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APPLICATION OF JUST-IN-TIME TECHNIQUE OF
TOTAL QUALITY MANAGEMENT IN OIL FLOW
STATIONS
BY
UTAZI, JOHN. O
PG/M.ENG/07/42599
DEPARTMENT OF MECHANICAL ENGINEERING
FACULTY OF ENGINEERING
UNIVERSITY OF NIGERIA
NSUKKA
NOVEMBER 2009
2
APPLICATION OF JUST-IN-TIME
TECHNIQUE OF TOTAL QUALITY
MANAGEMENT IN OIL FLOW STATIONS
BY
UTAZI, JOHN .O PG/M.ENG/07/42599
A PROJECT WORK PRESENTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE
AWARD OF THE DEGREE OF MASTER OF ENGINEERING IN MECHANICAL ENGINEERING
OPTION: INDUSTRIAL ENGINEERING AND MANAGEMENT
TO THE
DEPARTMENT OF MECHANICAL ENGINEERING
FACULTY OF ENGINEERING
UNIVERSITY OF NIGERIA
NSUKKA
3
CERTIFICATION
Utazi, John. O., a postgraduate student in the Department of
Mechanical Engineering and with the registration number
PG/M.ENG/07/42599, has satisfactorily completed the requirement for
courses and research work for the degree of Master of Engineering in
Mechanical Engineering with option in Industrial Engineering and
Management. The work embodied in this project is original and has not
been submitted in part or full for any other diploma or degree of this or
any other university.
……………… ………… ..………………… ………… UTAZI JOHN, O. DATE ENGR PROF.C.I EZEKWE DATE
(STUDENT) (PROJECT SUPERVISOR)
………………………. ..…… ……………….. ………. ENGR.PROF. S.O. ONYEGEGBU DATE EXTERNAL EXAMINAR DATE
(HEAD OF DEPARTMENT)
4
DEDICATION
I dedicate this work to the Almighty God for His guidance and protection
through out the period of this research work. It is also dedicated to firms,
individuals wishing to enhance JIT of total quality management.
5
ACKNOWLEDGEMENT
I give glory to the Almighty God for the enablement and guidance, for He
alone is the source of all knowledge embodied in the mystery of the Trinity.
Unique appreciation goes to my project supervisor, Prof. C.I. Ezekwe, for
the excellent supervisory skills provided during the planning and review of
every phase of this work. My sincere thanks goes to my sub-supervisor Engr.
C.I. Ezema for his total commitment in actualizing this noble task. My
unique and sincere appreciation goes to Prof. Agunwamba of Civil Engr.
Dept. UNN, Prof. Uche of Statistics Dept., UNN and in a greater way to
Nwosu Christian (Prof. Emeritus) of Statistics Dept. UNN for their
wonderful academic contributions at the difficulty stages of this research
work. Special thanks also goes to some of my post-graduate course mates for
their wonderful encouragement rendered to me at some difficult stages of
this work. I am deeply indebted to my immediate family who made all
necessary sacrifices in the course of this study. I also wish to express my
deep gratitude to the management and staff of ALCON NIG. Ltd, Noble
Engineering Nig Ltd and EXPRO TECH OIL AND GAS NIG. LTD for
their immense cooperation given to me especially in obtaining their
individual data.
It is my fervent hope that every reader of this work will be motivated
to pursue or adopt JIT of Total Quality, which will be the driver of all
economies in this century.
6
ABSTRACT
This work examines the concept of just-in time technique through reorder
point of total quality management with a view to understanding and appreciating
how its principles, techniques and model can be used to successfully manage flow
station’s project of variable demands and lead times.
Flow stations and its facilities, operated by multinational corporations, dot the land
scape of the entire Niger Delta region are not well managed. Some of these were
built over 25 years ago with little regard for safety, continuous service and the
environment. Due to internal and external pressure, the Shell Petroleum
Development Company (SPDC) among other flow stations embarked on major
upgrade of these flow stations to meet international standard, optimize production,
enhance plant safety, ensures streamlined production, maintainability and reduce
impact of its operation on the environment. To achieve these goals, TQM
strategies were deliberately developed and adopted by the contracting company,
ALCON NIG. Ltd to satisfy the client and enhance its productivity, economic
performance and to satisfy all stakeholders in the immediate environment where
these plants are located.
This work also identifies principles and techniques for building quality into all the
stages of a project cycle.
Information and data from field experience and survey are critically examined and
necessary findings presented.
The ROP model formulated to handle cases of variable demands and lead times of
selected flow stations were also tested using the data obtained from the field.
Recommendations that will hopefully encourage managers of flow stations project
to embrace the principles of Just-in-time of TQM are discussed with a view to
enabling them use its benefits to enhance productivity, continuous service,
acceptability by various stakeholders and economic performance in the face of
increasing competition amongst firms.
7
TABLE OF CONTENTS
Title page - - - - - - - - - - - - - - - - - - - - - - -- - - - - - i Certification - - - - - - - - ii Dedication - - - - - - - - - iii Acknowledgement - - - - - - - iv Abstract - - - - - - - - - v Table of contents - - - - - - - - vi List of tables - - - - - - - - vii List of figures - - - - - - - - viii CHAPTER ONE-INTRODUCTION 1.1 Background - - - - - - - - 1 1.2 Importance of the study - - - - - - 1 1.3 Basis of the study - - - - - - - 3 1.4 Research objectives - - - - - - 4 1.5 Significance of the study - - - - - - 5 1.6 Research methodology - - - - - - 5 1.7 Model formulation - - - - - - 6 CHAPTER TWO-LITERATURE REVIEW 2.1 Historical review - - - - - - - 7 2.2 Concept of just-in-time technique of TQM - - - 9 2.3 Other tools of total quality management (TQM) - - 10 2.4 Total quality – its meaning, significance and composition - 12 2.5.0 The ISO 9000 Bench mark for quality - - - - 17 2.5.1 Basic system design for JIT of TQ in project management 20 2.5.2 Management policy decision and planning - - - 23 2.5.3 Configuration management and work breakdown structures in JIT
project quality planning - - - - - - 24 2.5.4 Organizing the Just-in-time TQM structure - - - 28 2.5.5 Quality consideration in human resources - - - 31 2.5.6 Quality consideration in Engineering design using JIT project
management - - - - - - - - 33 2.5.8 Design inputs - - - - - - - 34 2.5.9 Design outputs - - - - - - - 35 2.6.0 Quality consideration in managing materials and project inputs 37
8
2.6.1 Procurement data processing - - - - 38 2.6.2 Material control - - - - - - - 41 2.6.3 Building quality into project execution processes - - 41 2.6.4 Procedures and instructions - - - - - 43 2.6.5 Process control - - - - - - - 44 2.6.6 Final inspection - - - - - - - 44 2.6.7 Quality records - - - - - - - 45 2.6.8 Non-conformances - - - - - - - 46 2.6.9 Corrective action - - - - - - - 47 2.7.0 Measurement and testing - - - - - - 47 2.7.1 Audits and field feed back - - - - - 48 2.7.2 Audit scheduling - - - - - - - 49 2.7.3 Audit planning - - - - - - - 49 2.7.4 Audit personnel - - - - - - - 50 2.7.5 Audit reporting - - - - - - - 50 2.7.6 Audit follow-up 2.7.7 Integration and enculturization of JIT of TQM programme 51 2.7.8 Other Aculturized tools and techniques for total quality - 52 2.7.9 When to reorder with EOQ - - - - - 60 2.8.0 Inventory control - - - - - - - 61 2.8.1 Inventory control model 62 CHAPTER THREE -PROBLEM FORMULATION/RESEARCH
METHODOLOGY 3.0 Chapter overview - - - - - - - 71 3.1 Data collection method - - - - - - 71 3.2 Model notations - - - - - - - 72 3.3 Model formulation - - - - - - - 73 3.4 Model assumptions - - - - - - 75 3.5 Result specification - - - - - - 75 CHAPTER FOUR - DATA PRESENTATION AND ANALYSIS 4.1 Chapter over view - - - - - - - 76 4.2 General analysis of survey - - - - - 76 4.3 The questionnaire - - - - - - - 78 4.4 Analysis of questionnaires field data - - - - 80 4.5 Employees’ awareness level of company performance statistics 80 4.5.1 Availability of specific company goals, policies and objectives 81 4.5.2 Assessment of documented quality system - - - 83 4.5.3 Assessment of specific quality plans and practices - - 84
9
4.5.4 Assessment of available other total quality tools and techniques 85 4.5.5 Availability and scope of quality audit system - - 86 4.5.6 Frequency of auditing - - - - - - 87 4.5.7 Assessment of scope of quality assurance - - - 87 4.5.8 Assessment of assurance records - - - - 88 4.5.9 Quality personnel authority - - - - - 89 4.6.0 Assessment of availability and type of formal and informal
association amongst workers - - - - - 89 4.6.1 Availability of reward for quality - - - - 90 4.6.2 Assessment of length of education and experience of workers 91 4.6.3 Availability of procedures for evaluating quality cost - 92 4.6.4 Responsibility for quality management - - - 93 4.6.5 Acceptability of quality functions - - - - 95 4.6.6 Testing of model formulation - - - - - 97 CHAPTER FIVE – DISCUSSION, CONCLUSION AND
RECOMMENDATION 5.1 Discussion - - - - - - - - 103 5.2 Summary of finding - - - - - - 103 5.3 Recommendation - - - - - - - 104 5.4 Conclusion - - - - - - - 105 References - - - - - - - - 108 Bibliography - - - - - - - 110 Appendix - - - - - - - 112
10
LIST OF TABLES
Table 1.1 The IAO 900 family of standards. Table 2.1 Tools and techniques used for quality improvement Table 4.1 Survey response Table 4.2 Response by category Table 4.3 Summary of questionnaire structure Table 4.4 Employee’s awareness level of company’s information Table 4.5 Availability of specific company goals, policies and objectives Table 4.6 Assessment of availability and awareness of the documented
quality system. Table 4.7 Assessment of availability and awareness on quality plans,
procedures, codes and standards. Table 4.8 Assessment of available TQ tools and techniques in use. Table 4.9 Span of Quality Audit. Table 4.10 Frequency of project audit. Table 4.11 Frequency of implementation of audit findings. Table 4.12 Scope of quality assurance. Table 4.13 Span of quality control Table 4.14 Availability and retrieval of quality records. Table 4.15 Availability of authority to quality personnel. Table 4.16 Management tolerance of workers association. Table 4.17 Type of association encouraged by management. Table 4.18 Availability o reward for quality Tale 4.19 Average length of formal education of workforce. Table 4.20 Average experience of workers. Table 4.21 Availability of procedures for evaluating cost of quality per
project. Table 4.22 Approximate cost of quality per project. Table 4.23 Responsible focal point for quality. Table 4.24 Acceptance of quality department’s work by top management. Table 4.25 Acceptance of quality department’s work amongst workers. Table 4.26 Flow station (A1) with variable demands, service level and lead
time. Table 4.27 Flow station (A2) with variable demands service level and lead
time. Table 4.28 Flow station (A3) with variable demands, lead time and service
level.
11
LIST OF FIGURES
Figure 2.1 Relationship between QC, QA and TQ
Figure 2.2 Basic system design requirements for a TQM project.
Figure 2.3 Configuration management Activities.
Figure 2.4 A typical TQM project organization chart.
Figure 2.5 Typical design schematic sequence.
Figure 2.6 Typical procurement schematic sequence.
Figure 2.7 Skilled man power loading histogram
Figure 2.8 ROP at safety stock.
Figure 2.9 Economic order quantity with safety stock.
Figure 2.10 Economic order quantity when there is shortages.
Figure 2.11 Similar triangles for determining economic order quantity.
Figure 2.12 Economic lot size when supply is continuous.
12
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
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.
1.2 IMPORTANCE OF THE STUDY
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
13
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.
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.
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).
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.
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.
14
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.
1.3 BASIS OF THIS STUDY
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.
The flow stations project are spanned through all key engineering,
disciplines Viz; mechanical, Civil, structural, instrumentation, electrical and
environmental.
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
15
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.
The results obtained with the phases II and III quality models were out
standing compared with phase I.
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.
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.
1.4 RESEARCH OBJECTIVES
The Objectives of this study are;
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).
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.
16
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).
To make recommendations for improvement strategies in the
management of flow stations project using Just–in–time of TQM
principles and techniques.
1.5 SIGNIFICANCE OF THE STUDY
It is hoped that at the end of this research work, the information obtained
will;
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.
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.
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.
To guide future researchers, operators and managers of
engineering projects (flow stations) the concept of Just–In–Time of
Total Quality in project Management.
17
1.6 RESEARCH M ETHODOLOGY
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;
(i) 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.
(ii) The system documents of the companies 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 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).
1.7 MODEL FORMULATION.
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.
18
CHAPTER TWO
LITERATURE REVIEW
2.1 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
19
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.
20
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).
2.2 CONCEPT OF JUS-IN-TIME TECHNIQUE OF TOTAL
QUALITY MANAGEMENT (TQM)
According to American production and inventory control society
(APIC), JIT is “A philosophy of manufacturing based on planed elimination
of all waste and continuous improvement of productivity”. It encompasses
successful execution of all manufacturing activities required to produce a
final product, from engineering to delivery all states of conversion from raw
material onward. It is also believed to be a track which follows the
path/route of continuous improvement. Just-In-time is believed to; Attacks
Wastes of all kinds may be inventory time or scrap etc, identifies bottle
necks and problems and also helps in achievement of streamlined
production.
Just-In-time is also required in the following factors; (i) adoption of
TQC so as to achieve the target of quality (ii) participation of employees at
various levels (iii) small lot size processing so as to attack all wastes and
also in production, it utilizes the pull system ratter than traditional push
21
system which focuses on the end of the production line and pulls work
through from preceding operations.
2.3 OTHER TOOLS OF TOTAL QUALITY MANAGEMENT
(TQM)
(i) PARATO ANALYSIS: This provides one of the most powerful
ways of looking at data for the purpose of quality improvement. It
is based on the 80/20, rule. 80 percent of the problems can be
attributed to 20 percent of the causes. Hence, it identifies the cause
of the majority of the problems. It helps the user to quickly and
visually identify the most frequently occurring type of defects so
that the causes of these defects should be probably be identified
and attacked first. It is an investigatory tool that enables the quality
assurance service to assign priorities to the possible sources of
quality defects. This leads to PARETO PRINCIPLE, which says
that there are many unimportant problems but only a few serious
ones. The diagram which is drawn with the aid of HISTOGRAM
enables us objectively to identify the serious problems we are
currently facing and take up the really important ones as a matter
of policy.
(ii) CAUSE-AND-EFFECT DIAGRAM: This is nick-named the
“fish bone diagram”. This is because of its skeletal structure which
resembles the skeleton of a typical fish. It illustrates the
relationship between characteristics (the results of a process) and
those causes considered for technical reasons to exert an effect on
the process. When used with other statistical tools such as pareto, it
is useful for promoting process improvement on a priority basis,
accumulating and organizing knowledge and technology,
22
consolidating the ideas of all employees for control–related
activities, and facilitating discussions, education a variety of other
aspects of human relations. It is mostly used to illustrate the
various sources of non conformities in products and
interrelationships. It is also used in focusing the attention of
operators, manufacturing Engineers, and managers on quality
problems.
(iii) HOUSE OF QUALITY (Quality function development): This is a
graphic tool for defining the relationship between customer desires
and the firm/product capabilities. It is part of QFD and it utilizes a
planning matrix to relate what the customer wants to, how a firm
(that produces the products) is going to meet those wants. The
basic structure is a Table with “what” as the labels on the left and
“How” across the top. The roof is a diagonal matrix of “How vs
How” and the body of the house is a matrix of “what vs How”.
Both of these matrices are filled with indicators of whether the
interaction of the specific item is a strong positive, a strong
negative or somewhere in between.
iv TAGUCHI TECHNIQUE: Genichi Taguchi developed in
interesting quality cost model that is today called Taguchi technique
or taguchi’s loss function. The basic philosophy is that, when ever
something is produced, a cost is imposed on society. Part of that cost
is borne by the producer and part is borne by the customers as a result
of using the product or service. If these cost are plotted as a function
of “quality”, producer cost tend to increase with increased quality;
customer costs, tends to decrease because of greater efficiency, less
breakdown and so forth. The total cost or loss to society is the sum of
23
these two cost functions it tends to decrease over some range of
increasing “quality”, until a minimum is reached and then increased
beyond that point. Hence, the focus is on minimizing deviations in
parameter settings (Xo) and reducing process variability. The
parabolic loss function equation proposed by Taguchi for two sided
specifications is L = K (δ2 + ∂2) = K (M S D); where δ = the current
best estimate of process standard deviation, ∂ = (μ-T) where; µ = the
current best estimate of process centering, T = the target or nominal
dimension. K=A constant used to convert M S D = (δ2 + ∂2) into
monetary unites. MSD = Mean – Square Deviations.
(v) QUALITY CONTROL PROCESS CHARTS (PROCESS
CHART):
This is a graphic representation of the sequence of events or steps that
occur in the work method or procedure, classifying them by symbols
according to the nature of the event. It is a device for visualizing a procedure
for the purpose of improving it. It is used in process analysis by
investigating what is happening in practice, and revises the process chart on
the basis of the results of the analysis so as to facilitate process chart. Some
symbols are used eg; O operation, Inspection,
Transport, D delay etc.
2.4 TOTAL QUALITY – ITS MEANING, SIGNIFICANCE AND
COMPOSITION
According to Lockyer [1983:P.88], four main factors that determines
the acceptability of a product by a consumer Viz; Quality, reliability,
availability (delivery) and reliability price, but to much larger extent, quality
and reliability play much more significant roles in most situations. The
ISO/TC No. 176 [1994:P.2], emphasized the importance of quality thus;
24
“today, all industrial enterprises are finding that their principal market place
competitors include companies headquartered in other countries,
consequently, quality continues to grow in importance as a factor in market
place success”.
The primary purpose of business is to make profit in the process of
satisfying customers’ needs and requirements. In contractual situations such
as in engineering projects, these needs and requirements are usually
described in the service specifications often, the specifications by the client
may fail to meet part or all of his requirements due to deficiencies in the
specifications used or in the organization itself. Also, in a project situations,
it is often not possible for the client to state all his requirements in an order,
it therefore behaves on the contractor, as a specialist, to develop ways of
meeting the minimum specifications set by his client and ‘work’ quality into
the entire stages of the project cycle.
In doing this, the contractor will have to rely on standards with which
specifications can be compared. A standard is a document or physical.
Specimen defining or giving examples of parameters, properties of
professional performances of work. It is also a set of specifications for parts,
materials, product or processes intended to achieve uniformity, efficiency
and a specified quality [ Shigley and Mischke 1989,p.10]. Standards defined
specifications and any standard is a minimum requirement for a defined
situation or process which provides a basis for comparing current practices
with established parameters.
Another use of standard is in the process of standardization, which seeks to
place a reasonable limit on the number of items in the specifications so as to
provide uniform inventory of tooling, sizes, shapes, spares and varieties.
25
In certain situations, the aim might be to drew a set of specifications to
assure that some specified degree of “safety parameters” are built into the
product (or project). This type of standard is called a CODE. It is a set of
specifications for the analysis, design, manufacture and construction of
something [Shigley and Mischke 1989,p.10]. The overall aim here in the use
of codes is to produce things, which are operationally safe without end-
angering the life of the user, reliable and functionally satisfactory to the user
and third party who may be impacted by its use.
A procedure is a laid down and previously agreed route to achieving a
defined project objectives. Procedures are project control tools to
ensure and assure that activities leading to the manufacturer or
installation of something are done systematically according to an
agreed pattern and to pre-set specifications [Weihrich and Koontz
1993,p.125]. Procedures may cover both administrative and technical
activities and is usually administered at the middle level management.
Examples are; project costing and evaluation procedures
(administrative) and non-destructive testing procedure (technical).
Practices are documented actions based on experience acquired over
the years from often repeated operations which have come to be
regarded as part of the culture of the firm, for instance, design and
Engineering practice (D.E.P). It is not standard parse, but documented
evidence that certain processes will produce a desired end-result.
Project guidelines, instructions and statements are a body of rules
developed by a firm to guide its member at the working level while
carrying out their routine functions. Instructions and statements
particularly, give details of actions that are required by the sender
from the recipient.
26
A policy e.g. company’s quality policy, shows the overall intentions
and direction of that company expressed formally by top management.
Quality is all about doing things right the first time and in project
management situations, a client will judge the contractor by his ability to
follow relevant specifications, codes, procedures, practices and denied
polices, project guidelines and instructions, including a documentary
evidence that indeed every phase of the project has had the level of quality
requirements built into it. The ISO standard No. 8402 [1994:p.6], has
defined quality as the “totality of characteristics of an entity that bear on its
ability to satisfy stated and implied needs”. An entity in this context is tat
which can be individually described and could be an activity, a process, a
product, an organization or combination of all these.
In project management, therefore it follows that the intention of quality must
include meeting, satisfying, conforming to prior agreed and negotiated client
needs, requirements and expectations, including the expectations of all
stakeholders in the project.
The operational techniques and activities that are used to fulfill
requirements for quality is termed quality control, while quality
assurance implies all planned and systematic activities implemented
within the quality system and demonstrated as needed to produce
adequate confidence that an entity will fulfill requirements of quality.
The quality system of a firm include its organizational structure,
available standards, specifications, procedures, processes and
resources needed to implement quality management [The ISO
standard No 8402, 1994: p.16].
Modern quality management and hence its implementation is not just
mere quality control, as widely misunderstood, but includes all
27
activities of the overall management function that determine the
quality control and the quality system. Since the mid 80’s, the global
trend has been the conscious realization that a management oriented
quality system is necessary to achieve and sustain good economic
performance. This than is the underlying basis for the wider concept
called Total Quality Management (TQM).
The ISO 8402 [1994:p.17], has defined TQM as the “management
approach of an organization centered on quality, based on the
participation of all its members and aiming at long-term success
through customer satisfaction and benefits to all members of the
organization and to society”. This brings to fore, the four vital
principles on which TQ is anchored viz:
Total quality must be the higher priority of the firm and all individuals
in the team.
The TQ team must have an aim, a goal which is properly
communicated, generally understood and accepted by every team member.
The concept of client is broader than just the purchaser (investor), but
includes all employees, suppliers, stakeholders, the community and every
interface that could be possibly impacted by a defined activity. It is this
broadness that accommodates the needs and expectations of every
stakeholder and makes the team responsible in the eye of every body.
There are some values which every member of the team holds dear
integrity, honesty, commitment, active participation and a sense of
ownership. To meet these principles, the TQ practitioner must appreciate
that JIT of TQ is a working philosophy, it is a management journey, not a
destination and it calls for continuous measurable improvements at all levels
of the organization [Akanya, p.13]. the just-In-Time of TQM concept
28
applied to project management would mean a management approach that
would centre on quality, with the participation of all team members aiming
at client and stakeholders’ satisfaction at every phase of the project life
cycle.
The relationship between quality control, assurance and TQ is shown is fig
2.1 to provide clearer understanding of each concept
Fig 2.1: RELATIONSHIP BETWEEN QC, QA AND TQM
Management policies and
actions cent red on quality
All activities associated
with the attainment of quality
Actions and systems to
measure and regulate quality
SOURCE. Adopted, with modifications, from standards organization of
Nigeria (SON), lectures slide an quality (1994).
SOURCE: Adapted, with modifications, from standards organization of
Nigeria (SON), lectures slides on quality (1994).
2.5 THE ISO 9000 BENCH MARK FOR QUALITY
TOTAL QUALITY MANAGEMENT (TQM)
QUALITY ASSURANCE (QC)
QUALITY CONTROL (QC)
Effective QC confirms that QA is working An understood QA system confirms that TQM is working TQM ensures that QA and QC works effectively
29
The ISO 9000 family of international standards provides a kind of
model, detailing minimum requirements for achieving the TQ goal. It
prescribes what elements quality systems should encompass but not how a
specific organization should implement these elements. The objective is to
ensure that quality is assured at every stage of the production or service
process.
The international Organization for standardization (ISO) was
established on February 23, 1947, having metamorphosed from the
international standardizing Association (ISA), itself having been founded in
1926. ISO has since issued numerous standards and models covering many
fields of human endeavor. However, as ubiquitous as some of these
standards have become, none has matched the rapid rise to world wide
application of the ISO 9000 series of standards, which is recognized
internationally as a bench mark for measuring quality in a trade context
[Akanya, p.8]. The series provides criteria for evaluating quality assurance
and quality management within an enterprise and between its customers or
public. It contains generic guide lines for quality systems covering every
conceivable field of human activity from manufacturing to servicing. Table
1.1 gives a brief description of standards in the ISO 9000 series.
30
TABLE 1.1 THE ISO 9000 FAMILY OF STANDARDS
STD No. DESCRIPTION USES REMARKS
ISO 9000 Quality Systems-
Quality Manage-
ment and Quality
Standards-
Guide Lines for
selection and Use.
* For non – contractual
situation
* Guides management in
selecting and using the
appropriate quality model
(s).
ISO 9001 Quality systems-
model for quality
assurance in Design /
Development,
production,
installation and
servicing
* Model for use in
contractual situations
when conformance to
specified requirements is
to be assured by the
supplier during design,
development, production,
installation and servicing.
Good for EMPIC
contracts ie Engineering,
manufacturing,
procurement, installation
and commissioning
projects.
ISO 9002 Quality systems –
model for quality
assurance in
production and
installation.
* For contractual
situations where
conformance to specified
requirements is to be
assured by the supplier
during production,
installation and servicing
Good model for project
management.
ISO 9003 Quality systems –
model for quality
assurance in final
inspection and Test.
* for contractual
situations when
conformance to specified
requirements is to be
assured by the supplier
solely at the final
Good for third party
inspection, services, and
for service providers.
31
inspection and testing
phase.
ISO 9004 Quality management
and quality system
Elements guidelines.
*For non – contractual
situations.
* Used in the
development and
implementation of in-
house quality system with
a view to ensuring
customer satisfaction
* Used with ISO 9000
SOURCE. Constructed from ISO 9000 series; International standards for Quality
management, 4th Edition, (1994. p. 71 - 124).
2.5.1 BASIC SYSTEM DESIGN FOR JIT OF TQ IN PROJECT
MANAGEMENT
Like any other organization effort, total quality must be properly
design to suite the requirements of the project in contractual situations,
within the ambit of the organization’s mission and business goals. An
effective TQ design must ensure that there are mechanisms of identification
and control of all sub-elements in the project cycle, in a way that enhances
quality at every stage with adequate documentary evidence that all defined
acceptance criteria have been met and are traceable.
In the case study project, the just-in-time of TQ was designed as
shown in fig 2.2. The ISO 9001 provided the basis for the design. It is
important to note the feed forward and feed back effort and the
consideration given to the impacted environment, in the quality loop.
32
Eight main steps were taken to achieve the objectives of the design
namely;
(1) Firm management policy and a proper plan
(2) Organizing an effective project structure
(3) Emphasis on quality consideration in employee selection,
training and motivation.
(4) Total quality consideration in engineering design and project
technical specifications.
(5) Effective control and deliverance of purchased materials, as
well as third party inputs.
(6) Proper control of project execution processes
(7) Adequate audit and field back programmes.
(8) Integration and enculturization of gains of the programme.
The discussion that follows gives details of how and why these steps
were taken, including the theoretical basis underlying each step.
33
FIG 2.2 A BASIC SYSTEM DESIGN REQUIREMENTS FOR A TQM PROJECT
SOURCE. TQM DESIGN FOR FLOW STATIONS UPGRADE PHASE II ALCON, 1995
Available An Appropriate Quality Model Quality Policy Decision Quality Planning Quality Procedures Task and work instructions Document control system Adequate human resources.
DESIGN PURCHASING
PROJECT EXECUTION PROCESSES
VENDOR
QUALITY AUDIT
FINAL INSPECTION AND TESTING
REPAIRING WORK
FEED FORWARD Ѕ FEED BACK EFFORT FEED FORNARD EFFORT ONLY
POST COMMISSIONING ENGINEERING SERVICES
PROJECT COMMISSIONING AND HANDOVER
CLIENT
ENVIRONMENTAL IMPACT BY PROJECT
SCRAP PAILED PROJECT
PROJECT GUARANTEE PERIOD
34
2.5.2 MANAGEMENT POLICY DECISION AND PLANNING
Weihrich and Koontz [1993, p. 199], have defined decision as the
selection of a course of action from among alternatives, while planning
involves objectives and the actions required to achieve them. A plan can
therefore not be said to exist unless a decision has been made. Juran et al
[1993, p.119] defined a policy as a broad guide to action or a statement of
principles that guide mangers’ thinking in decision making. In project
management, the decision to apply TQ principles must be evaluated on the
basis of some deliberate policies with the aim of transforming the
organization into a quality company within the framework of its mission
and business goals. It follows therefore that only those who are equipped
with the necessary authority (at the top most management level) can decide
on the ways and means of committing the company’s resources in a TQ
policy.
In this case study, for instance, the decision to adopt JIT TQ, the
model to be adopted, the investment requirements etc; were taken
during the technical and commercial proposal stages of the project
which allowed the cost elements to be built into the project at the
tendering stages. A quality route selection scheme as already seen in
fig 2 was developed during the front end planning of the project. The
decision to adopt Just-in-time of TQ was taken based on its
experience and to give it competitive advantage ever other builders,
reduce field problems (post Commissioning failures, client complaints
etc.), offer some production cost reduction, increases profit yield and
reduce down time associated with repairs, retesting etc. prior to phase
II of the project ALCON’S concept of quality was still traditional
characterized by a mere programme keyed to assure conformance to
35
client specifications and without sufficient budgetary cover to permit
preventive efforts. In phase II and III, when it decided to introduce
Just-in-time of T Q, the project objectives became more centrally
defined and properly structured to minimize problems in delivery and
service. “Fire fighting” approaches usually adopted for correcting
defects became unnecessary, since the new techniques effectively
closed the loop holes that created the problems in the first place.
2.5.3 CONFIGURATIONMANAGEMENT AND WORK
BREAKDOWN STRUCTURES IN JUST-IN-TIME PROJECT
QUALITY PLANAING
According to the ISO 9004 part 7 [1994: p.405], configuration
management (CM) is a management discipline that applies technical and
administrative direction to the configuration, production and support life
cycle of a configuration item (CI) and aggregation of a project discrete
portions which can be treated as a single entities in the management process.
CM can be seen as the implementation of a formal management and
technical direction and controls definition of the functions and physical
characteristics of each item, to control the adoption of changes and to
maintain continuous accounting of the design and all equipment
configuration item of a CM are usually selected, by a process of
decomposition which divides the project structure into logically related
aggregates. CM helps in monitoring technical documentation to ensure
complete visibility of the products and consistency between the
documentation and the completed project itself.
A typical Configuration management plan (CMP) comprises five
phases – concept formation, definition execution, commissioning and post
commissioning which must be tailored to the project by the project manager.
36
A typical flow diagram of the CMP used for the case study is shown in fig.
2. 3. In our CM model, configuration base lines were established separating
the different phases and stages of the project. These represented points in the
project, which provided a precise identity of the results of the proceeding
phase and the objectives of the following phase. The effort on a project
could not be allowed to proceed until the documents consists of each base
line were verified as complete and accurate, and accepted by all parties. In
this way the client was carried along and assured that requirements were
being met. These base line documents, consisted of design documents,
approved for construction drawings, material take-off documents,
specifications, quality manuals and plans, project quality audit reports,
inspection and
37
Table 30
FIG. 2.3 CONFIGURATION MANAGEMENT ACTIVITIES
SOURCE: CM DESIGN FOR FLOW STATIONS UPGRADE, PHASE II, ALCON (1995)
─ Contract Award ─ Pre-qualification of personnel ─ Arrange plans and equipment
Stop 9 2
3 4 5
6 7 8 10 1
GENERAL MOBILIZATION PHASE
ENGINEERING PHASE
PROCUREMENT PHASE
YARD FABRICATION PHASE
MOVEMENT TO SITE
SITE PREINSTALLATION PHASE
SHUT DOWN WORKS PHASE
COMMISSIONING PHASE
POST COMMISSIONING PHASE
DEMOBILIZATION
CONFIGURATION MANAGEMENT PLAN
─ Detailed engineering ─ Design review ─ AFC Drawings ─ Approval of specifications ─ Materials acquisition ─ Detailed CMP ─ Detailed WBS
-Order material ─ Purchasing ─ Expediting ─ Shipment ─Forwarding ─Customs clearance ─ Delivery to site
─ Spool fabrication ─ NDT ─ Painting ─ Records ─ Package ready for shipment to site
─Shipment to site ─ Erect temporary site facilities ─ Ready to start inst work ─ Settle with communities
─Decommission ─Redundant system ─ Pre-install pipe work and new equipment ─ Civil works ─Inst./Electpre-shut down works
─Decommission producing system ─ Inst. new pipe work and tie-in to equipment ─ Tie-in all pre-installed items ─ Mach; instr/Elect ─ Carry out pre- commissioning cheeks
─ Start-up new and existing equipment ─ Carry out operating parameters check ─ Ensure all parameters are recorded
─ Paint entire facilities ─ clean-up site
─ settle all communities ─Demobilize all resources from site ─Reconcile materials ─ Hand over all works with certificates of completion ─ Produce project documentation and reports ─ close –out contract
Base line Base line Base line Base line Base line Base line Base line Base line Base line Base line
Start
LEGEND
Project effort
38
testing records, Operating Manuals etc. All documents included revision
information and traceability indexes. The CM base lines thus, provided a
stop gap opportunity to assure and reassure that the project quality objectives
were being met.
Closely related to CM is the concept of work Breakdown structure
(WBS), whereby the work items in the project were decomposed or broken
down into specific work packages with each package containing its budget, a
schedule, some performance evaluation criteria and information relating to
effort [Hajek: 1984 p.20]. The benefit of this is that it allows quality inputs
to be recognized and planned into every phase and activity in the project.
The Overall objectives of using configuration Management and work
breakdown structures is to avoid:
(i) Delays on decisions affecting optimal changes.
(ii) Undirected flaws requiring corrective actions.
(iii) Excessive cost of changes.
(iv) Documentation of those are inconsistent with actual site situations,
(v) Project objectives which are not clearly stated and understood by
every member of the T Q team.
39
2.5.4 ORGANIZING THE JUST-IN-TIME T Q M STRUCTURE
Heinz Weihric et al [1993: p. 20] have defined organizing, as that part of
managing that involves establishing an intentional structure of roles for
people to fill in an organization. It is intentional in the sense that all tasks
necessary to accomplish pre-selected goals are assigned to people who can
to them best and with clearly defined boundary of actions, its purpose being
to help create an environment for human performance. Therefore, the
effectiveness of a Just-in-time of a TQM programmed in a project depends
largely on an efficient and suitable human structure carefully deigned to
meet the project objectives.
In this case study, prior to kick-off, a project organization structure
(see fig. 2.4) was designed to allows flexibility in meeting JIT of TQM
objectives within all project disciplines, as well as allow for accountability
for action by all. Roles were assigned to all projects key personnel in the
team. Which was designed in line with requirements of the ISO 9001
model. The project manager was assigned the additional responsibility as the
leader of the TQM team, thus making him the TQM focal point, apart from
his primary duty for steering the technical and financial aspects of the
project. Similarly, every sectional head was assigned the additional task of
being responsible for quality in his area of Jurisdiction with all workers in
his team being accountable for their responsibility was that of the integrative
role of co-coordinating the programme amongst and within the various
disciplines. For effectiveness, the top echelon of the project was constituted
into the JIT of TQM committee as follows; project manager (team leader),
Quality manager (secretary),
40
Fig. 2.4: A TYPICAL TQM PROJECT ORGANIZATION C HART
SOURCE: ORGANI GRAM FOR FLOW STATIONS UP GRADE PROJECT, PHASE II, ALCON (1995)
MANAGING DIRECTOR
SAFETY MANAGER PROJECT MANAGER (TQM TEAM LEADER)
QUALITY MANAGER PROGRAMMED CO-ORDINATION
ENGINEERING MANAGER
PROCUREMENT MANAGER
PLANNING AND COST CONTROL MANAGER
ADMINISTRATIVE AND FINANCIAL MANAGER
CONSTRUCTION MANAGER
PROCESSЅ BASIC ENGINEERING
PURCHASING PLANNING AND SCHEDULING
ACCOUNTING FIELD ENGINEERING
DETAILED ENGINEERING
DRAFTING
EXPEDITING
SHIPPING AND TRANSPORT
ESTIMATING
COST CONTROL
PERSONNEL ADMINISTRATION
BANK AND FINANCING
FIELD CONSTR CREWS
GENERAL CINSTR
SERVICES
FIELD ADMINISTRATION
41
Construction, Engineering, Procurement, cost ,and planning, safety,
financial and Admin. Managers as members. Meetings were held by
monthly to specially discuss the progress and problems of the TQ effort.
Based in field reports, serious problems were diagnosed and remedy sort to
prevent recurrence. In this way, top management became aware of areas
where management action was required such as making equipment
replacement decisions, hiring of more competent personnel, introduction of
better equipment, out right change in procedures etc.
To facilitate the work of the TQ committee, quality review meetings
were held with the participation of the entire project term of about 350.
These meetings provided opportunity to further sensitize the workforce,
review the implementation of the TQ programme, high light critical quality
problem areas and allow workers to proffer solutions. It was discovered that
this 45 minutes, once – a – month meeting changed the thinking and
orientation of the lower level work force, boosted their morale and reduced
not only human induced defects, but also increased the volume of production
geared towards the positive impact of Just – in – time technique. Also,
workers became more conscious of their actions and efforts such as timely
reporting of equipment and process failures, changes in atmospheric
conditions (eg humidity) which can adversely affect the quality of their
work. Twice yearly, the managing director attended the quality review
meetings in order to have first hand information on the conduct of the
meeting.
As discussed above, three organization mechanisms were used to
achieve the desired TQ objectives namely. A formal project structure using
the cross- functional TQ committee and the quality review meetings. There
42
is other known tested mechanism-both formal and informal-which an
organization can use to achieve its objective. One of these is the use of
QUALITY CIRCLES which is a group of volunteers made up of workers
and managers who meet frequently to discuss quality problems in their work
bits with a view to finding solutions to these problems. The circle members
select the problems and are given training in problem solving techniques.
Juran et al [1993: p. 147] have identified a three fold powerful beneficial
effect of Quality circles thus;
(i) Effect on the workers’ individual characteristics – it improves
personal capabilities, increases the individual self respect and changes
certain negative personality characteristics.
(ii) Effect on workers’ individual relations with each other - it increases
the respect of management and supervisors for their workers and creates
workers understanding of the difficulties faced by the supervisors.
(iii) Effect on workers attitudes to the company – it allows for re –
orientation of negative attitudes towards the company goals, reduces
interface conflicts and creates general understanding of the TQ programme
amongst employees.
2.5.5 QUNLITY CONSIDERATION IN HUMAN RESOUCES
For JIT of TQ programme to be successful, careful consideration must
be given to the selection, training and motivation of the employee. It entails
aligning the team members to imbibe the culture of quality with a focus on
the customer, because only qualitative workers can produce quality results.
Selection is the process of choosing from among candidates, from
within the organization or outside it, the most suitable persons for available
positions in an established structures on the basis of some pre – determined
criteria such as the level and quality of training, relevant experience,
43
personal attitudes etc. It has been established that the quality of staffing
affects the quality of leadership and control necessary to achieve the
enterprise objectives, preventing many desirable deviations which can
adversely affect the quality of human output in a production process
[Weihrich et al. 1993: p.359].
In this case study, practical steps were taken to ensure that workers
selected to constitute part of the team were the best available within the
organization, 20% of the work force were also brought in from out side
using very strict pre – employment criteria. Training for selected personnel
was also given the necessary importance. Engineers and other technical staff
were sent on refresher courses within and out side the company, while
skilled and unskilled workers were given periodic tutorials and practical
training sessions to enhance the quality of their outputs. This arrangement
provided the opportunity for the project personnel to interact with expert
resource persons within the industry, thus broadening their own expertise
and helping to adapt new techniques and technologies. Further, periodic bi –
annual award with some monetary component was instituted and given to
the best member of the team who consistently maintain quality conscious
approach to his work for six months. The managing director during the
quality review meetings presented the awards. Apart from the monetary
package equivalent to the winner’s one – month basic salary, a souvenir, a
certificate and a letter of recognition was issued to the award winning
personnel.
One major discovery was that, these made the workers in the TQ Team to
take more pride in their work, boosted their morale, increase their
productivity and encouraged a higher team spirit within the TQ team. It is
not the intent of this work to study the various theories of motivation as
44
these are studied in existing literature [see Weihrich et al . 1993: p.462–488],
but suffice it to state here that motivation is a widely accepted factor in
human performance.
2.5.6 QUALITY CONSIDERATION IN ENGIVEERING DESIGN IN
JUST – IN – TIME PROJECT MANAGEMENT
By far one of the most important factors that bears directly on the
quality of any project, product, and system or for that matter any engineering
task, is the quality of input into the design and technical appraisal process.
Juran et al [1993. p.25] states that there is dramatic evidence that many
quality problems encountered by both internal and external customers can be
traced to design. These quality problems are easily traceable to deficiencies
arising from use of obsolete specifications, poor selection of processes, out
right technical errors due to limited experience and knowledge of the
designer etc. The severity of quality problems caused by design related
factors, if not detected early in the project life cycle, can totally derail an
otherwise laudable project leading to out right project abandonment, hence
the need to have necessary safe guards to identify impending problems,
before they become impossible to solve. One method is by design review
which is a formal, documented, comprehensive and systematic examination
of a design to evaluate the design requirement and the capacity of the design
to meet these requirements and to identify problems and propose solutions.
Design Review is usually done by specialist personnel with many years’
relevant design and field experience who meet as necessary to consider the
project concept, its function, its preliminary design, feasibility, main
trainability, operation ability etc. The purpose is to discover critical features
of the project design that may give rise to problems during the production,
material sourcing, maintenance, operations etc. and to consider the tests and
45
quality evaluation needed for reliability, safety, environmental, customer and
project life cycle demands.
In the case study, a design review method called Hazard and operational
analysis (HAZOP analysis for short) was used to identify design deficiencies
at the early stages of the project life. HAZOP analysis is a helpful qualitative
tool for design assurance and is similar to the so called failure mode, effect
and criticality (FMEC) analysis [Juran et al 1993: p.266]. During the design
review, a number of potential safety, environmental, operational and quality
problems which could have marred the project were discovered. In some
cased, designs were completely changed and scope of work revised on the
basis of the studies. Expectedly, on completion of the project, only routine
complaints were received from client and third party stakeholders who were
solved within the project guarantee period.
Once the design and other technical specifications have been reviewed
and approved for implementation, there is still need to monitor, account and
control its circulation and use, and ensure that only the initial approved or
approved variations of it, is transmitted into the project execution processes.
Therefore, there must be a defined process for managing design inputs and
out puts, design changes, document control procedures etc. This is because
mismanagement of engineering information can impact very negatively on
the project quality even though all designs, specifications etc are right. In the
case study project, the designs and technical documents were managed as
discussed below.
2.5.7 DESIGN INPUTS
Distribution of the applicable information from the client’s contract
and technical specifications was recognized as the start point of each design
activity in the project. Where contractual rules and regulations were being
46
complied or a third party certifying authority involved, the project team
made itself aware of the requirements of the body and relevant approval
needs. Based on the identified technical data, the engineering team defined
the basic parameters of the systems to meet functional, safety, reliability and
operational requirements. The Quality Assurance function ensured that the
design inputs, were clearly identified, documented, reviewed and that the
quality requirements provided for proper flow of technical information, its
control and revision as needed.
2.5.8 DESIGN OUTPUTS
Design documents (such as drawings, specifications, calculations,
procedures etc). We are prepared by specialist engineers in the project team.
Each design document was checked by another senior specialist engineer
who verified compliance with the contractual data, interface constraints,
safety, layout etc.
The Quality Assurance function ensured that all design criteria
imposed by the client were clearly identified, documented and that a system
of technical information retrieval by numbering, indexing, filing etc., was
available for every out going document. It also ensured that the design
review and verifications processes were completed prior to issuance. The
project manager had the ultimate responsibility for approving and issuing
technical documents to the client and third party certifying authorities, where
required.
47
A typical design Sequence Schematic is shown in Fig 2.5
CONTRACT SPECIFICATIONS
PROJECT ENGINEERING
ENGINEERING DEPARTMENT
LIST OF DESIGN DOCUMENT
DESIGN DOCUMENTS
DESIGN DOCUMENTS
INTERNAL VERIFICATION
Q. A VERIFICATION
PROJECT INTERNAL APPROVAL
CLIENT APPROVAL / CERT. AUTHORITY
PROJECT CONCRETION DEPARTMENT
SITE
FIG. 2.5: A TYPICAL DESIGN SCHEMATIC SEQUENCE SOURCE: DESIGN MANAGEMENT FOR FLOW STATIONS UPGRADE, PHASE II
ALCON (1995)
48
2.6.0 QUALITY CONSIDERATIONS IN MANAGING MATERIALS
AND PROJECT INPUTS
A company’s quality programme, no matter how carefully designed,
will not yield optimum result, except there is a defined process to ensure that
in-coming materials and inputs by other parties, especially sub contractors
are subjected to the same rigorous quality management as with the internal
processes. One method to achieve this is by in-coming materials control and
sub-contractor/vendors whose activities have impact on the quality of the
project.
[Feigeribaun 1993: p.681] defines material control from quality
management perspective as involving the receiving and stocking, at the most
economical level of quality of only those parts whose quality conform to the
specification requirements, with emphasis upon the fullest vendor
responsibility. Sub-contracts on the other hand, are those services given out
to others which in the opinion of the prime contractor will help to achieve
the objectives of the project in terms of quality, as well as optimize the use
of specialized resources which are better manage by the specialists in certain
aspects of the project.
In the case study, project materials were widely varied such as heavy
duty machinery, valves, pipes, fittings, structural steel, instruments,
electrical machines, cement, aggregates etc. Therefore the co-ordination of
quality of inputs posed challenges to the TQ team. For instance, in phase I of
the project, a particular batch of concrete for vibrating equipment foundation
(export pump) was found to have very low crushing test results. On
investigation of the causes, it was discovered that from a sample of 100 bags
taken from a batch of 1000 bags supplied (ie. 10%), the port land cement
averaged 42.8kg per bag instead of 50kg. The design was for 8 bags (400kg)
49
per m3 of concrete, thus implying that every m3 of concrete cast fell short by
57.6kg. Further investigation showed that the shortages were in fact
committed at the bagging section of a local cement bagging plant. There
were other similar situations whereby suppliers used body fillers to build up
late thickness to meet specifications in their purchase orders. To prevent re-
occurrence of such problems in phase II of the project, a proactive quality
management approach was adopted to ensure proper verification of all
project inputs as discussed below.
2.6.1 PROCUREMENT DATA PROCESSING
Material list requisition and inquiry list of materials to be purchased,
as well as subcontracts were finalized prior to project kick-off which were
then included in the overall project planning. The main aim was to ensure
that an effective system was put in place for planning quality into
procurement and vendor activities. The project procurement function was
responsible for issuing inquiries, based on requisitions from the various
functions while QA ensured that applicable quality requirements were built
into such inquires. Inquires were issued only to qualified suppliers and
contractors who were assessed on the basis of their objective evidence of
ability to comply with specified requirements and previous experience.
Every inquiry documentation included: a correct description of the item to
be purchased or the scope of work to be subcontracted, drawings and
specifications which established what codes and standards to be fulfilled,
QA system requirements, inspection and testing requirements, certification
by an accepted inspection entity, list of documentation and certificates
requirements for packing, handling, storage and transportation.
On receipt of response to inquires, the responses were reviewed on the
basis of certain criteria such as the ability to meet preset quality
50
requirements, economic view points, delivery terms etc. The winning bid
then gets a firm order.
A procurement flow scheme involving quality consideration is shown
in fig 2.6
51
REQUISITION DOCUMENTATION
PROJECT ENGINEERING
PROCUREMENT
INQUIRY TO QUALIFIED SUPPLIERS
BID
PROCUREMENT
COMMERCIAL EVALUATION
MATERIAL LIST
Q. A VERIFICATION
ADMINISTRATIVE FINANCIAL EVALUATION
Q. A AND Q. C EVALUATION
TECHNICAL EVALUATION
P. O REGISTER PURCHASE ORDER APPROVAL
SUPPLIER P. O ACCEPTANCE
P. O FILES
PROJECT ENGINEERING
QUALITY ASSURANCE
MATERIAL CONTROL
FINANCE
52
FIG: 2.6 TYPICAL PROCUREMENT SCHEMATIC SEQUENCE
SOURCE: QUALITY CONSIDERATION IN MATERIAL
/SUBCONTRACT MANAGEMENT FOR FLOW STATIONS UPGRADE,
PHASE II, ALCON (1995)
2.6.2 MATERIAL CONTROL
All materials to be used in a project should be subjected to strict
quality control at manufacturer site and to inspection by the material control
personal at their receipt at every location.
The quality plan should establish method of acceptance of material in
manufacturer site according to the following process:
- Acceptance by certificate of conformance method
- Acceptance by receiving inspection method
- Acceptance by surveillance method
Dedicated project procedures should be available detailing how materials are
to be received, handled, identified, stored and issued to production to allow
for full traceability. The subject of materials control is wide and poses
special challenges in terms of quality, economics, Usage etc. The discussion
on material management and control is outside the scope of this study,
however a large body of knowledge can be found in existing literature [see
Feigenbaum 1991: p. 677 – 735].
2.6.3 BIULDING QUALITY INTO PROJECT EXECUTION
PROCESSES
A process has been defined as some unique combination of machines,
tools, methods, materials and people engaged in production of something
53
[Juran et al. 1993, p.393]. For total quality to be built into the execution of
any project, it requires that all processes, which directly or indirectly affect
quality be identified and that these processes are carried out knowledgeably
by all and under controlled conditions via documented procedures defining
every possible task that could be encountered, the amount of knowledge
required of the personnel performing the task, the type of suitable
equipment, compliance with requirements of all reference codes, standards,
specifications, monitoring and control of process parameters to meet some
pre set acceptance criteria for workmanship, aesthetics, maintainability,
operation ability and reliability. [see Lockyer, et al. 1983, p.20].
When a quality system is being developed for a project, one of the
first decisions to be taken is that of defining the activities to be covered by
the system. The activity definition must have a mechanism for controlling all
inputs – both hardware and software, including information -that goes into
every process throughout process throughout the project life cycle also, there
must be a way of verifying that each process has an acceptable out put that
meets the stated needs of the immediate client, as well as the implied needs
and expectation of other stakeholders who may be impacted by the process
being implemented.
In the case study project, the following methods were adopted by the
JIT of TQM team to achieve a satisfactory delivered project.
Generally, project production processes were properly planned and
organized before work break down structures previously discussed.
Technological processes to be adopted were evaluated not only from the
production performance point of view, but from the quality consideration.
Resources, facilities and materials were provided timely to avoid
delays which usually lead to rework. The production personnel were trained
54
and qualified to acceptable codes for the operations they were employed to
do. Responsibility for project quality was placed on those managing,
supervising, planning the work, as well as those performing the work, with
additional provision for in – process surveillance during installation to
ensure that the required level of quality was being attained and that deficient
items or systems were found and prevented from further processing.
Inspections of work – in – progress were performed to verify that items
being installed, assembled or constructed complied with requirement of the
contract, latest revisions of approved specifications, drawings, procedures,
standards and codes.
2.6.4 PROCEDURES AND INSTRUCTIONS
Procedures provide the fulcrum around which quality surveillance
revolves. In JIT of TQM, the rule of the thumb is; “if it is not written down,
it does not exist, but when it is written, it must be done”. This underscores
the importance of documented way of executing every project activity. For
the case study project, each project activity was covered by adequate
instructions in form of drawings, specifications, work procedures, method
engineering statements etc, with the project manager ensuring timely issue
of such instructions to all personnel and forwarding of Subsequent revisions
to ensure that personnel were updated adequately.
Special processes were covered by detailed procedures which were
qualified by tests prior to work commencement. Such processes included,
welding procedures, non destructive and destructive examination
procedures, heat treatment procedures, coating and hydrostatic testing
procedures etc. Also, apart from testing the procedures to ensure that they
will meet the required services, the operators assigned to execute the
55
procedures were subjected to performance qualification tests before being
allowed to make production input [Hajek et al. 1984, p.85].
2.6.5 PROCESS CONTROL
All project activities were subjected to inspection on the basis of the
requirements of the contract and all associated codes, standards and
specifications. These inspections were detailed in the quality control plans
and procedures which were developed at the planning stages of the project
containing as a minimum, control activity against process description,
process document references, verifying document references and
intervention required for all organizations involved in the process execution.
Specialist inspectors were responsible for the inspection activities specified
in the relevant control plans and were provided with all necessary technical
data, drawings, specifications, procedures etc.
2.6.6 FINAL INSPECTION
Final inspections to verify that the completed systems and items were
in conformance with specified requirements were carried out. These
inspections verified the operational readiness of systems and items. The
inspection techniques selected were determined by considering the
characteristic or parameter to be measured on the operations being
performed. The basic criteria for the selection of inspection techniques and
processes were based on requirement of the applicable specifications, codes
and standards.
When the physical inspection of completed items was impossible or
disadvantageous, in direct control by monitoring of the processing methods,
equipment and personnel were performed. Inspection and process
monitoring were also performed were control was inadequate without both.
56
2.6.7 QUALITY RECORDS
A good Quality Assurance programme ensures that there is objective
evidence of the quality of the work being done via quality records. For this
purpose, a system of records to document the internal control on all project
processes must be developed.
Records should be easily retrievable and traceable to the processes
which they were produced for, provided with identification, date, signature,
activity reference. At the beginning of the works, an indexing system should
be established for all record to be produce on a project index. Generally,
quality records should have adequate provision at all intervention points of
the production processes, as discussed below.
(i) Inspection Records. Documentation of inspection results is important
for evaluation purposes and to provide evidence that the inspected item or
systems are acceptable. For the case study project, checklists, which list each
inspection criteria, were prepared to document the results of the various
inspections. As a minimum, they identified the date of the inspection, the
inspector, reference appropriate drawings and specifications, and note the
type of observation, the results, the acceptability of the results, and the
action taken in document with any deficiencies noted.
(ii) Monitoring inspection results: The inspection results for the various
processes should be monitored to keep a track of the processes, which were
producing deficiencies. This monitoring is often called trend analysis. In this
case study, this trend analysis’s were performance by complex methods (e.g.
statistical evaluation) and simple methods (e.g. plotting the percentage of
rejects on weekly basis). The trend analysis provided a much more objective
and systematic appraisal than that achieved by simply relying upon the
memory of the inspection or construction personnel (Spiegel 1972).
57
When an analysis revealed some problems, the first step was to
determine the cause of the problem and then take steps to correct the causes.
It was not sufficient to simply increase inspection, since this will only
separate the good from the bad. Increased inspections usually increase costs
because the money spent on work which was rejected cannot be retrieved
and the increased volume of inspection costs more money. The greater
amounts of rework also affect the schedule, since less acceptable work is
completed.
(iii) Final data book: All project records should be collected in a final
data book, which documents the complete history of the work, performed. In
the case study project, the detailed list of the records included was finalized
under the responsibility of the project Q.A. function.
2.6.8 NON CONFORMANCES
Any non-compliance with approved plans, drawings, procedures or
specifications is a non-conformance. Therefore, non-conformances may be
related to materials, documents and activities. Two examples of non-
conformances are described below:
(1) PROCUREMENT NON-CONFORMANCE: Procurement non-
conformances are deviations from procurement document
requirements. It is essential to correct these non-conformances to
prevent further processing, and completion or delivery of material
and equipment items to incorrect procurement requirements.
(2) CONSTRUCTION PROCESS NON-CONFORMANCE: It is
important to present the use or installation of items which have
been determined to be unacceptable. An effective and positive
system for controlling these items included procedures for the
identification, segregation, and disposition of the non-conforming
58
items. Non-conforming items should be identified by the use of
tags or other markings, or the placement of these items in
containers, which are so marked.
The responsibility and authority for the disposition of non-
conforming items must be defined to assure that these important
decisions are controlled.
2.6.9 CORRECTIVE ACTION
The aim of a corrective action in project management is to rectify
non-conformances and prevent their reoccurrence. The project Q.A. function
should be responsible for initiating all corrective actions. The corrective
actions could be generated by an audit or an inspection as result of
evidenced deficiency.
2.7.0 MEASUREMENT AND TESTING
The accuracy and adequacy of measurement and testing is very vital
in a project to assure that quality requirements are being met. It provides
some level of confidence that quantity and quality as specified in design and
other engineering specifications are being followed and should be a routine
requirement in the project execution process.
In the case study, to ensure precision, tools, gauges, instruments and
other measuring and testing devices were calibrated to assure that they
produced accurate measurements. They were physically identified by unique
serial (or other) numbers, and calibrated according to reference standards.
The equipment were calibrated at scheduled intervals with each item
calibration interval being based on the type, required accuracy level, and the
frequency of use. Every,calibrated equipment had a label bearing the
equipment serial number, the date of calibration, the last date the equipment
could be used and the name of person or company performing the
59
calibration. The TQM team performed some of the calibrations, while it used
the services of independent laboratories for others. In some cases, the
equipment supplier performed the initial calibrations when it was stipulated
in the purchase order (certificate of calibration was requested from the
supplier or the records).
2.7.1 AUDITS AND FIELD FEED BACK
For a JIT of TQM programme to succeed there must be a visible
mechanism for self appraisal to show that the programme is indeed on
course. The ISO 8402, [1994: p. 26] defines quality audit as a systematic,
independent examination and evaluation to determined whether quality
activities and results comply with planned arrangements and whether these
arrangements are implemented effectively and are suitable for achieving
objectives. Juran et al [1993: p. 567] states that “independence” of the audit
team should be a critical consideration in the sense that the reviewer(s) is
neither the person responsible for the performance under review nor the
immediate supervisor of that person.
The purpose of audits on a project is to provide independent assurance
that;
(1) Plans for attaining quality are adequate, such that if followed the
intended quality objectives will be achieved.
(2) Relevant codes, standards, specifications and regulations in so far
as it affects the project are being followed.
(3) The data collection system is accurate and adequate.
(4) Non-conformances are identified and corrective actions
implemented.
The production process or its final product can be audited, but in project
management, the aim should be to audit the project processes right from
60
conception to commissioning and hand over. This is the only way audits can
be harnessed and built into the entire project.
2.7.2 AUDIT SCHEDULING
The audit should be regularly scheduled on the basis of the status of
work activities. They are normally conducted at the beginning of a project,
at three-month intervals during peak periods, and near the completion of
work.
Regularly scheduled audits can be supplemented by additional audits
when any of the following conditions occurs;
(a) When it is suspected that the quality of an item is in jeopardy due
to deficiencies in the quality management programme.
(b) When significant changes are made to the quality management
programme such as extensive reorganization or procedure
revisions;
(c) When independent assessment of programme effectiveness is
considered necessary;
(d) When it is necessary to verify implementation of required
corrective action.
2.7.3 AUDIT PLANNING
Audits are performed in accordance with checklists used by the
auditor to enter all pertinent areas in an orderly sequence and with a
minimum of wasted time and effort. Without a checklist, the auditor enters
an area with only the requirements or working procedures at hand. It is
difficult to leave through the requirements, documents, or procedure on the
spot and pick out the specific items that can be checked at the point it is all
too easy to live the area only to find, often when it is entirely too late to
remedy the over sight, that one or more significant points have been over
61
looked. The audit checklist provides a useful means of determining, at any
time what was actually done during the audit and what the auditor found.
2.7.4 AUDIT PERSONNEL
To avoid conflicts of interests, personnel who do not have direct
responsibilities in the areas being audited should perform audits. Personnel
performing audits should be competent and have sufficient authority and
organizational freedom to make the audit process meaningful and effective.
When specific technical expertises are required in the performance of an
audit, it is desirable to select appropriately qualified technical personnel to
participate in the audit.
2.7.5 AUDIT REPORTING
In the case study project, audit results were documented in an audit report
form which was transmitted to management personnel having responsibility
for the activity audited. The audit report included the following;
(a) Description of the audit scope;
(b) Identification of the auditors
(c) Personnel contracted during the audit;
(d) Summary of the audit results;
(e) Details of specific non – conformances observed;
(f) Recommendations for correcting quality programme non –
conformances or improving the program;
(g) Date of required response by the audited organization.
The report was distributed to management of both the audited and auditing
organization and issued within 5 working days after the audit.
2.7.6 AUDIT FOLLOW – UP
This is important for an effective TQ programme. Usually, the
management of the audited activity should scheduled appropriate corrective
62
action, to prevent recurrence (including, where necessary, changes to the
quality management programme). Follow – up actions are taken by the audit
team leader for the following reasons;
(a) To obtain a written response to the audit report, when a response is
required.
(b) To evaluate the adequacy of the response
(c) To ensure that corrective action and means of preventing reoccurrence
are identified and scheduled for each non – conformance,
(d) To verify that corrective actions are accomplished as scheduled.
2.7.7 INTEGRATION AND ENCULTURIZATION OF JIT OF TQM
PROGRAMME
The attitude of the people doing the job determines the level of quality
that can be attained – numerous quality problems is attitudinal; while
management should give the direction and vision; every member of the
organization should receive and drive the JIT of TQM objective of the firm.
Therefore, the TQ machinery of the firm must necessarily function Via the
co- operation of all members.
Juran et al [1993: p.158] have defined quality culture as the pattern of
human habits, beliefs and behaviour concerning quality. Thus, while all
variables discussed under the basic system design for TQ in this paper, are
management controllable, it will be fool hardy to think that a disoriented
work force which does not take these issues to heart can effectively produce
tangible results in terms of meeting the desired quality objectives. This then
is the reason for integrative approach to the subject of TQ, where by all men,
machines, tools, information and indeed all company resources are
integrated and harmonized for optimum quality performance. Thus, the top
and middle level management spends more time in teaching, counseling and
63
leading both individual employees and employee work teams on quality,
productivity and other related matters, which makes the entire work force
participation to become institutionalized in the quality programme. The TQ
concept must be sufficiently internationalized and appreciated by every
segment of the project team before it can be effective.
In this case study scenario, there was a dramatic discovery that the most hard
working employees, when given a little training on quality consciousness,
can also be the most quality minded, thus re – affirming that quality and
productivity is a habit and can be mutually integrated into production
without any operational conflicts. To enculturize quality habits, our
experience shows that there must be the “CARROT” and the “Stick” side by
side, to respectively encourage the determined employees and prevent the
never changing types from corrupting the programme.
2.7.8 OTHER ACCULTURIZED TOOLS AND TECHNIQUES FOR
TOTAL QUALITY
To successfully progamme TQ into a project as discusses in the
proceeding section, we need to appreciate what scientific tools and
techniques are available for quality Improvement in project processes from
conception up to commissioning and hand over. The ISO 9000 series has
identified and recommends a number of techniques for use in contractual
situations, such as project engineering. Table 2 shows list of both numerical
and non – numerical tools recommended by ISO 9004 – part 4 (1994: p. 6)
of these tools and techniques, shell Malaysia (petronas carigali) strongly
recommend the use of the following as primary or frequent application tools
for day to day management of quality in its engineering projects. These in
addition to other TQM tools discussed in this chapter.
64
Check sheets
Bench marking
Brain storming
Flow and control charts
Histograms
In this case study, the following tools and techniques were used:
(i) CHECK SHEETS: Check sheets were developed for every
conceivable aspect of the project like design review check sheet, procedure
review, specification, purchasing construction and reaction activities check
sheets. In all over 200 check sheets were developed for the project
(ii) BENCH MARKING: There was a deliberate attempt to improve in
quality by comparing the available process and performances to that of those
considered to be industry leaders. This led to management radical decisions
in such areas as equipment replacement decisions, personnel retraining and
outright changes in procedures and process. At commencement of the
programme, two companies were identified as industry leaders in TQ and
efforts were made to study their systems, most times by engaging their
strategic personnel through pay and other incentives.
(iii) BRAIN STORMING: This provided opportunities for every segment
of the company and within the TQ team to interact, thus tapping the creative
thoughts of every team member to generate and clarify ideas, problems and
issues. For example, all the decisions reached during the bench marking
processes were as a result of brain storming.
(iv) FLOW DIAGRAMS: Flow charts were used in the project as a
planning tool, either to describe an existing process or design entirely a new
one in order to gain precise understanding of how a selected process should
65
work. Flow charts were used extensively in TQ programming efforts as
already seen in the proceeding section.
(v) HISTOGRAMS AND TRENDS CURVES: Histograms were
developed for analysis of situations, when there were need to graphically
summarize some variations in a set of data. For instance, in phase I of the
project, it was discovered that the plant shutdown time approved for each
plant was being exceeded by an average of 18 hrs per station implying oil
deferment, increased supervision cost, loss of revenue to the client and
ultimately client dissatisfaction. After a careful study, it was discovered that
the root cause of the problems arose from under estimation of the scope of
tie in works and consequent impact on the production and service delivery.
To correct this problem in phase II, manpower histograms were constructed
to show weekly requirements of all description of manpower per flow
station, who were them matched with appropriate tools and equipment they
required to do their work effectively. Also, trends curves were developed by
trade, thus enabling the team to evaluate its readiness for that phase of the
work.
A typical manpower histogram used for the project is shown in fig
2.7. This approach enabled management to deploy enough resources as
required with a consequent reduction of plant down time from the approved
14 days to an average of 11.75 days per facility. Of course, this delighted the
client which rewarded the TQM team by awarding the phase III of the
project to it.
66
A TYPICAL MANPOWER HISTOGRAM USED FOR THE
PROJECT`
WEEKS
Fig 2.7: skilled manpower loading histogram
Source: manpower loading, flow stations upgrade phase II, alcon (1995)
(VI) CONTROL CHARTS: Generally, control chants are used
Fig 2.7: Skilled Manpower Loading Histogram
Source: Manpower loading, flow stations Upgrade Phase II, Alcon (1995)
No. of workers
140
120
100
80
60
40
20
0 1 2 3 4 5 6 7 8 9 10
Weeks
67
(vi) CONTROL CHARTS: Generally, control chants are used to show
the significance of an observed difference between a process actual
performance and some set goals. Process variations can be as a result of; (i)
A read difference due to some cause or (ii) An apparent difference arising
from random variation. According to Juran et al: [1993: p. 108], the former
is termed random (due mainly to chance), while the latter is called
Assignable causes. Random causes are allowed in a process while assignable
causes are not allowed. Control charts are used to distinguish random from
assignable causes in a process through choice of control Limits, which are
calculated from the laws of probability in such a way that highly improbable
random variations are presumed to be due not to random causes but
assignable causes. Thus, when the actual variations exceed the control
Limits, it signifies that some assignable causes have entered the process and
the process should be investigated, while variations within the control Limits
means that only random causes are present and the process is statistically
stable /okay and should be left intact. The control chart therefore, provides
an early warning of impending problems which could have a major
economic significance, if the process were allowed to continue on
uncontrolled. It is thus used as a preventive tool. There are three main types
of control chart namely;
Those that plot statistical mean X and range, R (called X- and R-
charts).
Those that plot percentages (called P- charts) and
Those that plot number of non – conformities (called C- charts). These
charts are used depending on what is being investigated.
In this case study project, control charts were used for evaluating process
stability, determine when a process needed to be adjusted, or rejected out
68
right and to confirm that some certain processes were responding to
improvement efforts. For example, every high importance was attached to
assuming the quality of parent metals and their fusion weld joining
processes, because of the safety, environmental, cost and operational
implications. It was therefore mandatory to carryout 100% Gamma ray
examination on all process equipment, as well as 24 hour hydrostatic testing.
These are two forms of non – destructive examination (NDE) to assure that
the systems will be able to with stand operational working pressures,
stresses, impacts etc. Hydrostatic testing was achieved using high pressure
pumps to raise the hydraulic pressure to 1.5 X design temperature for 24
hours within the design temperature develop. The test pressure was then
observed for the varying conditions; pressure, temperature and flow
recorders equipped with time mechanisms, were used to monitor these
conditions on a P – chart. A sudden drop in test conditions is immediately
noticed on the chart and if it drops further below a certain percentage, the
test is superadded and the system checked for faults, which are rectified
before continuing. If it is a long pipe for instance (eg.20kg), the entire length
is inspected physically to locate exact problem point. In this way, there is an
assurance that the pipeline will perform to design requirements when
commissioned. A pressure – flow circular chart is used to record the test
using a Bordon Spring of suitable range at atmospheric temperature. There
are other controls charts like, stress relief charts, differential pressure – flow
chart etc. for use depending on what is being controlled.
(vii) CAUSE AND EFFECT DIAGRAMS: Though, it has been
emphasized in this chapter but to go into details; Extensive use was made of
cause and Effect diagrams otherwise called the ISHIKAWA diagrams
named after Kaoro Ishikawa who first developed it. Though initially
69
designed for descriptive problem analysis, they have been improved for use
in effectively solving process problems, especially in system trouble
shooting. Example of a practical application is the typical cause and effect
Matrix for flow station logic system. This is use for safety and operational
shutdown devices in the plant. A typical flow station has between 10 and 20
surface processing and production units, including 5 to 10 heavy duty
rotating equipment and about over 50 electro pneumatic control instruments
that keeps the plant in unmanned mode. The cause and effect diagrams allow
for diagnosis of plant problems when they occur, since the plants are
unmanned.
TABLE 2.1 TOOLS & TECHNIQUES USED QUALITY
IMPROVEMENT
NO TOOLS AND TECHNIQUES
APPLICATION
1 GENERAL (i) Data Collection Firm To gather data systematically in order to
obtain picture of the facts (ii) Check List A simple data - recording from which
results can be readily interpreted from the firm itself
2 NON-NUMERICAL TOOLS AND TECHNIQUES FOR NON-NUMERICAL DATA
(i) Affinity Diagram To organize into groupings in large number of ideas, opinions or concerns about a particular subject
(ii) Bench Marking To compare a process against others to identify opportunities for improvements
(iii) Brain Storming To identify possible solutions to problems and potential opportunities for improvement
(iv) Cause and Effect Diagrams (Also known as ISHIKAWA
To communicate cause and effect To facilitate problem solving from
70
diagram) symptom to cause to solution (v) Flow Chart To design a new process
To describe an existing process (vi) Tree Diagram To show relationship between a subject
and its component elements 3 TOOLS & TECHNIQUES
FOR NUMERICAL DATA
(i) Control Charts Diagnosis: To evaluate process stability Control: To determine when a process
needs to be adjusted and when it needs to be left as it is
Confirmation: To confirm an improvement to a process
(ii) Histograms To display the pattern of variation of data To communicate visually, information
about process behaviour To make decisions about where to focus
improvement efforts (iii) Pareto Diagram To display, in order of importance, the
contribution of each item to the total effect
No TOOLS AND TECHNIQUES APPLICATION To rank Opportunities. Ranked Comparison
of factors related to problems separates vital few from useful many.
(iv) Scatter Diagram To discover and confirm relationships between two associated sets of data.
To confirm anticipated relationships between two associated sets of data.
SOURCE: ABRIDGED FORM 150 9004 PART 4:
GUIDELINES FOR QUALITY IMPROVEMENT, (1993: P2)
71
2.7.9 WHEN TO REORDER WITH EOQ ORDERING
EOQ models answer the question of how much to order, but not the
question of when to reorder (Stevenson 2006, 8th edition). The reorder
occurs when the quantity on hand drops to a predetermined amount. That
amount generally includes expected demand during lead time and perhaps
on extra cushion of stock, which services to reduce the probability of
experiencing a stock out during lead time.
In order to know when the reorder point has been reached, a perpetual
inventory is required. The goal in ordering is to place an order when the
amount of inventory on hand is sufficient to satisfy demand during the time
it takes to receive that order (ie lead time). There are four determinants of
the reorder point quantity.
The rate of demand (usually based on a forecast)
The lead time
The degree of stock out risk acceptable to management
The extent of demand and / or lead time variability
R OP = d x LT at constant demand and lead time where d = demand
rate (units per day or week), LT = lead time in days or weeks.
When Variability is present in demand or lead time, it creates the
possibility that actual demand will exceed expected demand. Consequently,
it becomes necessary to carry additional inventory, called safety stock, to
reduce the risk of stock out during lead-time. The reorder point in greases by
the amount of the safety stock ie ROP = expected demand during lead-time
+ safety stock, where SS = Zσdlt where SS = safety stock, Z = Number of
standard deviation of lead time demand, Zσdlt = the standard deviation of
lead time demand. The amount of safety stock for a particular situation
72
depends on * The average demand rate and average lead time, * Demand
and lead time variability * The desired service level. ROP AT SAFETY STOCK THAT REDUCES RISK OF STOCK OUT DURING
LEAD TIME
Figure 2.8 (R.O.P at safety stock)
2.8.0 INVENTORY CONTROL
This is defined as the scientific way of finding out the quantities to be
kept in stock to meet the production requirements and the systematic
location, storage and recordings of the goods/items in such a way that
desired degree of service can be provided at competitive prices or at
minimum ultimate cost.
The functions of inventory control are as follows;
To develop policies, plans and standards required
To ensure effective running of stores
Technological responsibility for the state of different materials
Qua
ntity
LT
Maximum probable demand during lead time Expected demand
during lead time
ROP
Place order
Receive order
Safety stock Time
73
Stock control system
To ensure the timely availability of goods.
Inventory can be viewed as a descriptive list of items/goods which gives
quantity and money value of each item. Inventory has the following as its
functions;
It serves as cushions
It serves as a necessary evil for any enterprise
It provides production economies
Maintenance of smooth and efficient production flow
Creation of motivational effect in decision making.
Inventory has the following as it importance;
(i) Good consumer service can be provided and maintained in the
organization.
(ii) Enables smooth and efficient production flow of goods/items.
(iii) Provides protection against uncertainties regarding demand and
supply of materials and out put.
(iv) Ensure better utilization of men, machines and materials.
The various classification of inventory are as follows;
Production inventory
Work in process inventory
Finished goods inventory
Operating and maintenance inventory
Miscellaneous inventory
2.8.1 INVENTORY CONTROL MODELS
One of the problems of inventory management is to find out the
quantity (of items required as inventory) to be ordered for each of the
74
supplies or the lot size to be manufactured. So that it is most economical to
the enterprise or organizational aspects point of view (Stevenson 2006).
In inventory control, two conflicting costs come into picture which
finally decides how much is to be ordered or produce. This model integrates
the time, costs and quantity of items to be produced.
MODEL I; Harris formula for instantaneous supply, continuous
consumption and zero buffer stock (Relationship for EOQ and ELS).
Let Yc = total yearly cost (total annual investment)
Yc = material cost + Annual Inventory carrying or Holding cost of
Procurment or preparation or set up cost.
But;
Material cost = Unit cost x Annual production/usage
∴ Material cost = CD
Annual inventory carrying cost/Holding Cost = (Holding cost) x average
Inventories = CxHQ2
But D = annual production, C = unit cost of production
Q = economic lot size to be manufactured.
Preparation cost or set up cost = preparation cost per unit x D = P/Q x D.
Yc = C x D + (Hc) Q/2 + P/Q x D
Now, for economic ordering Quantity or lot size, differentiating Yc with
respect to, Q and equating it to zero, we have
220.
2)(0
QPDHC
DQPQ
HCCDdQd
dQdYc
OR
HC
DP.2 Note: No reserve stock has been kept
75
MODEL II; ECONOMIC ORDER QUANTITY OR ECONOMIC LOT
SIZE WITH RESERVE STOCK
Here when the supply is instantaneous and consumptions continuous and
there is reserve stock and for this model, the pattern of inventory is shown
below; ECONOMIC ORDER QUANTITY WITH SAFETY STOCK
Maximum level
Re – Order level
Figure 2.9 Economic order quantities with safety stock
Now following the previous notations and R as reserve stock, we have the
total annual costs (Yc) as:
Yc = material cost + Inventory carring or Holding cost + setup cost. But
material cost = C.D Inventory carrying cost = H x cost if inventory =
H(R+2Q ) C . Here we take the average of Q and zero plus safety stock setup
cost = P/Q x D
Yc = C.D + H . C (R + Q/2) + P/Q x D
Inve
ntor
y qu
antit
y
Q(yr)
Safety stock minimum level R
Time
76
Uc = C.D + Q
PD + HRC + H2Q .C
Let R/Q = F ie Let R be taken as a fraction of Q or R = fQ.
Yc = C.D + P/Q.D + H.Q.F.C + H.Q/2 .C
For economic order, quantity or economic lot size differentiating with
respect to Q and putting to zero, we have;
CHQCHQfDQ
PDCdQd
dQdYc .
2.....
2QP D + H.F.C +
2HC = O OR
P/Q2 D = HC [f + ½] = 2
)12( fCH
OR Q2 = )21.(.
2),21(
2fHC
PDQ
fCHPD
77
MODEL III; ECONOMIC ORDER QUANTITY OR ECONOMIC
LOT SIZE WHEN THERE IS SHORTAGES
See the illustration below; MAXIMUM INVENTORY LEVEL
MODEL FOR ECONOMIC
ORDERED QUANTITY
WITH SHORTAGES
Qm
SHORTAGE QUANTITY Time
Figure 2.10 economic order quantity when there is shortages
Following the previous notations with
C1 = penalty per unit shortages cost per unit time.
Q = order quantity or lot size, Qm = maximum Inventory level, n = Number
of Orders planed per year = D/Q Total time of the cycle t = t1 + t2. t1 is the
time during which demand is met from inventory stock and t2 = the time
when shortages occur. Now, using the geometrical relationship from these
similar triangles as shown below;
Inve
ntor
y Q
uant
ity
Q
t1 t2
78
SIMILAR TRIANGLES
We have Q
Qmtt1 from ∆s, CDB and CED
OR
t1 1egntQ
Qm And t2 = )2(egnt
QQmQ from ∆S,
COB and OFD or OAD
Now, the average number of units in inventory during time t1 = 2
Qm
Average Inventory cost during time t1 = 2
Qm C. t1 But, Average Inventory
Carrying cost during this period = H. 2
Qm C. t1; since n is the number of
orders placed annually. The annual inventory carrying cost will be = H. 2
Qm
C. t1 x n
Similarly, the average number of units short during
22
QmQt
The average shortage cost during time
22
QmQt
C1 t2
Annual Shortage Cost = 2QmQ C1 t2 n
C
Qm
Q B
E
t1 Q-Qm
t
O t2 A
F t2 D Time
Qua
ntity
79
So that yearly Cost (Yc) material cost + Inventory carrying cost + setup cost
+ shortage cost = C. H 2
Qm t1 n + CD + P/Q.D 2QmQ C1 t2. n
Substituting the value of t1 and t2 from equation (1) and (2)
Yc = CD + p/Q.D+C.H 2
Qm Q
Qm t. n + 2QmQ C1 Q
QmQ )( t. n
Putting n. t = 1 year;
Yc = CD + P/Q.D + C.H QmQ
2
2
+ 1
2
2)( C
QQmQ =
CD + QP .D+C.H
QmQ
2
2
+ 1
2
2)( C
QQmQ
CASE I; TO GET OPTIMUM Qm; differentiating Yc with respect to Qm
and putting it equal to zero;
1
2
2(
2. C
QQmQ
QmQ
CHDQP
DCdQ
d
m
OR
012
22
200 1
C
QQmQ
QQmCH
CHQm – QC1 + Qm C1 = 0); Qm (CH + C1) = Q C1
Qm = 1
1
CCHQC
Since the factor 1
1
CCHC
is always less than 1, so
The optimum Qm will always be less than Q.
CASE II; TO GET OPTIMUM Q
Put dQdyc = O And Qm = Q
1
1
CCHC
in the result dQdyc =
dQd
QQQ
QCHQ
DQP
CD mm
2)(
2
22
= O
80
On simplification, we get Qopt = CHPD2
1
1
CCHC
Since factor 1
1
CCHC is greater than 1, so, Q >
CHPD2
Figure 2.12 Economic lot size when supply is continuous
Here, the supply rate (s) is greater than the rate of consumption (p). There is
a gradual build up of inventory at the rate or (S-P) The rate of inventory
build up = (S-P). Model for economic lot sizes with supply and consumption
rates varying, no shortages, no buffer stock, rate of supply = r, rate of
consumption = p.
Inventory after time t1 = (S-P) t1 = St1(1-p/s) = Q (1-p/s) since Q = St1
∴Average inventory = Q/2 (1-p/s)
Then, the annual cost (Yc) = material cost + set up cost + inventory holding
cost OR Yc = CD + P/Q. D + Q/2 (1-P/S) CH
(S -
P)
(S -
P)
Inve
ntor
y Q
uant
ity
MODEL IV; ECONOMIC LOT SIZE WHEN SUPPLY IS CONTINUOUS (NOT INSTANTANEOUS), CONSUMPTION IS CONTINUOUS, NO SHORTAGES AND NO BUFFER STOCK.
TIME t1 t2
81
Form minimum total annual cost, put dQdyc = O =
dQd
CHSPQ
QPD
CD
1(
2
OR O = SPCH
DQP
122
OR Q = )/1(
2SPCH
PD
82
CHAPTER THREE
PROBLEM FORMATION/RESEARCH METHODOLOGY
3.0 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.
3.1 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
83
practices of the firms (flow stations). Data on variability of quantity
demanded corresponding to their Lead times were also obtained.
3.2 MODEL NOTATIONS
The following notations were used in the model formulation below;
d = Average demand (weeks)
L = Average Lead time (days)
= Number of standard deviations
= Level of significance 2d = Variance of the demand 2L = Variance of the Lead time
dLS = Standard errors of the mean of the led time and mean of the demand.
N (0,1) = Follows normal distribution with zero mean and variance 1
Z = test statistic
P = Probability
Ss = Safety stock
(1 – α) = Confidence region
(1 – α) 100% = Shows that we are (1-α)100% confidence that the safety
stock will lie in the interval.
L = Lower Limits
U = Upper Limits
ROP = Re-order point
84
3.3 MODEL FORMULATION
The Re-order point (ROP) based on a normal distribution of variable
lead time and variable demand may be represented in the diagram below;
To establish the safety stock region, we employ the following test statistic
(Z)
ie meantheoferrordardS
meanPopulationmeanSampleZtan
dLS
dELEdLZ )(.)(
)1,0(222
NdL
SsLxd
Ld
…………….. (1) Satorra and Bentiler(2001).
where 222LddL
dLS
The confidence interval for the safety stock (Ss) is given by
1ZZZP 100% …………….. (2)
substituting for Z in equation (2) above, we have;
Service level (probability of no stockout)
Risk of stockout
ROPQty
Ss
Zα - Zα
2
(1 - α)
0
2
85
1
222Z
dL
SsLxdZPLd
100% __________ (3)
Multiply each term in the bracket by
)4(%1001
%1001
222222
222
222
222222
222
LdLd
Ld
Ld
LdLd
Ld
dLZSsLddLZP
dLZdL
SsLdXdLdLZP
havewedL
Subtract Ld from each term in the bracket, we have that;
)6.........(....................%1001
)5(.........%.........1001
222222
22222
LdsLd
LdLd
dLZLdSdLZLdP
dLZLdLdSsLddLZLdP
Now multiply each term in the bracket by – 1 to make Ss positive.
)7(...............%.1001222222
LdsLd dLZLdSdLZLdPie
Using the fact that if a ≥ x ≥ b ≡ b ≤ x ≤ a, we can write that
)8(................%1001222222
LdsLd dLZLdSdLZLdP
Let L and U denote Lower and Upper Limits respectively.
)10(........................................
).9.(........................................
222
222
Ld
Ld
dLZLdU
ndAdLZLdL
86
Since stock cannot be negative, equation (10) becomes useful. So, we use
the upper limit to find our Re-order point (ROP) ie
ie ROP = 222Ld dLZLd
3.4 ASSUMPTIONS OF THE MODEL
(i) One of the assumptions is that the test statistic Z, is normally
distributed with 0 mean and variance 1
(ii) The Interval of the safety stock is taken to be non-negative
(iii) The model assumes variable demands and variable lead time
(iv) Sample values were used to estimate the population values. Eg sample
means Ld , were used to estimate the population means of d and L and
sample variances 2L and 2
d were used to estimate their population
variances.
(v) The model is valid if the service level of the flow station is known
3.5 RESULTS SPECIFICATION
The results of the research/model formulated will be applied to flow
stations wishing to adopt Just-in-time through Reorder point model of total
quality management.
The model will also be suitable in solving problems of variability in
both the quantity demanded and as well the production lead times which is
aimed at knowing the proper time a firm (flow station) should Re-order or
their quantities to be always available for Work. This is also geared towards
having a good inventory level of their firm. It ensures Just-in-time of their
products there by avoiding risk of stock out or excess stock, to avoid
doubling of projects execution time. This also minimizes the cost of
production of any flow station’s project.
87
CHAPTER FOUR
DATA PREENTATION AND ANALYSIS
4.1 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.
4.2 GENERAL ANLYSIS OF SURVEY
To effectively study the subject, three flow stations including the one
in the case study, were surveyed using the methods already discussed in
chapter three.
Sixthly questionnaires were administered to twenty respondents in
each of the firms, out of which fifty-one were properly filled and returned
representing 51%. For the purpose of this study, these flow stations are
coded AI (case study firm), (AlCON NIG LTD), A2 (NOBLE ENGR. NIG
LTD), and A3 (EXPRO TECH OIL GAS NIG LTD)
These companies (flow stations) were selected at random to asses how
they apply JIT technique as a measure of quality performance of their
products.
88
Table 4.1 SURVEY RESPONSE
COMPANY /
FLOW
STATION
CODE
NO.OF
QUESTIONNAIRES
ADMINISTERED
RESPONSE REMARKS
A1 20 19 Expatriate
A2 20 17 Expatriate + +
Indigenous
A3 20 15 Wholly
indigenous
TOTAL 60 51
The distribution in table 4.1 shows that while response from A1 (case study
firm) was 99%, others (A2 to A 3) were 97% and 95% respectively.
This may be suggestive of how these flow stations appreciate issues
concerning quality.
Respondents were chosen among project managers, supervisors and
skilled work force as show in Table 4.2 below.
89
Table 4.2 Response by Category
Company
code
No. of questionnaires administered by
category
Response per category
Managers Supervisors Skilled workers Managers Supervisors Skilled
workers
A1 3 8 9 3 8 8
A2 3 8 9 2 7 8
A3 3 8 9 2 6 7
Total 9 24 27 7 21 23
4.3 THE QUESTIONNAIRE
To capture the key issues in this research, the questionnaire was
structured into two parts in line with the ISO 9000 series of standards. Part
A, comprising 9 questions, dealt on the respondent, the company and some
performance indicators. Part. B, comprised 32 questions, spanning corporate
specific statements, project, structure, documentations and process
management system audit, training, record. Sample of the questionnaire is
attached as addendum to this project.
Specifically, the composition of the questions and intent is as
Summarized in table
90
TABLE 4.3 SUMMARY OF QUESTIONNAIRE STRUCTURE
QUESTIONS RESEARCH INTENT
PART A GENERAL INFORMATION
Q1 to Q3
Q4 to Q6
Q7
Q8 to Q9
To obtain brief personal data of respondent.
To obtain information on company age and ownership.
To obtain information on type of service offered by company.
To appreciate the size of company in terms of company’s trading
results and employee’s awareness of results.
PART B ASSESSMENT OF QUALITY MANAGEMENT SYSTEMS
Q10 to Q17
Q18 to Q19
Q20
Q21
Q22
Q23
Q24 to Q27
Q28 to Q30
Q31
To assess the availability of company’s specific mission, policy and
objectives in respect of JIT of TQM and spam of coverage of these
documents.
To assess the availability of a document quality system and
awareness level of the employees.
To assess the availability of the minimum system elements.
To assess the availability of documented process specific practices.
To assess the firms awareness of statutory industry codes and
standards.
Assessment of available tools and techniques apart from JIT for
quality improvement.
Assessment of the QA (quality assurance) audit programmed
including effectiveness and team work.
To assess the span of Quality assurance and control.
Assessment of authority level of quality personnel.
91
Q32 to Q33
Q35 to Q36
Q37 to Q38
Q39 to Q41
To provide insight into employee association within firm.
To assess the level of education and experience of company
operatives.
To assess the approximate cost of quality.
To appraise the quality function, service level of the firms and it’s
acceptance by management and employees. Also to get the variable
demands quantities in (weeks) and variable led times (days) of each
of the flow stations surveyed
4.4 ANLYSIS OF QUESTIONNAIRES FIELD DATA.
The field responses as summarized in table 4.3 above are analyzed in
tables 4.4 to table 4.27 below. Some inferences are drawn, where necessary,
based on interviews, discussions, observations etc made by the researcher
during the survey. The testing of the model formulated using the data
obtained from the surveyed flow stations was also done.
4.5.0 EMPLOYEE’S AWARENESS LEVEL OF COMPANY
PERFORMANCE STATISTICS
Table 4.4 Employee’s awareness level of company’s Indicators
Compan
y code
No. of
respondent
Age Service Ownership Size turn
over
Employee
awareness
level
Average
awareness
A1
10
25
Engr. design,
drilling,
construction
Expatriate
>300m
16
84.2%
92
A2
A3
12
9
19
12
/maintenance
Design, drilling
and installation/
maintenance
Engr. design,
construction/dril
ling and
maintenance
Expatriate
+
indigenous
Indigenous
Within
200-250m
<2oom
12
6
75%
50%
As seen in table 4.4, a relationship exists between the type of ownership and
level of awareness of the work force. This is because the ownership structure
influences the level of centralization of power at top level. For instance in
company A3 only the managers knew the company’s approximate turn-over
because the span of delegation is low, thus affecting team efforts which is a
main requirement in JIT of total quality management.
4.5.1 AVAILABILITY OF SPECIFIC COMPANY GOALS,
POLICEES AND OBJECTIVES
Table 4.5 Availability and awareness of documented mission, policies
and objective statements.
Code No of
respondents
Respondent’s Answers to awareness on: Mean%
Mission
statement
% Quality
policy
% Objective
documents
%
93
statement
A 1 19 13 68.4 17 89.47 15 78.9 78.9
A 2 16 10 62.5 12 75.0 10 62.5 66.7
A 3 12 5 41.7 6 50.0 4 33.3 41.7
From Table 4.5, it can be seen that A1 to A2, have higher number of
employees who know the company’s mission and what route it intends to
take to meet required organizational goals with respect to quality. In all the
companies, the researcher sighted these documents but the availability was
not transformed into awareness for company A3. These documents as earlier
discussed, when well managed are supposed to provide the inertia for
organizational performance be it in production, quality, and good will.
94
4.5.2 ASSESSMENT OF DOCUMENTED QUALITY SYSTEM
Table 4.6 Assessment of availability and awareness of the documented
quality system
Code No of
respondents
Respondent’s Answers To: Mean%
Mission
statement
% Quality
policy
statement
% Objective
documents
%
A 1 19 19 100 14 33.9 16 84.2 86.03
A 2 16 16 100 15 93.8 13 81.3 91.7
A 3 9 5 55 3 3.3 2 22.2 37.03
Table 4.6 shows that employees A1 and A2 have higher awareness
level of availability and contents of their quality assurance system. In A3,
only the managers with a few senior personnel knew of the existence of a
QA system for their company. As discussed in section 2.4, a basic TQ
design requires that an appropriate quality model is chosen, documented
with provisions for under standing by all members of the organization.
95
4.5.3 ASSESSMENT OF SPECIFIC QUALITY PLANS AND
PRACTICES
Table 4.7. Assessment of availability and awareness of quality plans,
procedures, codes ,and standards.
Code No of
respondents
Respondent’s Answers To: Mean%
Availability
of specific
project plans
% Availability
of method
of
statement
and
procedures
% Familiarity
with
statutory
codes and
standards
%
A 1 19 19 100 17 89.5 15 78.9 89.5
A 2 12 12 100 10 83.3 8 66.7 83.3
A 3 9 6 66.7 5 55.6 2 22.2 48.2
As, seen in table 4.7, again the availability and awareness of documented
plans and practices for executing processes were higher in A1 and A2 which
tended to be company – wide, while awareness is restricted in company A3
to senior managers only. In fact, in A3 only two managers knew what
statutory codes and standards were being used in their company, which
hinders effective team work and communications of technical specifications
down the line.
96
4.5.4 ASSESSMENT OF AVAILABLE OTHER TQ TOOLS AND
TECHNIQUES
Table 4.8 Assessment of availability of other quality tools in use.
CODE No. of
respondents
RESPONDENTS ANSWER TO.
Awareness of
tools in use
% Average
No. of tools
/tech in use
Complexity of tools/
techniques in use
A1 19 10 52.6 10 Simple to complex
tools
A2 16 8 50 10 Simple to complex
tools
A3 12 5 41.7 6 Simple and medium
tools
Awareness level of other tools and techniques in use was restricted to
managers and supervisors in company A1 and A2, while only the managers
knew one or more tools used in A3. Also, while the tools and techniques
available in A1 and A2 were varied and ranged from simple to complex,
company A3 has simple and medium tools / techniques.
97
4.5.5 AVAILABILITY AND SCOPE OF QUALITY AUDIT SYSTEM
Table 4.9 Span of Quality Audit
RESPONDENTS ANSWER TO SCOPE OF ADUIT AVAILBLE
Cod
e
Ava
ilabi
lity
of p
lan
%
STR
AC
TUR
E %
PER
SIO
NN
E
L %
DO
CU
MEN
T
%
EQU
IPM
EN
T %
PRO
CESS
%
WO
RK
ARE
A
%
MEA
N %
A1 12 63.3 6 31.6 5 26.3 12 63.2 16 84.2 18 94.7 18 94.7 65.4
A2 10 62.5 8 40.2 8 50 13 81.3 15 93.8 15 93.8 15 93.8 75.0
A3 6 50.0 4 0 0 0 4 33.3 6 50 8 66.7 8 66.7 42.9
Table 4.9 shows respondents awareness of the availability and scope of
quality audit system being adopted by their companies. The companies were
evaluated on a seven – point scale. While A1and A2 gives a demonstration
of an awareness of the availability, as well as the scope of quality audit in
these firms, A3 obtained low points. Field observation showed that only the
managers and few senior personnel know the importance and relevance of
audit in the pursuance of quality objective. Further analysis shows that A3
lack audit schemes in structure, and personnel and even, does not audit its
documentation during the survey also confirm observation.
4.5.6 FREQUENCY OF AUDITING
Table 4.10 Frequency of project audit
CO
DE
No.
O
F R
ESPO
ND
EN
TS
RESPONDENTS ANSWER TO FREQUENCY OF AUDIT ON PROJECTS
Mon
thly
%
2-
3 m
onth
s %
Q
uarte
rly
%
Bi-
annu
ally
%
A
NN
UA
LLY
%
IN
FREQ
UEN
TLY
%
CENTRAL TENDENCY
A1 18 5 27.8 5 27.8 8 44.4 0 0 0 0 0 0 QUARTERLY A2 15 0 0 12 80 3 20 0 0 0 0 0 0 2-3 months A3 10 0 0 1 10 4 40 5 5
0 0 0 0 0 Bi-
ANNUALLY
98
TABLE 4.11 FREQUENCY OF IMPLEMENTATION OF AUDIT
FINDINGS
FREQUENCY OF IMPLEMENTATION OF AUDIT FINDINGS
No
of
resp
onde
nts
BEL
OW
20%
%
BET
WEE
N
30%
& 5
0%
%
BET
WEE
N
60%
& 8
0%
%
UP
TO
100%
%
CENTRAL TENDENCY
A1 18 - - 3 16.7 8 44.4 7 38.9 B/W 6O% & 80%
A2 15 - - - - 10 66.7 5 33.3 B/W 60% & 80%
A3 14 - - 12 85.7 2 14.3 - - B/W 30% & 50%
Table 4.10 and 4.11 reveals that ,A1 and A2 audit their projects and
implement their audit findings more frequently. Company A3, audit their
projects bi-annually and has a lower percentage range on the frequency of
implementation of their audit findings.
4.5.7 ASSESSMENT OF SCOPE OF QUALITY ASSURANCE
Table 4.12. Scope of Quality Assurance
CO
DE
NO
OF
RESP
ON
DEN
TS
RESPONDENTS ANSWER TO SCOPE OF ASSURANCE
MA
NA
GEM
ENT
QC
AN
D
POST
INST
ALL
AT
ION
%
CO
NTR
OL
OF
PRO
CESS
%
INSP
ECTI
O
N
%
ZER
O
ASS
UR
AN
C
E %
QC
BY
CLI
ENT
INSP
ECTI
O
N
%
CEN
TRA
L
TEN
DEN
CY
A1 15 8 53.3 7 46.7 - - - - - - Through mgt, QC &
post installation
A2 14 9 64.3 5 35.7 - - - - - - Through mgt QC &
post installation
A3 7 - - - - - - 2 28.5 5 71.4 By client inspectors
TABLE 4.13 SPAN OF QUALITY CONTROL
99
COD
E
NO
OF
RES
PON
DEN
TS
RESPONDENS ANSWER TO WHAT IS CONTROLLED
CEN
TRA
L TE
ND
ENC
Y
SYST
EMS
RESS
OU
RCES
PR
OC
ESS
&
PRO
DU
CT
%
%
INSP
ECTI
ON
%
ZERO
A
SSU
RA
NC
E
A1 15 9 60 6 40 - - SYSTEMS, RESSOURCES PROCESS AND PRODUCT
A2 14 8 57.1 6 42.9 - - SYSTEMS, RESSOURCES, PROCESS AND PRODUCT
A3 7 2 - 2 28.6 5 71.4 PROCESS AND PRODUCT ONLY
Tables 4.12 and 4.13 show the scope of quality assurance and control. While
A1 and A2 adopt management system approaches, with a focus on systems,
resources, process and product. A3 relies on process approach where in only
the process and the product are controlled. A3 scope of quality assurance
efforts are not internalized, as only the client dictates the level of quality to
be built into its product.
4.5.8 ASSESSMENT OF ASSURANCE RECORDS
Table 4.14 Availability and retrieval of quality records.
COD
E
RESP
ON
DEN
TS
RESPONDENTS ANSWERS TO AVAILABILITY & EASE OF TRACE AND RETRIEVAL
LESS
TH
AN
10
%
%
B/W
20 &
50
%
%
B/W
50
&
80%
%
ALW
AY
S
%
CEN
TRA
L TE
ND
ENCY
A1 16 - - - - 7 43.8 9 56.2 RECORDS RETRIEVAL IS 100%
A2 13 - - 2 15.4 3 23.1 8 61.5 RECORDS RETRIEVAL IS 100%
A3 10 2 20 5 50 3 30 - - RECORDS ARE AVAILABILITY 20-50% OF THE TIME
100
Table 4.14 shows that A3 has low level ability to trace and retrieve quality
records, while A1 and A2 have 100% ability. It is worthy to note that this
culture is a function of the scope and span of quality assurance as already
discussed in section 4.3.8
4.5.9 QUALITY PERSONNEL AUTHORITY
Table 4.15 Availability of authority to quality personnel
CODE No. OF RESPONDENTS
Responses to availability of stop and resume authority
CENTRAL TENDENCY
YES % NO % A1 19 15 78.9 4 21.1 STOPAND RESUME
AUTHORITY IS HIGH A2 15 11 73.3 4 26.7 STOP AND RESUME
AUTHORITY IS HIGH A3 12 7 58.3 5 41.7 STOP S RESUME
AUTHORITY IS FAIR From the table 4.15, we see that the authority to stop and resume work, when
required, is available in A1 and A2 while in A3 it is fair. Infarct, in A3, only
the managers said the authority existed.
4.6.0 ASSESSMENT OF AVAILABILITY AND TYPE OF FORMAL
AND INFORMAL ASSOCIATION AMONGST WORKERS
Table 4.16 management Tolerance of workers association CODE No. OF
RESPONDENTS
Respondents Answer to management Tolerance of workers association
CENTRAL TENDENCY
YES % NO % A1 19 14 73.7 5 26.3 ASSOCIATION
WELL TOLERATED
A2 18 10 55.6 8 44.4 ASSOCIATION FAIRLY TOLERATED
A3 9 3 33.3 6 66.7 NOT TOLERATED
101
Table 4.17 TYPE OF ASSOCIATION ENCOURAGED BY MGT
CO
DE
No.
OF
RES
PON
DEN
TS
RESPONDENTS ANSWER TO TYPE OF ASSOCIATION ENCOURAGED CENTRAL TENDENCY U
NIO
N
%
QU
ALI
TY
CIR
CLE
%
WEL
FAR
E
ASS
OC
IATI
ON
%
CO
MM
ITT
EE
%
A1 19 4 21.1 - - 2 10.5 13 68.4 USE OF COMMITTEE TO
ACHIEVE TASKS IS MORE
ENCOURAGED
A2 18 3 16.7 - - 5 27.8 10 55.5 ,,
A3 9 - - - - 3 33.3 6 66.7 ,,
Management tolerance of workers association in the companies surveyed
seem to be encouraged in A1 and A2 as shown in table 4.16. However, the
type of association encouraged tended towards the use of committees in all
the companies (Table 4.17) with only A1 and A3 barely tolerating unionism.
None of the companies, even the case study flow station, uses the concept of
quality circles. The usual suspicion between management and workers may
be responsible for the Tendency towards the use of committees in handling
special tasks for specific problem solving. However, it is note worthy to
state that companies / flow stations have more to gain by allowing free and
responsible association amongst and between their workers.
4.6.1 AVAILABILITY OF REWARD FOR QUALITY
Table 4.18 availability of reward for quality
CO
DE
No
OF
RES
PON
DEN
TS Respondent to availability of Quality reward
Yes % No % CENTRAL TENDENCY
A1 19 17 89.5 2 10.5 There is some reward for quality A2 17 16 94.1 1 5.9 ” A3 9 1 11.1 8 88.9 There is no reward for quality
102
As seen in table 4.18, A1 and A2 have an incentive scheme which is under
stood by not only the managers but the work force as well. While A3 may
not necessarily be as a result of non – availability of reward schemes, but
the fact that the work forces are not aware and is not being practiced.
Observations during the survey shows that in this firm/flow station, only the
managers had full understanding of documented practices which is not good
enough for effective JIT of TOTAL QUALITY implementation.
4.6.2 Assessment of length of education and experience of workers.
Table 4.19. Average length of formal education of workforce. CODE No OF
RESPONDENTS
RESPONDENTS ANSWER TO AVAILABILITY OF QALITY
REWARD;
TOP
MGT
MIDDLE
MGT
SUPERVISORS SKILLED
WORKERS
MEAN
(YRS)
A1 19 12 16 12 8 12
A2 17 16 16 12 5 12.25
A3 9 12 12 8 5 9.25
TABLE 4.20 AVERAGE EXPERIENCES OF WORKERS
CODE No OF
RESPONDENTS
RESPONDENTS ANSWER TO AVAILABILITY OF QALITY
REWARD
TOP
MGT
MIDDLE
LEVEL
MGT
SUPERVISORS SKILLED
WORKERS
MEAN
(YRS)
A1 19 28 18 20 20 21.5
A2 17 30 20 25 22 24.25
A3 9 30 12 25 20 21.75
103
Table 4.19 and 4.20 respectively show the average length of formal
education and experience of all categories of members of each flow station.
While A1 and A2 have longer period formal education, A3 has lower
education at the top, but with much experience. The lower formal education
explains its inability to cope with the challenges of JIT of total quality
management. Education and experience when properly blended is a
stimulant for total quality, as already discussed in chapter 2.
4.6.3 AVAILABILITY OF PROCEDURES FOR EVALUATING
QUALITY COST.
Table 4.21 availability for procedures for evaluating cost of quality CODE No OF
RESPONDENTS
AVAILABILITY OF PROCEDURES FOR COST
EVALUATION
YES % NO % CENTRAL
TENDENCY
A1 8 8 100 - - Procedures for cost
evaluation strongly
exists
A2 10 10 100 - - Strongly exists
A3 7 4 57.1 3 42.9 Fairly exists
104
TABLE 4.22 APPROXIMATE COST OF QUALITY PER
PROJECT CODE No OF
RESPONDENTS
AVERAGE COST OF QUALITY PER
PROJECT
TOTAL
COST
% Preventive cost
(%)
Failure cost (%)
A1 8 10 1.75 11.75
A2 10 12 O.5 12.5
A3 7 3 10 13
Availability of means of evaluating the cost of quality is a necessary
incentive for companies / flow stations to appreciate how well their
programmes are doing. As seen in tables 4.21, A1 and A2 have procedures
for evaluating cost while such procedures exist fairly in A3. As shown in
table 4.22, (approximate cost), it is worthy to note that A1 and A2 have
massive expense on preventive costs and keeps its failure cost low, while the
failure cost in A3 is high due to low investment in preventive efforts.
105
4.6.4 RESPONSIBILITY FOR QUALITY MGT
Table 4.23 Responsible focal point for quality
As seen in Table 4.23, while A1 and A2 have senior managers in charge of
their quality Departments, A3 rely on QA/QC engineers, who are at
supervising level, hence the differential effect it has on their individual
programmes in their firms.
CO
DE
No
OF
RES
PON
DEN
TS RESPONSBLE FOCAL POINT FOR QUALITY
SEN
IOR
MA
NA
GER
%
Com
mitt
ee
Cha
riman
%
Con
sulta
nts
%
QA
/QC
ENG
ING
EER
S %
NO
NE
%
CENTRAL
TENDENCY
A1 15 13 86.7 - - - - 2 13.3 SNR. MGR.
HEADES
THE QA
FUNCTION
A2 12 8 66.7 6 33.3 - - - - SNR. MGR.
HEADS
THE QA
DEPT.
A3 10 - - 4 40 - - 6 60 QA/QC
ENGINEER
S
106
4.6.5 ACCEPTABILITY OF QUALITY FUNCTION
TABLE 4.24 ACCEPTANCE OF QUALITY DEPARTMENT’S
WORK BY TOP MANAGEMENT
CO
DE
No
OF
RES
PON
DEN
ACCEPTANCE OF QUALITY DEPT’S WORK BY WORKERS
BEL
OW
30%
%
B/W
30&
50%
%
B/W
50^
80%
%
100%
AC
CEP
T
AN
CE
%
CENTRAL
TENDENCY
A1 19 - - - - 7 36.8 12 63.2 WORK OF
QUALITY
FUNCTION IS
STRONGLY
ACCEPTED
A2 16 - - - - 6 37.5 10 62.5 STRONGLY
ACCEPTED
A3 15 - - 7 41.7 8 53.3 - - WELL ACCEPTED
107
Table 4.25 Acceptance of quality Departments work amongst workers.
CO
DE
No
OF
RES
PON
DEN
T
BEL
OW
30%
%
B/W
30&
50%
%
B/W
50&
80%
%
100%
AC
CEP
T
AN
CE
%
CENTRAL
TENDENCY
A1 19 - - - - 10 52.6 9 47.4 WORK OF
QUALITY
FUNCTION IS
STRONGLY
ACCEPTED
A2 16 - - - - 12 75 4 25 WELL ACCEPTED
A3 15 - - 6 40 9 60 - - FAIRLY
ACCEPTED
Table 4.24 and 4.25 shows that the work of the Quality Assurance and
control function is strongly accepted by top management of A1 and A2. It is
fairly accepted in A3.
However, amongst the work force; the quality function is well
accepted in A1 and A2, while it is fairly accepted in A3 Several reasons
account for this, amongst which is the level of leadership in quality
Assurance Department, as well as the level of commitment by top
management, as workers cannot be accepted to be more committed to a
philosophy than its leadership.
108
4.6.6 TESTING OF MODEL FORMULATION
This model as formulated to know the reorder point when there are variable
demand and lead time of flow stations activities to ensure Just – in – time of
their products which prevents stock out or excess stock of their inventory
level.
Three flow stations data of variable demands and lead times were
obtained. The flow stations were coded A1, A2 and A3. The service level of
each of them was also recorded as shown below;
FLOW STATION A1 WITH SERVICE LEVEL OF 96%
Table 4.26 flow station A1 (ALCON Nig Ltd) with variable demands
lead times.
WEEKS 1 2 3 4 5 6 7 Mean( x ) Variance(σ2) Standard deviation
DEMANDS (WKS)
50 60 45 80 75 65 55 d = 61 2d = 141
87.112 d
LEAD TIMES (DAYS)
5 6 4 7 6 5 4 5L 2L = 1.14 07.12 l
DETAILS OF THE CALCULATION:
Mean of demand 7
55657580456050
nd
d
61)( d
Mean of lead time 57
4567465
nL
L
Variance of Demand 2d =
ndddddddd n
223
22
21 )(...)()()(
109
7)6155()6165()6175()6180()6145()6160()6150( 2222222
2 d
14179872 d
Variance of lead time 2L =
nLLLLLLLL n
223
22
21 )(....)()()(
7
)54()55()56()57()54()56()55( 22222222 L
14.1782 L
Standard Deviation of demand 87.111412 d
Standard Deviation of lead time 07.141.12 L
At service level of 96%=0.96, Zα=1.75 (from the table of normal distribution
Service level).
Applying the R O P Model, we have;
R O P = 222Ld dLZLd
R O P = 61 x 5 + 1.75 14.1611415 2 xx
R O P = 305 + 1.75 94.4241705
R O P = 305 + 1.75 94.4946
R O P = 305 +1.75 x 70.33 = 305 +123
R O P = 428 quantities
Hence, flow station A1 places an order at an inventory of 428 quantities of
pipes and other structural steel equipment to allow Just-In-time of their
products before a stock out is noticed.
FLOW STATION, A2 WITH SERVICE LEVEL OF 93%
Table 4.27; flow station A2 (Noble Engineering Nig. Ltd) with variable
quantities of demands and production lead times of their products
110
WEEKS 1 2 3 4 5 6 7 Mean
( X )
Variance
(σ2)
Standard
Deviation
DEMANDS
(Weeks)
30 20 50 45 60 70 65 ( d )
=4 9
( 2d ) =
291
172 d
LEAD
TIMES
(Days)
4 3 4 5 6 7 5 ( L )
= 4.9
( 2L ) =
1.6 3.12 L
Mean of demand ( d ) = 497
65706045502030
nd
Mean of lead-time ( L ) = 9.47
5765434
nL
Variance of demand ( 2d ) =
nddddxddd n
223
22
21 )(.....)()()(
2d =
7)4965()4970()4960()4945()4950()4950()4920()4930( 22222222
2d = 291
72037
Variance of lead time ( 2L ) =
nLLLLLL n
222
21 )(....)()(
2L =
7)9.45()9.47()9.46()9.45()9.44()9.43()9.44( 2222222
2L = 6.1
787.10
Standard Deviation of demand 172912 d
Standard Deviation of lead time 3.16.12 L
111
At service level of 93% = 0.93, Zα = 1.48 (from the table of normal
distribution service level).
Applying the Developed R O P model, we have that;
R O P = LdLZLd d222
R O P = 49 x 4.9 + 1. 48 6.1492919.4 2 xx
R O P = 240.1+1.48 6.38419.1425
R O P = 240.1+1.48 6.7248.11.2405.5267 x
R O P = 240.1+107.45 = 347.55
R O P 348 quantities
Thus, flow station, A2 reorders at an inventory of 348 quantities of pipes and
other flow stations equipment to ensure J I T of their products before a zero
stock is experienced.
FLOW STATION, A3 (EXPRO TECH OIL AND GAS NIG. LTD) with
SERVICE LEVEL OF 82%
Table 4.28; flow station, A3 with variable demands and lead times of
their products.
WEEKS 1 2 3 4 5 6 7 Mean
( X )
Variance
(σ2)
Standard
Deviation
DEMANDS
(WEEKS)
72 64 80 91 63 94 83 ( d )
= 78
( 2d ) =
130
4.112 d
LEAD
TIMES
(DAYS)
4 5 6 5 6 5 6 ( L ) =
5.3
( 2L ) =
0.49 7.02 L
112
DETAILS OF THE CALCULATION
Mean of demand ( d ) = 7
83946391806472
nd
d = 78
Mean of Lead time ( L ) = 7
6565654
nL
L = 5.3
Variance of demand ( 2d ) =
ndddddddd n
223
22
21 )(...)()()(
2d =
7)7883()7894()7863()7891()7880()7864()7872( 2222222
2d = 130
7911
Variance of lead time ( 2L ) =
nLLLLLL n
222
21 )(...)()(
2L =
7)3.56()3.55()3.56()3.55()3.56()3.55()3.54( 2222222
2L = 49.0
743.3
Standard Deviation of demand 2d = 130 = 11.4
Standard Deviation of lead time 49.02 L = 0.7
At service level of 82% = 0.82, Zα = 0.92
(From the table of normal distribution service level)
Applying the R O P Model, we have that;
R O P = LdLZLd d222
R O P = 78 x 5.3 + 0.92 49.0781303.5 2 xx
R O P = 413.4 + 0.92 16.2981689
113
R O P = 413.4 + 0.92 16.3670
R O P = 413.4 + 0.92 x 60.58 = 413.4+55.74
R O P = 469.14 ~ 469 quantities
Thus, flow station, A3 reorders at an inventory level of 469 quantities of
pipes and other structural steel equipment to allow J I T of their products
before zero stock is observed.
From the detailed calculations of all the three flows stations data
surveyed, it shows that the model formulated is relevant in determining the
point reorder of variable cases of demand and lead time of which this
project is designed to look into.
114
CHAPTER FIVE
DISCUSSION, CONCLUSION AND RECOMMENDATIONS
5.1 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.
5.2 SUMMARY OF FINDINGS
From table 4.26 to 4.28 for the testing of he formulated model, it was
found that;
(i) 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.
(ii) 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.
(iii) Commitment of top management to the principles of JIT quality if
lacking, will in turn reduce the continuous production leading to
zero stock.
(iv) 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.
115
(v) 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.
(vi) 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.
5.3 RECOMMENDATIONS
Based on the Discussion above, the followings are recommended;
(i) 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.
(ii) 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.
(iii) 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.
116
(iv) 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.
(v) Managers and investors of different companies should embrace
Just-In-Time technique of Total Quality Management in achieving
their goals.
(vi) 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.
6.0 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
(ii) The interval of the safety stock is taken to be non-negative.
117
(iii) There is variability of the quantity of the firm and as well their
production lead times.
(iv) Sample values were used to estimate the population values.
(v) 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.
118
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APPENDIX
Sample of table for normal distribution service level and unit loss
function.
Sample of the research questionnaire.
