ABSTRACT
This study investigated the relationship between total productive maintenance and performance of oil producing and exploration companies in Nigeria. The objectives of the study include to determine the effect of autonomous maintenance on effective employee performance, focused improvement on efficient operations performance, planned maintenance on profitability, quality maintenance on customer satisfaction, education and training on business performance, and examine the extent institutional culture influence total productive maintenance and performance of the oil companies. The researcher used both primary and secondary sources of data and employed descriptive survey design in the study. A structured Likert Scale questionnaire was the major instrument for data collection drawn from 212 respondents from a total of 612 workers in the specified population frame. Validity for the study was assessed based on content and face validity, while reliability was assessed using the Cronbach alpha reliability coefficient. The study employed descriptive statistics of percentages, mean and standard deviation for analysis of data obtained by way of questionnaire administration while a total of 6 hypotheses were tested using the Spearman’s rank order correlation coefficient for the bivariate hypotheses and the partial correlation coefficient for the multivariate hypothesis. The analysis was done with SPSS software. The findings from the tests reveal that total productive maintenance through dimensions such as autonomous maintenance, focused improvement, planned maintenance, quality maintenance, education and training, significantly contribute towards outcomes of performance such as effective employee performance, efficient operations performance, profitability, customer satisfaction and business performance. The findings also show that institutional culture plays a key role in advancing the relationship between total productivity maintenance and performance of the oil producing firms. On the basis of these results all hypothesized statements were rejected. The researcher concluded that Total Productive Maintenance enhances overall performance of oil producing and exploration companies in Nigeria. It was recommended that management of Oil producing and explorations companies should implement Total Productive Maintenance in their organizations to enable them ensure efficient machine maintenance and enhance performance. It was also recommended that daily machine maintenance activities and other pillars of TPM should be embedded in the culture of the organizations.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgements v
Table of Contents vi
List of Tables viii
List of Figures ix
Abstract x
CHAPTER 1: INTRODUCTION
1.1
Background of
the Study 1
1.2
Statement of
the Problem 7
1.3
Objectives of
the Study 12
1.4
Research
Questions 12
1.5
Research
Hypotheses 13
1.6
Significance
of the Study 14
1.7
Scope of the
Study 15
1.8
Limitations
of the Study 16
1.9
Definition of
Terms 17
1.10
Profile of
the Organizations under Study 18
CHAPTER 2: REVIEW OF RELATED LITERATURE
2.1 Conceptual
Framework 30
2.1.1 Operational
conceptual framework 30
2.1.2 Total
productive maintenance 31
2.1.3 Pillars
of total productive maintenance 42
2.1.4 Autonomous
maintenance 42
2.1.5 Education
and training 47
2.1.6 Focused
improvement (Kobetsu Kaizen) 50
2.1.7 Planned
maintenance 55
2.1.8 Quality
maintenance 58
2.1.9 Office
total productive maintenance (TPM) 61
2.1.10 Safety,
health and environment 64
2.1.11 Effect
of total productive maintenance on organizations 66
2.1.12 Total
productive maintenance and performance 70
2.1.13 Similarities
and differences between TQM and TPM 72
2.1.14 Types
of maintenance 82
2.1.15 Benefits
of implementing total productive maintenance in companies 85
2.1.16 Challenges
of total productive maintenance implementation 87
2.1.17 Performance
measures for companies under total productive maintenance 87
2.1.18 Organizational
performance indicators 89
2.1.19 Effect
of total productive maintenance on operating performance 89
2.1.20 Institutional
culture 97
2.2 Theoretical
Framework 100
2.3 Empirical
Review 106
2.4 Gap
in Literature 116
2.5 Summary
of the Review of Related Literature 118
CHAPTER 3: METHODOLOGY
3.1 Research
Design 122
3.2 Sources
of Data 122
3.3 Population
of the Study 122
3.4 Determination
of Sample Size 124
3.5 Sampling
Technique 127
3.6 Description
of the Research Instrument 127
3.7 Validity
of Research Instrument 127
3.8 Reliability
of Research Instrument 128
3.8 Method of Data Analysis 128
CHAPTER 4: DATA PRESENTATION AND ANALYSIS
4.1 Return
Rate of Questionnaire 131
4.2 Data
Presentation 131
4.2.1 Demographic
Analysis 131
4.2.2 Universal
Analysis 133
4.3 Test
of Hypothesis 161
4.3.1 Bivariate
Analysis 161
4.3.2 Multivariate
Analysis 166
4.4 Discussion
of Results 169
4.4.1 Autonomous
Maintenance and Effective Employee Performance 169
4.4.2 Focused
Improvement and Efficient Operational Performance 170
4.4.3 Planned
Maintenance and Profitability 171
4.4.4 Quality
Maintenance and Customer Satisfaction 172
4.4.5 Education/Training
and Business Performance 173
4.4.6 Institutional
Culture Influence Total Productive and Performance 174
CHAPTER 5: SUMMARY, CONCLUSION
AND RECOMMEDATIONS
5.1 Summary
of Findings 177
5.2 Conclusion
177
5.3 Recommendations
178
5.4 Contribution
to Knowledge 180
5.5 Suggestion for
Further Research 181
References 183
Appendices 194
LIST
OF TABLES
Pages
2.1 5S – The
foundation program 39
2.2
16 Major losses in an organization 40
2.3 Classification of losses 53
2.4 Differences between TQM and TPM 54
2.5 Targets
of Total Productive Maintenance 73
3.1 Employees
in the study companies 78
3.1 Stratified
distribution of the sample for the study 124
4.1 Survey result for the study 125
4.2 Distribution for gender 131
4.3 Distribution for gender 132
4.4 Distribution for years of service 132
4.5 Result of analysis for indicators of
autonomous maintenance 133
4.6
Result of analysis for indicators of
focused improvement 134
4.7 Result of analysis for indicators of
planned maintenance 136
4.8 Result of analysis for indicators of
quality maintenance 139
4.9 Result of analysis for indicators of
education and training 141
4.10
Descriptive Summary for the dimensions
of total productive maintenance 143
4.11 Result of analysis for indicators of
effective employee performance 145
4.12
Result of analysis for indicators of
efficient operational performance 147
4.13
Result of analysis for indicators of
profitability 149
4.14 Result of analysis for indicators of
customer satisfaction 151
4.15
Result of analysis for indicators of
business performance 153
4.16
Result of analysis for measures of
performance 156
4.17
Result for descriptive analysis of
organizational culture 158
4.18
Test for hypotheses on autonomous
maintenance and effective employee
Performance 160
4.19
Test for hypotheses on focused
improvement and efficient operational
Performance 162
4.20
Test for hypotheses on planned
maintenance and profitability 163
4.21
Test for hypotheses on quality
maintenance and customer satisfaction 164
4.22
Test for hypotheses on
education/training and business performance 165
4.23 Test for moderating effect of institutional
culture 166
LIST OF FIGURES
Pages
2.1 Conceptual
Model of Total Productive Maintenance and Performance 30
2.2 Total
Productive Maintenance Activity Pillar 39
4.1
Histogram distribution of total
productive Maintenance (predictor variable) 146
4.2
Histogram distribution of
performance (criterion variable) 159
4.3
Histogram distribution of
organizational culture (moderating variable) 161
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
After
the Second World War, a revival of world industry began. Manufacturing
management programs were created to support the development of industry at that
period, such as Just in Time (JIT) and Total Quality Control (TQC). However,
companies applying these programs at their factories reported that a consistent
quality product could only be assured with machines or equipment in good
condition. Thus, equipment management began to be emphasized (Terry, 2004). At
first, companies applied breakdown maintenance (BM), meaning that workers fixed
equipment after it broke down (Kunio and Seiichi, 1992). This basic maintenance
was unsuccessful in preventing some serious failures. The concept of preventive
maintenance (PM) was introduced in the 1950s and recommended to users by
equipment manufacturers (Terry, 2004). Preventive Maintenance was used to
prevent breakdown and defects by performing daily activities such as equipment
checks, oil changes, lubrication, precision measurements, and repair. Records
of equipment deterioration also became important in reminding operators of the
need to replace and repair damaged components (Kunio and Seiichi, 1992). In
light of new demands in industry, the concepts of maintainability and methods
improvement (MI), and maintenance prevention (MP) were introduced. Methods
improvement reduces the repetition of the same issue, such as breakdowns or
defects; while Maintenance Prevention refers to the design of equipment for
convenient maintenance. Methods improvement and Maintenance Prevention were
added to preventive maintenance and integrated into a new concept called
“productive maintenance”. Using these approaches, companies could maximize the
productivity of their equipment processes. In the 1970s, the concept of total
began to be incorporated into productive maintenance activities. Total refers to
total employee participation, which implies “involving all the people in
maintenance procedures” (Terry, 2004). Therefore, Total Productive Maintenance
evolved from productive maintenance into total productive maintenance.
Total
Productive Maintenance (TPM) is also a unique Japanese philosophy, which has
been developed based on the productive maintenance concepts and methodologies. This concept was first
introduced in Japan by Nippondenso Co Ltd of Japan, a supplier of
Toyota Motor Company, Japan in 1971 (Nakajima, 1989). Nakajima (1989) highlighted how the research group, the (JIPE)
Japan Institute of plant Engineers (now known as Japan Institute
of Plant Maintenance, JIPM) was formed after a mission to the USA to study
plant maintenance. Japan Institute of plant Engineers (JIPE)
then started to work closely with Nippon Denso on the issue of Plant Maintenance
and the change of roles of the operators to allow them to carry out routine
maintenance led to the beginning of Total Productive Maintenance, he
concluded that Total Productive Maintenance (TPM) is a positive approach to
maximize equipment effectiveness (Ahmed, Hassan and Taha, 2014).
Early Total Productive Maintenance
implementation in Japan was primarily within the automotive industry,
particularly within Toyota and their associated component suppliers (Robinson
and Ginder, 1995). However, not many Japanese companies initiated Total
Productive Maintenance in the beginning and earlier (TPM) implementation was met with limited success (Vardhan,
Gupta, and Gangwar, 2015). This all changed in the 1970’s when Japan faced a worsening
economic climate and adoption of Total Productive Maintenance began to accelerate as a means to improve manufacturing productivity (Ireland and Dale, 2001). Structured and phased implementation processes developed by Nakajima
(1989) provided standardized and repeatable methodology for Total Productive
Maintenance.
Total productive maintenance is an innovative approach
to maintenance that optimizes equipment effectiveness, eliminates breakdowns
and promotes autonomous maintenance by operators through day-to-day activities
involving total workforce (Bhadury, 2000).
Total Productive Maintenance is a highly structured
approach, which uses a number of tools and techniques to achieve highly
effective plants and machinery. Total Productive Maintenance
has proved to be the maintenance improvement philosophy preventing the failure
of an organization (Eti, Ogaji and Probert, 2006). Today, an effective Total Productive
Maintenance strategy and programs are needed, which can cope with the dynamic
needs and discover the hidden but unused or under-utilized resources (human
brainpower, man-hours, machine-hours). Total Productive Maintenance methodology
has the potential to meet these current demands.
Total
productive maintenance could be described as a technique which would assist oil
companies in increasing performance, efficiency, effectiveness, productivity,
reduce waste, proper maintenance and availability of equipment and aiming at zero
defects. Zero equipment breakdown and zero product defect leads to increase in
productivity by reducing waste. It is a lean tool to optimize the effectiveness
of oil companies’ equipment and tooling. Total productive maintenance concept
has been accepted by many industries in developed world to solve different type
of problems in oil companies, given that it aims at maximizing equipment
effectiveness and efficiency (Ahuja, and Khamba, 2017).
The effect of total productive maintenance on the
performance of oil production and exploration companies in Nigeria is enormous and
it plays a crucial role in the maintenance of oil facilities in order to avoid
breaking down of their equipment. Petroleum, which is a natural liquid found in rock
formation, consists of a complex mixture of hydrocarbons. The petroleum
industry is responsible for the global processes of exploration, extraction,
refining, transportation and marketing of petroleum products (Anderson
and Neri, 2016). Petroleum
is vital to many industries and is of importance to the maintenance of
industrial civilization. There is upstream
and downstream in the oil sector. The upstream sector includes the searching
for potential underground or underwater crude oil and natural gas fields,
drilling of exploration wells and subsequently drilling and operating the well
that recover and bring the crude oil and natural gas to the surface (Anderson
and Neri, 2016).
According to
De Groote (2018), Oil exploration and production can
be either done offshore or onshore. Drilling of natural gases offshore requires
the drilling platform to be hundreds of miles away from the nearest landmass and
this have been found to be of an advantage as a great number of large natural
gas deposit is found there. Due to the harsher and remote environment
associated with offshore, the installation of the facilities and equipment used
for drilling are more challenging than the land based installation, therefore
this equipment should have an effective maintenance system (Bamber,
Castka, Sharp and Motara, 2013). All equipment is designed to last for a period of time
called the design life span. If the equipment does not last this long, major
faults are attributed to the maintenance culture of the handler or equipment
manager. Therefore, maintenance is the activity done to preserve the initial
condition of an equipment or asset while atoning for the normal wear and tear.
Bagshaw and George (2015) observed that facility maintenance is the effort in connection
with different technical and administrative action to keep a physical asset, or
restore it to a condition where it can perform a required function. The
function of maintenance is to ensure the reliability of machines or equipment
in the course of its use.
Equipment maintenance represents a significant
component of the operating cost in transportation, utilities, mining,
manufacturing, oil exploration and production industries. The potential effect
of maintenance on the oil exploration and production on performance is
substantial. Maintenance is responsible for controlling the cost of manpower,
material, tools, and overhead (Pintelon and Gelders, 1992). In financial terms,
maintenance can represent 20 to 40 per cent of the value added to a product as
it moves through the plant (Eti, Ogaji and Probert, 2006).
In view of
these, Total productive maintenance (TPM) plays an important role in the
maintenance of oil facilities. However, Slack (2017), defines total productive
maintenance (TPM) as the maintenance that is carried out by all employees
through small group activities in order to ensure proper functioning of the
company’s facilities. According to him total productive maintenance has the
following benefits which includes; enhancing safety of its staff, it also increases
the reliability of the equipment, and results in increased production outputs,
total productive maintenance also helps in reducing operating cost and also
results in higher scrap values.
Though,
despites the numerous benefits attached to total
productive maintenance, failure to frequently maintain oil facilities will result
to loss of operation, failures of the machines or equipment which also highlights
the aspects of availability and reliability of the systems safety (Birolini,
2012). Poor maintenance will result in dysfunction that might likely result to
production of defective products which affect the quality of the product in a
production process. It involves reliability of the machines and equipment to
perform to a standard level of quality assurance (Shohet, 2018). Again, poor
maintenance of production facilities can result in poor end-product quality and
customer dissatisfaction, lost production runs, cost inefficiencies, and
sometimes, unavailability of the facility for future use (Lavy, Garcia and
Dixit, 2016). This is because the equipment is designed for a particular
functional use and the reliability of the equipment is assured as quality control measures in the design of the asset to
minimize machine failures. One approach to improve the performance of maintenance activities
is to implement total productive maintenance (TPM) system.
In fact, the only proven work culture that promotes and sustains reliable equipment at lower cost
is through Total Productive Maintenance (Williamson, 2006). A well-drawn Total
Productive Maintenance implementation plan not only improves
equipment efficiency and effectiveness but also brings appreciable improvement
in other areas such as reduction of manufacturing cycle time, size of
inventory, customer complaints and creates cohesive small group autonomous
teams and increase the skill and confidence of the individual (Shamsuddin,
Hassan, and Taha, 2005).
This
study focused on the effects of Total Productive Maintenance on performance of
Oil Producing and exploration companies in Nigeria centering on Shell Petroleum
Development Company, Total Nigeria Plc and Newcross Exploration and Production
located in South-South geographical zone of Nigeria.
1.2 STATEMENT
OF THE PROBLEM
A cursory look at various infrastructures
in a typical Nigerian society and indeed in all the third world nations,
including roads, houses, company equipment, vehicles, others, one will notice
dilapidated buildings, abandoned equipment, broken vehicles, deplorable roads,
and malfunctioning office equipment (Oseghale, 2018). This state of affairs depicts a society with
little regard to or the complete absence of a maintenance and replacement
cultures. Looking deeper in more organized companies and corporate
organizations, such as geberal electric company of USA, Toyata Motors, Coca
Cola etc different picture is likely to be observed (Ibekwe, Ngige and Jacobs, 2020).
Generally, in this contemporary world of global competitiveness, evolving
technologies, environmental and safety requirements, sensitivity towards total
quality, and with various treats to company’s performance (profitability),
there is every need for industries to optimize their production system (Nzewi,
Chiekezie and Arachie, 2016). It is
rather surprising to note that majority of industries in Nigeria leave much to
be desired in administration of maintenance programs. Most of the companies do
not have a functional maintenance department not to talk of engaging in
capacity development of their maintenance personnel. Most of the companies do
not see maintenance as a profit making venture, as such do not invest or make
sufficient funds available for maintenance purposes. Sometimes there is no ownership of
maintenance when it is contracted out; in such cases the equipment could only
be maintained when it has broken down.
In order for an
organization to function properly, every running process, activity and resource
should be properly maintained for their quality, effectiveness and other
productivity factors. The oil
producing nations has become one of the world’s largest economic contributors
to the gross domestic product of any nation’s economy. As the oil producing
companies grow, more and more Plants are built to refine the Crude Oil and
natural gas, hence new equipment with complex mechanism and function are
developed for better processing and refining of these natural resources. In
order to make these large exploration and production plants continue to
function as designed week in week out, there is need for total productive
maintenance to be constantly improved upon.
But that is not the case especially in Nigeria. The culture of lack of
maintenance that has eaten into the fabric of the country is also threatening
the Oil exploration and production sector, hence the need to mitigate it by
implementing Total productive maintenance in these companies.
In the oil exploration and production fields, there
are lots of hazardous materials and their environmental impact are very
dangerous, given that oil spillages are harmful to not only the environment but
also to the people and their means of livelihood. So the safety issue of the
oil production companies, operators and the host communities are matters to be
quickly resolved and is also considered as very important by all
stakeholders. Total productive
maintenance will ensure maximization of machines, quality products and ensure
zero spillage of products.
The operators of oil producing companies are
consistently under pressure to attain both technical and commercial standards
required in managing oil and gas assets in the country (Tsang and Chan, 2015). The
aim of total productive maintenance program is to maximize the production line
and equally employ standard models and rules to achieve job satisfaction. It
brings maintenance into an essential and competitive nature of the products,
since it is now regarded as a profit making activity/process unlike previously
when it was regarded as a non-profit making activity. However, most oil
companies in Nigeria have not been able to implement operation of total
productive maintenance and it’s practices and this is assumed to have negative
effect on the performance of the oil companies in the country.
The effectiveness of the productive equipment also
directly or indirectly depends on the maintenance culture adopted by the
organization. In the focused organizations, it is believed that the duty of
maintaining productive equipment and machinery is that of engineers,
technicians and the engineering department as a whole. Oil check, cleaning and
greasing machines, changing of worn-out parts, replacement of machineries,
checking the operating parameters and general inspection seem to be left to the
engineering department to carry out during specific periods. This implies that
the organizations maintenance culture is scheduled maintenance and breakdown
maintenance (Nzewi, Chiekezie and Arachie, 2016).
There is a need to develop an understanding of the
basic perception of the maintenance function. Here, it is pertinent to note
that the maintenance function has undergone serious change in the last three
decades. The traditional perception of maintenance’s role is to fix broken
items. Taking such a narrow view, maintenance activities have been confined to
the reactive tasks of repair actions or item replacement. Thus, this approach
is known as reactive maintenance, breakdown maintenance, or corrective maintenance.
Total productive maintenance is one of the major activities which account for
up to 40% of total costs, in most oil companies in Nigeria (Tsang and Chan,
2015). Thus, Total productive maintenance plays a significant role in the
performance of oil exploration and production companies (Alberto and Giulio,
2012). Total productive maintenance is therefore perceived as activities done
to preserve the initial condition of an equipment or asset while atoning for
the normal wear and tear. Bagshaw and George (2015) observed that facility
maintenance is the effort in connection with different technical and
administrative action to keep a physical asset, or restore it to a condition
where it can perform a required function.
It is observed that there has been a general lack of
synergy between maintenance management and quality improvement strategies in
the organizations, together with an overall neglect of maintenance as a competitive
strategy (Wireman, 1990). Thus the inadequacies of the maintenance practices in
the past, have adversely affected the organizational competitiveness thereby
reducing the throughput and reliability of production facilities, leading to
fast deteriorations in production facilities, lowering equipment availability
due to excessive system downtime, lowering production quality, increasing
inventory, thereby leading to unreliable delivery performance. Total productive
maintenance is becoming more important than ever before because of the alarming
high operation and repair costs of equipment and systems (Wireman, 1990). The
need for total productive maintenance is essential as it not only reduces the
cost of operation but also ensures optimal component availability and plant
performance (Löfsten, 2017). To support production, maintenance must ensure
equipment availability in order to produce products at the required quantity
and quality levels. Total productive maintenance (TPM)
plays an important role in the maintenance of oil facilities, however, Slack (2017)
defines total productive maintenance (TPM) as the maintenance that is carried
out by all employees through small group activities in order to ensure proper
functioning of the company’s facilities. According to Löfsten
(2017),
total productive maintenance has the following benefits which includes; enhancing
safety of its staff, it also increases the reliability of the equipment, and
results in increased production outputs, total productive maintenance also helps
in reducing operating cost and also results in higher scrap values.
Maintenance is normally perceived to have a poorer
rate of return than any other major budget item. If most companies can increase
maintenance costs by at least one-third, it would improve the level of
productivity, and give maintenance the management priority it requires. That
priority must span all levels of an organization’s management structure to
develop an understanding at each level, of the significance maintenance can
have upon the success or failure of organizational objectives (Al-Hassan, Chan
and Metcalfe, 2000). The maintenance processes can be streamlined to eliminate
waste and produce breakthrough performance in areas valued by customers (Hammer
and Champy, 1993).
According
to Adekunle (2017), many oil companies in Nigeria function effectively for less
than 50%. Part of the issues is usually caused by poor maintenance, poor
management, vandalism of oil facilities, multiple taxation, lack of qualified
staff, government policies and inability to cope with sudden high demands from
consumers in the country and this brings about a negative effect on the
performance of oil companies in the country.
The
management and mangers of oil producing companies are constantly under pressure
to attain both technical and commercial standards required in managing oil and
gas assets in the country. The criterion includes achieving and maintaining
production targets, minimizing production costs and maintaining the highest
safety and environmental standards. However, oil producing companies performance
in the country continue to deteriorate due to lack of poor implementation
of total productive maintenance in the
oil companies in the country and this is assume to have an adverse effect on
the performance of oil producing and
exploration companies (Ahmed, Hassan and
Taha, 2014).
However,
despites the numerous benefits attached to total productive maintenance,
failure to frequently maintain oil facilities will result to loss of operation
resulting from failure of the machines or equipment availability and
reliability (Birolini, 2012). Poor maintenance will result in dysfunction that
might likely result to production of defective products which affect the
quality of the product in a production process. It involves reliability of the
machines and equipment to perform to a standard level of quality assurance
(Shohet, 2018). Again, poor maintenance of production facilities can result in
poor end-product quality and customer dissatisfaction, lost production runs,
cost inefficiencies, and sometimes, unavailability of the facility for future
use (Lavy, Garcia and Dixit, 2018). In view of these various
challenges, the study intends to empirically evaluate the effect of total productive
maintenance on the performance of oil producing and exploration companies in Nigeria.
1.3 OBJECTIVES OF THE STUDY
The main objective of this study was to examine the effect
of total productive maintenance on the performance of oil producing and
exploration companies in Nigeria, while the specific objectives of the study
are to;
i.
determine the effect of
autonomous maintenance on effective employee performance.
ii.
investigate the effect of
focused improvement on efficient operations performance.
iii.
identify the effect of
planned maintenance on profitability in the oil industry.
iv.
ascertain the effect of
quality maintenance on customer satisfaction.
v.
establish the effect of
education and training on business performance.
vi.
examine the extent
institutional culture influence total productive maintenance and performance of
the oil companies.
1.4 RESEARCH
QUESTIONS
The following research
questions were put in place by the researcher, which includes;
i.
To what extent does
autonomous maintenance affect effective employee performance?
ii. To
what extent does focused improvement affect efficient operations performance?
iii. To
what extent does planned maintenance affect profitability in the oil sector?
iv. To
what extent does quality maintenance affect customer satisfaction?
v. To
what extent does education and training affect business performance?
vi. To
what extent does institutional culture influence total productive maintenance
and performance?
1.5 RESEARCH HYPOTHESES
Ho1: There is no significant relationship between
autonomous maintenance and effective employee performance.
Ho2: There
is no significant relationship between focused improvements and efficient
operations performance.
Ho3: There
is no significant relationship between planned maintenance and profitability in
the oil sector.
Ho4: There
is no significant relationship between quality maintenance and customer
satisfaction.
Ho5: There
is no significant relationship between education/training and business
performance.
Ho6: Institutional
culture does not positively moderate the relationship between total productive
maintenance and performance.
1.6 SIGNIFICANCE OF THE STUDY
This
study examined the effect of Total productive maintenance on the performance of
oil producing and exploration companies in South-South Nigeria. The research
work would be of immense benefit to the following groups;
Managers of the Study
companies: The findings and recommendations of
the study will enable the board of management of the studied companies to consider
implementing total productive maintenance (TPM) that will lead to machine
efficiency, effective employee performance, increased life span of machines,
efficient operations performance in a healthy and safe environment, production
of quality products with zero losses, customer satisfaction and increased
profitability.
Government: The
findings and recommendations of the study will also enable government to
implement policies that would assist the management of studied oil companies
and other players in the oil sector to improve on the implementation of total
productive maintenance.
Policy Makers: The
findings and recommendations of the study will also enable policy makers to
formulate policies that will benefit the management and staff of oil companies
in the implementation of Total Productive Maintenance thereby enhancing both
machine and employee performance and also make it easy to be implemented by
other companies in the country.
General Public: Individuals,
institutional investors and the general public will find this study useful in
guiding them in making sound investment decisions on total productive
maintenance and also implement the concept in their various production, manufacturing
and administrative functions.
Students
and Researchers: This work will be a
contribution to literature. The research
community will benefit from it. As an
empirical work, it will serve the academia and students as a pivot for further
studies. Researchers and students
interested in a similar field of study in future will find this work useful as
a conceptual guide and reference material.
1.7 SCOPE OF THE STUDY
The
researcher was limited to the content scope of the effect of total productive maintenance
on the performance of oil exploration and producing companies. It determined
the effect of autonomous maintenance on effective employee performance,
investigated the effect of focused improvement on efficient operations
performance, identified the effect of planned maintenance on profitability in
the oil industry, ascertained the effect of quality maintenance on customer
satisfaction, established the effect of education and training on business
performance and lastly examined the extent institutional culture influence
total productive maintenance and performance of the oil companies.
The
study was limited to the unit scope of Machine Operators, Field Maintenance Engineers
and Office managers who are relevant to the study.
The
study was carried out only at the Shell Petroleum Development Company Nigeria
(SPDC) Limited, Total Nigeria Plc. and Newcross Exploration and Production
Limited in South-South Nigeria. Therefore the geographical scope is South-South
Nigeria. The choice of these organizations is hinged on the fact that the first
two (SPDC & Total) are multinationals and are among the biggest and oldest
operators in the Nigerian Oil production sector while Newcross is an
indigenous, 100% Nigerian owned exploration and production operator. It will be
assumed that any inference from a study on these organizations would be
generalized on other operators in the Nigerian exploration and production
industry. This is because they all have
many things in common and operate within the same environment. In addition, the study shall make general
references to the Nigerian exploration and production industry as the need
arises.
1.8 LIMITATIONS OF THE STUDY
The researcher
encountered a number of constraints in the course of conducting this study.
Some of the challenges faced were:
·
Attitude
of Respondents: It was difficult getting some of the
respondents to timely fill the questionnaires since some of them perceived that
whilst it was not an official document so it could be done at their convenient
time or not at all. Some of the questionnaire copies administered to the
respondents were not returned while few of those that were returned were not
properly filled according to the instructions on the questionnaire. Some
respondents felt their responses could be used against them by the company. The
researcher through the Human resources of the various companies assured the
respondents that any information revealed to the researcher would solely be
used for academic purposes.
·
Coronavirus
Pandemic (Covid 19): This study suffered some
set back due to the coronavirus pandemic which wreaked havoc globally.
Businesses in Nigeria, including the study organizations, limited movements of
visitors to their various offices and this limitation delayed the timely
administration and collection of the questionnaire copies. This halted the
research for a while before the situation got better, filled questionnaires
collected and the researcher continued with her work.
1.9 DEFINITION OF TERMS
Total Productive
Maintenance: is one of the innovative approaches
to maintenance that optimizes equipment effectiveness eliminates breakdowns and
promotes autonomous maintenance by operators through day to day activities
involving total workforce.
Autonomous
Maintenance: This is the first pillar of total
productive maintenance which deals with making the machine operators more
responsible for the equipment they operate. This pillar is geared towards
developing operators to be able to take care of small maintenance tasks, thus
freeing up the skilled maintenance people to spend time on more value added
activity and technical repairs.
Focused
Improvement: (Kaizen) - Basically kaizen is for
small improvements, but carried out on a continual basis and involve all people
in the organization. Kaizen indicates a
process of continuous improvement of the standard way of work. It is a compound word involving two concepts Kai
(Change) and Zen (for the better).
Quality
Maintenance: This pillar deals with the quality
of processes and products in the plan.
Education and
Training: This pillar deals with employees that are
graded here on the basis of their skill levels and on their willingness to
learn. Education is given to operators
to upgrade their skill.
Office Total Productive
Maintenance: This pillar tries to minimize
wastage in office in the form of communication, data processing, and
decision-making among others.
Safety, Health and
Environment: This pillar deals with the aspect of
safety and workplace environment in the plant. It involves issues related to
productivity, equipment, and human resources too. The target of this pillar is
zero accident, zero health damage and zero fires.
Organizational
Performance: This is the actual output or
results of an organization as measured against its intended outputs (goals and
objectives).
Performance: This
can be defined as the action or process of carrying out or accomplishing an action, task,
or function. It is a set of processes and systems aimed at developing an
employee so they perform their job to the best of their ability.
1.9.1 Profile of the Organizations under Study
SHELL PETROLEUM
DEVELOPMENT COMPANY
Shell Petroleum Development
Company of Nigeria Limited (SPDC) Shell started
business in Nigeria in 1937 as Shell D’Arcy and was granted an exploration
license. In 1956, Shell Nigeria discovered the first commercial oil field at Oloibiri
in the Niger
Delta and started oil exports in 1958 when
its first oil field came on stream producing 5,100 bpd. Prior to the discovery
of oil, Nigeria like many other African countries strongly relied on
agricultural exports to other countries to support its economy. Many Nigerians
thought the developers were looking for palm oil. After 1960, exploration
rights in onshore and offshore area adjoining the Niger Delta were extended to
other foreign companies. In 1965 the EA field was discovered by shell in
shallow water southeast of Warri.
In 1970, the end of the Biafran war coincided with the
rise in the world oil price, and Nigeria was able to reap instant riches from
its oil production. Nigeria joined the Organization of Petroleum Exporting
Countries (OPEC) in 1971.
Shell Nigeria
is the common name for Royal
Dutch Shell's Nigerian operations
carried out through four subsidiaries, primarily Shell Petroleum Development Company of Nigeria Limited (SPDC).
Royal Dutch Shell's joint ventures account for more than 21% of Nigeria's
total petroleum production (629,000 barrels per day (100,000 m3/d)
(bpd) in 2009) from more than eighty fields. Together with its joint venture
partners, SPDC is capable of producing some 1 million barrels of oil per day on
an average. Through its community investment programme, SPDC is demonstrating
its commitment to improving the quality of life for all those who live and work
in the Niger Delta. As one of the world’s leading energy companies, shell plays
a key role in helping to meet the world’s growing energy demand in
economically, environmentally and socially responsible ways. In Nigeria, Shell operated
companies SPDC, SNEPCO and SNG employ more than 6000 direct employees and
contractors of which over 90% are Nigerians.
Their mean activities are exploration and production
of oil and gas onshore, offshore, sales and distribution. She also has major
interest in Nigeria’s largest liquefied natural gas plant (NLNG). SPDC has been
at the forefront of efforts to develop Nigeria’s gas resources and is currently
the sole supplier of gas to domestic customers, she produces about 70% of
Nigeria’s gas supply. She operates Bonny crude oil terminal, is the largest of
its kind in Africa. The Bonny associated gas plant can harness 20 million
standard cubic feet of gas a day-enough to provide power to more than 200,000
average European households.
There offices are located at Port Harcourt, Lagos,
Warri and Abuja. Shell Petroleum Development Company (SPDC) is the largest fossil fuel
company in Nigeria, which operates over 6,000 kilometres (3,700 mi) of pipelines
and flowlines, 87 flow stations, 8 natural gas plants and more than
1,000 producing wells. SPDC's role in the Shell Nigeria family is
typically confined to the physical production and extraction of petroleum.
It is an operator of the joint venture, which composed of Nigerian National
Petroleum Corporation (55%), Shell (30%), Total
S.A. (10%) and Eni
(5%). Until recently, it operated largely onshore on dry land or in the mangrove swamp.
Shell’s main contribution to communities in the Niger
Delta is through the taxes and royalties they pay to the federal government. The
joint venture operated by the Shell Petroleum Development Company Nigeria
Limited (SPDC) contributed about $31 billion to the government between
2006-2010. The Federal Government receives about 95% of the revenue after costs
from the SPDC operated joint venture. The Shell Nigeria exploration and
production company of Nigeria Limited (SNEPCO) – which operates offshore
business in deep water –has paid about 3.8billion in tax and royalties over the
last five years.
In addition to generating revenue, Shell Companies in
Nigeria actively promotes projects in the Niger Delta that support small
businesses, agriculture, training, education, healthcare and capacity building.
Much of which is done in partnership with the government and the Niger Delta
Development Commission. In 2010, shell operations contributed $161.13 million
(Shell share $59.8million), to the commission, as required by law, SPDC and the
joint venture partners contributed directly a further $65.6million (Shell share
$19.7million), to community development projects, many of which were delivered
in partnership with others. Shell work
together with government agencies, companies, local and international NGOs and
the United Nations Development Programme (UNDP). Shell also pays a share of its
profits into an education, fund for rehabilitation, restoration and
consolidation of education in Nigeria.
TOTAL NIGERIA PLC
According
to the Total website: https://nigeria.total.com/total-nigeria/total. TOTAL as a group is active in the whole value chain of
oil and gas: upstream, midstream and downstream. In line with their Committed
to Better Energy ambition, Total downstream launched the first
solar-powered service station in West Africa, Total service station, Onigbagbo
on June 12, 2014. The construction of this service station was part of efforts
towards providing energy solutions that are efficient and environmentally
friendly.
The company has been serving the
Nigerian hydrocarbons industry for more than half a century, in partnership
with the Nigerian Government and in different equity associations with other private
companies. Total have been active in Nigeria
for more than 60 years in oil and gas exploration and production, natural gas
liquefaction and the marketing of products and services.
Discoveries and testimonials
·
1956,
Total creates Total Oil Products Nigeria and begins the construction of a
warehouse in Lagos.
- 1961,
BRP (Elf) creates SAFREP for exploration in Nigeria.
- 1964,
the African Oil Exploration Society (SAFREX), which followed SAFREP,
makes its first oil discovery in Obagi.
- 1965,
Elf discovers the Upomani deposit
- 1966,
Elf discovers the Obodo deposit and put Obagi into production.
- 1967,
Elf discovers the deposits of Okpoko, Yabumé and Anambra River.
- 1985,
the Group sells 1497 KT per year, including 946 in the network, and owns
nearly three hundred outlets at very high unit throughput.
- 1986,
Elf-Aquitaine obtains four licences in the Gulf of Niger Delta.
- 1989,
Elf discovers the deposits of Akamba and Ofon. That same year the
Natural Gas Liquefaction Company is formed around the national
company NNPC. Elf participates with Shell and AGIP.
- 1990,
Elf discovers the Amenam deposit.
- 1992,
Elf discovers the Seibou deposit.
- 1994,
Total discovers the small field of South Okwori.
- 1995,
Elf is associated with the discovery of Bonga
- 1996,
Elf launches the Obite project, which involves recovering associated
gas from the Obagi field to power the Bonny liquefaction plant.
- 1998, the
government asks Total to lead the rehabilitation of the Kaduna
refinery. 2000,
- TotalFinaElf
discovers Akpo and launches the Amenam/Kpono project.
- 2001,
the Group discovers the Bonga South West deposit.
- 2004,
Total discovers hydrocarbons in the western area of the Usan deposit,
under the OPL 222 Deep Water Exploration Licence.
- 2012,
TOTAL kicks off offshore production at Usan in February
The Upstream activities of Total in Nigeria
Total E&P Nigeria Limited TEPNG, an affiliate of TOTAL S. A., has
operated in the upstream sector of the Nigerian hydrocarbon industry for
more than 55 years and has added over 3.6 billion barrels of oil equivalent
to Nigeria's production to date.
Incorporated in Nigeria in 1962, TEPNG has maintained strong and
steadfast partnerships with the Nigerian Government, the Nigerian National
Petroleum Corporation (NNPC) and several indigenous companies, in
developing the country's hydrocarbon industry.
Total entered the
country in 1956 with the creation of Total Oil Products Nigeria for the
distribution of petroleum products. Initially the idea was to build a deposit
in Lagos, because the CFDPA had to make agreements with international
distributors (especially Shell) to serve a part of Chad, Dahomey and
Niger. Elf Aquitaine focused on exploration in 1961. Thus, the Group will
continue to develop in the country both upstream and downstream.
TEPNG operates and holds a 40% interest in the NNPC/TEPNG Joint Venture,
producing oil and natural gas from several onshore and shallow water
concessions. Total Gaz Electricite Holdings France (TGEHF) also has a
15% interest in Nigeria LNG, which currently operates 6 LNG liquefaction
trains on Bonny Island. In addition, TEPNG has non-operated interests in
the SPDC-operated joint venture (10%), the Bonga field (12.5%) and the
Usan field (20%). Another Total affiliate, Total Upstream Nigeria Limited
(TUPNI), operates the Akpo and Egina fields in OML 130 deep water lease.
Total is committed to working closely with its host communities and is
supporting many projects in the areas of health, education, environmental
conservation, infrastructure and economic development, through its
sustainable development and community relations programmes. Total delivers
world-class energy solutions adds economic value to the country and
promotes best practices in safety and environmental protection,
business ethics and corporate social responsibility.
With staff drawn from many nationalities and cultures working together,
Total is proud of its diversity and contributions to the socio-economic
development of Nigeria.
The
Downstream activities of Total in Nigeria
The downstream activities are managed by Total
Nigeria Plc (TNPLC), which was incorporated in 1956.
Today, TNPLC is the leader in the downstream
sector of the Nigerian oil and gas industry, with an extensive
distribution network of 577 service stations nationwide and delivers
a wide range of top-quality service to its customer from its 17-customer
service centers, 5 White Product Depots, 2 Lubricants blending plants and
numerous industrial outlets which are strategically located across Nigeria
to ensure smooth delivery of products to customers.
Total
Service Stations: the
“one-stop-centers”
To satisfy the evolving needs of its customers,
TNPLC developed a 'one-stop-centre' strategy whereby a variety of customer
needs are met in one place, Total service stations. Therefore, in addition
to receiving premium care from service assistants, customers could
purchase petroleum products, gas, lubricants, car-care
products, insecticides, groceries etc. conveniently at their Café Bonjour
shops, pick up a meal from their partners at stations (KFC & Chicken
Republic) and receive premium car maintenance and care services from Auto Express
and Auto Clean Deluxe Services. Their corporate customer demands for bulk
products are met through our Vendor Management Service
and Equipment/Technical Assistance service.
Total contribute to the socio-economic development
of their host communities by supporting, training and developing Nigerians
using several societal impact interventions including skills acquisition
programmes and Young Dealers Scheme among others.
Total leads a number of community outreach initiatives in the
country, with a focus on health, road safety, education and entrepreneurship.
Total represent more than 500 productions, commercial and support professions
in over 130 countries.
Total Nigeria Plc. is a Marketing and Services subsidiary of Total;
a multinational energy company operating in more than 130 countries and
committed to providing sustainable products and services for its customers. For
over 50 years, Total Nigeria Plc. has remained the leader in the downstream
sector of the Nigerian oil and gas industry with an extensive distribution
network of over 570 service stations nationwide and a wide range of top quality
energy products and services. TOTAL NIGERIA PLC (RC 1396) was incorporated as a
private company on June 1, 1956 to market petroleum products in Nigeria. In
September 11, 2001, the company had a successful merger which paved way for
sustainable growth and continuous development. The share capital of the company
after the merger is presently =N=169,761,000 made up of 50k ordinary shares
authorized and fully paid up with Nigerian Citizens and Associations holding
38.28% of the share capital.
TOTAL
Nigeria Plc has continued to experience consistent growth, they commissioned
their first Filling Station at Herbert Macaulay Street, Yaba, Lagos in 1956.
Since then, the ever-increasing demand for convenient accessibility to
petroleum products and services as well as the need to be closer to its
customers made Total Nigeria Plc. to invest in its network of over 500 service
stations, 19 customer service centers, numerous industrial outlets, 5 depots,
distribution plants and warehouses with high safety standards spread across the
Western, Northern, and Eastern territories in Nigeria. To satisfy the
evolving needs of its customers, the company developed a ‘one-stop centre’
strategy whereby a variety of customers’ needs are met in one place, TOTAL
service stations. Therefore, in addition to receiving premium customer service
from service attendants, customers could purchase petroleum products,
conveniently shop at Café Bonjour shops, and receive premium car maintenance
and care services from our Auto Express and Auto Clean Deluxe Services.
In addition,
the Company meets its corporate customers demand for bulk products through its
Vendor Management Service. In order to maintain and consolidate its unique
position in the oil and gas industry, the Company established two Lubricants
Blending Plants at Koko in Delta State and Apapa in Lagos State.
TOTAL
Nigeria Plc. with the support of Air Total International (incorporated in
Switzerland), is well established as one of the major suppliers of Aviation
fuel to the Aviation Industry in Nigeria. Indeed, it is currently one of the
two largest suppliers of JET A1 fuel in Nigeria today, offering excellent
fuelling services at Lagos Airports (domestic and international), Kano, Abuja
and Port Harcourt Airports.
The Company
has over 470 employees with which it enjoys a cordial management / staff
relationship built over the years through progressive welfare and staff
development schemes. At the heart of the TOTAL Nigeria Plc’s core value
is the Group's unwavering commitment to top quality products and safety of the
environment and people
Today, TOTAL
NIGERIA PLC is perceived as a leader as well as the symbol of good service in
the downstream sector of Nigeria’s oil and gas industry. The Company maintains
excellent corporate relations with the general public and investors' confidence
in its performance is tremendous as depicted by the pricing of its share, which
is highly sought after, in the Nigerian Stock Exchange.
Because
TOTAL knows that building and sustaining trust is more important than ever in
today’s global business environment, the company strives to conduct its
businesses in a manner that reflects its passion for top quality products,
customer service, Health, Safety and Environment. Little wonder why many people
choose Total every day, it’s a matter of trust.
NEW CROSS EXPLORATION AND
PRODUCTIVITY
Newcross Exploration
& Production Limited (Newcross EP) is a wholly-owned indigenous company
formed in 2013 for the acquisition of OML 24. In 2014, Newcross EP emerged as
the successful bidder of OML 24 and acquired a 45% participating interest in
the block hitherto managed under the NNPC/SPDC/ TOTAL/NAOC Joint Venture
arrangement. The OML 24 asset covers over an area of 162. Sq.km. It is located
onshore western Nigeria Delta, about 40km South-West of Port Harcourt. This
includes Awoba, Awoba North West and Ekulama Fields. Acquisition transaction
closed on November 1, 2014. Operatorship was granted on December 31, 2014.
After a 3-month transition period, Newcross EP became operator of the assets on
February 1, 2015.
Newcross Exploration
and Production maintains that they deliver on their promises by capitalizing on
their resource advantage, harnessing their strengths in human capital
development and innovative performance while always being mindful of their
environment. They run a business based
on a home-grown approach to deliver value to all key
stakeholders. They are committed to the
highest standards and internationally-regarded techniques of production.
Newcross
Exploration and Production remains innovative and forward-looking, gradually
improving output through continuous review of existing structures. To achieve
long term sustainable growth as a leading indigenous energy company, they
strive to attract, retain and develop the best people while keeping them safe. At
Newcross, they believe their people are the most exceptional asset. The welfare
and safety of their people, both staff and contractors, across their facilities
are the cornerstone of their business. They pledge their dedication to the
wellbeing of the environment: every function or activity directed by Newcross
is uniquely designed to ensure zero impact to their host communities and the surrounding
environment, which they call, Goal Zero.
They
continuously develop environmental policy and strategy to minimize the impact
of their work on the environment, making sure that all their projects are
driven by an emphasis on safety, efficiency, and a smaller environmental
footprint.
They
remain committed to Goal Zero across their facilities and installations. They
are conscious in word and deed that the idea of a healthy and vibrant workforce
is only safeguarded through the deliberate and conscious design of wellness and
welfare programs, centered around every individual.
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