Achieving Competitive Advantage through the Use of Total Quality Management in the Downstream Petroleum Sector
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Abstract
One of the most important factors in running a business in the world economy today is competition, andproduct quality is increasingly becoming a major factor for a company to be competitive. For the past decades, there has been a growing interest in product quality, and in particular, the concept of Total Quality Management (TQM). Reasons accounting for the interest growth in TQM include customer's increasing demanding quality requirements, higher competition in markets, demands for improved profitability and growing complexity of goods and services as well as product liability legislation(Sandholm, 2000).
In the Ghanaian economy, one of the key industries is the downstream petroleum industry. It comprises of Tema Oil Refinery (TOR) Ltd., Ghana National Petroleum Corporation (GNPC), Bulk Oil Storage and Transportation Company Ltd. (BOST), Bulk Distribution Companies (BDCs) and the Oil Marketing Companies (OMCs).TOR, currently can only satisfy up to 11.7% of the total consumption of crude oil in the country, making it imperative for BDCs to meet the remainingdomestic demandforpetroleum products. This study sought to investigate the effectiveness, effects, and challengesof TQM implementations among selected BDCs in Ghana.
The findings from this research suggested that effective implementation of the TQM practices enables the petroleum industry to gain competitive advantage, that TQM improves the performance of the downstream petroleum sector,and that industries that were planning to implement TQM would be able to understand and anticipate the potential barriers of TQM implementation. The study also recommended that the industry developed more comprehensive TQM programs as there were more benefits to be reaped from TQM.
The study also made some contribution to knowledge in that organizations need to analyse their environment to assess the applicability of TQM in their setting before implementation.