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Part 2 - INTRODUCTION

Future Role of Management

Traditionally, general management has been associated with the concept of an hierarchical organisation structure, based on the established chain of command.  Control is exercised through corporate investment decisions, and the setting of annual budgets.  Accounting, marketing, sales, production, staffing, training, maintenance and distribution functions are regularly monitored with the objective of increasing market share, profitability and safe-guarding of accumulated capital and survival of the organisation.

In the past, relatively stable economic conditions provided reliable data for analysis of business trends and implementation of corrective action. Management strategies were conservative and tended to avoid risks.  Functional specialisation was high, formal lines of communication were followed, individuals conformed and were rewarded in their life-time employment.

Around 40 years ago, the trend to hand projects to Specialist Managers occurred, which in turn tended to isolate specific projects from the attention of direct control of general management.  This move towards specialist attention of a number of high cost, involved projects led to evolution of Project Management Theory and the training of Project Managers.  It was during this time that computer programs were developed to assist project managers in applying specific techniques to monitor/control aspects such as planning, scheduling, organising, controlling, procurement and reporting.

The amalgamation of executive management with the unique form of project management practised today is described by King-Siem (1978) as well suited to the rapidly changing business environment.  Project managers are readily accustomed to working within tight time frames, budgetary and other quality assurance control parameters and are familiar with:

1       Adoption to changing work situations and unforeseen contingencies;

2       The inevitability of risk taking;

3       Uncertainty and delay;

4       Dependency with other external organisations;

5       The breaking down of communication impediments and the need for sharing of ideas; 

6       The issue of environmental awareness and sensitivity in the work place; and

7       Human Relation management skills.

Savory, (1992), in "The Total Manager" described the role of the modern-day Project Manager as becoming more relevant to the needs of all managers of the current business environment, viz;

"In a period of relatively rapid change all Managers are required to be Project Managers.  They are also required to apply the principles of Quality Management, and to provide training for their workers to learn the skills of the new business culture.  Regardless of their technical specialisation, managers are expected to be Total Quality, Trained Project Managers and must quickly learn to integrate the technical, quality, training and project tools and techniques into their managerial styles and methods (pg. 224).

Changing Environment

The work environment today is subject to many changes.  Traditional work practices are changing which means companies need to be more flexible so as to compete in the market place.  Some organisations adopt new practices (such as Total Quality Management),  to change their existing organisational culture, and start to place more emphasis upon a customer focus and the need for continuous improvement. 

Total Quality Management (TQM) is based on the introduction of an environment that provides a culture and the values where freedom of choice can flourish, and cross-fertilisation can take place for the mutual benefit of all team members, and the organisation as a whole.

The elements common to both Project Management as well as Total Quality Management are defined by Hubbard (1991:260) as:

Mission; Type of Process; Acceptable Quality Standards and Consistency; Performance Measurement; Change Acceptance; Management Style; Personnel Skills; Career Path; Teamwork; and Reward. 

A well developed and functional TQM system is therefore based on an equally well defined and Managed Quality System which is in line with the International ISO 9000 Series, or Australian AS9000 Series of Quality Standards.

Process Management for implementation of projects including large Turn-Key type of project can be documented by a Project Implementation Process.  Project related processes can be shown in a project implementation flow chart supported by Project Implementation Procedures, Work Instructions and Forms (see footnote).  The whole project implementation process illustrates and describes the necessary phases and milestones needed to bring a project to successful completion by the use of project management techniques.

To ensure compliance with ISO 9000, project management philosophy requires a project to be planned and executed in such manner to guarantee compliance with quality, cost and delivery imperatives.  The planning, production and verification processes are divided into several discrete phases. 

Where detailed engineering, hardware and / or software design is required, procedures for each project process must be shown under separate heading.  The scope of the planning process and definition of desecrate stages at which review and evaluation will occur depends upon the type of final product or  project being constructed/manufactured.  Similarly the complexity of design, the extent of product innovation or process technology utilised, the degree of similarity with past projects and the proposed duration of the project will need to be considered.

Project Management (PM) is an organisational strategy which is utilised to effect a predetermined scope of change.  Project management provides all the technical elements necessary to successfully launch a project, set clear objectives, provide resources, to develop work breakdown structures, cost estimating, time planning and scheduling, control, allocation of resources and the co-ordination and review, as well as communication, organisation, training and team motivation.  The project manager is central to a project as its Facilitator, Co-ordinator and Project Champion. 

In comparison, line management within a strictly functional hierarchy is a position which directs all processes of a routine or cyclical nature and provides the ongoing authority and framework for work operations.

Project Management is commonly concerned with the controlled use of resources (time, money, materials and equipment) in a competitive environment.  Project success depends upon getting things done on-time, within budget, to the originally agreed quality parameters or standards and able to meet the functional objectives with the available resources.  Every project goes through a definitive Life Cycle which has a specific start, finish and duration. 

Management of projects encompasses a range of techniques including:

Setting objectives and priorities; work break down structuring (WBS); cost estimating; time/sequence planning and control; resource allocation and scheduling as well as co-ordinating and reviewing; communicating; organising; training and motivating.

Such technical elements may have different terminology in different cultures but a synthesis of common purpose and meaning of some of them is as below:

Objectives and Priorities: Relate to setting of performance indicators which provide a target for overall project performance evaluation.  Such performance indicators need to be measurable, relevant and meaningfully graded according to their priority.

Work Breakdown Structure (WBS): A formal and systematic way of defining and identifying of the project unique phases, breaking down of work for planning, the structuring of and its integration into the project’s information system.  The WBS is a formalised approach to breaking the project into its practical and logical component parts.

Cost Estimating and Control: The project manager is concerned with achievement of financial objectives, subject to the project’s time, cost and quality constraints.  Budgeting information is integrated into the planning system, thereby providing data for optimal project control.

Planning and Time Control: Monitoring and controlling of the project are fundamental to the discipline of project management.  The aspects of change management needs to be anticipated and effective stratagems made available at an early stage, to prevent future problems arising.  Network planning techniques have been developed to allow orderly arrangement of tasks and the setting of work priorities and, to simplify management and reporting functions these include the capacity for sub-optimisation into sub-projects.

Resource Allocation and Scheduling: Unlimited manpower, time, plant, space, material and money are not usually available in practice.  Resource allocation during planning and scheduling is used to ensure resources are managed in the most time and cost efficient manner.

Co-ordination: The project organisation takes place within the framework of the project’s nominated structure and the project will operate according to the type of structure and processes that are specified.  By delegating work the project manager is sharing accountability and responsibility with other members of the team.

Communication: All parties in the project need to have clear targets and goals;  a communication structure should be established between suppliers, vendors and the end-user to ensure that they have the appropriate and timely information for their particular needs.

Training:Continuous training of the individual project participants is necessary, it is reviewed during the project’s progress and at project completion. 

[Footnote:]

[Quality Policy is the overall quality intention of the organisation formally expressed by executive management;

[Quality Procedures describe the organisational processes which must be in line with the policy framework expressed by executive management;]

[Quality Work Instruction describe the technical structure of the organisation and are usually Industry Specific;]

[Quality Form are mostly single page check sheets used to verify adherence to the specified quality system.]

PART I

The Quality System as a management tool

The prime objective of both the Australian and International 9000 - Series Quality Standards, is to provide a structured approach for the Quality Management Process which one can use to manage an organisation / project efficiently and to satisfy all stakeholders in the project.

Lowe (1995:82) defines Quality Management as:

“the way all people within an organisation manage (control) their processes in order to achieve the desired output, taking into account both the needs of the company and the needs of the client.  The system will primarily control process through the control of information.  In the first instance the system will ensure that those at the workforce (those generating the cash flow) are made aware of the standards of performance which are required of them in order to achieve a quality output.  The standards of performance may be outlined in plans, schedules and procedures (Information flowing from management to the workforce)”.

Lowe also refers to a second flow of information from the workforce and client level to management which is based on performance measurements and that can be used to continuously measure client satisfaction.  This is a two-way flow of information where continuous quality improvements flow from this bi-directional feedback loop.

The quality of a project or project organisation goes beyond management of the design process, the process of control and the delivery of customer service.  For the project organisation to flourish, and continuously improve, there must be an overall quality management system in place which is often referred to as Total Quality Management (TQM).

For such a system to be effective it must be fully documented so that the unique processes and procedures are not forgotten over time.  If the system is to continue to provide ongoing efficiency and quality improvement, there need to be a continuing program of control and monitoring in the form of audits and reviews. These audits and reviews form the basis for a well designed TQM system and are a prerequisite for staff and managerial group training which is needed to create the organisational environment which facilitates TQM, and allows it to flourish.

Audits and reviews serve two functions.  The first and most important is that they provide valuable information for management to identify problem areas and to nominate remedial action. Secondly, they are the ongoing review activity that monitors whether work is progressing according to the plan, as documented.  Management reviews are not only an audit process but are used to maximise the benefits of feedback and correction.  Reviews encompass more than individual improvement of activities but focus on the entire project’s productivity and quality performance.  The customer benefits most when objective observations are made through these review processes which look at:

-        Preventative quality aspects such as the cost of inspection;

-        The Quality System running costs; 

-        Failure costs, both internal and external;

-        Customers complaints; and the

-        Supplier performance data.

All information gained through these audits and reviews should be used to establish new policy directives and initiatives which can be developed to reinforce and maintain the whole continuous improvement cycle.  By incorporating quality processes into the daily functions within a project, the efficiency of the product / service being developed will, more likely, meet the time, cost and quality parameters required.  These functional elements need to be structured so that they can be understood and applied by all group members.  A well developed Quality Management System will form the basis of a well run and successful project.

The Quality Management System consists of policies, procedures , work instructions and supporting forms which provide a systematic approach for instilling quality controls into work actions and activities within the business process.  These quality controls within the quality system need to totally interact and their interrelationships need to be structured so as to relate as closely as possible to the actual work to be performed.

Fig. 1 - Relationship between Policies, Procedures and Work Instructions

Policies and procedures in a Quality Manual are generally grouped into sections which document specific intentions and philosophies:

1.      The organisational structure of  the company, its departments and projects;

2.      The quality management policies, strategies and responsibilities;

3.      A description of process management activities, such as Sales, Purchasing,  Project Implementation, Service;

4.      A description of management support processes, including documentation control, non-conformance, standards, cost control, calibration, people, selection and training;

5.      Audit control processes including internal, external and customer audits; and

6.      Human resources, selection and training.

Project Implementation

Subjects to be addressed specifically for development of Project Implementation Procedures are listed below.  These elements can be addressed in sequence, or according to the way the work is structured within the organisation.

When developing procedures for project implementation some general organisational topics should also be covered.  The following are a summary of additional topics.

Turn-Key Project

The managerial process for a turn-key project may be presented in a flow chart format. The structure of the Quality Process Flow should be embraced as policy with each element in the structure described by a Quality Procedure.  Policies and procedures, which form the managerial process are supported by work instructions and forms detailing the technical process of the project. The technical process represented through work instructions and forms are industry dependent and should be used to describe how to undertake specific procedures; how to install specific equipment; component acceptance and final project acceptance, etc.  Sample forms are within the Appendix, Section 5.

Total Quality System

An effective Total Quality Management System is based on a well integrated audit and review process, embedded in a culture which embraces motivation, responsibility, authority, training and team work for staff and management.

Fig: 2 - Total Quality Management System Model

The question of ‘transferability’ of project management techniques has always created lively discussions amongst project managers.  One could argue that the technical processes are indeed industry or product specific, and as such difficult to transfer.

Managerial processes however are transferable with the acception of the industry specific part of the Quality Process System.  The implementation of software development versus hardware development processes as well as turn-key project processes all require development of specific implementation flow diagrams.  Based on the managerial processes, reflected in an updated flow diagram, procedures are written to reflect the industry specific requirements. 

An organisation which features a turn-key project department would require a quality manual specifically aligned to turn-key project work which can be audited and controlled by that department.  A software development department would match its quality manual to reflect their software development.  In large organisations each department should develop their own unique quality procedures manual and the same is true for turn-key projects.

Establishing department or project specific quality procedures manuals is in line with modern quality management philosophy.  One quality procedural manual (per large organisation) will become unmanageable and the staff would find it difficult to become personally involved in the maintenance of the quality system through their audit and review process.

The Project Implementation Flow Chart

The implementation flow chart describes the management requirements for the implementation of Turn -Key projects.  The flow chart covers the 4 phases of Contract Negotiation, Specification, Development and Support.  It illustrates the basic steps necessary to implement the contractual obligations according to project procedures.  Each element within the flow chart is represented by an appropriate procedure as described in the next section of this book.

Contract Negotiation Phase 0

Specification Phase 1

Development Phase 2 

Support Phase 3

B            DEVELOPING QUALITY SYSTEM POLICIES

This Quality Manual, based on the Australian Standard AS / NZS3913: 1992 “Quality Manual-Guide to preparation”, was developed after preparing a Quality Management Systems Manual for Turn Key Projects.  The author endeavoured to cover all sections of the Australian Standard AS/ISO 9001- 1994.

1.0      GENERAL

The quality manual details an organisation’s quality management system and includes the Project Implementation Process policies, procedures and specific work instructions, and forms. 

If corporate policies have been recorded the policies quoted in the project quality  manual must confirm and support policy statements already made otherwise both or all manuals will need revision.  The contents of  this particular manual is summarised in headings listed in the overall table of contents below.  The titles in the Table of Contents are divided into sections, from 1.0 to 8.0, and these should match with those of the Corporate Policy.  The titles should also be referenced using issue numbers and dates in either the Header / Footer of each page so as to facilitate accurate updating, tracing and authorisation.

1.1                  Table of Contents

1.0                  General                                                                               

1.1                  Table of contents                                                                 

1.2                  Standard layout

1.3                  Authorisation                                                                     

1.4                  Confidentiality                                                                     

2.0                  Quality System Requirements                                     

2.1                  Quality manual purpose                                                                       

2.2                  Relation to other manuals                                                                                 

2.3                  Quality manual development                                                               

2.4                  Review and updating                                                                            

2.5                  Quality Manual Distribution                                                                  

2.6                  Definition of terms

3.0                  Organisational Management                                                              

3.1                  Department organisation                                                                      

3.2                  Scope of operation                                                                                 

3.3                  Interfaces                                                                                                 

3.4                  Responsibility and authority

4.0                  Quality Management                                                                            

4.1                  Mission and Quality policy                                                                    

4.2                  Quality strategies                                                                                    

4.3                  Quality responsibility and authority

4.4                  Quality performance measurement

4.5                  Quality system audits                                                                            

4.6                  Management review                                                                              

5.0                  Management of Processes                                                                

5.1                  Marketing                                                                                                 

5.2                  Sales                                                                                                                         

5.3                  Project implementation                                                                         

5.4                  Design / Development                                                                           

5.5                  Engineering                                                                                            

5.6                  Procurement / purchasing / warehouse

5.7                  Site establishment                                                                                 

5.8                  Materials control                                                                                                  

5.9                  Manufacturing                                                                                        

5.10                Distribution / delivery                                                                             

5.11                Installation / construction                                                                      

5.12                Testing / commissioning                                                                       

5.13                Customer hand over                                                                              

5.14                Job reconciliation                                                                                   

5.15                Product Support

6.0                  Management of Support Processes                                                             

6.1                  Documentation control                                                                          

6.2                  Equipment calibration and maintenance

6.3                  Risk management                                                                                  

6.4                  Non-conformance and corrective action                                            

6.5                  Identification and traceability                                                               

6.6                  Supplier / subcontractor evaluation                                                    

6.7                  Occupational health and safety / Environment

6.8                  Standards and regulations                                                                   

6.9                  Cost control and invoicing                                                                                 

6.10                Specific Forms                                                                                        

7.0                  Control of Processes                                                                           

8.0                  Human Resources                                                                               

The above revisions are authorised for use by:

Name:                                                         Signature:                                                    Date:

Details on revision, authorisation and updating are provided in  section Review and updating

1.2      Standard Layout

The quality manual should be prepared electronically to enable easy updating and printing.  It should be accessible for all employees to view the documents and a Quality Representative needs to be authorised to control and document all / any changes to it.  For practical purposes, it is usually convenient to keep one controlled hard copy with the responsible Quality Representative.

1.3      Revision Authority:

Revisions of individual sections of the quality manual should be signed off by the authorised person.  An updated issue for each section, or the total manual if necessary, is usually authorised through initialling or signing of the Table of Contents of the new update or issue.  This process must be followed when releasing policies, procedures, work instructions or forms.

1.4      Confidentiality                                                                              

A quality manual usually contains confidential information or sensitive formulation, or similar.  Therefore copies should not be made of the individual parts or of the whole of the document except where it may be necessary for internal use.  After management approval has been given, uncontrolled copies may be provided to customers or prospective customers when tendering, or to confirm current contracts or supply agreements.

2.0         QUALITY SYSTEM REQUIREMENTS

It is usually necessary to document the objectives of the organisation through policies, procedures, work instructions and forms.  The effective implementation of any Quality System is monitored through use of audits.  The input to the quality manual can be made by staff members who wish to update any of the existing procedures or work instructions.

2.1         Quality manual purpose

The purpose of the quality manual is to reflect, through documentation, the sequence of activities applicable to the various operations and the major reason for developing a quality manual is to provide relevant information which can be used to formulate a continuous improvement strategy.

2.2      Relation to other manuals

Any cross referencing of quality manuals to other manuals needs to be clearly stated and referenced so that people know exactly where to look for specific information.  The quality manual would usually be accessible via the computer network for viewing and copying by relevant personnel.  NB.  Only one person within the department, usually the Department Administrator or the Quality Representative, should be able to modify and update the manual (refer to Item 1.2 above).  The quality system will also utilise relevant company standard manuals such as accounting procedures, Human Resource procedures, etc.

2.3         Quality manual development

The quality manual should be structured such that it logically describes the flow of operations associated with the department, and the company.  The objective is to allow ease of access and understanding of policies and procedures by all personnel. Additionally, the manual should align with all of the organisation’s other policies and procedures.  As an integral part of continuous improvement the content of the manual must be subject to regular review.

2.4         Review and updating

Where discrepancies are found in any documentation, a Document Change Request (DCR) should be initiated.  Access for maintenance and updating of files should only be available to those specific individuals nominated by management.  Once the change to a specific document is made its Issue Status must also be updated.  Records of updated quality documents should be archived electronically and manually.

2.5         Quality Manual Distribution

Distribution of the quality manual needs to be co-ordinated by the administrator.  One controlled copy should be available in house.  Uncontrolled copies of the quality policies may be included in tender documents.  Management should approve any distribution of the Quality System information to an external party.

2.6      Definition of terms

All documents need to include or make reference to a Glossary of Terms and Abbreviations used.  A sample of terms used is given in the Appendix, Section 6.

3.0         ORGANISATIONAL STRUCTURES

A full description of the corporate structure should be referenced in the Quality Policy Manual.  Divisional or department structures may also be shown in the divisional or departmental quality manual.  It is now customary to make each department individually responsible for their own Quality Systems Manual.  A quality managers position may only be needed at senior management level and, all quality system responsibilities for department activities shall remain with the department manager and his/her nominated representative.

The quality responsibility for a project rests with the project manager and his/her project team members.  Quality representatives report to their respective departmental head or the project manager.  Organisational working charts which document the functional roles could also be shown within this part of the quality manual.

3.1         Department Organisation

This section describes the area of responsibility within the department.  The description can be in the form of an organisation chart or, as an individual written description of the role of individuals working in the department.

3.2         Scope of Operation

This section details individual department’s responsibilities such as design, marketing, sales, manufacture, installation.  Quality aspects and the relevant technical support are also installed in this section.  The range of products being handled by the department may also be listed.

For the benefit of turn-key activities it should be stated if the department specialises in this for of project activity.  The relevant turn key activities that may be included are sales, marketing, planning, design, engineering, supply, installation, commissioning, maintenance and repair of specific equipment. 

These activities may also be supported by a number of functional groups or other departments within the organisation as well as specialised 3rd party sub-contractors, and as such should be documented too.

3.3         Interfaces

In addition to the centralised commercial and corporate communication aspects, specific other support functions may also be outlined within the quality policy manual.  These interfaces occuring between Departments should also be recorded.  If projects require involvement of more than one department the functional interfaces and accountabilities must be defined in specific project quality plans.

A generic sample of a project quality plan can be found in the Appendix, Section 4.

3.4         Responsibility and Authority

It is important that each staff member understands his/her responsibilities and has sufficient authority to carry out their tasks in an effective manner.  This authority may be delegated according to specifically stated signature authority guidelines however, instead of individual job descriptions, responsibilities may be assigned to the functional work groups.  Project specific authority and responsibility with respect to Project Implementation should be defined in the Project Quality Plan.

4.0      QUALITY MANAGEMENT                                                                               

4.1       Mission and Quality policy
A Quality Management System must support the Mission, Vision and Values of the Organisation, it needs to emphasise continuous improvement and the level of service required for all internal and external customers alike. Customers, are those people or organisations upon which business or project activities have an impact.  Service is any product, system, advice or consultancy that may be provided to customers.


Competitive continuous improvement needs to be part of the Quality Policy.  This can be accomplished by ensuring all employees are satisfied with their working environment.  It also includes legal requirements, and reward systems, career planning and communication processes.  The ability of the organisation to carry out its objectives and to reach its goals is influenced strongly by the skills of its employees.  It is therefore necessary to ensure that all employees have the skills to undertake their work-tasks.  The organisation has a need to ensure that all training effort is geared towards its current and future workplace needs.

All employees need to be trained in TQM concepts and its associated techniques and the working environment should be such that the training concepts and techniques can be readily translated into real-life action plans.  It is also mandatory that all/any improvements can be measured to ensure that the organisation’s activities are relevant and up-to-date.  Monitoring of the activity and performance of all subsidiary companies is also essential.  A good indication of quality performance can be obtained by monitoring of the level of customer service received by its external and internal customer.  This may take the form of quantitative measures of elements which are already being measured internally and might only need confirmation.  Measures could include delivery reliability; regularity of breakdown or faults; or the frequency of customer complaints. 

The gauging of customer service satisfaction through regular customer interviews should also be performed as it reinforces the 2-way nature of the customer quality continuum. Interviews not only help to measure customer opinion, but they assist in determining whether all staff understand the nature of their customers needs and any resultant problems.

4.2         Quality strategies

The organisation’s Quality Strategy should be clearly spelled out in the form of a policy statement.  The following strategy points should be included;

-        Focussing on Quality as a means to continuous improvement of the organisation’s  competitiveness;

-        Viewing Quality as the “vehicle” for obtaining increasing market share;

-        Using Quality to project the focus on long-term planning.

Some examples of the areas that may be addressed are technical training and quality improvement training as well as personal growth and improvement.  Training needs to be structured around team activities and working on recognised quality improvement projects.  It should also ensure, through the use of budget cost centres that all employees gain an enhanced sense of responsibility and shared ownership for achievement of cost and quality targets related to their work. 

This could be measured through use of regular audits and managerial review of the quality system. The basis for a well functioning TQM System is team training, motivation and dedication through shared exchange and participation, together with regular audits and reviews of the quality management system.

4.3         Quality responsibility and authority

In a functional structure the managing director is ultimately responsible for the overall business activities and success of the organisation.  This defined responsibility for quality is usually delegated to each department’s management and staff.  Each manager must plan and document their quality strategy and objectives, based on guidelines listed in the Corporate Quality Policy Manual. The department manager must ensure that this strategy is known and adhered to by his/her employees. 

In relation to project work where several departments may be involved, the project manager takes on overall quality responsibility with specific assistance from relevant associated functional groups . The project manager is charged with achieving agreement about co-ordinated quality assurance functions, including what measures and monitoring parameters are to be applied.  The project manager may request assistance from an appointed quality assurance representative.

Within the functional structure each department may have a QA-representative reporting to a specific department manager.  If a quality assurance department has been established the quality assurance personnel only need have the responsibility and authority to ensure that the requirements of the relevant Quality Assurance Standards are maintained, which is in line with the Corporate Quality Policy and Manual.

A QA-Representative may have the following responsibilities:

-        Assist the head of the department or project manager in maintaining an effective QA system;<