Total quality management implementation in oil refining industry


Firstly I will give a brief summary of what quality management is. Quality management is an ongoing process within a business to continually improve quality and meet the needs and requirements of its customers. Quality management is not a procedure or something that can be installed by manual. It is an ongoing process, which involves every level of employee in the organisation, from the cleaners to the senior management. The most popular quality management process is known as TQM (Total Quality Management) and was popularised by the Japanese. This is a process where all employees are encouraged to help out in the continued race for quality and efficiency. TQM also emphasises that quality become part of the underlying philosophy of management, rather than just another process to be followed.

Applying TQM in industry

In this section I will look at literature that has looked at how TQM can be implemented into the everyday day life of an organisation. My main focus will be on the industry of oil refining.A recent paper by Prajogo and Sohal (2006) looked at how TQM has affected operational strategy of organizations. They looked at empirical evidence gathered from 194 Australian companies. They found that TQM by itself does not have much impact; it needs to be complemented with other tools. This quote sums up their findings, 'The implication is that TQM needs to be complemented by other resources to more effectively realize the strategy in achieving a high level of performance, particularly innovation.' Also, a paper by Lee and Whang (2003) has emphasized the need for continued improvement. They say that, 'By using the right management approach, new technology, and re-engineered operational processes, we can also achieve higher supply chain security at lower cost.' This paper focuses on improving supply chain security in the wake of the September 11th attacks in New York. However, ideas from this paper could be adapted to the oil refining industry.

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The need for the oil refining industry to become more efficient is becoming more and more important. The reduction of natural oil reserves and political and environmental pressures means that the industry is forced to employ management tools such as TQM. A paper by Sousa-Aguiar, Appel and Mota (2005) touched on this by stating that, ' Environmental problems caused by both mobile and fixed sources, such as vehicles and chemical plants, are drastically changing the main objectives of the refining industry, as cleaner sulfur-free fuels are obligatory. Therefore, the search for alternative hydrocarbon sources, which enable the traditional refiner to reduce contaminants without major investments, is very important.' A paper by Asonye and Bello (2003) also observes that the oil refining industry is coming under increased outside pressure and needs to become more efficient. This paper focuses on pollution caused by oil refining.

A paper by Marcilly (2002) touches on the fact that other forms of fuels are becoming more and more popular. This is another reason why TQM has had to be implemented in the oil refining industry. The industry needs to become more competitive to fight off new rising competitors.

Another paper published by Tempest (2003) also touches on the need for the oil refining industry to implement TQM techniques. In this paper he says that, 'as privatization, global markets, improving telecommunications and new technology provide many new opportunities and challenges, they will bring strong pressures to bear on the less flexible and increasingly less competent companies.' This article is talking about the increased globalization and continued improvement of technology. In order for the oil refining industry to keep up with these continued global changes it needs to also continually improve. This is where TQM will come into play.

A paper by El-Fadel and Khoury (2001) looks into how efficient the industry is. This paper looks specifically at the waste-management side of oil refining. It observes that waste management is becoming increasingly important as the natural reserves of oil are running out. It also considers the environmental aspects of inefficient waste management. A quote supporting this is, 'This paper describes current waste-oil management practices in Lebanon and identifies the extent of potential adverse environmental impacts associated with these practices. Strategies for proper waste-oil management are then proposed in the context of prevailing public perception and environmental awareness.' These considerations seem to suggest that total quality management issues are being considered and are indeed being implemented.

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There have also been papers published that have looked at the implementation of innovation in the industry. These innovations mean that the industry is becoming more efficient. These papers also look at future innovations that will affect the oil refining industry. One such paper was by Gulli (2000). In this paper it was stated that, 'As an alternative to technological reconversion, this adaptation may be achieved through the gasification of heavy refinery residues with electricity generation (ITGCC plants). The development of ITGCC plants represents product innovation and process innovation at one and the same time, for both the oil refining industry and the electricity sector.' This innovation and continued improvement are more examples of how TQM techniques are being implemented.

Improvements in efficiency in the oil refining industry are not a new concept. Improvements have been taking place for many years. A paper by Reid (1987) looks at improvements that took place at a specific plant nearly 20 years ago. In the paper he says, 'Some of the early technical problems at the refinery required immediate remedial action, but in subsequent years many further changes have been made to improve efficiencies and reduce energy costs and manning requirements.' This demonstrates that TQM techniques have been implemented in the industry for many years.