Quality Control in an Oil and Gas Industry - Essay Example

Introduction: In its simplest form quality is defined as ‘Conformance to requirements and specifications’ (Beckford 55). However, the term quality is very wide in meaning and cannot be defined universally to fit every situation, process and individual. This is because for a same product or service, the standards of quality may be different in different scenarios. For example, one consumer can believe that quality biscuits are those which give high nutritious value within affordable price. For others, quality of biscuits can be measured by their taste and the way they are presented. The above example also shows the fact that there are certain parameters which can be used to measure or identify the quality level of a certain product. These are called as ‘Quality Characteristics’ by Mitra (6). These characteristics may include the aesthetics of the product, its durability, cost, utilization factor etc. 1.1. History of Quality: The sense of maintaining the quality of products and services has been existent since times immemorial. The early Egyptians, Greeks and Romans maintained quality standards in their buildings, structures, artifacts, utensils etc. The term ‘quality’ itself is however relatively newer. During the early days of industrial revolution, the need of maintaining quality in the production industry recognized but not emphasized. As a result no special workforce was designated to check the quality control. Instead, the foreman or the supervisor was the person responsible for the quality of product being made. Hence it was entirely on his discretion what efforts he puts in order to maintain the quality standards. As the industries grew in size and the strength of personnel reporting to a particular supervisor increased in size, it became impossible for the supervisor to check the quality of each unit produced at the industry. The task of maintaining the quality was then assigned to quality inspectors. Large scale industrial units had quality inspection teams who would compare all the products produced to a certain standard product and check the conformity of the product with the standard. The products failing to meet the quality standards were either corrected or discarded. Even with the formulation of separate quality inspection teams, the checking of each and every unit of product was becoming impossible as the sizes of industry and labor costs increased. This moved the engineers and mathematicians to develop statistical methods of quality control. Walter Shewhart, in 1924, proposed his quality control charts which aimed at controlling the features of a product through statistical methods (Mitra 3). In 1929 he formed ‘Joint Committee for the Development of Statistical Applications in Engineering and Manufacturing’ with the support of American Society of Testing Materials (ASTM), American Society of Mechanical Engineering (ASME), American Statistical Association (ASA) and Institute of Mathematical Statistics (IMS). The committee made efforts to promote the principles of statistical quality control in the industries. The use of statistical methods in the quality control procedures gained wide acceptance in the days of World War II. Good quality machinery was vital for the armies to win battles hence quality control was essential. But large amount of weapons and machinery supplies has to be produced and every single unit could not be checked for quality assurance. Hence powerful statistical methods were required for ensuring quality in industries. The rules of Sampling gained were widely accepted and implemented. The American Society of Quality Control was established in 1946 to standardize the quality control procedures 1.2. Quality Control and Six Sigma: Six Sigma is a technique used to measure the degree to which a process conforms to the consumer needs. It is based on the number of units produced that comply with the quality standards set by the organization or demanded by the customers. The method was developed by Motorola Corporation in 1986. Six Sigma basically focuses on containing the variation in a process within limits. To understand the concept, we have to consider the figure shown. The symbol ‘?’ here represents the ‘Standard Deviation’ of a product’s parameters from standard. The lines LSL and USL represent ‘Lower Specification Limit’ Upper Specification Limit’ respectively. As the limit of process variability is increased from 2? to 3?, the number of units outside the specified range decrease. The number of parts within the specified limits is the maximum as the ‘process variability is limited within six standard deviations from the mean’ (Mitra 93). Oil companies are successfully implementing Six Sigma techniques for quality improvement of their products and services. Hess Energy is one such example which has started implementation of six sigma in its ‘Marketing and Refining Division’ in 2004. Schlumberger and Baker Hughes frequently advertise positions for the quality engineering experts in six sigma methodologies which show their interests in the use of technique for quality enhancement. 1.3. Types of Quality: Different types of quality have been identified on the basis of different criteria. Quality can be divided in to Internal and External Quality. External Quality refers to the quality standards that an organization has to maintain for its customers. Internal Quality includes the measures that an organization takes to improve the standard of its operations. Further classification of Quality may include the following three types: Quality of Design, which is described as the minimum requirements in the design of the product that are necessary to satisfy the customer. For example, the composition of a particular blend of ‘Leaded Gasoline’ will describe the quality of that product. If this composition is very effective in avoiding knocking in the engine then the product is said to be of good quality. Quality of Conformance means the degree to which the actual features of a product match with those claimed by the manufacturer. Considering the same example, if the composition of the gasoline remains the same as claimed by the oil company when it reaches the consumer at the pumping station then the quality of conformance is maintained. Quality of Performance is related to the standard of the job that a product performs when put in to use. In the above mentioned example, if the gasoline indeed reduces the knocking without damaging the engine then it has shown quality of performance. But if, at the same time, the gasoline damages the engine of the car then it is said to be of low quality. 2. Quality in Industry: As the global markets are becoming more and more competitive, quality is becoming the major focus of industries all around the world. It includes both the quality of the product being made and the operations within an industry. 2.1. How Quality Impacts an Industry: Implementation of quality control practices accompanies by significant changes in company’s manufacturing practices. A whole new department of quality control normally adds to the existing infrastructure that comprises of skilled quality control personnel. The quality personnel are in charge of ensuring that the quality practices have been effectively adopted in all the manufacturing processes involved. Good quality control in the manufacturing process results in low costs, good reliability of product, reduction in scrap etc. This can directly translates into higher profits and growth rates for the industry. It must be noted however that only realistic and achievable quality targets can help reducing the costs of the products. Too high quality standards will add very high costs to the products without adding any value to it. There are many instances in which industries improved their performance by the application of quality control methods such as TQM, TPM, and Six Sigma etc. One such example is of Siemens VDO which implemented Six Sigma doctrine for quality improvement in 2005 (Jacobsen 2). The statistical data shows that the industry has significantly reduced scrap and faults in one of their products. Failures due to solder imperfections on electronic equipments were also reduced after the Six Sigma Implementation Project. Another such example, which illustrates the success of quality control processes in terms of substantial profits, is of Crown Equipment Corporation. Starting from the ‘Focused Factory’ Strategy in 1990s, the company has implemented the latest and up-to-date knowledge of quality control to enhance its productivity. Implementation of these practices has saved the company an amount as high as $1.5 million (Chircop 3). Japanese industries as a whole have reduced their environmental impact and dangerous emissions by implementation of quality control practices such as Total Quality Control, Total Productive Maintenance, and KAIZEN etc. (Matouq 1). Schlumberger Owings Mills, a company which produces computer readable magnetic cards, is another such example. The company faced the challenge of optimizing its production costs to gain competitive edge in the market. It was decided by the management to implement the technique of ‘Lean Sigma’ to achieve its objectives. The technique was successfully implemented to achieve its goals through scrap reduction and eliminating variation in the products (‘Schlumberger Owings Mills Improves efficiency’ 1). 2.2. Effects of Quality on Oil and Gas Industry: Implementation of quality control practices generally improves the features of the product in an industry. As a result of this, customer’s faith on the particular product increases and hence the market value and competitiveness of the particular product improves. For an oil and gas industry, good quality control also helps in reducing the cost, environmental impact and above all accidents and hazards. As mentioned earlier, Hess Energy took the initiative of implementing Six Sigma techniques for quality improvement. The company’s commitment to implementing six sigma in its process activities can be estimated from the fact that the company has set highest standards of professional excellence for its Six Sigma work force (Black belts and master black belts) (Marx). The company’s VP for Process Excellence believes that the company can show good ‘financial performance’ and bring ‘high professional development’ to its workers through implementation of Six Sigma (Marx). Xcel Energy is another example of leading Natural Gas Company which achieved high targets of worker’s safety by implementing quality control. The total length of installed pipeline operated and maintained by company is 33,000 miles which provides gas to its 1.8 million customers and most of its 71 power plants (Chircop 2). In 2003, during the company’s regular Fire Protection drills, it was revealed that the fire protection suits provided to the workers were not satisfactory for the gas fire hazards to which their workers were regularly exposed. A mere 12 seconds exposure to fire could cause severe third –degree burns to the workers. Hence the company resorted to quality control techniques in order to provide its employees with safe work environment (Chircop 1). A team comprising of experienced and trained professionals was assigned the task to improve the fire clothing. It carried out detailed study of the conditions to which the workers were exposed in case of a fire hazard. With the help of simulations and workers’ feedback, shortcomings were enlisted and targets for improvements were identified. To arrive at different possible solutions, the team performed extensive market surveys and case studies and shared experiences of other energy sector companies as well. A final solution was selected by employing the design selection matrix. The fire suits thus designed were again tested through simulations and this time the results were extremely encouraging. The new suit did not allow the heat to pass through even for an exposure of one minute (Chircop 5). The old suits were readily replaced by new ones and the company ensured through regular checks that the workers wear the new fire protection overalls (Chircop 5). Hence through this whole procedure performed at Xcel Energy, the company was able to improve the quality of fire resistant clothing being provided to its workers thereby saving thousands of workers from fatal fire accidents. Nimbus is a company providing management solutions to different oil and gas companies apart from other sectors. Their customers include Chevron Oil, Cameron Oil and Marathon Oil (Solutions for Oil and Gas Energy). The experts at Nimbus believe that Lean Sigma technique can optimize the process control through by achieving quality control at a fast pace (Lean Six Sigma). 3. Quality Methods: Various tools and techniques are employed by the quality control personnel in an industry to ensure that the highest possible quality standards are maintained. A few of these are discussed in the following lines. 3.1. Statistical Process Control: Statistical Process Control is the process of quality control which ‘involves comparing the output of a process or service with a standard and taking remedial actions in case of a discrepancy between the two’ (Mitra 9). The process uses the basic tools of statistics namely mean (average value of a data set) and standard deviation (average variation of the data set from the mean value) to identify whether the product of a certain process meets the desired quality standards or not. If it is found that the deviation from the desired value is greater than the specified limits, a corrective action is taken (Mitra 317). The so-called seven tools of statistics, namely histogram, scatter diagram, Pareto chart, check sheets, graphs, control chart, and cause and effect diagrams, are utilized in the process at different stages to mathematically evaluate and present process variables (Doty 45). 3.2. Design of Experiments: Design of experiment (DOE) methods is an important analytical tool of statistics to optimize the performance of a certain process. The method involves modeling of a real system to design an experimental setup, a setup in which certain controlling variables (called factors) are altered and their effects on the process output are observed. Hence, by performing this method, the optimum values of ‘factors’ are obtained for which the process gives best output (Allen 241). 3.3. Quality Function Deployment: Quality Factor Deployment (QFD) ‘is a planning tool that focuses on designing quality in to a product or service by incorporating customer needs’ (Mitra 94). QFD is a technique which optimizes a process right from the start of designing phase through manufacturing up to the delivery of product to the customer. It believes in identifying the customers’ needs and interests and then with the help of design selection matrices and other such tools attributes of the product or service are finalized. This stage is called the ‘What’ stage of QFD i.e. in this stage we identify what to deliver to the customer. In the next stage, termed as ‘How’ stage, the process parameters are decided and the feasibility of the process is made. This section aims at defining how to deliver the product or services to the customer. The figure above (house of quality) shows various steps involved in using QFD for quality enhancement. In the following table, example of these two stages with reference to developing lubricating oil is mentioned. The attributes of the two stages ‘what’ and ‘how’ are enlisted. Following this step, matrices will be created to make final decisions regarding the product. ‘Whats’ and ‘Hows’ of a Lubricant Customers’ Needs (‘Whats’) Technical Aspects (‘Hows’) High viscosity Wide temperature range High flash point Low cost Availability round the year Good after sales services Better selection of petroleum fraction; research on additives Research on additives; Good blending to obtain homogeneousness Research on additives Reducing wastes; Reducing Labor Cost High production rate; Efficient supply chain planning Establishing a Customer Support Center 4. Conclusion: The above discussion shows that quality control is one of the key factors in deciding the success of an industrial process in general and oil and gas industry in particular. Numerous quality control techniques are available which, when implemented, can help in reducing injuries and hazards, costs of operations and products, environmental impacts of process and wastage of material, time and efforts. At the same time, good quality control results in improvement of product or service parameters thereby resulting in better market competitiveness and greater profitability. That is why oil and gas industry has generally shown keen interest in implementing quality control measures in the design, manufacturing and delivery of its products and services. Works Cited Allen, Theodore T. Introduction to Engineering Statistics and Six Sigma. London: Springer-Verlag London Limited, 2006. Print. Beckford, John. Quality. N.p.: Routledge, 2002. Print. Chandra, M. Jeya. Statistical Quality Control. USA: CRC Press LLC, 2001. Print. Chircop, Jeanne. "Quality Strategies Help Eliminate Likelihood of Serious and Deadly Injuries." Quality in Service - Case Studies (2007): n. pag. American Society for Quality. Web. 10 Feb. 2011. Chircop, Jeanne. "Regional Team Approach Helps Energy Company Enhance Safety, Avoid Costs." Quality in Service - Case Studies (2007): n. pag. American Society for Quality. Web. 11 Feb. 2011. Chircop, Jeanne. "Six Sigma Green, Black Belts Help Manufacturer Save Nearly $1.5 Million." Quality in Service - Case Studies (2007): n. pag. American Society for Quality. Web. 11 Feb. 2011. Doty, Leonard A. Statistical process contro. Second. N.p.: Industrial Press Inc., 1996. Print. Jacobsen, Janet. "Siemens VDO Optimizes Processes Using Six Sigma." Quality in Service - Case Studies (2007): n. pag. American Society for Quality. Web. 10 Feb. 2011. "Lean Six Sigma." Nimbus. N.p., n.d. Web. 10 Feb. 2011. . Marx, Michael. "Six Sigma at Hess." iSixSigma. 26 June 2006. Web. 10 Feb. 2011. . Matouq, Mohammed, Nasir Kloub, and Kazue Inoue. "The Role of Quality Control and Everyone’s Participation in Japan to Prevent Pollution During Last Five Decades." American Journal of Applied Sciences 4.1 (2007): 14-18. Print. Mitra, Amitava. Fundamentals of Quality Control and Improvement. Second. Singapore: Pearson Education, 1998. Print. "Schlumberger Owings Mills Improves Processes, Efficiencies with STATISTICA Enterprise-wide SPC System (SEWSS)." STATISTICA Case Study (2003): n. pag. Schlumberger Owings Mills. Web. 11 Feb. 2011. "Solutions for oil and gas energy." Nimbus. N.p., n.d. Web. 10 Feb. 2011. . Read More