Quality Management

The term Quality Management can be taken to refer to the process or efforts to ensure that a product or service is of a certain consistent standard. The PMBOK Guide describes three elements of quality management; quality planning, quality assurance and quality control. Other authorities include quality improvement as a necessary element of quality management.

Quality management is focused not only on product/service quality, but also the means to achieve it. Quality management therefore uses quality assurance and control of processes as well as products to achieve more consistent quality.

Quality Planning should determine which quality standards are relevant to a project and determine how to satisfy them
Quality Control is the ongoing effort to maintain the integrity of a process to maintain the reliability of achieving an outcome
Quality Assurance is the planned or systematic actions necessary to provide enough confidence that a product or service will satisfy the given requirements
Quality Improvement can be distinguished from Quality Control in that Quality Improvement is the purposeful change of a process to improve the reliability of achieving outcome

A quality management system (QMS) can be expressed as the organisational structure, procedures, processes and resources needed to implement quality management.

The quality parameter can underpin proper management at every project lifecycle stage; contracts, requirements determination, project framework, personnel, project controls and project outcomes and deliverables.

This article considers the place of quality in the upstream oil and gas offshore project sector under three main headings

1 Introduction – Quality, Quality Management, ISO 9000 and Six Sigma

1.1 Quality Management

1.2 ISO 9000

1.2.1 ISO 9001:2008 Certification

1.2.2 ISO 9001:2008 Advantages

1.3 Six Sigma

2 Quality, Quality Management, Integrated Management and Customer Relationships in International Ephemeral Data or Infrastructure Projects

2.1 The Challenge of Quality

2.2 General

2.2.1 Documentation

2.2.2 Quality Manual

2.2.3 Control of Documents

2.2.4 Control of Records

2.3 Management

2.3.1 Commitment, Quality Objectives and QMS Planning

2.3.2 Communication

2.3.3 Customer Focus

2.3.4 Quality Policy

2.3.5 Management Representative

2.4 Products and Resources

2.4.1 Product Planning and Realisation

2.4.2 Determination of Customer Requirements

2.4.3 Resources

2.4.4 Purchasing

2.4.5 Control of Production, Products, Services

2.4.6 Control of Monitoring/Measuring Equipment and Data

3 Improvement

1 Introduction – Quality, Quality Management, ISO 9000 and Six Sigma

1.1 Quality Management

Quality Planning should determine which quality standards are relevant to a project and determine how to satisfy them
Quality Control is the ongoing effort to maintain the integrity of a process to maintain the reliability of achieving an outcome
Quality Assurance is the planned or systematic actions necessary to provide enough confidence that a product or service will satisfy the given requirements
Quality Improvement can be distinguished from Quality Control in that Quality Improvement is the purposeful change of a process to improve the reliability of achieving outcome

A quality management system (QMS) can be expressed as the organisational structure, procedures, processes and resources needed to implement quality management.

1.2 ISO 9000

The ISO 9000 family of standards is related to quality management systems and designed to help organisations ensure that they meet the needs of customers and other stakeholders while meeting statutory and regulatory requirements related to the product.

The standards are published by ISO, the International Organisation for Standardisation, headquartered in Geneva, Switzerland.

ISO 9001 deals with the requirements that organisations wishing to meet the standard have to fulfill. An organisation (that is the quality management system operated by an organisation) can be certified is ISO 9001:2008. ISO 9001:2008 is supported by two other standards ISO 9000:2005 and ISO 9004:2009.

ISO 9001:2008 Quality Management Systems – Requirements is a document of approximately 30 pages length
ISO 9000:2005 Quality management systems – Fundamentals and vocabulary
ISO 9004:2009 Managing for the sustained success of an organisation – A quality management approach

Only ISO 9001 is directly audited against for third party assessment purposes. The other two standards are supplementary and contain deeper information on how to sustain and improve quality management systems; they are therefore not used directly during third party assessment

Summary of ISO 9001:2008 in informal language

The quality policy is a formal statement from management, closely linked to the business and marketing plan and to customer needs
The quality policy is understood and followed at all levels and by all employees. Each employee works towards measurable objectives
The business makes decisions about the quality system based on recorded data
The quality system is regularly audited and evaluated for conformance and effectiveness
Records show how and where raw materials and products were processed to allow products and problems to be traced to the source
The business determines customer requirements
The business has created systems for communicating with customers about product information, inquiries, contracts, orders, feedback, and complaints
When developing new products, the business plans the stages of development, with appropriate testing at each stage. It tests and documents whether the product meets design requirements, regulatory requirements, and user needs
The business regularly reviews performance through internal audits and meetings. The business determines whether the quality system is working and what improvements can be made. It has a documented procedure for internal audits
The business deals with past problems and potential problems. It keeps records of these activities and the resulting decisions, and monitors their effectiveness
The business has documented procedures for dealing with actual and potential nonconformances (problems involving suppliers, customers, or internal problems)
The business

makes sure no one uses a bad product
determines what to do with a bad product
deals with the root cause of problems, and
keeps records to use as a tool to improve the system

1.2.1 ISO 9001:2008 Certification

An organisation applying for ISO 9001 certification is audited based on an extensive sample of its sites, functions, products, services and processes. The auditor presents a list of problems (defined as “nonconformities”, “observations” or “opportunities for improvement”) to management. If there are no major nonconformities, the certification body will issue a certificate. Where major nonconformities are identified, the organisation will present an improvement plan to the certification body (e.g. corrective action reports showing how the problems will be resolved); once the certification body is satisfied that the organisation has carried out sufficient corrective action, it will issue a certificate. The certificate is limited by a certain scope (e.g. a specific statement of whatever of the organisation’s activities are certified) and will display the addresses to which the certificate refers.

Two types of auditing are required to become registered to the standard: auditing by an external certification body (external audit) and audits by internal staff trained for this process (internal audits). The aim is a continual process of review and assessment to verify that the system is working as it is supposed to; to find out where it can improve; and to correct or prevent problems identified. The ISO standard that sets out the guidelines for quality management systems auditing is ISO 19011 (the current version of ISO 19011 is ISO 19011:2012)

1.2.2 ISO 9001:2008 Advantages

A number of major purchasers require their suppliers to hold ISO 9001 certification. In addition to several stakeholders’ benefits, a number of studies have identified significant financial benefits for organisations certified to ISO 9001, with a 2011 survey from the British Assessment Bureau showing 44% of their certified clients had won new business.

Over one million organisations worldwide have implemented ISO 9001. More than 1,200 companies are currently certified in Ireland to ISO 9001. A 2010 study found that organisations that pursued standards had higher growth rates for sales, employment, payroll and average annual earnings. Sales were close to 10% higher and there was higher employment growth at ISO certified workplacesϮϮ. Siemens, BAE Systems and IBM Corporation hold ISO 9001:2008 certifications.

1.3 Six Sigma

Six Sigma is a set of tools and strategies for process improvement originally developed by Motorola Inc. in the 1980s. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimising variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates an infrastructure of people within the organisation (Champions, Black Belts, Green Belts, Orange Belts, etc.) who are experts in the Six Sigma methods. Each Six Sigma project carried out within an organisation follows a defined sequence of steps and has quantified financial targets (cost reduction and/or profit increase).

The Six Sigma doctrine asserts that

Continuous efforts to achieve stable and predictable process results (i.e., reduce process variation) are of vital importance to business success
Manufacturing and business processes have characteristics that can be measured, analysed, controlled and improved
Achieving sustained quality improvement requires commitment from the entire organisation, particularly from top-level management

Features that set Six Sigma apart from previous quality improvement initiatives include

A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project
An increased emphasis on strong and passionate management leadership and support
A special infrastructure of Champions, Black Belts, Green Belts, etc. to lead and implement the Six Sigma approach
A clear commitment to making decisions on the basis of verifiable data and statistical methods, rather than assumptions and guesswork

The term Six Sigma comes from a field of statistics known as process capability studies. Originally, it referred to the ability of manufacturing processes to produce a very high proportion of output within specification. Processes that operate with Six Sigma quality over the short term are assumed to produce long-term defect levels below 3.4 defects per million opportunities (DPMO). Six Sigma’s implicit goal is to improve all processes to that level of quality or better.

2 Quality, Quality Management, Integrated Management and Customer Relationships in International Ephemeral Data or Infrastructure Projects

Dubán’s primary focus is in upstream oil and gas offshore. Many of the worldwide locations where such activities occur are in international waters offshore developing countries. Many projects in the sector have very finite lifespans, many have lifespans of less than one year. That having been said, many projects have multi-year lifespans and may experience changes of key personnel during the project.

There is quite a low level of awareness of the ISO 9001 standard or other quality standards within the sector. But there is a tendency amongst a good many managers/salesmen/personnel involved in tenders and contract negotiation to make reference to the general notion of quality in presentations.

There is an ISO standard for the sector, ISO 29001, but penetration of this standard and general awareness of its existence is even lower than that of ISO 9001.

2.1 The Challenge of Quality

Given the perceived advantages of operating an integrated management system with quality at its heart, to companies and customers, many organisations in the upstream oil and gas offshore sector seek to become certified to ISO 9001 (or similar).

But, it is also true that, of these organisations a good many have been seen to afterwards relinquish the certification. Abandonment/loss of the certification is conceivably attributable to the frenetic character of the industry and the frequent changes of personnel within organisations in that industry sector. There is a good deal of discussion to do with the perception of the quantity and standard of record keeping necessary for ISO 9001 certification.

It is not untypical of a project in the sector that a contract is awarded with expectation that personnel and equipment will be mobilised to a remote location at the earliest possible opportunity after signing. Contracts are often remunerated as a lump sum for completion of a specified scope-of-work and often come with penalties imposable on a certain date should the work be uncompleted by that date. In order to achieve such often difficult targets many projects throw people at them in an effort to bring about something like the desired result.

The most notable feature of the sector is the emphasis on safety. This is certainly understandable in the often frenetic environment. In the period between the Exxon Valdez accident and the Macondo accident emphasis on safety, with all of its obvious benefits, has grown to a point where the safety parameter can be regarded as a kind of talisman overriding all other considerations.

Efforts at safety management are often without a well designed structure and are often ad hoc and not integrated. And projects often suffer from lack of clarity in respect of project goals. Disjointed safety management efforts, meetings and documents often serve on one hand to draw management attention away from project focus and can, due to complexity caused by the absence of a management structure, become confused; it is possible to point, for an example, to bridging documents/emergency callout lists containing incorrect or out-of-date information due to poor document control/lack-of-clarity in respect of roles or responsibilities.

Quality, for all of the lip service it might be paid, is generally held to be something peripheral to an undertaking. It is felt that the parameter might concern issues relating to content, materials or suppliers but it is poorly understood and rarely (except as a given) upfront in the contract relationship discussions. The idea that top-to-bottom integration of projects with customer satisfaction (beyond the standard horsetrading required to get future work), product consistency, fitness-for-purpose or commitment to improvement as project goals is generally not a central notion in the sector.

Lack of clarity about what exactly the project outcomes will be can often lead to conflict. This coupled with the traditional adversarialism of the sector do indeed lead to frequent unhappy partings-of-the-ways.

But the sector certainly can benefit from integrated management, especially quality-focused integrated management. Indeed, it can be argued, the elements of the sector badly need such reasonable control mechanisms.

2.2 General

The frenetic character of projects, the frequent changes in personnel, the sector’s requirement for an integrated safety management system informed by the project-specific scope-of-work as well as the fact that work locations are remote from the office-based managers all point towards obvious potential benefits of quality-focused integrated management.

In general, project design relies upon what has been done in previous projects and any effort to design a project-goal-specific architecture is rarely seen. Efforts to design project-specific spreads are usually very minimalist. This is certainly explicable by high costs that would be associated with and stem from such efforts. It can be argued that this tendency, to do what has been done the last time, conspires against systems improvement or operational improvement.

2.2.1 Documentation

Projects in the sector generate a great many documents. Contracts, work orders, procedures, work instructions, plans (ostensible quality plans and safety plans), minutes-of-meetings including HIRAs (hazard identification and risk assessment, level 1, level 2 and toolbox talks), bridging documents, daily progress reports, daily results, site memoranda, field reports and variation orders are all generated during the life-cycle as well as a great many performance reports and statistics stemming from the work. These documents will be prepared by a number of departments and authors (at a number of different companies) and will often reside within a number of different document control systems.

The procedures and plans generated are often very minimalist; and often can contain cut-and-pasted material and errors. In general document control in the upstream oil and gas offshore sector leaves a lot to be desired and represents a clear opportunity-for-improvement.

2.2.2 Quality Manual

Most contractors / operators have quality manuals. These documents usually form part of the organisation’s operational body-of-documentation. The manual does not usually occupy a central location during contract generation or project planning; indeed the manual may be of a character that does not lend itself to sitting centrally at those stages. Copies of the manual will be available to the managers onshore and may be available to personnel offshore but it is very unlikely that any requirement to make use of the manual during project activities will ever be raised by any participant.

The manuals may be undergoing continuous maintenance. But updates are rarely publicised. And the intention of a quality manual is rarely delivered; few know what is contained in the manual (or even under what headings the substance is dealt with)

Often no project-specific quality policy or quality objectives are defined. Usually no such statements are widely disseminated. Definitions or instructions on how the various participants can contribute to project quality are rarely communicated or even suggested.

2.2.3 Control of Documents

In general document control in the upstream oil and gas offshore sector leaves a lot to be desired and represents a clear opportunity-for-improvement. Document generation is usually left up to whatever personnel happen to come along and usually lack standardisation. Contracts are generally minimalist in respect of what documents will outcome from a project. And opinions often differ about what documents will outcome and what these documents might contain. Templates for documents are often provided but these templates can certainly differ between suppliers (involved in the same project) and even between different departments within a single organisation.

A good many instrument calibrations are routinely performed during project lifecycles. Files documenting calibrations can be managed in a wide variety of ways; calibration information is often misplaced and lost.

2.2.4 Control of Records

Personnel records (including short service employee training and qualifications information) are often maintained in a haphazard fashion; often this can be left up to personnel in the office to maintain on their own initiative according to no particular format. Heavy reliance on short service employees and the agencies used to source such personnel can mean that organisations may never collate the full set of an individual’s training and qualifications records during a project lifecycle. And may not properly maintain contact information for individuals during or after a project.

Most companies are committed to a selection process for suppliers and detail that process in the quality manual. But records to do with supplier selection are often not collated for specific projects. And suppliers that may never have been approved under the organisation’s policy can sometimes supply goods and services into an organisation if the schedule demands that.

The large amount of data and records generated during project lifecycles are sometimes improperly managed. For example, files documenting calibrations can be managed in a wide variety of ways; calibration information is often misplaced and lost. The differing character of the range of instrumentation is sometimes poorly understood by managers who might not know what files to expect. The protocols and requirements for delivering relevant information may not be communicated to technicians.

2.3 Management

There is often discussion nowadays to do with poor understanding amongst senior management of IT matters. Similar arguments can be set-out in respect of complex multi-element programmes and campaigns. But such discussions can simply be the soundings-off of those down-the-pile or at the coalface. Certainly, the responsibilities of senior managers (striving to meet statutory obligations and duties) can leave little time for keeping up-to-date with evolving systems. And can lead to a lack of engagement of senior management with day-to-day activities. This coupled with the tendency on the part of middle managers/technicians to do what has been done in previous projects conspires against continuing improvement: and may indeed conspire against the very obligations and duties of senior managers.

Also worryingly, the remote work locations in the upstream offshore sector and the fact that middle managers may not know the personnel in the field can lead to poor involvement in day-to-day activities by line managers and project managers.

2.3.1 Commitment, Quality Objectives and QMS Planning

The quality function is often delegated out to a department charged with discharging anything perceived to relate to that. Senior managers might sign documents and authorise expenditure without any great understanding (except in its colloquial sense) of the quality function.

2.3.2 Communication

Communication of quality aspirations is often left up to the quality department. The quality department may or may not be supported by line managers and project managers in this regard. The quality manager usually does receive good moral support from senior management in this regard, but there does seem to be a tendency to somewhat usurp responsible for the area to that manager.

2.3.3 Customer Focus

Customers often require timely mobilisation of equipment and personnel in front of other concerns. In cases where timely mobilisation is the priority suppliers focus is naturally in that direction. What the various parties might do in the field once mobilisation has been achieved is sometimes left until this first objective has been organised.

Delivery of (or even potential for delivering) the mobilisation requirement can sometimes be enough for award of future work. Even when followed by poor performance during the programme lifecycle. Poor performance and conflicts arising from it can sometimes be resolved at a higher level (than the project/middle manager level) after demobilisation.

2.3.4 Quality Policy

Often no quality policy or quality objectives are defined (except perhaps those contained, we might say hidden, inside the quality manual). Usually no such statements are widely disseminated (the quality manual is often available but is rarely referred to or used in the field or during the contract stage, Section 2.2.2).

2.3.5 Management Representative

Organisations in the upstream offshore sector usually have a quality manager and often have a quality department. This organisation division is often under resourced and can spend most of its resources involved in purchaser (client) audits and audits relating to projects by validating bodies (e.g. Lloyds, DNV or IMCA) leaving little time for building or maintaining the organisation QMS. And little time for implementing the system or communicating or managing quality objectives associated with the works.

Senior management often delegate out to the quality manager everything perceived to relate to quality. The quality manager usually receives good moral support in this regard, but there does seem to be a tendency to somewhat usurp responsible for the area to that manager (who can often be quite a junior person within an organisation).

2.4 Products and Resources

Mobilising resources and personnel to the field is often the primary objective of project planning. There is often little consciousness of any product, beyond a generic product (e.g. diving services, inspection, maintenance of anything substandard that may be discovered, et cetera) or a rough description of the activity (install/remove riser) being delivered once the spread is there.

The personnel or infrastructural equipment (ships, cranes, ROVs et cetera) are usually up to the job. But tools found inadequate-for-purpose in the field are often jerry rigged or adapted. Procedures can often be seen amended in the field. Management-of-change processes of varying degrees of complexity and varying degrees of rigour are usually employed during these changes; a certain amount of confusion sometimes accompanies such changes.

2.4.1 Product Planning and Realisation

2.4.2 Determination of Customer Requirements

Customers often require timely mobilisation of equipment and personnel over-and-above other concerns. In cases where timely mobilisation is the priority suppliers focus is naturally in that direction. What the various parties might do in the field once mobilisation has been achieved sometimes is left until this first objective has been organised.

Contracts are generally minimalist in respect of what documents, validation data or other outcomes might arise from a project. The procedures and plans generated by contractors and subcontractors are often very minimalist. Lack of clarity about what exactly the project outcomes will be can often lead to conflict. This coupled with the traditional adversarialism of the sector do indeed lead to frequent unhappy partings-of-the-ways.

Efforts to design project-specific spreads are usually very minimalist. This is certainly explicable by high costs that would be associated with and stem from such efforts. It can be argued that this tendency, to do what has been done the last time, conspires against systems or operational improvement.

2.4.3 Resources

The often difficult targets associated with many projects can lead managers to mobilise people, sometimes filling roles inappropriate to the task at hand, into the field in an effort to bring about something like the desired result.

It can be said that the vessels, spreads, instrumentation and software mobilised for works are usually adequate-for-purpose.

2.4.4 Purchasing

In recent years the upstream oil and gas offshore sector has been experiencing a boomtime. Demand for many resources and services has consistently remained ahead of supply. Prequalification or listing as an approved supplier is not always required for contract awards. Often capacity, available or willingness to undertake the work, alongwith roughly meeting the product or service requirement specification, can be enough.

Most companies commit to a selection process for suppliers and detail that process in the quality manual. But short deadlines and lack of capacity amongst suppliers can lead to certain selection criteria being overlooked. Suppliers that may never have been approved under the organisation’s policy can sometimes supply goods and services into an organisation if the schedule demands that.

2.4.5 Control of Production, Products, Services

See Section 2.4.1, Section 2.4.2, Section 2.4.3 et alia.

2.4.6 Control of Monitoring/Measuring Equipment and Data

It can be said that instrumentation employed across the sector is usually adequate-for-purpose. And calibration methods and software are usually technically proper. Individuals operating and calibrating tools and instruments are trained, competent personnel in the overwhelming majority of instances. In the overwhelming majority of instances calibration and operating instructions for equipment and instrumentation are in line with manufacturers’ instructions. Performance of calibrations would certainly follow any project procedures that might be in existence, but project procedures are often silent or vague in respect of such specific information.

And, the large amount of data and records generated during project lifecycles are sometimes improperly managed. For example, files documenting calibrations can be managed in a wide variety of ways; calibration information is often misplaced and lost. The differing character of the range of instrumentation is sometimes poorly understood by managers who might not know what files to expect. The protocols and requirements for delivering relevant information may not be communicated to technicians.

3 Improvement

The upstream offshore project sector certainly can benefit from integrated management, especially quality-focused integrated management. The best development that might be hoped for is that purchasers of products and services in the sector might more clearly define the outcomes possible for them from programmes and campaigns. And manage all elements of programmes and campaigns in an integrated way with the intention of deriving maximum benefits.

Suppliers into such programmes or campaigns can better live up to expectations when any expectation is clearly defined.

Expenditure on future programme or campaign design might be expected to deliver future improvements. But it is probably larger purchasers of programme and campaign products and services that will most usefully make that expenditure.

Dubán offers project and systems management and can advise on how best quality management can benefit projects and organisations. And can implement integrated quality management as extensively or intensively as determined required