Quality Systems - Assignment Example

Quality systems Essay due: 2032 Words Question Critically analyse the application of quality management, over the entire project life cycle, as applied to projects in the UK oil and gas industry Companies investing in the gas and oil industry need to acquire ISO/TS 29001 quality management standard. The ISO/TS 29001 certification proves the company’s commitment to quality to stakeholders and customers. The standard has been as a result of the partnership between ISO and International Oil and gas industry. With the assistance of SGS’s oil and gas industry experts, a company can apply for ISO/TS 29001 certification, however, if it has the ISO 9001 certification relevant audits are performed to upgrade the quality management certification. A lingering question in regard to quality management in the UK oil and gas industry ‘is quality management important in the oil and gas industry?’ Quality is eminence which results to one company’s product dominating another and guarantee its survival by initiating a new standard of quality. From this perspective, quality is a mark of excellence, persistent and preserved over long duration of time1. Quality has various definitions by the gas experts: It is meeting or exceeding customer’s prediction at a price that amount to value to them2. It is the fitness for reason for use3. It is the totality of characteristics and features of a service or product that deliver on its ability to fulfil implied or stated needs4. It is the total compound service and product characteristics of engineering, maintenance, marketing and manufacturing through which the service and product in use will satisfy the customer’s expectation5. The companies in the petroleum sector in the UK are concerned with drilling and oil fields that experience the following in the course of their entire project life cycle6: Integration issues between outbound/inbound offshore logistics performances and onshore supply chains. Customer fulfilment issues as a result of late or partial deliveries and ‘stock outs’, resulting in work deferrals. Substandard returns management leading to project surpluses, items at 3rd party sites doing nothing and under recovery against investments. Incompetent container management, resulting in underutilised container convoys and crisis in offshore deck capacity. Therefore, the Oil and gas industries in the UK adopt total management tool to overcome these challenges to achieve a continuous improvement to satisfy ever-rising customer needs and at the same time attain continuous improvement in each feature of the organisations performance. The ISO 9000 series covers the following in the whole cycle of production: Quality assurance and management standards and guidelines for use and selection – ISO 9000. A quality system structure for quality confidence in development/design, installation, production and servicing – ISO 9001. A quality systems model for quality assurance in installation and production – ISO 9002. A quality systems model for quality guarantee in final test and inspection – ISO 9003. Quality system and management elements: guidelines – ISO 9004. These standards act as a quality guarantee to customers that products have been processed according to specific quality criteria and they apply to companies of all descriptions and sizes. Therefore many companies request to obtain a certificate to prove that they have quality management systems in place. The companies need to demonstrate adherence to quality standards for regulatory, risk or contractual management purposes. These standards are improved periodically but the scope is constant on three segments; documentation, planning and control of a quality system7. A current addition to the ISO standards is ISO 20252 which is the international standard for market research. In the UK there are marketing quality standards as follows: Marketing Quality Assurance (MCA) Market Research Quality Standards Association (MRQSA) inscribed in BS 7911:2003 in the United Kingdom. Complaints Management Systems (BS 8600) establishes standards for operational components of a complaints management system. The cost of quality in the oil and gas industry is the variation between the real cost of producing and selling services and products and the cost if no failures occurred during production or use and no chance of failure. In addition, it is the costs incurred as a result of poor quality that might occur or does exist. Moreover, it is the cost of not satisfying the customer’s needs. Furthermore, all activities that are done and are not required directly to underpin departmental aims are contemplated as the cost of quality8. Question 2 Discuss and justify your views on the most effective aspects of quality management From my perspective, total quality management (TQM) tool is the most effective feature in quality management. Total quality management (TQM) is the continuous advancement to satisfy ever-rising customer needs and at the same time attain continuous improvement in each feature of the organisations performance. Procedures are critical to delivering quality of services and products to customers. Procedures are the vital linkage between the enablers of planning through individuals into the production measured by society, customers, people and main outcomes. There are four ‘Ps” that are the foundation of a simple TQM model and give the ‘hard management necessities’ to lead companies successfully into the modern world9. The three Cs that is communication, commitment and culture when integrated with the 4 four Ps move companies forward successfully. The new TQM model is illustrated below10: Source: Bagad, V. S. Management information systems. Technical Publications, 2009. Quality standards are the degree of excellence, are a minimum with which the customers may be reasonably satisfied, they serve as a foundation of comparison and lastly, it is identified as a model of imitation. There are minimum standards which constitute the level of acceptability and they must be met. The minimum standards must be fulfilled by all and on the other hand optimal standard indicates a degree of excellence. The standards are developed and maintained and consist of the management and organisation standards for professional practice11. The quality standards are the benchmarks or guidelines which good quality systems are compared or adhere to. Generally, quality standards and systems demand documentation for example work instructions, specifications, quality standards, procedure manuals and quality manuals documents. The most popular of the quality system standards is the quality management ISO 9000 series that is developed by the International Organisation for Standardization (ISO), situated in Geneva. The ISO standards are an endeavour to coordinate quality standards throughout the world12. Objectives and benefits of TQM They are two categories of benefits of total quality management; cost reduction and revenue enhancement. It also results to enhanced product performance in reliability, conformance, serviceability, perceived quality, and features which lead to increased demand. A cut in total product cycle time upgrades ability and availability to give tailored customer service. These benefits convert to enhanced market share and generally increased revenues. Enhanced quality control minimises direct and indirect labour costs, working capital and material costs. Moreover, a cut in total product cycle time minimises inventory stock that holds costs13. The employment of TQM consequently enhances financial and other critical broad based organisational results. TQM necessitates employees to be liberated to participate in decision making in regards to product quality and process. Successful TQM implementation culminates to: Satisfying customer’s needs and ensuring their satisfaction; increasing revenue, return on assets, market share, providing higher employee satisfaction, reducing internal costs, comprehending better the competition and developing a successful competitive strategy. Attain a top-quality production in all operational and business areas, not only in service and quality, through continuous and critical assessment of all procedures to remove non-productive waste and activities. Engagement of everyone in continuous improvement, not just people directly engaged in greater focus on work processes and improvements, quality function, recognition and solutions of difficulties at lower levels by individuals close to the work who are liberated to handle the problems. Less rework and fire-fighting, more information-based efforts to eradicate the sources of problems; more advance effort to elucidate needs and avoid errors and defects. More frequent and open communication horizontally among individuals who treat and view one another as suppliers, customers and better interdepartmental collaboration. Action taken on and intolerance of, errors and defects that have formerly been ignored. Question 3 What aspects of quality management do you consider to be underutilised on projects in the UK oil and gas industry The aspect of quality management which is underutilised on projects in the UK oil and gas industry is six-sigma. In the oil and gas industry logistics is concerned with managing inventory both in motion or sitting, in the process or finished goods and in raw state. It is important for inventory to be available when and where clients want it14. Reducing inventory is the main objective of a ‘lean’ initiative. Inventory forms between five and thirty per cent of the manufacture’s total assets and constitute half of a retailer’s total assets. When demand is highly seasonal, companies must participate in long-range planning and manufacturing products in advance of the high season. In a lot of processing industries for example petroleum refining stopping the machine is the same as shutting down the ocean, a company cannot do it. To achieve the lowest per-unit production cost is the most important consideration in most oil and gas industries. This objective results to most companies seeking offshore manufacturing processes to minimise production costs. Such occurrences outline the various ways in which variance occurs. The objective of six-sigma is to control the variance, to enhance supply chain processes such that the work is carried out better on a consistent basis. The six-sigma apprehend the expectations and experience of the client, reducing the possibility of manufacturing goods and services that are not consistent with market needs and wants and also reducing the risk of being caught unaware when a product skyrockets15. The six sigma approach permits for no more than 3.4 defects per million components in produced goods or 3.4 mistakes per million activities in a service performance. When six- sigma is applied the production will need to be 99.99966% perfect for it to result to 3.4 defects in a million. Therefore six-sigma is an approach that moves a procedure towards perfection and reduces variability in products manufactured by the same process. The six sigma team utilise DMAIC methodology to recognise and eliminate the causes of defects16. Although it is an effective tool in production, six -sigma in managerial level involves technologies, schedules, projects units and details to be coordinated and managed. It also requires taking many actions, developing plans and finishing a lot of specialised work. In order for these factors to work together and the technical parts of six- sigma to be efficient, the company has to establish the appropriate management orientation17. For successful implementation of six-sigma, the company needs to identify the area of application and the employees need to be trained in six sigma. This may pose as a limitation to many oil and gas industries in applying six-sigma. A fact is that six-sigma technique is underutilized; this is because of it consists of many complex processes that most company members cannot comprehend or perform fully. In conclusion, quality management is essential in oil and gas industry. With the description of six sigma and total quality management it is evident that if well utilised it can lead to quality of products and services, reduce waste in the production process and satisfy the customer’s demands. Reference list Absoft OIL & GAS SAP SPECIALISTS. "Efficient Operations for Remote Logistics." Http://www.absoft.co.uk/. 2014. Accessed October 31, 2014. Bagad, V. S. Management information systems. Technical Publications, 2009. Badiru, Adedeji B., and Samuel O. Osisanya. Project management for the oil and gas industry: a world system approach. CRC Press, 2013. Elearn. Quality and Operations Management Revised Edition. Taylor & Francis, 2013. Goldsby, Thomas J., and Robert Martichenko. Lean six sigma logistics: strategic development to operational success. Boca Raton, Flor: J. Ross Pub, 2005. Gygi, Craig, Bruce Williams, Neil DeCarlo, and Stephen R. Covey. Six Sigma for dummies, 2012. Kubr, Milan. Management consulting: a guide to the profession. Geneva: International Labour Office, 2007. Mohanty, R. P. Quality management practices. New Delhi: Excel Books, 2008. Palmer, Roger, Richard Meek, and Lynn Parkinson. Managing marketing performance. Routledge, 2006. Read More