Total Quality Management in UK Petrochemical Industries

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Executive Summary

The topic for the study is the advantages and disadvantages of implementing TQM as a precursor to ISO 9000 and vice versa. The sector taken for the study is the petrochemical industry in the UK. The current position of this industry and the challenges faced by it are also discussed. The reasons for implementing quality concepts in the petrochemical industry are pointed out. The advantages and disadvantages that are found in the implementation of TQM and ISO 9000 are also explained. Performance standard for each activity increases the overall performance of the organizations in this sector.

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Introduction

In this modern fast-changing world, most organizations are coming up with new strategies to attract customers. Nowadays the customers are very much aware of the quality of products and services delivered by the organizations. They demand good quality products and services for which they pay. Due to this, the use of the quality concept has become an important criterion for both manufacturing and service industries across the world.

For maintaining quality within the organization, some quality concepts are implemented. Among various quality concepts, the most important concepts are the total quality management system and ISO 9000. Maintaining quality in the overall work progress has envisaged the petrochemical industries to emphasize more on the quality of products and services they deliver.

The industry taken for the study is the petrochemical industry in the UK. Due to the slowdown in the global market economy in the year 2009, there was a huge decline in the demand for the products manufactured by the petrochemical industry. “The petrochemical industry of today is an indispensable part of the manufacturing and consuming sectors, churning out products which include paint, plastic, rubber, detergents, dyes, fertilizers, textiles, and even solvents.” (Analyzing the global petrochemical industry, 2009, para.1).

The top ten petrochemical industries in the world are as follows:

  1. “BASF (Germany)
  2. Dow Chemical (USA)
  3. ExxonMobil Chemical (USA)
  4. LyondellBasell Industries (Netherlands)
  5. INEOS (UK)
  6. Saudi Basic Industries Corporation (Saudi Arabia)
  7. Formosa Plastics Corporation (Taiwan)
  8. Sumitomo Chemical (Japan)
  9. DuPont (USA)
  10. Chevron Phillips (USA).” (Baxter, 2009, para.7).

As far as the petrochemical industry in the UK is concerned, maintaining quality is an important aspect. To maintain overall quality in work processes in the petrochemical industry, various quality concepts have been implemented in these organizations. Among these, the concept which has created overall progress for this sector is the concept of total quality management (TQM) and ISO 9000.

Total quality management (TQM) is considered a holistic and systematic approach that provides quality base management for the petrochemical industry in the United Kingdom. It is an integrated management philosophy which is continuously focusing on improvising the quality performance of the products, processes, and services that are delivered by the organization to meet the customers’ requirements and enhance customer loyalty. “TQM is a management philosophy that seeks to integrate all organizational functions (marketing, finance, design, engineering, and production, customer service, etc.) to focus on meeting customer needs and organizational objectives.” (Hashmi, 2009, para.4).

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ISO 9000 is a group of standards that is mainly implemented in the organization to improve the overall efficiency and quality management system within the organization. In the earlier days, this was meant for only those organizations which were engaged in international trade. “ISO 9000 can help a company satisfy its customers, meet regulatory requirements and achieve continual improvement.” (ISO 9000 and other standards, n.d., para.4).

ISO 9000 series is composed of ISO 9000:2005, ISO 9001:2008, ISO 9004:2008, and ISO 9004:2009. There is a specific ISO standard for every industry. ISO/TS 20091 is a specific quality management system that includes the requirements related to design, production, development, installing, and delivering the services related to the products that are manufactured by the petrochemical industry.

The problem faced by the Petrochemical industry

Quality plays a significant role in the development and success of any organization or product. The UK is recognized as a core of the creation of petrochemical and other associated products of petrochemical. There is high demand for this product all over the world, so quality assurance and quality management are very important in the petrochemical industry to exist in the global economy. There are many petrochemical industries in this country and millions of people are working in these industries. Even though this sector is the major source of economic growth, the industry is facing some problems regarding quality management and quality assurance. The main challenges faced by the petrochemical industry are:

  • “the need to manage the commercial environment better – and as a minimum to stop worsening the industry’s inherent cyclicality
  • the need for further restructuring in order to improve underlying performance
  • and the need to improve relationships with the outside world because crucially these relationships increasingly will determine the scope for success in our industry.” (Grote, 2001, para.5).

During the production process, they are not fully utilizing the resources and they are not aware of the recycling of the waste products. The rate of manufacturing petrochemical products is very high; so the wastage of resources is causing a great loss of profit for them. The petrochemical industry like BP did not implement the latest technology and methods to improve the activities in the production procedure and to improve the performance of the workers. Due to lack of the latest technologies, they could not increase the quantity and quality of products and also could not provide the customer’s requirements properly. So, to overcome such problems, they introduced quality management techniques like TQM and ISO 9000 standards.

Implementation of TQM as a precursor to ISO 9000 and vice versa

The petrochemical industries are those involved in the manufacturing of toxic chemicals and organic compounds which can affect people when not maintained properly. Quality assessment and quality standard implementation should be done from the start-up of production to the final despatch of the product for customer satisfaction and the maintenance of the quality system. The petrochemical industry should also comply with the requirements of occupational health and safety management systems which deal with the precautions on health and environmental factors. This applies to all chemical industries.

Implementation model

Implement- from quality to organizational excellence
(Implement- from quality to organizational excellence, n.d., p.1).

The implementation of quality factors starts with the vision and mission of the company, the vision is the future view of the company; the mission is the goals in terms of quality products, customer satisfaction, and the profit which they want to achieve. The statements should be clear and spontaneous.

CSF/KPI: The critical factors for successful implementation are the building blocks for the success and those identified factors that affect the implementation by analyzing the past data and the modification to be done in implementing the new standards. They identify the key performance indicators like the employees, resources like plant and machinery, innovation, etc. Encouraging new ideas and technology, discarding obsolete ones, etc contribute to the success in the implementation; they monitor the performance and report the progress and the feedback for the organization’s well-being.

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Core process: The core business processes are the profit-rearing segments of the business and they consist of suppliers, processes, and customers. The quality implementations create a major impact on the core process and the competitive advantage when the implementation of the TQM is done in the business process.

Defining of the business opportunity: Quality implementation is done mainly for increasing the reputation of the company. The company must be against the acceptance of any kind of compromise in the product quality which affects the company and its reputation in the market. To make the situation at an ease and conducting a review to identify the particular need and the specification of the customer and the company and the analyzing whether the required standard is met or not, this becomes the method for getting a better business opportunity.

The ISO 9000: This is an important tool for the implementation of TQM. This is a general name given to the list of quality standards. The main aim of these quality standards is to provide the company with the standard products and to make the company profit-oriented and highly reputed.

The brainstorming of the ideas is given a good place for the implementation. They help in several ideas generated by the people and the product analysis and the performing of the functions according to the effectiveness of the customer satisfaction and the major role in the quality assessment criteria and to enhance the company position, reputation, and profitability. Decision-making by the management and the implementation to be done by the different standards and the performance of them are monitored continuously, and the demerits in the performance are identified and continuous improvement is done by providing adequate training and development.

The idea of improvement in implementing TQM by the companies is to have the accreditation, proper dealing with the customer for the certification for the business and exports to be done to other countries and also to increase the position and profit of the company.

Advantages of implementing TQM as a precursor to ISO 9000 and vice versa

The ISO 9000 and TQM are two main subjects that are used to show the quality of the industry. “Although fundamentally different – TQM ensures organizations do the right thing, while ISO 9000 is about doing things right.” (Exhibit: An introduction to ISO 9000 & TQM, 1999, p.2).

There are many advantages in implementing TQM as a precursor to ISO 9000 and vice versa in petrochemical industries. These two topics have got good exposure and encouragement. The petrochemical industries find it very important to obtain them. This has grown in popularity due to its advantages. The ISO 9000 is considered a quality model. The implementation of TQM creates a competitive advantage. The implementation will also improve the participation and dedication of the employees in the petrochemical industry. The employees work as a team for the implementation activities and thus cooperation increases. The implementation of TQM and ISO 9000 helps provide quality to the customers. It helps in meeting the needs of the customers. Assessing the quality can be done by quality standards like ISO 9000. It determines whether the work is done efficiently or not. Total quality management can be implemented through ISO 9000. Implementing ISO 9000 as a precursor can be of advantage to the implementation of TQM because it will help increase the profit and thereby keep their regular customers. ISO 9000 can be used as a tool for TQM in petrochemical industries. ISO 9000 will help the process of production when the quality management process is at the starting stage. ISO 9000 has nowadays become a need for the petrochemical industries because it helps to improve productivity. It helps in organizing the process of production. It also helps in improving the performance of the company.

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Disadvantages of implementing TQM as a precursor to ISO 9000 and vice versa

In petrochemical industries, ISO 9000 and TQM are the integral components of the successful running of every organization. When a petrochemical industry is considered there exist a lot of difficulties regarding the implementation of TQM as a precursor to ISO 9000 and vice versa. The petrochemical industry plays a major role in the economic growth of a country. Nowadays petrochemical products are used for several purposes of our day-to-day life. While implementing TQM as a precursor to ISO 9000, few problems arise in connection with customer satisfaction, because without the incorporation of TQM and ISO 9000 does not bring enough customer satisfaction. They consider that ISO 9000 certification is the main thing that shows the manufacturer’s ability to produce high-quality products. Also, the implementation of TQM as a precursor to ISO causes difficulties for entering into the international market because ISO 9000 certification is an integral component of the petrochemical industry to enter an international market. To get ISO 9000 systematic planning is necessary and it will help bring faith on the part of the customer and also to produce good quality products. ISO 9000 certification is the major thing that is used to compete with the international markets. Also, implementing TQM as a precursor to ISO 9000 will cause difficulties to maintain quality improvement. So, it is better to follow ISO 9000 standards before TQM in every organization. But, there exist few disadvantages also for this type of implementation. To achieve maximum profit from a business, the major thing is to fulfill the needs of the customer and the TQM approach gives more consideration to customer satisfaction. So, implementing ISO 9000 first will cause few problems regarding customer satisfaction.

Conclusion and Recommendations

The concepts of TQM and ISO play a significant role in improving the quality management system within an organization. The adoption of these two concepts has enabled the petrochemical industries to overcome all the problems they were facing before their implementation. The challenges faced by the petrochemical industries can be solved effectively by implementing these concepts.

The overall performance of this sector can be improved by framing a standard for each activity that is carried out in an organization so that the deviations occurring in each activity can be identified easily and appropriate measures can be taken in time.

Reference

Analyzing the global petrochemical industry: Description. (2009). Mind Branch. Web.

Baxter, K. (2009). World’s 10 largest petrochemicals companies. Arabian Oil and Gas.com. Web.

Exhibit: An introduction to ISO 9000 & TQM. (1999). Baldrigeplus.com: Adding Value to Excellence in Your Organization. Web.

Grote, B.E. (2001). Millennium challenges. BP p.l.c. Web.

Hashmi, K. (2009). Introduction and implementation of total quality management (TQM): TQM defined. I Six Sigma. Web.

Implement- from quality to organizational excellence. (n.d.).2009. Web.

ISO 9000 and other standards. (n.d.). ASQ: Organization-Wide Approaches. 2009. Web.

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