Managing Quality and Risk in Projects

Abdullah Shaiban, Project Inspection Supervisor at Saudi Aramco – a multinational petroleum and natural gas company – highlights the importance of integrating risk into a quality management system.

ISO 9001:2015 provides a framework which organisations can apply to their quality management system (QMS) to deliver sustainable development solutions and to improve the overall performance of their businesses. Performance enhancement outcomes are created by conducting a sequential set of activities on each individual process of a project. Those activities are based on evidence-based decision-making, which utilise continual improvement opportunities to achieve quality objectives.

This framework has been adopted by many industries; for instance, within constructing oil and gas facilities, the projects require a QMS to achieve their quality objectives. Towards this goal, key performance indicators (KPIs) are developed to determine the effectiveness of certain processes to implement a sustainable QMS in organisations (as per ISO 9001:2015). KPIs are imperative because they keep business objectives at the forefront of decision-making, allowing project managers to gauge the effectiveness of the process at hand.

Risks affect project objectives (eg, scope, schedule, cost, and quality), which should be considered when it comes to developing a QMS. Risks are potential threats that may cause failure and loss which can lead to negative effects to a particular project. Therefore, risk is integrated when determining quality objectives, and is monitored through KPIs. These include: the work acceptance rate, number of deficient equipment items, preservation failure rate, and welding repair rate (WRR). For each of those, a quality objective is set based on the risk mitigation factors.

Quality performance can be measured by different indices, one of which is the project quality index (PQI), which is a performance indicator that measures the effectiveness of QMS implementation, and project compliance to mandatory standards and codes. Oil and gas projects, for example, are executed in three major phases: design, procurement and construction. For each of these project phases, quality-related KPIs are developed to measure progress towards predefined quality goals and objectives, and the sum of the weighted average scores of quality KPIs is used to calculate the PQI.

Monitoring continuous improvement

Through the continuous monitoring of KPIs, project teams can take immediate action to address any reported product or process deficiencies. It is important to not only focus on corrective action, but to also ensure that sustainable results are achieved, which can occur by utilising continual improvement tools, such as Six Sigma, Lean, Kaizen and Deming’s Plan, Do, Check, Act (PDCA) cycle. The ISO 9001:2015 Standard uses the PDCA cycle to enhance and improve processes using a four-phase iterative approach. The PDCA cycle ensures that the processes are sufficiently resourced and maintained, and that the improvement opportunities are effectively captured by the organisation. 

Oil and gas case study

In an oil and gas ‘mega project’, the PDCA cycle was implemented during the project execution in collaboration with the contractor. The goal was to reduce the welding rejection rates (WRR) from 11 per cent to five per cent, which was the quality objective.

The ‘plan’ phase was initiated by clearly identifying the core problem in the project. The goals were set according to the objective required and were based on the resources available. Planning consisted of detailed steps that considered all risk mitigation factors to minimise the probability of deviation from predefined KPIs. The team consolidated and analysed all the significant reports that were required to fulfill this task, including the weekly welding repair, defects analysis and the welders’ performance reports, in order to identify the root causes that led to a high WRR.

This analysis involved using a number of quality tools and techniques, such as checklists, Root Cause Analysis, the Fishbone Diagram and the Five W’s and 1H methodology. After utilising these tools, the potential factors that caused the high WRR were found to be the welders’ skill set, welding equipment, argon gas purity, and welding consumables.

In the ‘do’ phase, the plan was incorporated to identify which factors were prevalent, by creating a small-scale experiment in a controlled environment. Five welders with varying years of experience were required to weld 30 joints each, using the same welding technique on multiple types of piping material. The results were examined using radiographic testing, to verify the acceptance of the welded joints or the type of defect. Through this experiment, the main underlying causes of this issue were determined.

The ‘check’ phase is probably the most imperative stage of the PDCA cycle. In this phase, the plan’s execution was audited to determine whether recurring mistakes were avoided. Moreover, this enabled to further identify the root causes and eliminate unrelated ones. In the aforementioned case study above, a matrix was created to identify the type and frequency of defects per each welder, which included porosity, incomplete fusion, and root concavities. The results found that the most frequent type of defect was porosity – caused by an impurity in the argon gas used, along with a few joints that had incomplete fusion or root concavities, due to uncalibrated welding machines. It was also noted that welders with less experience had a greater number of welding defects.

Finally, in the ‘Act’ phase, the results drawn from previous phases were acted upon. The corrective measures were identified and incorporated in the process. For the welders, weekly training programmes and toolbox meetings were implemented to obtain a higher quality of skill sets as required. Additionally, the argon purity was periodically checked via a mockup joint. Lastly, a new calibration system was established for keeping records of calibration requirements for all the welding machines.

Benefits and outcomes

The project not only complied with the quality objective, which had a target of five percent for the WRR, but it also saved $535,040 US dollars in costs and prevented a six-month schedule delay in the project.

Accordingly, incorporating risk into a quality management system and applying continual improvement tools will help to:

  • establish a proactive culture of prevention and continual improvement;
  • minimise impacts and enhance benefits;
  • ensure high quality of the final product;
  • anticipate issues and opportunities;
  • increase customer satisfaction;
  • improve process performance and efficiency.

A quality management system that incorporates risk will be successful when continual improvement is performed and maintained. Therefore, continual improvement tools will result in outcomes that are compliant with pre-defined quality goals, and will help to develop preventative measures that can reduce the reoccurrence of failures further down the line.

Attribute to original publisher/ publishing organization: Abdullah Shaiban, Project Inspection Supervisor at Saudi Aramco, https://www.quality.org/knowledge/managing-quality-and-risk-in-projects

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