Quality Improvement: A Petroleum Industry Comparison

Abstract

Abstract Most integrated petroleum companies began implementing continuous quality improvement (CQI) programs in the early to mid-1980s. The Chemical line of business was first to implement CQI, at least partly in response to their customers initiating total quality programs. The Downstream (refining and marketing) line of business followed soon thereafter. By now, these two lines of business have institutionalized several aspects of their CQI programs. Quality is being permanently woven into the organization's culture. The future of CQI in the Upstream (exploration and production) line of business is less certain. Towers Perrin assessed the status of CQI in the Upstream line of business of nine companies (see Table 1). We found that after some initial enthusiasm the implementation of CQI has slowed. At this point, it is unclear when these programs will be fully implemented. TABLE 1 - LIST OF SURVEY PARTICIPANTS*Amoco Production Company*BP Exploration Inc.*Chevron U.S.A. Production Company*Conoco Inc.*Exxon USA*Mobil Oil Corporation*Phillips Petroleum Company*Shell Oil Company*Texaco Inc. Introduction All of the nine companies surveyed by Towers Perrin started improvement efforts during the last two to three years; however, not all companies are implementing CQI programs. Initially, three of the nine companies launched employee involvement/empowerment programs programs that have some but not all of the elements of a CQI program. Recently, however, one of the three companies announced plans to convert its employee involvement program to a CQI program. The following survey results focus on CQI programs, but reflect notable elements of the employee involvement/empowerment programs being implemented. CQI PROGRAM DEVELOPMENT The companies in the survey developed CQI programs that met their unique needs. Most companies used consultants with expertise in training and program design to help them develop their program. A series of questions highlights key aspects of the CQI programs. * Should the Upstream line of business develop a statement of vision, mission, and values? If so, how should it be communicated? There is no common approach to statements of vision, mission, and values. The surveyed companies have these statements for one or more of the following:the Upstream line of business,individual businesses within Upstream (i.e., Exploration, Production, Natural Gas),regions and headquarters staff in the Upstream line of business, andCorporate (i.e., no statement for the Upstream line of business). Generally, the companies communicate their vision, mission, and values via internal correspondence. Some companies post them on bulletin boards while others send them to employees at home to signify the importance of the document. One company adopted a novel approach by printing their vision, mission, and values on laminated business cards so employees could easily carry them. * What are the key milestones of the CQI program? All companies concur that the first milestone is completion of the training and education phase. Subsequent milestones are not well documented. Half of the companies do not have formal plans showing CQI milestones and timetables, while the other half include one- to two-year CQI goals and objectives in their business plans. One company prepares a formal Upstream line of business Quality Improvement Plan that is a consolidation of individual division-level plans. The Quality Improvement Plan is patterned after the Baldrige award criteria. P. 109^