Investment Now Could Have Saved their Company – Concrete Company Case Study
A major construction company calls for a variety sub-contractors required to assist with building a block of units.
Concrete Blocks* are successful in their bid for supplying product and services for concreting, including slabs, formwork, steel fixings and footings.
Concrete Blocks* is looking forward to cementing a strong partnership with the major construction company. They recognise that this is an excellent opportunity for Concrete Blocks* to expand their business and create further growth in their small business.
The block of units is built and Concrete Blocks* secure more lucrative contracts. The business is growing significantly and they are needing to employ more tradespeople. In fact, they just about cannot keep up with the demand and things become chaotic. The owners are constantly following up on jobs. And due to the increased workload the owners find themselves having to get “back on the tools” rather than managing the business. But the money is coming.
It’s five years down the track since the first block of units were built. Cracks and fault lines start to appear in units and residents are concerned.
Engineers are called in and an investigation begins along with the finger pointing. No-one is wanting to take the blame and the big companies are looking for a scapegoat.
The investigation team ask Concrete Blocks* to show them evidence of how they ensured that they delivered the correct product and structure each time. It appears that the engineers are indicating issues with the concreting. Concrete Blocks* become worried about the possibility of legal action. As a small business they do not have the same legal resources as the larger businesses. They are concerned about becoming the scapegoat.
What happens next?
This scenario is not a fantasy but a daily reality in not just construction, but right across the board in a variety of industries. Let’s have a look at two possible outcomes from this.
With a Quality Management System
Without a Quality Management System
Full control over job tasks, suppliers, equipment, materials and employees/sub-contractors
Materials from approved suppliers made to the correct specifications as required by the major contractor
Identification and traceability of materials supplied (where required)
Training records to show who is qualified, licenced and competent to perform tasks
Running the business in an adhoc manner - reactive
Obtaining concrete from any supplier
No traceability of raw materials
No official training records for sub-contractors or employees
With a QMS (Quality Management System), Concrete Blocks* were able to prove that they fulfilled the requirements set out by the major construction company. They had approved documentation showing they used materials from approved suppliers and this was able to be identified and traced. They could show they only used sub-contractors and employees who were properly trained and licenced to perform the tasks required.
Without a QMS, Concrete Blocks* did not have the correct documentation that indicated they had purchased materials from approved suppliers. They had invoices from a variety of suppliers but not necessarily from approved suppliers. They did not have suitable records to enable traceability or identification of materials throughout the job process. And they did not have records, other than pay slips, to show the qualifications and licences of their sub-contractors or employees. Concrete Blocks* assured the investigation team that they had followed the specifications of the job and they were sure that the concrete poured for the area under investigation came from a reputable approved supplier but they could not prove it through processes and documentation.
Other concrete contractors were able to show they had followed processes through their QMS and so they were exonerated from blame.
Due to Concrete Blocks* not having a QMS and being able to adequately prove they had followed the requirements it was decided that Concrete Blocks* were liable for the damage.
Needless to say, this outcome for Concrete Blocks* would significantly damage their business.
And here is the kicker – Concrete Blocks* may well have done everything correctly and they were not to blame for the damage. The problem may have been with the actual concrete supplied. But, because Concrete Blocks* did not have adequate records to trace the batch of concrete supplied, they were made fully liable. With a QMS in place, they would have been able to redirect the investigation to the supplier of the concrete as a trace on the product would have shown that the concrete supplier had not followed the specifications.
A Quality Management System not only makes your business run smoothly, efficiently and effectively, but it is also your best friend when sh*t hits the ceiling.
*Concrete Blocks is not an actual business