quality & business excellence conference€¦ · –perceived quality –initial quality...

Quality & Business Excellence Conference 26 – 27 November 2012


Quality in the Oil and Gas Industry

Ron Atkinson DQG Conference

November 27, 2012


There are many aspects of quality

• Product quality

• Perceived quality

• Quality reputation


Deepwater Horizon Poor safety culture onboard Deepwater Horizon

www.topnews.in/usa


Culture of Safety and Quality


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.


Culture beats process

every time James Albaugh, Executive VP of the Boeing Co. ASQ WCQI 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!


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.


Industry Similarities

Customers • Customers can drive the culture.

• We are all customers and suppliers

– Personal

– Business

• Let’s take a look customers.


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


An educated customer is our best customer.

Simms TV Advertising

A Detroit Area Clothing Store


Overall consumers determine the level of quality and drive quality improvement.


Consumer Expectations • Base Expectation

– Safe Products

• Additional Expectations – Best value

– Features

– Perceived Quality

– Initial Quality

– Reliability

– Environmental



Safe products are a minimum requirement.

Safe Products


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.


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.


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


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


Why is this Important?


Companies try to maximize profits.

Maximum profits only occur with maximum sales at the highest price and lowest cost.


• Production of safe products costs less than noncompliance to requirements and is a minimum requirement for sales.


• Safe products are a minimum requirement to do business. Other consumer expectations generate sales.



• Safety is primary and additional

expectations determine customer purchase decisions.

• These purchasing decisions may include services provided.


Consumer Expectations • Base Expectation

– Safe Products

• Additional Expectations – Best value

– Features

– Perceived Quality

– Initial Quality

– Reliability

– Environmental **


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.


Environmental Social Responsibility


The Role of Quality in the

Oil and Gas Industry


Role of Quality

Determine Customer Requirements

– Survey Techniques

• Statistical sampling

• Analysis of results

– Definition of Requirements


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


Role of Quality

Production

– Control processes

• Minimize waste

• Minimize cost

– Product testing


Role of Quality

Risk Evaluation

– Risk Analysis

– Failure Mode and Effects Analysis

– System Registration

• ISO, API, etc.

– Individual qualifications


Quality and Finances

• Bottom line –Lower cost production

• Top line –Demand a higher price –New business –Stimulate company growth


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.


ASQ. Make Good Great®

www.asq.org

quality & business excellence conference€¦ · –perceived quality –initial quality...

Documents