Description
The industrial revolution that occurred in Europe, America and other developed countries led to fierce competition amongst firms. It must be stated that most managers during this early period of industrial revolution, chose their corporate strategies with little or o regard for customer's value.
1
TOTAL QUALITY MANAGEMENT IN NIGERIAN OIL MARKETING
COMPANY: A STUDY ON MOBIL NIGERIA PLC
R.A. Gbadeyan
Email: [email protected],
And
J.O. Adeoti
E-mail: [email protected]
Department of Business Administration
University of Ilorin,
Abstract
The application of Total Quality Management in Organization is not limited to an area of
organization; it involves every department and section of the organization. It also means a
complete involvement .of the entire workforce in the organization, that is from the chief
executive to the least subordinates. This paper therefore, critically examines the contribution
of the Total Quality Management approach to high quality products and customer satisfaction
in a Nigerian Oil Marketing Company - Mobil Oil Nigeria Plc.. It considered the TQM
approach’s contribution to business organization in a downturn economy such as Nigeria and
recommends for its use not only in an oil marketing company but any business organization
either government owned or privately owned.
Key words: Quality Organization Customer Workforce Products Strategic
Introduction
The industrial revolution that occurred in Europe, America and other developed
countries led to fierce competition amongst firms. It must be stated that most managers during
this early period of industrial revolution, chose their corporate strategies with little or o regard
for customer’s value. However, with the continued growth in competition, managers were
forced to pursue corporate strategy that is customer’s focused (Oni, 1998). Today, customer’s
expectations are rising, hence they chose from among the competing firms, which produce or
offer the best products and services for their money. This trend towards getting customers
satisfied at consistently lower real cost stimulated interest in the Total Quality Management
Philosophy. There have been significant debates regarding the success of total quality
management in business organization. These have been between those supporting it for
bringing improvements in performance due to its application in business organization and
those considering it a failure and fad
(Zairi 1999, Becker 1993, Wilkinson et al 1994, Binney 1992, and Brown 1993).
This paper therefore aims at examining the contribution of TQM to high quality
products and customer satisfaction in Nigerian oil marketing company. Therefore, for this
objective to be achieved, the paper has been divided to the following sections: Introduction,
Literature Review, Total Quality Management System in Mobil Oil Nigeria Plc, Policy
Options and Conclusion.
Literature Review
Organizations are usually involved in manufacturing of products or provision of
services that are offered for sale to potential customers and clients. There are major issues to
be considered for the sale of these products or services, which include: Price and Quality.
According to Heizer and Render (1993) quality is often the major Issue because poor quality
can be very expensive for both the producing firm and the customer. It is therefore imperative
2
for every organization’s operation manager to ensure that his or her firm delivers a quality
product at the right place, at the right time and at the right price.
Quality has various meanings amongst which the following will suffice. Gilmore
(1974) defined quality as the degree to which a specific product conforms to a design or
specification. Ford (1991) believes that “Quality Is defined by the customer; customers want
products and services that, throughout their lives, meet customers need and expectations at a
cost that represents value.” J uran (1974) described Quality as fitness for use, while J ohnson
and Winchell (1989) in their own word regarded quality as “the totality of features and
characteristics of a product or service that bear on its ability to satisfy stated or implied
needs”. Garvin (1984), an authority on product quality said that the definitions of quality fall
into several categories: Users based, manufacturing based and product base.
In considering all these definition, it is very important that it must include an added
emphasis on meeting the customers need to make a meaningful contribution to the concept of
total quality management. Feigenbaum (1961) wrote a book titled “Total Quality Control”,
which delivered a fundamental message: make it right the first time. The burden of quality
proof rests not with inspection but with the maker of part: Machinist assembly foreman,
vendor. This message with those from others, evolved into a crusade known as Total Quality
Management. MC Adam (2001) gave a five point definitional framework for total Quality
management:
• Total Quality Management is strategically linked to the organizational goals.
• Customer understanding and satisfaction is vital within the organization.
• Employee participation and understanding in continuous improvement at all level is
required within the organization.
• There is a need for management commitment and consistency of purpose within the
organization.
• The organization is perceived as a series of processes that incorporate customer-
supplier relationship. This framework is both definitional and developmental.
Heizer and Render (1993) said that “TQM refers to a quality emphasis that
encompasses the entire organization, from supplier to customer”. TQM according to Sullivan
(1986) emphasizes a commitment by management to have a company wide drive toward
excellence in all aspects of products and services that are important to the customer. The
development of the quality management process was pioneered in America, but the first
country to take advantage of the development was J apan. Our discussions on Total Quality
magement would be incomplete without acknowledging the contributions of individuals such
as W. Edwards –Deming, J oseph M. J uran, and Philip B. Crosby. It was reported that after
World War II, an American, W.E. Deming went to J apan to teach quality and the J apanese
learned it. Deming is out spoken in his quality crusade that management must accept
responsibility for building good systems. J .M. J uran was also a pioneer in teaching the
J apanese how to improve quality. Like Deming, J uran believes strongly in top management
support and Involvement in quality control. He believes also in team work to raise quality
standard. J uran varies from Deming by focusing on the customer in an effort to define quality
as fitness for use, not necessarily the written specifications. Crosby’s traditional view has been
“with management and employee commitment great strides can be made in improving
quality”. He also believes that in the traditional trade off between the cost of improving quality
and the cost of poor quality; the cost of poor quality is understated. The cost of poor quality
should include all of the things that are involved in not doing the job right the first time
(Deming, 1986, J uran, 1974 and Crosby, 1989).
Basically, we have two ingredients of TQM Employee involvement and Quality
circles. Employee Involvement means including the employee in every step of the process
from product design to final packaging. Quality control circles is a situation in which, a group
3
of between 6 and 12 employees volunteer to meet regularly to solve work related problems.
The members, all from the same work area receive training in group planning, problem
solving and statistical quality control (Heizer and Render, 1993).
In recent years, Total Quality Management (TQM) has become so popular that most
western countries are following the example of J apan. Organizations and Government are not
only taking lead position in making use of the concept but are also committing their resources
toward spreading the doctrine. There has been a renewed emphasis on quality due to increase
appreciation of the cost of poor quality to the producer, customer and society. This emphasis
on quality therefore has evolved to such a point that we now have International Standard being
developed, for instance the J apanese Industrial standard and the Europe’s ISO 9000 standard.
(Heizer and Render, 1993; Oladele, 1997). The theory of Strategic Total Quality Management
(STQM) was later developed (Madu and Kuei, 1993) as an extension of Total Quality
Management, which was based on a total system view of quality viewing. Strategic Qua1ity
Management is seen as key to being competitive. Madueta1, 1994 were of the opinion that the
philosophy needs to emphasize integrity, environment issues and social responsibilities as key
element. In a situation where there is a strong strategic intent to promote quality is a strategic
advantage through Total Quality Management, there is lack of achieving this due to poor
communication and policy infrastructure. The underlying problems have been lack of the
quality strategies to act as a foundation and the continuing misperceptions of TQM by
company, leaders (Aravindan et al 1996). It is such difficulties that have lead to many
rejecting strategic Quality Management (SQM).
However, the focus is no longer on quality’s sake, but on the strategic use of quality.
This has resulted to many businesses learning that quality initiatives must go beyond being
tied to the bottom line and must be integrated into the company’s strategy (Voss 1994).
The theories of corporate strategy and the tools and technologies of strategic planning
have developed dramatically in the last 50 years. Like TQM, various theories and key
academics have shaped its development.
Ansoff (1984) defined strategic management as a systematic approach to a major and
increasingly important responsibility of general management: to position and relate the firm to
its continued success and make it secure from surprises. Bates and Dilard (1992) consider that
the existing approach to strategic planning is changing and it is bringing about a fundamental
redesign of the 1990’s strategic planners role. Many therefore, would reduce the 1990’s
strategic planner to a planning coordinator. These definitions according to Leonard and MC
Adam (2002) reflect a logic approach to corporate strategy, a sequence of events with clear
issues to be considered, to achieve the stated strategy.
There is evidence of a lack of an in-depth study on the relationship between Total
Quality Management and corporate strategy beyond the financial based impact measures and
focused on its application and especially on the dynamics involved in the relationship
(Leonard and MC Adam, 2002).
Morgan and Piercy (1996) underlined the fact that the link between strategy and
quality has not yet received enough attention in either quality and strategic literature. They
emphasized that there is, as yet, limited knowledge of the links between quality strategy and
competitive performance due to the lack of focus, upon the fundamental questions of how
quality may be effectively utilized as a base for competitive strategy. The methodology is
through the literature survey of their official documents.
Total Quality Management System in Mobil Oil Nigeria PLC
The first commercial oil well was struck in 1956 at Oloibiri, in present day Bayelsa
State by Shell Oil Company. The export of the first cargo of crude oil took place on 17th
February, 1958. These successes of Shell encouraged other companies to join in the
4
exploration race. Mobil was therefore awarded the Sokoto Basin the Benin Trough and fringes
of the Niger Delta to explore in 1956. This first venture was not successful, Mobil therefore
continued the search by moving offshore. The history of Mobil in Nigeria can be traced back
to 1907, when a predecessor company began marketing sunflower brand Kerosene in the
country. This small company evolved into the present day Mobil Oil Nigeria with assets of
$145 million and annual sale of petroleum products of more than six million barrels a year.
Subsequently, studies were conducted on the feasibility of natural gas recovery project,
which was initially projected to cost about $855m but actually cost $810m. This led to a joint
Venture in which Nigeria holds 49 percent equity (through NNPC) as against Mobil’s 51
percent. The first sales shipment left Nigeria for South America on 30th August, 1999. A gas
marketing subsidiary of Mobil is in charge of delivery and marketing of the products. This
J oint Venture Project is expected to earn $3.2 billion revenue over the production period from
petroleum tax and royalties.
Mobil Nigeria Plc, it was reported, started with the Total Quality Management system
vision in the late 1980s to address quality concerns, reduce rejects or rework rates and improve
productivity.
By 1993, the company took the improvement journey through ISO 9002 series Quality
Management System, with the purpose of reengineering the system to streamline job processes
and drive out cost for reworks, high inventory incidents.
This changes brought into the system the following, a new quality culture; partnerships with
suppliers and haulers, and good corporate image for the company. This led to the company
maintaining its leadership in the downstream sector, with high integrity, good quality
perception and customer satisfaction. There was focus on employee training and development,
which boosted efficiency, employee motivation and morale (Tell Magazine, 2004).
The company faces some challenges which want to make difficult the realization of
this goal amongst which include: Nigerian consumers not buying quality ‘products and
adulteration of Mobil products.
However, the company’s quality assurance managers, working with Standards
Organization of Nigeria (SON), the NIS Certification body, have achieved successes in
improving the recognition of ISO certification and reducing adulteration. There was also a ban
on base oil as lubricant in Nigeria, in order to sustain the certification in the downstream oil
sector. Mobil Oil Nigeria began the conversion process to ISO 9001-2000 Quality
Management system early 2003, to Improve quality of its products and services to exceed
customers expectation. This certification was obtained in 2004, thus making Mobil Oil Nigeria
Limited to become the first oil marketing company with ISO 9001-2000 Certificate for the
lubricant, petroleum jelly and insecticide aerosol plants (Tell Magazine, 2004).
In considering the company performance for the year 2003, it was reported that the
company’s turnover increased from N31.5 billion in 2002 to N37.l billion in 2003 representing
an Increase of 18%. The growth in turnover reflects price increase in both fuels and lubricants,
since fuels sales volume actually declined marginally. The year 2003 also was a good year for
the insecticide business. The profit after tax of the company increased from N0.5 billion in
prior year to N1.5 billion in 2003, representing an increase of 207%. This performance
recorded is an outcome of unflinching hard work, dedication and commitment of the entire
management and staff of the company. In other word, it is part of the contribution of the Total
Quality Management Philosophy to its corporate goal (Mobil Oil Nigeria Plc Annual Reports,
2004).
Policy Options and Conclusion
Total Quality Management philosophy is good for organization whether small or large.
There is no do doubt that organizations that offer quality products and services to customer
5
will record a resounding success, no matter how competitive the business environments may
be. The dynamic nature of business environments, therefore called for improved technology
and better production techniques which are synonymous with quality management.
Organization starting a TQM drive should try to ensure adequate training for their
workforce, most especially those that would be involved directly with the policy formulation
and implementation. This is to enhance the success of the Total Quality Management
programme for the Organization. Business Organizations in Nigeria would no doubt benefit, if
they can gear their resources towards better quality products and customer satisfaction. Total
Quality Management approach therefore, should enjoy popular support not only in the oil
marketing company but all other organizations.
References
Ansoft, H.I (1984) Implementing strategic Management. Prentice Hall.
Alavindan, P., Devadasan, S.R & Selladural, V (1996) A focus: system for strategic Quality
Management, International J ournal of Quality and Reliability Management, 3 (8), PP
79-97
Bates, D and Dillard, 1 (1992) A strategic planner for the l990’s, J ournal of General
Management, 18 (1).
Becker, S W (1993) TQM does work: ten reasons why misguided attempts fail, Management
Review, May. PP 32-33.
Binnney, G (1992) Making quality work2 lessons from Europe’s leading companies, The
Economist Intelligence Unit, London.
Brown, M.G (1993) why does total quality fail in two out of three tries? J ournal for Quality
and Participation, 16, PP 80-84.
Crosby, Philip B. (1989) Lets Talk quality. McGraw Hill New York.
Deining, Edward W. (1986) Out of the Crisis. Cambridge Massauchet Center for Advanced
Engineering Study.
Feigenbaum, A.V. (1961) Total Quality Control. Engineering and Management. McGraw Hill,
New York P. 17.
Ford (1991) As cited in William W. Scherkenbach (1991) Doming’s Road to Continental
improvement, SPC Press, Knoville, Tenn. P.. 161.
Garvin, David A. (1984) What does “Product Quality” Reality means?” Sloan Management
Review 26(1) pp25 - 43.
Gilniore, H.I. (1994) “Product conformance cost” Quality Progress P. 10.
Heizer, I and barry Render (1993) Production and Operations Management: Strategies and
Tactics. Allyn and Bacon, London. Pp736 - 745. Research agenda, total quality
management Vol. 13 No4pp 50/522.
J ohnson, Ross and William O. Winchell (1989) Production and Quality. Society of Quality
Control, Milwaukee, Wisconsin, P.2.
J uran, J .M. (1974) Quality Control Handbook (3” ed) McGraw Hill, New York P 2
Leonard, Dennis Rodney and MC Adam (2002) Developing strategic quality Management: a
research agenda, Total Quality Management vol. 13 No 4 Pp 507-522.
Madu, C.N and Kuei, C (1993) Introducing Strategic Quality Management, Long Range
Planning, 26 (6)pp 121- 131
Madu, C.N and Kuei, C (1994) Strategic Total Quality Management- transformation process
overview, Total Quality Management, 5 (5), Pp 255-266.
Mc Adam, R (2001) Challenging, Critiquing and transforming TQM: post modem and critical
perspective contributions. International. J ournal of Applied Management, 2 (2) PP.
101- 118.
Mobil Oil Nigeria Plc Annual Reports (2004) Chairman Statement Pp. 4-5.
6
Morgan, N.A apd Piercy, N.F (1996) competitive advantage, quality strategic and the role of
marketing, British J ournal of Management, 7 (3), PP231-245.
Oladele, O.B. (1997) Total Quality Management. An MBA Seminar Presentation to the Dept.
of Business Administration, University of Ilorin.
Oni, E.O. (1998) Total Quality Management in selected Nigerian Commercial Bankc. An
Unpublished Ph.D. Research Proposal of University of horn.
Sullivan, LP (1986) “The Seven Stages in Company Wide Quality Control” Quality Progress.
p. 78.
Tell Communications (2004) Mobil Maintains Leaders hip with High Quality Products and
Customer Satisfaction. Tell Magazine, April 26, P. 4. Voss, B (1994) Quality’s second
coming, Journal of Business Strategic, March- April, 15 (2), PP 42-45
Wilkinson, A., Redman, I and Snape, E (1994) What is happening In quality management
findings from an IMF survey, The TQM Magazine, 6(1), PP: 55-65.
Zairl, M. (1999) Management excellence: policy and strategy, The TQM magazine, 11(2) PP
74-79.
doc_126373795.pdf
The industrial revolution that occurred in Europe, America and other developed countries led to fierce competition amongst firms. It must be stated that most managers during this early period of industrial revolution, chose their corporate strategies with little or o regard for customer's value.
1
TOTAL QUALITY MANAGEMENT IN NIGERIAN OIL MARKETING
COMPANY: A STUDY ON MOBIL NIGERIA PLC
R.A. Gbadeyan
Email: [email protected],
And
J.O. Adeoti
E-mail: [email protected]
Department of Business Administration
University of Ilorin,
Abstract
The application of Total Quality Management in Organization is not limited to an area of
organization; it involves every department and section of the organization. It also means a
complete involvement .of the entire workforce in the organization, that is from the chief
executive to the least subordinates. This paper therefore, critically examines the contribution
of the Total Quality Management approach to high quality products and customer satisfaction
in a Nigerian Oil Marketing Company - Mobil Oil Nigeria Plc.. It considered the TQM
approach’s contribution to business organization in a downturn economy such as Nigeria and
recommends for its use not only in an oil marketing company but any business organization
either government owned or privately owned.
Key words: Quality Organization Customer Workforce Products Strategic
Introduction
The industrial revolution that occurred in Europe, America and other developed
countries led to fierce competition amongst firms. It must be stated that most managers during
this early period of industrial revolution, chose their corporate strategies with little or o regard
for customer’s value. However, with the continued growth in competition, managers were
forced to pursue corporate strategy that is customer’s focused (Oni, 1998). Today, customer’s
expectations are rising, hence they chose from among the competing firms, which produce or
offer the best products and services for their money. This trend towards getting customers
satisfied at consistently lower real cost stimulated interest in the Total Quality Management
Philosophy. There have been significant debates regarding the success of total quality
management in business organization. These have been between those supporting it for
bringing improvements in performance due to its application in business organization and
those considering it a failure and fad
(Zairi 1999, Becker 1993, Wilkinson et al 1994, Binney 1992, and Brown 1993).
This paper therefore aims at examining the contribution of TQM to high quality
products and customer satisfaction in Nigerian oil marketing company. Therefore, for this
objective to be achieved, the paper has been divided to the following sections: Introduction,
Literature Review, Total Quality Management System in Mobil Oil Nigeria Plc, Policy
Options and Conclusion.
Literature Review
Organizations are usually involved in manufacturing of products or provision of
services that are offered for sale to potential customers and clients. There are major issues to
be considered for the sale of these products or services, which include: Price and Quality.
According to Heizer and Render (1993) quality is often the major Issue because poor quality
can be very expensive for both the producing firm and the customer. It is therefore imperative
2
for every organization’s operation manager to ensure that his or her firm delivers a quality
product at the right place, at the right time and at the right price.
Quality has various meanings amongst which the following will suffice. Gilmore
(1974) defined quality as the degree to which a specific product conforms to a design or
specification. Ford (1991) believes that “Quality Is defined by the customer; customers want
products and services that, throughout their lives, meet customers need and expectations at a
cost that represents value.” J uran (1974) described Quality as fitness for use, while J ohnson
and Winchell (1989) in their own word regarded quality as “the totality of features and
characteristics of a product or service that bear on its ability to satisfy stated or implied
needs”. Garvin (1984), an authority on product quality said that the definitions of quality fall
into several categories: Users based, manufacturing based and product base.
In considering all these definition, it is very important that it must include an added
emphasis on meeting the customers need to make a meaningful contribution to the concept of
total quality management. Feigenbaum (1961) wrote a book titled “Total Quality Control”,
which delivered a fundamental message: make it right the first time. The burden of quality
proof rests not with inspection but with the maker of part: Machinist assembly foreman,
vendor. This message with those from others, evolved into a crusade known as Total Quality
Management. MC Adam (2001) gave a five point definitional framework for total Quality
management:
• Total Quality Management is strategically linked to the organizational goals.
• Customer understanding and satisfaction is vital within the organization.
• Employee participation and understanding in continuous improvement at all level is
required within the organization.
• There is a need for management commitment and consistency of purpose within the
organization.
• The organization is perceived as a series of processes that incorporate customer-
supplier relationship. This framework is both definitional and developmental.
Heizer and Render (1993) said that “TQM refers to a quality emphasis that
encompasses the entire organization, from supplier to customer”. TQM according to Sullivan
(1986) emphasizes a commitment by management to have a company wide drive toward
excellence in all aspects of products and services that are important to the customer. The
development of the quality management process was pioneered in America, but the first
country to take advantage of the development was J apan. Our discussions on Total Quality
magement would be incomplete without acknowledging the contributions of individuals such
as W. Edwards –Deming, J oseph M. J uran, and Philip B. Crosby. It was reported that after
World War II, an American, W.E. Deming went to J apan to teach quality and the J apanese
learned it. Deming is out spoken in his quality crusade that management must accept
responsibility for building good systems. J .M. J uran was also a pioneer in teaching the
J apanese how to improve quality. Like Deming, J uran believes strongly in top management
support and Involvement in quality control. He believes also in team work to raise quality
standard. J uran varies from Deming by focusing on the customer in an effort to define quality
as fitness for use, not necessarily the written specifications. Crosby’s traditional view has been
“with management and employee commitment great strides can be made in improving
quality”. He also believes that in the traditional trade off between the cost of improving quality
and the cost of poor quality; the cost of poor quality is understated. The cost of poor quality
should include all of the things that are involved in not doing the job right the first time
(Deming, 1986, J uran, 1974 and Crosby, 1989).
Basically, we have two ingredients of TQM Employee involvement and Quality
circles. Employee Involvement means including the employee in every step of the process
from product design to final packaging. Quality control circles is a situation in which, a group
3
of between 6 and 12 employees volunteer to meet regularly to solve work related problems.
The members, all from the same work area receive training in group planning, problem
solving and statistical quality control (Heizer and Render, 1993).
In recent years, Total Quality Management (TQM) has become so popular that most
western countries are following the example of J apan. Organizations and Government are not
only taking lead position in making use of the concept but are also committing their resources
toward spreading the doctrine. There has been a renewed emphasis on quality due to increase
appreciation of the cost of poor quality to the producer, customer and society. This emphasis
on quality therefore has evolved to such a point that we now have International Standard being
developed, for instance the J apanese Industrial standard and the Europe’s ISO 9000 standard.
(Heizer and Render, 1993; Oladele, 1997). The theory of Strategic Total Quality Management
(STQM) was later developed (Madu and Kuei, 1993) as an extension of Total Quality
Management, which was based on a total system view of quality viewing. Strategic Qua1ity
Management is seen as key to being competitive. Madueta1, 1994 were of the opinion that the
philosophy needs to emphasize integrity, environment issues and social responsibilities as key
element. In a situation where there is a strong strategic intent to promote quality is a strategic
advantage through Total Quality Management, there is lack of achieving this due to poor
communication and policy infrastructure. The underlying problems have been lack of the
quality strategies to act as a foundation and the continuing misperceptions of TQM by
company, leaders (Aravindan et al 1996). It is such difficulties that have lead to many
rejecting strategic Quality Management (SQM).
However, the focus is no longer on quality’s sake, but on the strategic use of quality.
This has resulted to many businesses learning that quality initiatives must go beyond being
tied to the bottom line and must be integrated into the company’s strategy (Voss 1994).
The theories of corporate strategy and the tools and technologies of strategic planning
have developed dramatically in the last 50 years. Like TQM, various theories and key
academics have shaped its development.
Ansoff (1984) defined strategic management as a systematic approach to a major and
increasingly important responsibility of general management: to position and relate the firm to
its continued success and make it secure from surprises. Bates and Dilard (1992) consider that
the existing approach to strategic planning is changing and it is bringing about a fundamental
redesign of the 1990’s strategic planners role. Many therefore, would reduce the 1990’s
strategic planner to a planning coordinator. These definitions according to Leonard and MC
Adam (2002) reflect a logic approach to corporate strategy, a sequence of events with clear
issues to be considered, to achieve the stated strategy.
There is evidence of a lack of an in-depth study on the relationship between Total
Quality Management and corporate strategy beyond the financial based impact measures and
focused on its application and especially on the dynamics involved in the relationship
(Leonard and MC Adam, 2002).
Morgan and Piercy (1996) underlined the fact that the link between strategy and
quality has not yet received enough attention in either quality and strategic literature. They
emphasized that there is, as yet, limited knowledge of the links between quality strategy and
competitive performance due to the lack of focus, upon the fundamental questions of how
quality may be effectively utilized as a base for competitive strategy. The methodology is
through the literature survey of their official documents.
Total Quality Management System in Mobil Oil Nigeria PLC
The first commercial oil well was struck in 1956 at Oloibiri, in present day Bayelsa
State by Shell Oil Company. The export of the first cargo of crude oil took place on 17th
February, 1958. These successes of Shell encouraged other companies to join in the
4
exploration race. Mobil was therefore awarded the Sokoto Basin the Benin Trough and fringes
of the Niger Delta to explore in 1956. This first venture was not successful, Mobil therefore
continued the search by moving offshore. The history of Mobil in Nigeria can be traced back
to 1907, when a predecessor company began marketing sunflower brand Kerosene in the
country. This small company evolved into the present day Mobil Oil Nigeria with assets of
$145 million and annual sale of petroleum products of more than six million barrels a year.
Subsequently, studies were conducted on the feasibility of natural gas recovery project,
which was initially projected to cost about $855m but actually cost $810m. This led to a joint
Venture in which Nigeria holds 49 percent equity (through NNPC) as against Mobil’s 51
percent. The first sales shipment left Nigeria for South America on 30th August, 1999. A gas
marketing subsidiary of Mobil is in charge of delivery and marketing of the products. This
J oint Venture Project is expected to earn $3.2 billion revenue over the production period from
petroleum tax and royalties.
Mobil Nigeria Plc, it was reported, started with the Total Quality Management system
vision in the late 1980s to address quality concerns, reduce rejects or rework rates and improve
productivity.
By 1993, the company took the improvement journey through ISO 9002 series Quality
Management System, with the purpose of reengineering the system to streamline job processes
and drive out cost for reworks, high inventory incidents.
This changes brought into the system the following, a new quality culture; partnerships with
suppliers and haulers, and good corporate image for the company. This led to the company
maintaining its leadership in the downstream sector, with high integrity, good quality
perception and customer satisfaction. There was focus on employee training and development,
which boosted efficiency, employee motivation and morale (Tell Magazine, 2004).
The company faces some challenges which want to make difficult the realization of
this goal amongst which include: Nigerian consumers not buying quality ‘products and
adulteration of Mobil products.
However, the company’s quality assurance managers, working with Standards
Organization of Nigeria (SON), the NIS Certification body, have achieved successes in
improving the recognition of ISO certification and reducing adulteration. There was also a ban
on base oil as lubricant in Nigeria, in order to sustain the certification in the downstream oil
sector. Mobil Oil Nigeria began the conversion process to ISO 9001-2000 Quality
Management system early 2003, to Improve quality of its products and services to exceed
customers expectation. This certification was obtained in 2004, thus making Mobil Oil Nigeria
Limited to become the first oil marketing company with ISO 9001-2000 Certificate for the
lubricant, petroleum jelly and insecticide aerosol plants (Tell Magazine, 2004).
In considering the company performance for the year 2003, it was reported that the
company’s turnover increased from N31.5 billion in 2002 to N37.l billion in 2003 representing
an Increase of 18%. The growth in turnover reflects price increase in both fuels and lubricants,
since fuels sales volume actually declined marginally. The year 2003 also was a good year for
the insecticide business. The profit after tax of the company increased from N0.5 billion in
prior year to N1.5 billion in 2003, representing an increase of 207%. This performance
recorded is an outcome of unflinching hard work, dedication and commitment of the entire
management and staff of the company. In other word, it is part of the contribution of the Total
Quality Management Philosophy to its corporate goal (Mobil Oil Nigeria Plc Annual Reports,
2004).
Policy Options and Conclusion
Total Quality Management philosophy is good for organization whether small or large.
There is no do doubt that organizations that offer quality products and services to customer
5
will record a resounding success, no matter how competitive the business environments may
be. The dynamic nature of business environments, therefore called for improved technology
and better production techniques which are synonymous with quality management.
Organization starting a TQM drive should try to ensure adequate training for their
workforce, most especially those that would be involved directly with the policy formulation
and implementation. This is to enhance the success of the Total Quality Management
programme for the Organization. Business Organizations in Nigeria would no doubt benefit, if
they can gear their resources towards better quality products and customer satisfaction. Total
Quality Management approach therefore, should enjoy popular support not only in the oil
marketing company but all other organizations.
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