A Collaborative Approach for Managing Project Cost of Poor Quality

Abstract

This paper presents a construct - a collaborative approach for managing project cost of poor quality. Changing project constraints makes it difficult or even impossible to utilize traditional cost of poor quality methodology in managing quality costs in project environments. The construct presented here modifies the root-cause analysis type of approach to manage the cost of poor quality by introducing the use of three prospective values and probabilities of occurrence in project ex-ante evaluations. An integral part of the construct is the way in which monetary values are determined through workshops. The results were obtained in a research project using the constructive research approach. The construct was created at Finnish Post, Hankkija-Maatalous and Nokia Networks and the validity was further tested at Valmet Paper Machines.

Keywords: Cost, Quality, Project, Constructive research approach, Action research

JEL Classification: M40, M46