Application of Just-in-Time Technique of Total Quality Management in Oil Flow Stations

Application of Just-in-Time Technique of Total Quality Management in Oil Flow Stations

Chapter One

RESEARCH OBJECTIVES

The Objectives of this study are;

To investigate the principles of Just-in-time Total Quality Management (TQM) among other tools and techniques Vis–a–vis Current international practices with particular reference to the management of engineering projects (flow stations).
To present, solve and analyze flow stations’ practical field data of Variable cases of demand and production lead times with the JIT of the TQM model through Reorder point.
To establish if there are indeed significant benefits accruable from the application of JIT of TQM and its model through Re-order points in handling engineering projects (flow stations).
To make recommendations for improvement strategies in the management of flow stations project using Just–in–time TQM principles and techniques.

CHAPTER TWO

LITERATURE REVIEW

HISTORICAL REVIEW

Quality dates back to medieval times from when man in his quest for meeting his basic needs began to engage in some form of manufacture. To create better articles of trade, man invented the idea of quality so as to enhance the Value of these articles in exchange. The medieval Craftsman for instance, who casted temple bells knew when a bell had been properly cast by striking the bell–a bell the “rang true” when struck was accepted as being without casting defects, while the one that produced “false note” was rejected.

In project management, the origin of quality can be traced to ancient structures like temples, tombs, pyramids etc. the desire for human safety, durability and aesthetics in these projects, spurred the idea of specialization of craftsmen and eventual enforcement of some rigid rules to regulate construction activities. Kings appointed more experienced craftsmen to oversee the implementation of these rules. These craftsmen therefore acted as both supervisors and inspectors. Initially, the rules were mostly unwritten, but as time went by and as the science of metrology became developed, learned craftsmen began to write down their experiences and expectations, thus leading to the development specifications, and much later standards.

According to Feigenbaum[1991:P.15], the first step in the development of modern quality predated 1900 during which every worker could take control of the quality of his personal work, since only one worker or every small number of workers were involved in the entire production process. This led to the period when foremen assumed responsibility for a group work, some time prior to the First World War due to the advent of the modern factory concept. About World War I, full time inspectors were appointed to handle quality matters as production systems became more complex. Then followed, the concept of statistical quality control, which emerged during world war II and which, continued to be improved upon until in the early 80’s when the idea of Just–in–time of Total Quality management emerged.

About this time, the work of the international Organization for standardization (shortened ISO) – a voluntary body of quality organizations in several countries around the world, began to develop quality models which have revolutionized the concept of total quality. Its ISO/TC 176 technical committee which was commissioned in 1978 produced a document in 1987 on quality models, now popularly known as the ISO 9000 series, thus harmonizing quality practices on an international scale. In this series, demonstrating conformance to one of three quality management models viz; ISO 9001, ISO 9002 and ISO 9003, becomes the “easiest” means by which an organization can provide objective evidence that it has in place an effective system for quality management. The ISO 9000 models radically changed management thinking in many organizations the world over, which led to a major revival in the application of the universal principles of quality management, application of the universal principles of quality management, first by the big corporations and soon by many smaller firms as a managerial philosophy for survival. The ISO 9000 models, thus laid the foundation of what is today called Total Quality Management (TQM) or Total Quality (TQ) and by mid 80’s following the collapse of communist Russia, many firms saw JIT of TQM as the “cheapest” route to internationalize their market opportunities.

The history of a formal, national effort in the development of quality management system for Nigeria, began in 1971, when the them Federal Military Government enacted the Decree No 56 of 1971, called the Nigerian standards Organization Decree [Laws of the FGN: 1990, p.155]. This Decree led to the formal national consciousness towards matters related to quality management, but has however done little to change the culture of some enterprises, especially indigenous engineering firms, thus affecting their ability to compete even in the domestic market. The standard organization of Nigeria (SON) is a member and subscribes to the character of establishing the International Organization for standardization (ISO).

CHAPTER THREE

PROBLEM FORMATION/RESEARCH METHODOLOGY

CHAPTER OVERVIEW

This chapter explains the model formulation of Re-order point of variable lead times and demand of Just-IN-time in flow stations. The various model assumptions were also explained, the condition in which the model is applicable and the statistics of some flow stations based on their variability of quantity demands and lead times are also discussed.

DATA COLLECTION METHOD

To accomplish the defined objectives of this study, a survey was carried out in some randomly selected flow stations in Port-Harcourt which offer similar services. The following methods were used to obtain the relevant information from the flow station Viz;

(i) During visits to these flow stations, direct observations were made by the researcher with respect to how their products are being demanded corresponding to their production lead time. Also how the operational tasks are organized and implemented in the flow stations are surveyed.

(ii) The system document of the firms (flow stations) were also sighted and recorded by the researcher.

(iii) 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.

(iv) Data were also collected 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). Data on variability of quantity demanded corresponding to their Lead times were also obtained.

CHAPTER FOUR

DATA PREENTATION AND ANALYSIS

CHAPTER OVERVIEW

The objective of this chapter is to present and discuss the data obtained from the flow stations mentioned. These data will be used in testing and in computation of the developed model. This is done to see the relevance of the model in approaching Just – in – time when variable demand and production lead time are experienced in flow stations.

CHAPTER FIVE

DISCUSSION, CONCLUSION AND RECOMMENDATIONS

DISCUSSION

Having gone through the reviewed empirical literature on reorder point model, it was discovered that ROP model of variable cases of demand and lead time have not been adopted in some of our flow stations. This made the researcher to analyze the formulated model using the data obtained from the randomly selected flow stations operating in Port Harcourt, Rivers state. The results obtained from these analyses and findings are presented and necessary recommendations made.

SUMMARY OF FINDINGS

From table 4.26 to 4.28 for the testing of he formulated model, it was found that;

The model can be used to determine point of reorder irrespective of the variability in the quantity demanded and the corresponding Lead times of any flow station.
The service level of any flow station is one of the factors that help in determining the quantity to be reordered so as not to have a zero or excess stock at any inventory level.
Commitment of top management to the principles of JIT quality if lacking, will in turn reduce the continuous production leading to zero stock.
In other aspect of total quality, over centralization of responsibility and authority at the top management level was also observed to be one of the major impediments to the firm’s growth.
Documentation, awareness, evaluating the cost of quality, the scope and frequency of quality audits, the acceptance of the work of quality personnel in the firms are factors that must be looked into by any firm (flow station) wishing to adopt total quality.
It was also established that the success of the quality programme of a firm is significantly determined by the type of model the firm uses, availability and type of codes, standards, techniques and the awareness level of employees in their use.

RECOMMENDATIONS

Based on the Discussion above, the followings are recommended;

That project managers of any flow station should strongly consider the option of adopting JIT of total quality at project planning phases and as well as execution phases, as the shortest, economical etc route to acceptability by client and third party that may be impacted by their activities.
That project managers of any flow station should adopt the Reorder point model of actualizing JIT in handling any cases of variability in both the quantity demanded and their corresponding lead times.
The management of project engineering companies (flow stations) should re-orientate the thinking that investment in quality is a waste and that only the minimum requirements should be done. This is not true. JIT of total quality also implies that every process in projects planning, designing, execution and implementation can be done better leading to cost reduction, loss prevention and repeat buying on the long run.
Clients (Investors) of engineering projects/flow stations project should begin to specify that JIT of TQ principle, among other tools, should be used in executing their projects as part of their purchase/procurement system. Only in this way, that contracting firms will begin to imbibe the culture of doing things in the right way at first attempt.
Managers and investors of different companies should embrace Just-In-Time technique of Total Quality Management in achieving their goals.
Just-In-time of total quality is good for the wider society and it is in the interest of all, irrespective of occupation, to begin to imbibe its principles which will help to reduce dependence on foreign goods and services, and lead to eventual prosperity for all, if carefully integrated into our national culture, especially by the small scale enterprises. Our ability to compete in the face of rapid globalization of our economy may well depend on JIT of Total Quality management.

CONCLUSION

Just-in-time of Total quality is attitudinal and part of a firm’s over all culture. Doing things the quality way does not negatively affect production, in fact, it helps to prevent doing things a second time over with its associated cost impact. This study revealed a positive, useful model of Just-in-time through Reorder point of variable demands and variable lead time. In the formulation of these models, the following assumptions were made: (i) The test statistic, Z is normally distributed with 0 mean and variance 1

The interval of the safety stock is taken to be non-negative.
There is variability of the quantity of the firm and as well their production lead times.
Sample values were used to estimate the population values.
The model is valid if and only if the service level of the flow station is known.

The study also revealed that documentation, awareness level, evaluating the cost of quality, the scope and frequency of quality audits, the availability and types of codes used, standards and techniques all amounts to the overall “SUCCESS OF THE QUALITY PROGRAMME OF A FIRM”. All these are important in the full attainment of any meaningful effort geared at improving quality, be it in the private or public sector.

REFERENCES

Akanya, J.N., (SON) (1999): “ISO 9000 Series Quality Management standards – implementation and Route to Quality system Certification”, A paper delivered at NSE Technical workshop on Quality, Port Harcourt.
Bowersox ,C. and Cooper (2002): “ Supply Chain Logistics Management”, 1^st edition, McGraw-Hill Inc. New York.
Cetinkanya, S, Mutlu, F, and Lee C.Y (2006): “A comparison of out bound dispatch policies for integrated inventory and transportation decisions. European journal of operational research 2006; 171(3): 1094-112.
Davis, Aquilano and Chase (2000): “Operations management for competitive Advantage”, 4^th edition, McGraw-Hill Inc New York
Feigenbaum and Armand V. (1991): “Total Quality control”, 3^rd edition, McGraw-Hill Inc. New York.
Hajek and Victor, G. (1984): “Management of Engineering projects”, 3^rd edition, McGraw-Hill Inc. New York.
ISO 8402 and 9000 series (1994): “International standards for Quality Management”, 4^th edition, international organization for standardization, Switzerland.
Juran, J.M. , Gryna and Frank M. (1993): “Quality planning and Analysis”, 3^rd edition, McGraw-Hill Inc. New York.
Lockyer and Keith (1983): “Production Management”, 4^th edition, pitman publishing Ltd., London.
Melnyk and Swink (1997): “Value-Driven Operations management””, 1^st edition, McGraw-Hill Inc. New York.

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