Application of just-in-time technique of total quality management in oil flow stations

Thesis Overview

<p> </p><p><strong>INTRODUCTION</strong></p><p>In the past one decade or so, managers of engineering projects world – wide are increasingly coming under market pressure to reform their quality management practices, as it is being done by their counterparts in manufacturing sector, service sector, the marketing sector etc.</p><p>In Nigeria, most engineering firms especially flow stations have learnt through the hard way that only those with efficient and effective systems and techniques for managing quality in all stages of production including the inventory control can survive in the sector. This is due to increased competition amongst firms, leading to capacity under – utilization and out right bankruptcy of many firms with the consequent social effect of unemployment and under development. Most affected are wholly indigenous firms whose fortunes have dwindled over the last few years due to liberalization of the economy. Some have lost out right patronage from their traditional clients due to mainly inability or unwillingness to embrace even elementary principles of quality in their practices. According to American production and inventory control society (APICS), Just-in –time is “ A philosophy of manufacturing based on planned elimination of all waste and continuous improvement of productivity. It also encompasses successful execution of all manufacturing activities required to produce a final product, from engineering to delivering and including all the stages of conversion from raw material to finished product. On that note, it is believed to be a track which follows the path/route of continuous improvement vis-à-vis identification of bottlenecks and problems, attacking waste of all kinds and the achievement of streamlined production. The fact is that issues of quality management are fast becoming central to both professional and business success. Thus, an engineering firm flow station that delights in profiteering at the expense of quality, will soon discover itself isolated by clients and more often places itself at the risk of being openly criticized by third party stakeholders who are directly or indirectly impacted in the environment where its activities are being undertaken.</p><p>This then is the basis of the renewed quest by project managers for better techniques of managing quality issues in engineering projects such as flow stations.</p><p>In most establishments in Nigeria today especially in flow stations, and in both private and public sector, project quality management is often not seen beyond the narrow precincts of traditional control mechanisms which places emphasis on inspection as the only tool for ensuring compliance with some stated standards and specifications. The result is high failure rate and outright abandonment of projects, monumental waste of scarce resources, transfer of avoidable defects, doubling of project execution costs, low return on investment by clients and general dissatisfaction with engineering activities in Nigeria (Hajek and Victor, G,1984).</p><p>Furthermore, many firms see quality as mere routine tasks and activities which are peripheral to main project objectives, the aim being only to satisfy some minimum specifications pre set by the client.</p><p>But, yet the concept of project quality is much wider and even more so, Total Quality Management (TQM). The effect of Total Quality Management (TQM) when properly employed and assimilated will be felt in all areas of the project cycle.</p><p>Just – In – Time technique must be recognized as a total quality management tool for attaining the firm’s objectives and must be one of the cardinal responsibilities of top leaders of the engineering firms especially flow stations. Just – in – time technique of total quality management (TQM) provides a frame work around which the five Universal functions of management namely; planning, organizing, directing, controlling and co-ordination should revolve. This process involves that quality is scheduled into all the factors of production (men, budget, materials, information, plant and equipment) and properly blended to work harmoniously to achieve set project objectives by encouraging the work force to participate in various programmes relevant for increasing profits and leading to work improvement through cost reduction, inventory reductions/eliminations and quality improvements.</p><p><strong>1.3 &nbsp; &nbsp; BASIS OF THIS STUDY</strong></p><p>This study is an investigation of how Just – In – Time technique of Total Quality management principles were used in flow stations through Re – Order point to successfully manage their project (a turn key project by shell flow stations upgrade) among other flow stations.</p><p>The flow stations project are spanned through all key engineering, disciplines Viz; mechanical, Civil, structural, instrumentation, electrical and environmental.</p><p>Also, to investigate the relevance of J I T. technique through Re – order point model in solving practical Variable problems in demand and production lead time in flow station’s project. For instance, one of the flow station’s projects (the shell flow stations upgrade project) was executed in three phases (I, II and III) over a period of seven years, 1992 to 1999. Twenty-five (25) flow stations sited in land and remote Swamp Locations were involved in the project. In the first phase of the project, ALCON (the contracting firm) adopted the traditional “test and Fix” quality practices. In phases II and III, it introduced J I T of T Q M, which encompasses teamwork and used it as a model for managing subsequent projects.</p><p>The results obtained with the phases II and III quality models were out standing compared with phase I.</p><p>At it acme (highest stage of development) the Just–In–Time technique of Total Quality model, more than doubled production; achieved near zero defect in all disciplines, reduced supervisory workload, greater capacity utilization, cost reduction, Inventory reduction and maximum reduction in plant down time as well as production lead time and set up times leading to increased patronage from clients.</p><p>Further, apart from increased turn over and profits, an astonishing discovery was made that workers in JIT technique of total quality management team were more motivated by the work they do than the monetary benefits they derive due to a kind of “ESPRIT DE CORPS” that seem to blind the team (JIT of TQM). It was discovered, as a sure way/ technique of motivating a work force company–wide.</p><p>The Objectives of this study are;</p><ul><li>To investigate the principles of Just-in-time of Total Quality Management (TQM) among other tools and techniques Vis–a–vis Current international practices with particular reference to management of engineering projects (flow stations).</li><li>To present, solve and analyze flow stations practical field data of Variable cases of demand and production lead times with the JIT of T Q M model through Re–order point.</li><li>To establish if there are indeed significant benefits accruable from the application of J I T of T Q M and its model through Re-order point in handling engineering projects (flow stations).</li><li>To make recommendations for improvement strategies in the management of flow stations project using Just–in–time of TQM principles and techniques.</li></ul><p>&nbsp;</p><p>&nbsp;</p><ul><li><strong>SIGNIFICANCE OF THE STUDY</strong></li></ul><p>It is hoped that at the end of this research work, the information obtained will;</p><ul><li>Serve as a readily available reference document for engineering firms (flow stations) as well as potential investors who want to take advantage of Just–In–Time of TQM principles and techniques to improve project management.</li><li>To encourage engineering firms especially flow stations to embrace the concept of Just–In–Time of TQM among other tools and techniques to enhance their productivity and acceptability in the market, especially the indigenous ones.</li><li>That the formulated model will provide the best approach to Variable Cases of demand and production lead time of JIT (Re–order point) in handling flow stations project.</li><li>To guide future researchers, operators and managers of engineering projects (flow stations) the concept of Just–In–Time of Total Quality in project Management.</li></ul><p>&nbsp;</p><p>1.6 <strong>RESEARCH M ETHODOLOGY</strong></p><p>To accomplish the defined objectives of this study, a survey was carried out in some flow stations in Port-Harcourt which offer similar production and services. The following methods were used to obtain the relevant information from the companies (ALCON ENGR OIL AND GAS LTD, NOBLE ENGR DRILLING COMPANY LTD AND EXPRO TECH OIL AND GAS DRILLING COMPANY LTD) Viz;</p><p>(i) &nbsp; &nbsp; During visits to these flow stations, direct observations were made by the researcher with respect to Variable Cases of demand and production lead time of their products. How the operational tasks are organized and implemented in the flow stations, are also surveyed.</p><p>(ii) &nbsp; &nbsp; The system documents of the companies were also sighted and recorded by the researcher.</p><p>(iii) &nbsp; During visits to these companies (flow stations), interviews and discussions were held with respondents in the course of administering and retrieving the research questionnaires. Information obtained from this source was recorded.</p><p>(iv) &nbsp; Data were also gathered from the companies with the aid of a research questionnaire. Questions structured using ISO 9000 principles, were used to explore the factors that collectively address the quality culture and practices of the firms (flow stations).</p><p><strong>1.7 &nbsp; &nbsp; MODEL FORMULATION.</strong></p><p><strong>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; </strong>A model on Just–In–Time of TQM through Re–order point was formulated to address the Various Cases of Variability in demands and production lead times of the said flow stations to ensure Just–in–time of their products. The model formulated and analyzed provided the basis for making empirical judgments, conclusions and recommendations.</p> <br><p></p>