Feb. 5, 2025
The worst time to be making changes to an established process is when you're under pressure. You're likely to be busy, with less time and attention available to notice and intercept problems. But this is also when the temptation to skip seemingly unimportant "nuisance paperwork" steps goes way, way up.
This story starts with a contractor working on a major redevelopment project in a prestigious multi-tenanted retail space in the heart of the city. It's approaching the grand opening date, but during final inspections the contractor discovers that a small section of air-conditioning ducting is missing.
The site supervisor is unable to secure the regular in-house installation team at short notice and under pressure to finish the project, decides to call in a favour from a mate. It seems like a straightforward installation and should be no problem for 'mate', so the supervisor goes off to work on the long list of other things that need to be done.
The mate doing the favour gets on site quickly with the needed section of ducting, but realises his ladder is too short and he will need to use an EWP (elevated work platform).
Luckily there's one parked onsite - with a key in it! 🤔
Not so luckily, a short time later the EWP strikes an overhead water valve while the operator was manoeuvring the platform. 😰
It causes a flood that damages several of the newly renovated retail spaces. 😱
It turns out the person called in for a 'quick fix' was not licensed to operate an EWP and now the quick fix has turned into a costly nightmare.
The Cascade of Consequences
Immediate Financial Impact:
- Direct repair costs exceeding $200,000
- Emergency restoration services
- Replacement of damaged shop fixtures and fittings
- Additional labour costs for repairs
Project Timeline Disruption:
- Delayed store openings for multiple tenants
- Lost rental income during repairs
- Compensation claims from affected retailers
- Extended project management costs
Reputation Damage:
- Strained relationships with retail tenants
- Negative impact on future contract opportunities
- Diminished trust from property developers
- Major impact on insurance premium renewals and coverage
Root Cause Investigation
The obvious causes were the lack of an EWP operator licence and poor supervision of the sub-contractor, but the incident investigation team dug deeper and identified several critical process breakdowns:
- Absence of an emergency supplier verification protocol
- Pressure to meet deadlines overriding safety considerations
- Lack of clear accountability in contractor selection
- Insufficient oversight of onsite operational decisions
The investigation team also noted that it was lucky no-one had been hurt in the incident.
The Response - Corrective Actions
The organisation identified several areas where they could make system improvements to prevent the same thing happening again.
Immediate Changes:
- Enforce mandatory task analysis and basic risk assessment for all non-routine tasks. The completed assessment must be reviewed by the site supervisor prior to work beginning - e.g., JSA, take 5. This would have identified the need for an EWP.
- Institute a "no credentials, no access" policy - without exceptions. Mandatory credential verification would have identified the missing EWP operator licence.
- Make it easier for site supervisors to access a list of pre-approved contractors. This would have given the site supervisor more options for finding someone suitable at short notice.
Longer Term:
- Create clear escalation procedures for emergency works
- Establish a verification process for urgent contractor approval
- Develop partnerships with multiple qualified contractors for emergency response
- Establish a training program for site supervisors on compliance requirements
- Implement a robust sub-contractor management system with digital credential tracking and automated expiry notifications that supervisors will be able to access while on site. Other improvements to supplier and contractor management include a program of safety performance reviews, verification of insurance coverage, and regular audits of contractor certifications.
The Business Case for Supplier Management
While maintaining a rigorous supplier qualification process can sometimes seem cumbersome and time-consuming, the alternative can be very expensive. The return on investment is easy to see when you compare the following costs:
- Cost to maintain a supplier qualification system: $5~$25K per year
- Cost of one major incident: over $250K
The Business Case for Processes
Implementing standard processes in your business is about efficiency and about controlling risks. The initial investment in proper systems and processes pales in comparison to the potential costs of cutting corners.
Following a process isn't just about "compliance" - it's about protecting your business, your clients, and your reputation.
How Quality Systems Toolbox software helped
The company used the 'Issues' module in QSToolbox software to implement a robust system for tracking non-conformance and corrective actions.
The new subcontractor and supplier management system was implemented in QSToolbox software 'Contacts' module. Site supervisors can access the software to find approved suppliers and to check the credentials of contractors.
Supplier audits are scheduled and audit findings are tracked in the software.
Policies, procedures, and document templates for the management system are controlled in the Documents module of QSToolbox software.
It doesn't need to be complicated, and you can have the whole management system in one place - in QSToolbox.
Key Takeaways:
Consider what you have, and what you might need to put in place to protect your business from sub-contractor risks:
- Implement a comprehensive supplier qualification program
- Maintain digital records of all contractor credentials
- Establish clear emergency procedures
- Never compromise on safety requirements
- Regular audit and update of supplier credentials
Get in touch to find out whether QSToolbox could help you too.
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