> A General Contractor’s Quality Journey

Quality is like concrete: They are both harder than they look.

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The Construction Industry Culture

Caste System

The craftsman with the most/best skills is king

Knowledge is power

Information is hoarded

The hardest workers are promoted, not necessarily the best

Construction workers are voracious problem solvers

Get ’R Done - NOW!

Are you Done Yet?

We’ve always done it that way

Don’t reveal your mistakes

You can’t put me behind a desk job!

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The Construction Challenge

Everything is unique

• The Facility

• The Location

• Drawings and Specs

• Project Schedule

• Project Partners

• Project Team Members

• Subcontractors

• Craftsman

• Material Suppliers

• The Results

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Quality in the Construction Industry A Generic Picture of the Past

Quality was narrowly defined – just meet the specs

Inspect quality into the work …. only if you had to

Fit & Finish are in the eye of the beholder

Repeat the work until the customer accepts it

Craftsman skill dictated the quality of the work

Quality often took a back seat to schedule and cost

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Productivity Construction vs. Manufacturing

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Effect of Quality Mistakes on Cost Inflation and Project Estimates

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Project A Project B Project C Project D

Unquantified Impact of Mistakes

Budget (Hours)

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Would you tackle this job?

Job Description:

Stop the Bleeding!

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Defining our Quality System

Take what has always worked and add:

• PDCA

• Malcolm Baldrige

• Army Corps of Engineers

• Lean/Kaizen

• Six Sigma

• ISO 9001

• Secret sauce

The system must integrate Safety, Quality, Efficiency to improve Cost, Schedule, and Morale

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Mortenson’s Quality Vision

Our vision is that Mortenson will do the job right the first time with Zero Rework.

We will implement and continuously improve a quality system that will help create the best experience for our customers, team members, and partners while stimulating company growth.

The purpose of the system is to achieve excellence in all aspects of our business and support the Company’s Strategic Objectives.

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Mortenson’s Quality Objectives

Customer Satisfaction - Meet or exceed customer expectations and attain Far Superior Performance Evaluation Survey (PES) scores.

Do it right the first time with zero injuries and zero rework.

Process Improvement - Define, document, simplify, and continuously improve all business and construction processes and increase efficiency.

Reduce the time & cost of construction through by eliminating waste, rework, and non-value added practices.

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The Mortenson Quality Fundamentals Define our Quality System

1. Customer Relationships and Engagement

2. Quality Management Planning

3. Integrated Planning

4. Quality Event Management

5. Best Practices

6. Quality resources

7. Quality training

8. Assessments

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Customer Relationships and Engagement

Focusing on customer relationships and engagement will be central to everything we do.

Understand our Customers

Listen to what the Customers are asking for and what they don’t ask for – Track it

Get them involved

Make a good first impression and leave a lasting impression second to none

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Our Customers

Primary Customers

• Owners

• Customer Representatives

• Architects and Engineers

• Subcontractors

Other Customers

• Code Authorities

• Community Organizations

• The Public

• Ourselves

• Many, many more...

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Customer Defined Success Factors

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Performance Evaluation Surveys (PES)

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Performance Evaluation Surveys (PES)

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Customer Testimonials

Jerry Abramson, Mayor of Louisville, KY

• KFC Yum! Center

Joel Maturi, Director of Athletics, University of Minnesota

• TCF Bank Stadium

Jerry Bell, President, Twins Sports, Inc.

• Target Field

Jim Host, Chairman, Louisville Arena Authority

• KFC Yum! Center

Video

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Quality Management Planning

All projects will have a written Quality Management Plan that is used to manage each “definable feature of work”

Develop & Implement Project Specific Quality Management Plans

• Custom fit the processes to the project

• Identify standard company quality procedures that apply

• Document how the quality system will work on the project

Perform Quality Control on Self Performed Work

• Inspect the work with detailed scope specific check sheets

Perform Quality Assurance as a GC

• Require subcontractors to do their own QC and prove it

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The Quality Management Process

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Scope Specific Check SheetsDone is Done : Right is Right

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Integrated Planning

An Integrated Plan that coordinates safety, quality, and productivity will be documented and used to plan each phase of work and high risk activity.

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Integrated Planning

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Integrated Planning

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Integrated Work Plans

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Quality Event Reporting and Management

Quality events will be reported in the Event Management System and investigated with corrective and preventive actions managed.

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Quality Event Analysis

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Best Practices

Mortenson Best Practices will be used for all High Risk Activities.

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Best Practices – Merging Safety, Quality and Efficiency

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Quality Resources

Each group will assign quality resources to include a dedicated Quality Leader (Director or Manager), a Quality Leadership Team, and an assigned person responsible for quality on each project (ex. Quality Managers for large or complex projects or assigned PE or APM for smaller jobs).

• A Quality Council was formed to lead the company

• 29 Quality Professionals have been hired/assigned to company, group, and project positions

• 67 “Quality Champions” have been assigned to oversee the project quality management process

• 84 “Process Stewards” have volunteered to create/manage Best Practices

• 191 “Subject Matter Experts” have been identified and are made available to help with Best Practices, planning, consulting, etc.

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Quality Structure and Resources

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Quality Training

Quality training will be provided for every project team member.

Quality related courses were created in MortU

• Training for all Team Members is tracked monthly

• Old courses are refreshed and new ones are added as the

quality system evolves

Subcontractor Quality Training was developed

• Quality Committed at the Top

• Quality 101

• Integrated Planning

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Quality Assessments

Periodic assessments of the quality system will be conducted at the company, operating group, and project levels.

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Continuous Improvement

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Effectiveness – Does our Quality System make us a better company ?

Customer Satisfaction – PES is up

Quality Event Reporting is up – nearly 3,000 shared to date

Sharing Best Practices is up – 1,200 completed to date

We have a tourniquet on the bleeding

Cost performance is up

Productivity is up

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Safety Performance Improvement Reduced Recordable Injury Rate

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Mortenson

Craft

BLS

CII

Mortenson 5.11 5.74 4.47 5.87 3.88 5.06 2.98 1.69 1.28 0.32

Craft 7.46 8.66 5.20 3.52 3.02 0.82

BLS 7.1 6.8 6.4 6.30 5.90 5.40 4.70 4.30

CII 1.23 1.16 0.88 0.72 0.58 0.68 0.57

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

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What’s Next for EfficiencyLean / Kaizen Goals

Mortenson Kaizen Promotion Office (KPO)

Goal: Reduce the time of construction by 25%

Goal: Reduce cost of construction by 25%

Provide Standard Work Instructions for each Crew Member

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Where are we going from here?

Subcontractor Quality

Design Phase Quality

Increase Design/Build

Mortenson’s 4th Phase of Control

Standardization

Modularization

The sky’s the limit.