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Quality & Business Excellence Conference 26 – 27 November 2012
Quality & Business Excellence Conference 26 – 27 November 2012
Quality in the Oil and Gas Industry
Ron Atkinson DQG Conference
November 27, 2012
Quality & Business Excellence Conference 26 – 27 November 2012
There are many aspects of quality
• Product quality
• Perceived quality
• Quality reputation
Quality & Business Excellence Conference 26 – 27 November 2012
Deepwater Horizon Poor safety culture onboard Deepwater Horizon
www.topnews.in/usa
Quality & Business Excellence Conference 26 – 27 November 2012
Culture of Safety and Quality
Quality & Business Excellence Conference 26 – 27 November 2012
Industry Culture
One of the five definitions of culture:
the behaviors and beliefs characteristic of a particular group
In our case, the group is the Oil and Gas Industry.
Quality & Business Excellence Conference 26 – 27 November 2012
Culture beats process
every time James Albaugh, Executive VP of the Boeing Co. ASQ WCQI 2012
Quality & Business Excellence Conference 26 – 27 November 2012
Barriers to Industrial Cultural Change
• We have always done it that way.
• What is the matter with the way that we are doing it?
• The rest of the industry does it like this.
• That is OK for other industries, but not for Oil and Gas.
• You don’t understand
OIL AND GAS IS DIFFERENT!
Quality & Business Excellence Conference 26 – 27 November 2012
Handling the Barriers
• Yes. Oil and Gas is different.
• Oil and Gas has similarities to other industries.
• Focus on the similarities and adjust the tools to address the differences.
Quality & Business Excellence Conference 26 – 27 November 2012
Industry Similarities
Customers • Customers can drive the culture.
• We are all customers and suppliers
– Personal
– Business
• Let’s take a look customers.
Quality & Business Excellence Conference 26 – 27 November 2012
Personal
– What they ordered
– When they want it
– Correct quantity
– Function as expected
– Reliability
Business
– What they ordered
– When they want it
– Correct quantity
– Function as expected
– Reliability
What all Customers Want
Quality & Business Excellence Conference 26 – 27 November 2012
An educated customer is our best customer.
Simms TV Advertising
A Detroit Area Clothing Store
Quality & Business Excellence Conference 26 – 27 November 2012
Overall consumers determine the level of quality and drive quality improvement.
Quality & Business Excellence Conference 26 – 27 November 2012
Consumer Expectations • Base Expectation
– Safe Products
• Additional Expectations – Best value
– Features
– Perceived Quality
– Initial Quality
– Reliability
– Environmental
Quality & Business Excellence Conference 26 – 27 November 2012
Quality & Business Excellence Conference 26 – 27 November 2012
Safe products are a minimum requirement.
Safe Products
Quality & Business Excellence Conference 26 – 27 November 2012
Safe Products
• Consumers demand safe products and drive safety in products through their elected officials. – Laws
– Government supervision of processes and products
• Some supervision is done without the government, such as, doctors.
Quality & Business Excellence Conference 26 – 27 November 2012
Safe Products • Safe Product Focus
– Emphasis on Food, Transportation, Building Materials and Construction, Electrical Devices, etc
– Oil and Gas is now being added
• Criteria based on Association Standards, International Standards and Government Legislation.
Quality & Business Excellence Conference 26 – 27 November 2012
Safe Products • Impacts of Unsafe Product
– Fines
– Interruption of production
– Destruction of product
– Criminal prosecution of leaders
– Loss of company and personal reputation
– Loss of sales
Quality & Business Excellence Conference 26 – 27 November 2012
Safe Products • Safe Product Summary
– Safe products are minimum requirement of customers
– Many different types of organizations may be involved
– Many different types of supervision
– Many different impacts
Quality & Business Excellence Conference 26 – 27 November 2012
Why is this Important?
Quality & Business Excellence Conference 26 – 27 November 2012
Companies try to maximize profits.
Maximum profits only occur with maximum sales at the highest price and lowest cost.
Quality & Business Excellence Conference 26 – 27 November 2012
• Production of safe products costs less than noncompliance to requirements and is a minimum requirement for sales.
Quality & Business Excellence Conference 26 – 27 November 2012
• Safe products are a minimum requirement to do business. Other consumer expectations generate sales.
Quality & Business Excellence Conference 26 – 27 November 2012
Quality & Business Excellence Conference 26 – 27 November 2012
• Safety is primary and additional
expectations determine customer purchase decisions.
• These purchasing decisions may include services provided.
Quality & Business Excellence Conference 26 – 27 November 2012
Consumer Expectations • Base Expectation
– Safe Products
• Additional Expectations – Best value
– Features
– Perceived Quality
– Initial Quality
– Reliability
– Environmental **
Quality & Business Excellence Conference 26 – 27 November 2012
Additional Expectations • Environmental
– This requirement is gaining momentum
– Some customers are making purchasing decisions based on a company’s perceived Social Responsibility and impact on the environment.
– This is becoming more of an impact in Oil and Gas.
Quality & Business Excellence Conference 26 – 27 November 2012
Environmental Social Responsibility
Quality & Business Excellence Conference 26 – 27 November 2012
The Role of Quality in the
Oil and Gas Industry
Quality & Business Excellence Conference 26 – 27 November 2012
Role of Quality
Determine Customer Requirements
– Survey Techniques
• Statistical sampling
• Analysis of results
– Definition of Requirements
Quality & Business Excellence Conference 26 – 27 November 2012
Role of Quality
Implement Customer Requirements
– Quality Function Deployment (House of Quality)
– Design for Six Sigma
– Define product specifications and criteria
– Product Testing
– Reliability Analysis
Quality & Business Excellence Conference 26 – 27 November 2012
Role of Quality
Production
– Control processes
• Minimize waste
• Minimize cost
– Product testing
Quality & Business Excellence Conference 26 – 27 November 2012
Role of Quality
Risk Evaluation
– Risk Analysis
– Failure Mode and Effects Analysis
– System Registration
• ISO, API, etc.
– Individual qualifications
Quality & Business Excellence Conference 26 – 27 November 2012
Quality and Finances
• Bottom line –Lower cost production
• Top line –Demand a higher price –New business –Stimulate company growth
Quality & Business Excellence Conference 26 – 27 November 2012
Summary
• Continuous Improvement is always needed.
• Culture beats process – Every time
• Oil and Gas is Different
– There are similarities
– Build on the similarities
• Customers will drive the culture and drive change.
Quality & Business Excellence Conference 26 – 27 November 2012
ASQ. Make Good Great®
www.asq.org
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