ENHANCING PRODUCTIVITY AND PROFITABILITY BY DETERMINATION OF POOR QUALITY COST, USING DASHBOARD MANAGEMENT INFORMATION SYSTEM

Companies are facing 17to 27% losses in their revenues due to Cost of Poor Quality (COPQ) as revealed in the research conducted over past many years. The disturbing fact is that these hidden failure costs are not reflected in the existing accounting and management information systems. Thus management fails to initiate corrective actions. COPQ adversely affects the productivity of resources and profitability of construction companies. Therefore an effective mechanism is needed to identify and measure the failure costs along with a management information system, so that corrective actions are initiated to control further hidden losses. A COPQ measurement and dashboard Management Information System was designed by the researchers to show the extent of losses during project execution along with reasons for the losses with the help of charts/graphs and summaries. The system/tool was used in an actual construction project to validate its effectiveness. The research purpose was to examine the effectiveness of the proposed system in reducing COPQ and its corresponding effect on profitability and labor productivity.