The Project Solvers' Chat Room

Many of you know that I teach a basic account-ing course for Project Managers. The PM‘s who take this course are interested in the accounting aspects of project management and the company. We as project managers are always concerned with the project schedule and the budget. This is what keeps us ―on point‖ with the project. But what about the costs of assuring that the project delivers a product that meets and exceeds the expectations of the stakeholders? In other words the cost of quality.

Last month in my article I said that at Ford Motors ―Quality is Job One‖. This statement has been around Ford for a long time, but, it wasn‘t until sales started falling and recalls got out of hand that the new and current president of Ford put in place quality standards for Fords projects and products. He came from the air plane manufacturing business and he knew that you must have a quality product or planes will fall out of the air. The cost of quality was put into place at Ford in order to save the business. Without a quality product Ford would continue its slide. It took GM longer to embrace this concept and we all saw the effects it had on GM vs Ford.

Your projects – what is the cost of not doing it right? Did you identify the risks of not doing it correctly or compromising on the project to meet the schedule? Last month I gave you seven quality management concepts (go to http://www.theprojectsolvers.com under Resources to see the Sept. 2010 newsletter). If you look at them it is fairly easy to determine the costs associated with each of them. It is these costs that must become a part of your budget. Only then will your budget be complete. After all, the budget for the project has to include all revenue, expenses, cost savings and now the cost of quality.

I‘ve also included a template on page 4 that I found on Ask Process for calculating the cost of quality in software. Email me if you‘d like it (it‘s in excel) and I‘ll send it to you.

- Al

Please send comments to agubiotti@theprojectsolvers.com

Filed under: PSA News and Updates, Quality Management | Comments Off

Most people associate quality with Manufacturing. This may have been in the past but today it is in everything we do as project managers, no matter what industry we work in. We have the responsibility to deliver a quality product within scope as planned, and in budget. The project manager has the ultimate responsibility for quality management of the project. Quality management has the same or equal priority with cost and schedule. However the direct measurement of quality may be the responsibility of the business or IT lead.

It has been stated by a number of authorities that as much as 20%-30% of all the labor in the project management office could be as-signed to assuring the projects meet the quality standards of the company. The project manager needs to make sure that the team is aware of the quality management concepts of a project:

• A Quality policy is in place throughout all the project
• A Quality change order system is in place at the beginning of the project and adhered to by all members of the team.
• Quality objectives are clearly stated and understood by the team
• A Quality Assurance lead is assigned and measurements are in place
• Quality Control –the PMBOK refers to quality control as the technical aspect of quality management
• Quality Audits ensures that the project is conforming to the project requirements
• Quality Plan is created by the PM and the team. Specific quality actions tied to the WBS needs to be identified.

-Al

Please send comments to agubiotti@theprojectsolvers.com

Filed under: PSA News and Updates, Quality Management | Comments Off