQ such as the one presented in this research. The research contributes to the body of knowledge in the area of cost reduction, quality improvements and knowledge management on projects.