Analysis of the causes cost of poor quality in the South African Construction small and medium enterprises

Abstract : With the current ever-growing competition within the worldwide market, business organisations are aiming to design and generate goods or service of high quality in order to have competitive market advantage. Over the last decades, many business organisations begun to be concerned with the issue related to enhancing quality and measuring qualityrelated problems. Nowadays, firms especially small to medium enterprises have developed the fear that generating product of high quality or offering service of high-quality mean that high cost will be involved. This is not true, since poor quality products or service equals high costs. Hence, the concept of Cost of Poor Quality has become a buzzword among industrial practitioners as well as scholars, during the past decades. To this end, this study aimed at analysing the causes behind the Cost of Poor Quality within the small to medium enterprises, using the South African Construction sector as case study. To achieve this goal, the present study adopted a two-fold approach, first this study conducted a critical appraisal of a set of previous studies with the aim of identifying existing gaps in the current literature. Secondly, the study refined the existing gaps by means of a quantitative research methodology. Based on the two-fold approach, the results related to the critical analysis of existing studies demonstrated that many studies have used large companies especially multi-national manufacturing companies to measure and determine the reason behind the Cost of Poor Quality. Whilst, very few attempted to measure the cost of poor quality in the small to medium manufacturing enterprises. Hence, this study is among the first example in the context South African small to medium construction enterprises. Secondly, the results obtained through a quantitative research survey demonstrated that the factors associated with poor performance of South African construction sector were cost, time, quality, productivity, client satisfaction, regulatory, human resource, health and safety, Innovation and learning and environmental factors. Additionally, the results revealed that the implementation of the concept of cost of quality was not easy. Furthermore, respondents argued that they did not have enough knowledge concerning the concept of cost of quality; the implementation of cost of quality was seen to be expensive; the collection cost of poor quality data revealed itself to be difficult; there is a lack of information sharing; there is no commitment from the senior management; an organisation’s culture can be a barrier to the implementation of a cost of quality program; experts perceive the benefits of cost of quality to be insufficient and lastly; and there is no sense of accountability when it comes to cost of poor quality. Considering these, the present study recommended that due to the benefits that can be generated through the implementation of the concept of Cost of Poor Quality, decision makers in the construction sector should develop a culture of knowledge sharing, especially in the small to medium enterprises in order to successfully adopt and implement the Cost of Poor Quality.M.Tech. (Operations Management