טכניון מכון טכנולוגי לישראל
הטכניון מכון טכנולוגי לישראל - בית הספר ללימודי מוסמכים  
M.Sc Thesis
M.Sc StudentJabarin Nizar
SubjectEstimation of Non-Quality Costs in Construction in Israel
DepartmentDepartment of Civil and Environmental Engineering
Supervisor Professor Yehiel Rosenfeld


Abstract

Eight ISO-9000 certified construction companies were comprehensively surveyed to identify primary sources of their ‘direct quality costs’ (DQC) in new residential projects. For the purpose of this study the DQC were divided into four components. Prevention costs (17%) and appraisal costs (25%), termed together as ‘quality costs’, constituted on average 42% of the DQC, while the costs of internal failures, which are corrected before delivery to the customer (22%), and external failures (36%), termed together as ‘non-quality costs’, constituted 58% of the DQC. Altogether, the DQC generated during the construction phase of thousands of dwelling units, constituted on average 4.23% of the total construction costs of those units, varying between 3.5% and 5%. With the addition of farther estimated costs due to embedded design defects and hidden costs, the total quality costs in these - apparently high-quality ISO-9000 certified construction firms - reach 8% - 13% of their total construction costs. Correlation analyses indicate that investment in prevention is worthwhile, since it substantially reduces the failure costs. In all of the companies there was not a single complete information system for thoroughly collecting and analyzing all quality related costs.  The external failures are best documented and best quantified by the ‘customer service’ departments of the companies. A detailed Pareto analysis of thousands of ‘post occupancy’ defects, in six of the eight companies, revealed that three work categories - plumbing, sealing, and tiling - account for about 45% of the defects number and for about 48% of their correction costs.