THE APPLICATION OF TOTAL QUALITY MANAGEMENT: A CASE STUDY OF RAILWAY CONSTRUCTION CORPORATION JSC

46 4.1.1 Total quality management system of the company prior to ISO 9001 standards implementation.. This research work has identified and addressed the important issues related to the i

FACULTY OF BUSINESS ADMINISTRATION

-*** -GRADUATION THESIS

Major: International Business Administration

THE APPLICATION OF TOTAL QUALITY

MANAGEMENT: A CASE STUDY OF RAILWAY

TABLE OF CONTENTS

TABLE OF CONTENTS i

ACKNOWLEDGEMENT iv

ABSTRACT v

LIST OF FIGURES AND TABLE vi

LIST OF ABREVIATION viii

CHAPTER 1: INTRODUCTION 1

1.1 Research purpose 1

1.2 Research objectives and scope 2

1.3 Research questions 2

1.4 Research methodology 4

1.5 Research structure 4

CHAPTER 2: LITERATURE REVIEW OF TOTAL QUALITY MANAGEMENT 6

2.1 Overview about quality management system 6

2.2.1 Definition of total quality management 6

2.2.2 Total quality management evolution 7

2.2.3 EFQM Excellence Model 11

2.2 Quality management system in construction 13

2.2.1 Quality defined in construction 13

2.2.2 ISO 9001:2008 standards 13

2.2.3 The effectiveness of implementing a quality management system 19

2.2.4 Obstacles to implement quality management systems 20

2.3 Critical success factors of TQM implementation in construction firms 22

2.3.1 Leadership 22

2.3.2 Resource management 23

2.3.3 Strategies and plan 24

2.3.4 Process management 24

2.3.5 Customer satisfaction 25

2.3.6 Training and education 26

2.3.7 Continuous improvement 26

2.3.8 Communication 27

CHAPTER 3: RESEARCH METHOD 28

3.1 About Vietnam Railway Construction Corporation JSC 28

3.1.1 Backgrounds of the company 28

3.1.2 The existing application of total quality management in Railway Construction Corporation JSC 32

3.2 Research sources 34

3.2.1 Primary data 34

3.2.2 Secondary data 35

3.2.3 Research sources 36

3.3 Sample selection 36

3.3.1 Population 36

3.3.2 Sample selection 37

3.4 Data collection procedures 38

3.4.1 Pilot study 38

3.4.2 Developing the interviews questions 39

3.4.3 Developing questionnaires 40

CHAPTER 4: RESEARCH RESULTS 46

4.1 Business results before applying total quality management 46

4.1.1 Total quality management system of the company prior to ISO 9001 standards implementation 46

4.1.2 Business results before applying total quality management system 50

4.2 Analysis of benefits and costs of Railway Construction Corporation JSC before applying total quality management 51

4.3 The status of TQM Implementation in Railway Construction Corporation JSC 52

4.3.1 The extent of implementation of Quality management systems 52

4.3.2 The implementation of EFQM Excellence Model’s Enables and Results

Criteria 56

4.4 Analysis of TQM Implementation in Railway Construction Corporation JSC 69

4.4.1 Relationship of TQM practices and business results 69

4.4.2 The effects of TQM practices on business results 71

4.4.3 Barriers faced by the Vietnam Railway Construction Corporation JSC in the implementation of quality improvement initiatives 73

CHAPTER 5: CONCLUSION AND RECOMMENDATION 78

5.1 Conclusion 78

5.2 Recommendation 79

REFERENCES 83

APPENDIX A: QUESTIONNAIRES 86

APPENDIX B: QUESTIONS FOR INTERVIEW SECTION 95

APPENDIX C: 20 ELEMENTS OF ISO 9001 96

ACKNOWLEDGEMENT

I would like to express my deep gratefulness for the patience, carefulness, knowledgeable guidance and constant encouragement of my supervisor, MSc Nguyen Khanh Hung His valuable advices are very essential to improve my graduation thesis quality

Besides, I am thankful to Project Department and all employees of Railway Construction Corporation JSC and CAS Global because of providing me the required materials and data to complete this research project

The research is involved in various discussions and interviews in order to contribute to its structure and quality Therefore, the assistance of MSc Nguyen Khanh Hung, Project Department of Railway Construction Corporation JSC and CAS Global is precious and is acknowledged for their time and patience

Finally, I would like to give my special thanks to my family and friends for their sympathy when I conduct this study

ABSTRACT

The development of modern society leads to diversified demands of customers

to the products or services which they intend to pay for These demands are including the high quality and also the values which customers can get from the products or services to serve their lives Especially in construction industry, in order

to meet the customer demands, the construction firms need to have a quality management system which controls all activities effectively and efficiently in both internal and external business Therefore, the framework for management and inovations of processes in construction industry has attracted the most interest This research work has identified and addressed the important issues related to the implementation of total quality management in Railway Construction Corporation JSC The main aims of this study are not only to improve the understanding of total quality management but also to present and evaluate the current situation of implementing the quality management system in the company Furthermore, one of the main aims of this study is to identify and highlight the current barriers faced by Railway Construction Corporation in the implementation

of total quality management philosophy All these aims are conducted based on data which are collected by qualitative method and compared with the standard criteria

of current quality management system and EFQM Excellence Model

By then, the findings of this thesis bring the status, the advantages and barriers

in the implementation of quality management system in Railway Construction Corporation The conclusions are drawn to sum up the results which are collected from the study Then, based on the results in the conclusion section, recommendations which consist of the individual ideas of the author are made up

It is hopeful that theses recommendations can help the company increase productivity, improve the business performance and develop the quality of the products and services in Railway Construction Corporation JSC

LIST OF FIGURES AND TABLE

Figure 2.1: EFQM Excellence model 11

Figure 2.2: RADAR logic 11

Figure 2.3: ISO 9001 process flow 16

Figure 2.4: Critical success factors of TQM - Resource management 21

Figure 2.5: Critical success factors of TQM - Process management 22

Figure 3.1: Personel in Management Board of RCC 27

Figure 3.2: Personnel in General Director of RCC 27

Figure 3.3: Departments of head office of RCC 28

Figure 3.4: Departments of head office of RCC 28

Figure 3.5: Primary data 31

Figure 3.6: Secondary data 32

Figure 3.7: Data collection procedure 34

Figure 4.1: Process of implementing the quality management system 43

Figure 4.2: Results of business performance with ISO 9001 principles 47

Figure 4.3: Results of business performance with ISO 9001 elements 50

Figure 4.4: Results of EFQM's enables - Leadership 51

Figure 4.5: Results of EFQM's enables - Policy and strategy 53

Figure 4.6: Results of EFQM's enables - People management 54

Figure 4.7: Results of EFQM's enables - Partnership and resources 55

Figure 4.8: Results of EFQM's enables - Process 57

Figure 4.9: : Results of EFQM's results - Customer results 58

Figure 4.10: Results of EFQM's results - People results 59

Figure 4.11: Results of EFQM's results - Society results 60

Figure 4.12: Results of EFQM's results - Business results 61

Figure 4.13: Effects of TQM practices on business results 65

Figure 4.14: Barriers in the TQM implementation 68

Table 2.1: Total quality management evolution 9

Table 2.2: ISO 9001 elements 14

Table 3.1: Sample selection for interview section 33

Table 3.2: Sample selection for questionnaires 33

Table 4.1: Results of evaluation performance with ISO 9001 principles 47

Table 4.2: Results of business performance with ISO 9001 elements 49

Table 4.3: Results of EFQM's enables - Leadership 51

Table 4.4: Results of EFQM's enables - Policy and strategy 52

Table 4.5: Results of EFQM's enables - People management 53

Table 4.6: Results of EFQM's enables - Partnership and resources 55

Table 4.7: Results of EFQM's enables - Process 56

Table 4.8: Results of EFQM's results - Customer results 57

Table 4.9: Results of EFQM's results - People results 58

Table 4.10: Results of EFQM's results - Society results 59

Table 4.11: Results of EFQM's results - Business results 61

Table 4.12: Effects of TQM practices on business results 65

Table 4.13: Barriers in the TQM implementation 67

LIST OF ABREVIATION

RCC Railway Construction Corporation Joint Stock Company TQM Total quality management

QSM Quality system management

EFQM European Foundation for Quality Management

ISO The International Organization for Standardization

CHAPTER 1: INTRODUCTION

1.1 Research purpose

Nowadays, the integration into the world economics has made Vietnam, especially companies which are located both inside and outside our territory, to face with lots of highly competitive problems They always have to hold the initiative to seek for the solutions in order to not only enhance their competitive effectiveness and efficiency but also meet the higher and higher demands of customers As the result, the problem raised here is what we have to do in order to achieve these objectives

Over a period of time, there are a lot of management writers who have strived for better methods of achieving time, cost and quality objectives They all support for an argument that quality management practices improve organizational performance in any firm placing at any part all over the world

However, although ISO 9001 quality management system is applied in Vietnam from 1987 and it has brought some positive changes such as: improving the business performance , increasing the customer’s trust in services and products, many obstacles still exist and need to be overcome Most of companies in Vietnam can recognize the importance of the implementation of total quality management system in Vietnam and its results as well However, it is not really popular to everyone and there are still few companies who only try their best to take the ISO certificate but not deeply understand about this management system Hence, it leads

to bad business consequences

The problem mentioned above also exists in Railway Construction Corporation They have developed the ISO 9000 total quality management system for nearly 20 years, but they have yet implemented this management system excellently without any obstacles and difficulties

Therefore, this research provides the overview about the total quality management system by the case study of Railway Construction Corporation JSC (RCC) Moreover, this research also concentrates on the role of managers within the

organization because in the modern working environment, they are not only responsible for maintaining the order and daily routine but also drive the development and comprehensive changes and continual improvement to meet the needs of society and customer requirements

1.2 Research objectives and scope

The main aim of this dissertation is to develop a framework for the implementation of TQM in Railway Construction Corporation JSC In order to achieve the aim, the following objectives must be attained:

- Understand the main principles and elements of total quality management

- Achieve the main requirement of total quality management implementation in Railway Construction Corporation

- Understand the current status of Railway Construction Corporation

- Identify the significant problems which Railway Construction Corporation has

to face up with in the process of ISO 9001 quality management system and provide refinement to them

- Identify the effectiveness of total quality management on business performance

By providing a framework for the effective implementation and continuous improvement of QSM’s by the RCC, it is expected that there would be improvements in customer satisfaction, reflecting the better management and control being applied to construction projects Hereby, the organization could be expected to begin to move towards operating total quality management practices, which should help to their delivery capability of construction projects, and thereby contribute to giving the organization a greater competitive advantage in local, national and global markets

1.3 Research questions

This research will address three main questions:

(1) What are total quality management and particularly ISO 9001 standards?

Prior to examining the total quality management in Railway Construction Corporation, it should be given the background of total quality management in

general This is the prerequisite to help the researcher have many opportunities to approach the total quality management system in the organization In order to find out the answer for this question, the below questions must be addressed:

- What is total quality management?

- What are ISO 9001 standards?

- What are the elements and principles of ISO 9001?

(2) What is the current status of the quality management systems (QMSs) being implemented by the Railway Construction Corporation?

Essentially, the QMS implementation in an organization involves examining how effective and successful the implementation of QMS requirements, such as the standards of ISO 9001:2008, is taking place The complex nature of construction practice often causes challenges in the new introduction of QSM at the management and project levels These challenges need to be identified in order to take measured actions to overcome the barriers Furthermore, the assessment of a company’s performance during implementation of a QSM is also important in order to evaluate the impact of the quality system on effectiveness of the system Therefore, the following questions should be address:

- What are the levels of implementation of the existing QMSs?

- What are obstacles in process of implementation of QMSs?

- What are the achievements of the company due to implementing the QMSs?

(3) How can effective QMSs be properly established, and be effectively implemented and continuously improved by the company?

With a lot of criteria in ISO 9001:2008 standards, in order to build a quality management system which is not only smoothly implemented by itself and also suitable for the current management culture of the company, it is not easy Therefore, to organize useful supporting information for the answer for this question, there are some following questions which must be declared:

- Which criteria should be proposed to decide a construction project’s success according to ISO 9001:2008?

- By which methods the company can maintain the implementation of ISO 9001:2008 effectively?

1.4 Research methodology

Based on research questions and objectives, this dissertation will approach the objectives by qualitative approach to collect the relevant information associated with the current circumstance of QMS practices within RCC Prior to undertaking the questionnaire survey, a pilot study was carried out Spontaneously, individual interview is used to obtain the evaluation and validation of the proposed QSM improvement implementation framework done by RCC After each research, it was followed by a detailed analysis and interpretation of the data collected

Besides, the research questions and objectives established the boundaries of the research because it was not aimed to develop a comprehensive QMS framework model but find out the improved factors and attitudes present in ISO 9001:2008 certificated in RCC that have an impact on the quality performance of their project management procedures and the application of process controls EFQM Excellence model will be used to analyze the effectiveness of the implementation of QMS applying the ISO 9001:2008 standards

Moreover, the sample is limited to a group of respondents in two companies Apart from Railway Construction Corporation, some experts from CAS Global whose responsibility is accessing the conformance of Railway Construction Corporation JSC with the ISO 9001 standards also take this survey

purpose, objectives and questions mentioned at the previous parts And this chapter will end up with the structure of the thesis

Chapter 2 provides a summary of the current state of knowledge by reviewing relevant literature in the area of total quality management This chapter will provide the background of TQM in general and in construction Especially, the fundamental knowledge of ISO 9001:2008 standards are mentioned through some perspectives

as what ISO 9001:2008 is, what principles ISO work out with and steps in application 9001:2008 in TQM as well Afterwards, we would like take into consideration about the general effectiveness and obstacles to implement quality management system Moreover, this chapter also provides the general criteria for assessing quality management system and answer for the question how the implementation could be recognized to be successful

Chapter 3 provides the background and some outstanding information about the Railway Construction Corporation By then, a description of the design of the research is built to answer the research questions The chapter outlines in detail, the research design and data collection methods – namely questionnaire design, preliminary studies, questionnaire survey and interview of individuals

Chapter 4 brings the interpretation of the collected data which is taken from the previous chapter is deeply analyzed We will run step by step from the period before the company applies the total quality management system using ISO 9001:2008 standards, the benefits RCC has earned and also costs they have paid for

it Afterwards, from the ultimate research findings of the previous chapter, we would like to interpret the current implementation of TQM in RCC to understand to what extent they apply the TQM, benefits they earned from the new TQS and barriers they have to face with during the process of the TQS

Chapter 5 is responsible for concluding the things which are taken into consideration in the previous chapters Moreover, this chapter also gives some recommendation for RCC in process of implementing the TQM

CHAPTER 2: LITERATURE REVIEW OF TOTAL

QUALITY MANAGEMENT

2.1 Overview about quality management system

2.2.1 Definition of total quality management

Since 1980s, total quality management (TQM) has become popular management approach with the purpose of developing and expanding the quality of products by adding more perspectives related to quality Moreover, it also became the powerful method of the organizational competitive advantage at that time There are different definitions of that phrase from different researchers

According to British Standard (BSI, 1992), TQM is defined as “a management

philosophy and company practices that aim to harness human and material resources of an organization in the most effective way to achieve the objectives of the organization” Deming (1986) also believes that total quality management can

be defined as “organization activities involving everyone in a company – managers

and workers – in a totally systemic and integrated effort toward improving performance at every level”

Besides, Asian Institute of Technology (AIT) proposes that TQM is “a

philosophy that strengthens the culture to foster continuous organizational improvement through systematic, integrated, consistent effort involving everyone and everything, focusing primarily on total satisfaction of internal and external customers, where employees works together in teams with process ownership, guided by a committed top management, which takes a proactive participation”

(Nukulchai, 2003) Relatively, Sashkin and Kaiser (1991) propose that total quality

management is based on “the accomplishment of customer satisfaction, through

integrating management and employee commitment, training, continuous improvement and great supplier relations”

By different points of view, TQM is defined in different ways While British standard proposes that TQM is considered as the management philosophy aimed to

achieve the organizational objectives, it is defined as the philosophy aiming at clients’ satisfaction by Asian Institute of Technology

Besides, US Department of Defence states that “TQM utilizes both

quantitative (technical) methods and human resource (behavioral) practice to improve material and services inputs, intra-and inter organizational processes, and

to sharpen the focus on meeting customers’ needs” (Singh and Smith, 2004)

Hereby, the researcher considers TQM as the leadership and excellence in doing things Its responsibility is responding to customers’ demands by the perfection of control and accuracy in daily producing activities

Out of the above opinions, these authors, by different ways to quote what total quality management is, have the same outlook about this definition and claim that total quality management plays an important part in the organizational management

to connect all organizational resources to focus on meeting the customer demands to achieve the organizational goals by providing the employees with the required training towards being self-motivated to come up with the potential ideas and methods to contribute to their jobs and create higher quality service for clients 2.2.2 Total quality management evolution

Nowadays, total quality management is a popular term all over the world There are different ideas about its starting point While Martinez, et al (1998) mentioned that the perception of total quality management was developed through the huge evolution of quality took place in the United States, Zairi (2007) proposes that it is the first conducted in the US military Despite different points of view, they all recognize that TQM has strongly influenced from manufacturing to construction and service industries According to Feighenbaum (1993), there are 6 phases in the evolution of quality:

 Operator quality control

This term existed before 19th century During that period, each worker or group of workers was responsible for the manufacture of products, so in this way,

the quality of a product could be better controlled because the workers focused on their work only

 Foreman quality control

This term developed in the period of 18 years from 1900 by mass production Mass production is characterized by the division of labor, specialization of skills and standardization The classical management approach known as the scientific management method was initiated by Fredrick Taylor and became very popular The foreman grouped the workers performing similar tasks under his/her supervision and he/she took full responsibility for the quality of all works done by the group

 Inspection quality control

The phase of inspection or testing quality control was developed during the World War I By World War II, the manufacturing system had become more complex and large numbers of workers were reporting to each foreman who could quite easily have lost control of the work As a result, it was necessary to engage full- time quality inspectors Quality inspection was adopted to separate non-conforming parts, and so the term "quality" meant inspection, and usually quality inspected during the production process itself

 Statistical Quality Control

During the period between 1937 and 1960, statistical quality control reached its peak There became an increased need for quality inspection in the late mass production era because the volume and variety of components increased dramatically Owing to the huge costs involved in quality inspection, Taylor's scientific management approach became inappropriate Statistical quality control concentrated on statistical tools and made the quality inspection department more efficient contributing most in sampling inspection rather than complete inspection Its slow growth was not due to its development of technical and statistical ideas material control, design control and business ability

 Total Quality Control (TQC)

The TQC phase started in the 1960 Feigenbaum was the first expert who used the TQC term He considered that "control must start with the design of the product and end when the product has been placed in the hands of customers who remain satisfied" There are 19 many elements such as supplier development relationships, people empowerment and teamwork that are considered as a part of the TQM concept, but not included in TQC

 Total Quality Management (TQM)

TQM evolved in the 1980s and began to have a major impact on management and engineering approaches to long-term success through customer satisfaction It is based on the participation of all members of an organization in improving processes, products, service and the culture in which they work Garvin (1984) outlined the evolution of TQM as the outcome of four major eras of development

He illustrates the evolutionary process where quality has moved from an initial stage of inspecting, sorting and correcting standards to an era of developing quality manuals and controlling process performance The third stage regards comprehensive manuals including areas of an organization other than production, and the use of standard areas of an organization other than production, and the use

of standard techniques such as statistical process control (SPC)

Martinez Lorente et al (1998) summarized the chronology of TQM development as in the following table:

Table 2.1: Total quality management evolution

Year Events

1924 Shewhart developed statistical process control (SPC)

1940s US army pushed the use of sampling methods during World War II

1950 Many attempts at work improvement undertaken (e.g job enrichment,

work redesign, participative management, quality of work life, worker involvement)

1960 Liberalization of economy in Japan with pressure to improve quality to

compete with foreign companies

1961 First edition of Feigenbaum's Total Quality Control published

1972 QFD was developed at Mitsubishi's Kobe shipyard

1974 Quality circles began to be widely introduced in the USA; the first

quality circle program was launched in Lockheed in 1974 and in the UK Rolls-Royce introduced the concept in 1979

1979 First edition of Crosby's Quality is free published Xerox Corp started

to apply benchmarking concept to processes Publication of the BS5750 quality management series

1983 "Quality on the line", published by Garvin in Harvard Business Review,

analyzed the differences between Japanese and US companies, showing some of the reasons for the better performance of the Japanese A paper about Taguchi's design of experiments was published in Harvard Business Review

1985 Navel System Command named its Japanese- style management

approach "total quality management"

1987 First edition of ISO 9000 quality management system series Publication

of the Malcolm Baldrige National Quality Award

Source: Martinez Lorente et al (1998)

2.2.3 EFQM Excellence Model

2.2.3.1 The need for a model

The world is changing faster and faster The interdependences between organizations, communities, countries and economies are increasing in complexity Organizations who would like to exist in this environment have to continuously improve and innovate themselves Whatever they do should be recorded and analyzed in suitable ways in order to gain experiences and then continue to develop properly EFQM Excellence model is one of the useful tools which are responsible for doing it This model allows people to understand the cause and effect relationship between what the organization does and the results it achieves

2.2.3.2 Fundamental concepts of excellence

According to EFQM Excellence model, in order to sustain excellence, organizations should build a foundation for this and there are 8 fundamental concepts:

 Adding value for customers

 Creating a sustainable future

 Developing organizational capability

 Harnessing creativity and innovation

 Leading with vision, inspiration and integrity

 Managing with agility

 Succeeding through the talent of people

 Sustaining outstanding results

2.2.3.3 Model criteria

To sustain success, organizations need strong leadership and clear strategic direction They should develop and improve their people, strategy, partnership and process to provide the products and services which meet the customers’ demands If these approaches work out effectively, they will achieve the results as expected

Figure 2.1: EFQM Excellence model

Source: http://www.efqm.org/ 2.2.3.4 RADAR

The RADAR logic is a dynamic assessment framework and powerful management tool which brings a structured approach to questioning the performance of an organization

Figure 2.2: RADAR logic

Source: http://www.efqm.org/

It is supposed that organization should

- Determine the results it is aiming to achieve as part of its strategy

- Plan and develop an integrated set of sound approaches to deliver the required

results both now and in the future

- Deploy the approaches in a systematic way to ensure implementation

- Assess and refine the deployed approaches based on monitoring and analysis of

the results achieved and on-going learning activities

2.2 Quality management system in construction

2.2.1 Quality defined in construction

“Quality” is not a new or recent definition and there is no exact definition of it

On the way of its development, there are lots of pioneers who have implemented the research on it such as Deming, Crosby, Feigenbaum, Taguchi and others According

to ISO DIS 9000:2000, quality is defined as “the degree to which a set of inherent

characteristics fulfill requirements” (Tricker 2008, 4) This means that in the

construction industry, quality will be achieved whenever the needs of the entities and individuals involved in projects or production and provision of services, such as consultants, constructors, project customers and other related stakeholders are fulfilled

ISO 9001 is the most worldwide recognized standard This is a basic quality management system that can be used in industries of any size, anywhere in the world Registration to ISO 9001 (or other quality management standards) provides objective proof that a business has implemented an effective quality management system, and that is satisfies all the requirements of the applicable standard An

external expert caller a register of CB (Certification Body) conducts an on-site audit

to determine whether or not a company complies with the standard If they are found to be in conformance, they will be issued a certificate showing their address, scope of operations and the seals of the accreditation bodies that give the registrar its legitimacy (Acsregistras.com)

In addition, the ISO 9001 is followed by ISO 9000 The first of ISO 9000 developed by the International Organization for Standardization - Technical Committees in 1987, was updated in 1994 and 2000 The latest version of the ISO

9001 standards was released in November 2008 The 2008 version did not modify any new perspectives compared to the 2000 version, therefore does not require the re-writing of quality documents to suit the most recent version

2.2.2.2 ISO 9001’s contents

ISO 9001 standard is covered by 20 elements which contain requirements that should be implemented properly to gain the benefit from quality management system In the area of construction industry, these 20 elements have been adapted for construction procedures to cover a wide of scope of quality related activities of construction-related firms (Chini and Valdez 2003) They are including:

- Control of customer’s supplied product

- Product identification and traceability

- Process control

- Inspection and testing

- Control of inspection, measuring and test equipment

- Inspection and test status

- Control of non-conforming products

- Corrective and preventive action

- Handling, storage, packaging, preservation and delivery

- Control of quality records

- Internal quality audits

- Training

- Servicing

- Statistical techniques

All these elements are described in detail in Appendix C

In order to use these elements of ISO 9001 and then improve the organizational performance, mangers should deeply understand and use the 8 principles on which the quality management system standards of ISO 9001 series are based They are derived from the collective experience and knowledge of the international experts who take part in ISO Technical Committee ISO/TC 176, Quality management and quality assurance, which is responsible for developing and maintaining the ISO 9001 standards These 8 principles are including:

- Factual approach to decision making

- Mutually beneficial supplier relationships

Content of each principle is presented in the following table:

Table 2.2: ISO 9001 elements

No Principles Contents of principles

1 Customer focus Organizations depend on their customers and therefore

should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations

2 Leadership Leaders establish unity of purpose and direction of the

organization They should create and maintain the internal environment in which people can become fully involved

in achieving the organization’s objectives

3 Involvement of

people

People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization’s benefit

4 Process approach A desired result is achieved more efficiently when

activities and related resources are managed as a process

5 System approach to

management

Identifying, understanding and managing interrelated processes as a system contributes to the organization’s effectiveness and efficiency in achieving its objectives

6 Continual

improvement

Continual improvement of the organization’s overall performance should be a permanent objective of the organization

Source: ISO’s Website – iso.org, 2012 2.2.2.3 ISO 9001 process flow

Each company has its own individual processes and methods, which must be reflected in the Control Documents and the Manuals, so each system is unique to

the customer and has to be individually created to reflect how you work and comply with the ISO 9001 Standards The overall ÍSO 9001 process flow is illustrated in the figure 2.3

A guide to just a few of the basic steps involved:

Document Control: All control documents and folders need to be identified

and issue status maintained The organization will need a Quality Manual, Control Documents, a Document Register and a Quality Policy The procedures Manual will must relate to what they do and how they do it The Quality policy states the scope

of accreditation and what your objectives and targets are

Ordering Processes: There needs to be a distinct ordering process and records

of products, programs or services ordered

Training: There must be personnel training records maintained on their staff

and a skill matrix created There needs to be a process for training planning either in-house or off-site

Company Vehicles: Any company vehicles need to have inspection records

kept and regular maintenance schedules

Customer Focus: There needs to be an agreed way of dealing with customers

and verifying their requirements You need to be able to record customer satisfaction feedback and how you deal with complaints etc

Management Commitment: There needs to be adequate resources to run the

business/services being offered and the desire and leadership to drive the improvements from the top to carry out regular Management Reviews of the companies and system performance

Process Management: There needs to be a defined process for dealing with

what they do and how they do it

Records: You need to define what records they keep and how they protect

them and how long they need to be retain for

Source: http://www.acsregistrars.com/

Continuous improvement feedback loop

Analysis and monitoring

Ordering Inspection Preservation Traceability

Define requirements

Confirm order

Issue wok instructions

Organize labor, materials

Verify and Process

Stock and materials

Records and documentation

Sustainability Maintenance Calibration Records

Records Preservation of data Document control

Plant and equipment

Customer

requirement

Customer satisfaction Continuous improvements

Human resources

Labor force Training Health, Safety Communication

Environmental resources

Location Building sustainability Working conditions Safety and security

Customer feedback Measurements Preventative actions Audits and reviews

Figure 2.3: ISO 9001 process flow

- Data:

Under the data protection act, it is ensured that private information is protected, stored and disposed of in a secure manner

- Analysis and Monitoring:

The organization will need to install a method of analyzing their results to assess whether they are improving or not They will need to carry out internal audits

to ensure the system is being maintained and identify any opportunities for improvement

- Non-conformances:

These can be within the company or with suppliers and clients, these needs to

be recorded and analyzed, so action can be taken to resolve the situation, a corrective and preventive action plan needs to be

- Corrective & Preventive actions:

The organization needs to log complaints or failures in the processes to identify the root cause and take action to remedy the situation You need to be seen

to be taking and recording corrective actions to stop the problem being repeated in the future

2.2.3 The effectiveness of implementing a quality management system

Over the world, there are a lot of organizations who have applied ISO 9001 into their total quality management system and achieved good results in different areas as detailed below

In the area of construction projects, as researches of Low and Wee (2001), Ofori, Gang and Briffett (2002), Farooqui and Ahmed (2009), ISO 9001 has prevented work and projects from repetition and time delay It is very efficient in using materials; therefore organizations can reduce their project costs And by then, ISO 9001 is considered as an effective and suitable working basis at both design and construction stage of a project

In the area of project management, it can control key processes and project management in an effective and consistent way, even become effective and efficient

in using scare resources (Farooqui and Ahmed in 2009, Watson and Howard in 2011)

Besides, it is believed by Low and Wee (2001), Farooqui and Ahmed (2009), Watson and Howarth (2011) that ISO 9001 can minimize the failure to meet specifications, promote control suppliers and the development of effective supply chain management

Moreover, ISO 9001 also plays an important role in improve organization performance By studies of Ofori, Gang and Briffett (2002), Turk (2006), Farooqui and Ahmed (2009), Watson and Howard (2011), it provides a means of attaining a top-quality performance in all areas and activities, can reduce inspection costs and

by then, enhance corporate profitability as well as a tool to help contractors establishing and measuring their performance indicators

Finally, ISO 9001 have many benefits in organizational management system, such as: improving organizational communication system and working environment, emphasizing more on leadership, team spirit and motivation, adequacy of training employees, planning and reviewing process to make sure that the system is still proceeding properly; identifying new opportunities;…(Ofori, Gang and Briffett (2002), Farooqui and Ahmed (2009), Leonard (2010), Watson and Howard (2011))

2.2.4 Obstacles to implement quality management systems

Although ISO 9001 implementation can take advantages as mentioned in the previous parts, a number of researchers still believes that IS0 9001 is not an appropriate standard for use in construction firms Construction projects, practices, contracts and specifications are too unique and specific to be assessed by general standards such as ISO 9001 (Landin, 2000) Moreover, it is noted by Turk (2006) that the development of an ISO 9001 certified QMS requires an enormous amount

of written documentation and it takes such a long time to integrate into company’s management system and it can result in substantial increase in operating costs There are lots of questions which are raised for implementation of ISO 9001 in management system in the construction industry; and Chini and Valdez (2003), McCabe and Boyd (2004), Ahmed at al (2005), McCornac (2006), ISO 9000 council (2009) and Watson and Howarth (2011), by their studies, have proposed the below problems which construction companies have to face when they implement ISO 9001 in their projects

- Management Attitude and Purpose

According to ISO 9000 council (2009), if construction companies consider obtaining ISO 9001 certification as a method to attract the customers’ attention about their projects, it is quite hard to make sure that implementing an ISO 9001 quality management system can improve the organization’s effectiveness

- Implementation by consultants

In the process of implementing quality management system, organizations usually engage consultants in preparing ISO 9001 written documents The problem here is that quality management consultants sometimes have deep knowledge in business concepts and culture of the company (ISO 9000 council, 2009)

- ISO 9001 management representative without power

According to ISO 9000 council, management has made a bid mistake when ISO 9001 is consider only as a task of documentation, to be filled in by companies but not a tool to improve quality management system It leads to the limitations of the organizational representatives who are responsible for preparing the quality documentation and setting up a workable QMS while they are lack of the power to make real decisions or effect changes In addition, they do not have adequate authority to fully connect people during the project implementation process (McCabe 1998; Watson and Howarth 2011)

- Insufficient resources

One of the crucial factors in the success of ISO 9001 implementation is sufficient financial resources for the establishment and implementation of an effective QMS Despite the popularity of ISO 9001 standards, they are built into a tightly structured document, so organizations have to paid for training programs which provides employees basic knowledge about ISO 9001 to properly implement steps in QMS, prepare written documentation and analyze them

- Lack of improvement

As mentioned above, business environment is constantly changing all the time This makes organization to improve and develop more and more to exist Hence, the ISO standards must be adapted to improve business competitiveness and technologies (ISO 9000 council, 2009) However, in fact, ISO 9001 does not yet prove their strength in improving the business performance after the organizations register on it (McCornac, 2006)

- Making it complicated

ISO 9001 is admitted to be too complicated and general for all organizations to understand deeply The reason why it is so general is that it is designed to become general standards used in every industry However, the problem is really raised when the management and staff cannot thoroughly understand how the system is working and which benefits ISO 9001 can bring to their organization (ISO 9000 Council, 2009)

2.3 Critical success factors of TQM implementation in construction firms

There are 8 factors which directly affect to the success of TQM implementation in construction firms They are interpreted as following:

2.3.1 Leadership

Leadership is considered as the most influential TQM element because it affects all of the other elements in the organization Top managers have to own good visibility to approach the success of a total quality management system

According to Zhang (2001), Antony et al (2002), Jung and Wang (2006); Sarros et

al (2006), the leadership success factors include:

- Top management commitment; middle management and employee’s commitment

- Ability of top management to identify the responsibilities for quality performance

- Ability to distribute the responsibilities for quality on the department heads

- Attached to quality by the top management in relation to cost and schedule objectives

- Involvement with customers and suppliers

- Support of total quality in organization culture

- Involvement in total quality objective task definition, budgeting, and measurement

- Develop a long-term vision

- Strong character of leaders such as humility, courage, integrity, compassion, humor, passion, and wisdom

2.3.2 Resource management

This is also an important factor to the success of total quality management system because it is designed to manage the inputs for projects and all activities from the beginning to the end of a project This factor consists of 5 sub-factors which concentrate on implementing a clear methodology to plan, develop, enhance and review the resources needed to succeed

Figure 2.4: Critical success factors of TQM - Resource management

Source: Bryde and Robinson, 2007 and Abu-Hamatteh et al, 2003

Resource managemnt

Human

resources

Information resources

Financial resources

Material resources

Technological resources

2.3.3 Strategies and plan

Quality strategies and plans are activities which establish the objectives and activities to implement TQM They must be feasible and practical in doing and can prevent the major problems which may be raised in the process of TQM implementation

2.3.4 Process management

This factor focuses on the extent in which the company commits to set and implement a comprehensive methodology to plan, execute and develop all activities

within the company According to Abu-Hamatteh (2003), there are 3 sub factors which are included in process management

Figure 2.5: Critical success factors of TQM - Process management

Source: Abu-Hamatteh (2003)

 Quality process system

- Achieve project’s mission

- Conformance to codes and standards, owner’s requirements, design process, safety process and documentation

- Time focus

 Customer relation management

- Methodology for collection and analyzing information

- System to specify needs, suggestions and complaints

 Coordination and structure

- Methodology for setting and improving the organization structure

- Mechanism of coordination between different project parties and levels

- Methodology for authority delegation

2.3.5 Customer satisfaction

In fact, there are difficulties in defining what customer’s requirements exactly are in the construction industry They may not the buyer which would like to own products or services but could be the owner of the project, the contractors and partners, vendors and suppliers, users and society (Taylorand Wright, 2003) However, according to Karna (2004) and Bryde and Robinson (2007), there are some factors which achieve the customer satisfaction in constructions included as below:

Process management

Quality process system

Customer relation management

Coordination and structure

- The contractor’s abilities to cooperate and the skills of the contractor’s workers and supervisors

- Measure overall customer satisfaction

- Response time for customer requests

- Achieve the plane

- Continuity and future work with same customer

2.3.6 Training and education

Many researchers propose that this factor is vital to TQM success According

to Antony et al (2002), there are some elements of training and education which would result in the success of TQM implementation as follows:

- Develop team work between employees

- Training given to managers, supervisors and employees related to quality

- Employees receive training in specific skills (technical and vocational)

- Availability of resources for employee training in the company

- Training in interactive skills such as communication skills, meeting skills, and leadership skills

- Training in problem identification and solving skills, quality improvement skills

2.3.7 Continuous improvement

This factor is adopting TQM to improve their performance Continuous improvement would perform in plan, design, and execution and create a teamwork spirit As the results from the studies of Antony at al (2002) and Pheng and Kewei (1996), the key to achieve the continuous improvement in the construction process are followed by:

- Working smoothly in teams

- Gradual future change

- Regular evaluation for the operating system

- The quality of data used to evaluate supervisor and managerial performance

- Good communications between different departments

- Quality techniques/tools to solve problems

- Effective top-down and bottom-up communication

- Formal feedback

- Feedback on quality issues

CHAPTER 3: RESEARCH METHOD

3.1 About Vietnam Railway Construction Corporation JSC

3.1.1 Backgrounds of the company

3.1.1.1 Important points of time in foundation and development

Railway Construction Corporation Joint Stock Company was established on November 5th, 1973 and named United Railway Construction Enterprise Its headquarter was located in Ngoc Khanh ward – Ba Dinh district – Ha Noi City Up

to November 1975, the Company moved to 131 Thach Han road – Thuan Hoa ward – Hue City – Thua Thien Hue province to realize the task to restore the North – South United Railway;

In July 2003, due to the task requirement, the business moved to No 9 Lang

Ha street – Thanh Cong ward – Ba Dinh district – Ha Noi city and its name was changed to be Railway Construction Company Up to May 2005, to realize the guidelines of the Party and State on renovating state owned enterprises, improving the effect of production and business and competition power of the business, the Company was transformed into the Joint Stock Company and named Railway Construction Joint Stock Company

In April 2011, our Company's name had changed to Railway Construction Corporation Joint Stock Company

At present, the company has 11 branches and 03 representative offices, having the headquarters located in 07 cities and provinces nationwide, throughout railway lines of the Vietnamese Railway and 1,400 total personel, establishment force of personel for each branch (member enterprise) has from 130 – 170 people

The Party Committee of the Company is the upper-grassroots Party Committee; party committees of branches are grassroots; the Trade Union is the upper-grassroots level; trade union cells of branches are grassroots; Communist Youth Unions of branches are grassroots

- Connection 2 essential sections of railways from km344+750 to km354+950 according to the urgent demand of the government

- Building Van Hoa Bridge over Gianh River, Quang Binh Province This bridge are 3,955m, connected from 12A Highway at the point km17+298 to Quang Phuc Gianh River Concrete Production Company, Van Hoa district, QuangBinh province with the total investment at 431, 464 million VND

- Based on their good result in the area of construction, the company has awarded a lot of certificates from the government

3.1.1.2 Mission and vision

 Mission

- Implement the construction in railway and road

- Consulting in investment, supervision and design in traffic projects

- Investing and trading on real estate

- Producing materials for construction

- Making business on restaurants, hotels, international trades,

 Vision

- Finish the development strategies on railways in Vietnam until 2020

- Become the leading company in the railways construction

3.1.1.3 Business activities in 2010-2014

In this period, by the continuous attempt and deep experience in the area of construction, the company has finished many project with high effectiveness and efficiency In detail, they are the following projects:

- Building Cai Dau Bridge on the South to Hau River, Bac Phuoc Bridge in Quang Tri province; a half of Cua Bridge, Quang Tri Province

- Building over bridge no.1, 2, 3, 4 over the Sai Gon- Trung Luong highway Besides, they are on the way to implement some following projects:

- Connection 2 essential sections of railways from km344+750 to km354+950

according to the urgent demand of the government

- Building Van Hoa Bridge over Gianh River, Quang Binh Province This bridge are 3,955m, connected from 12A Highway at the point km17+298 to Quang Phuc Gianh River Concrete Production Company, Van Hoa district, Quang Binh province with the total investment at 431,464 million VND

- Based on their good result in the area of construction, the company has awarded

a lot of certificates from the government

3.1.1.4 Structure of human resource

Organization structure of Railway Construction Corporation Joint stock Company includes: Management board, Control Unit, Director Board, Departments

of Head Office, Subsidiary companies

The detail:

 Management board: The management board has five members as follows

Figure 3.1: Personnel in Management Board of RCC

Source: Human Resource Department in 2014

 Control Unit: The control unit has three members as follows:

Chairman:

Mr Nguyen Thanh Huyen

Mr Pham Xuan Hao

Figure 3.2: Personnel in Control Unit of RCC:

Source: Human Resource Department in 2014