EFFECT OF MATERIAL INSPECTION ON PRODUCT QUALITY IN POWER HOLDING COMPANY OF NIGERIA (PHCN), PORT HARCOURT

CHAPTER ONE

INTRODUCTION

Background of the Study

Philip Crosby in his book “Quality is free” summarizes the effect of inspection in the following statement:

“A prudent company makes certain that its products and services are delivered to the customers by a management system that does not condone remake, repairs, waste or non-conformance of any sort. These are expensive problems, they must not only be detected and resolve at the earliest moment, they must be prevented from occurring at all”.

Product quality as a strategy for competitiveness has become the focus of going concerns today, be it a manufacturing or a service industry. Be that as it may, quality product or service goal in any organization will be difficult to realize without the watchful eyes of inspection. Materials outsourced or insourced as the case may be either as raw materials, components, spare parts or maintenance repairs and operation items, must be subjected to thorough examination to ensure that they are the right materials of the correct quality according to agreed standards and specifications. This is because the slightest deviation from standards, oversights of any defect in in-coming or insourced materials results to numerous and serious consequences on the life of the organization. As a result of these consequences, organizations are forced to set in place a system to ensure that only materials of quality are allowed to come into the organization. This is achieved always through the mechanism of inspection.

The responsibility for inspection in an organization differs from organization to organization depending on the nature, make up and policy of the organization in question. The purchasing or procurement or materials department however plays an important role because they are responsible for the sourcing of the materials used by the organization.

Inspection depicts the general idea and concept which signifies the ascertaining and determination of quality or conformity of sourced materials or services to established standards and specification. This, therefore brings to mind the fact that inspection and quality can hardly be discussed separately without reference to one. It is a major tool for the determination of quality. This study therefore, shall focus on specification, standardization, inspection and quality control and assurance.

Statement of the Problem

Oversights and deviation from  standard for supplied materials due to the inability of organizations to closely inspect these materials remains the bane of most government agencies and parastatals failure. These problems are further exacerbated by the overall management approaches and attitudes to these issues. These has resulted to continued accurate and epileptic power supply in the state which are often blamed on the failure of installed equipments such as transformers and cables.

The choice of Power Holding Company of Nigeria (PHCN) Port Harcourt is to examine the issue arising from these. The question that is asked is; what measures are put in place in the organization to determine the needs for materials and specifications? Again, what mechanisms are put in place by the organization to ensure that purchased or outsourced equipment and materials are properly inspected for quality?

Objective of the Study

Because of the effect of substandard materials allowed into the organization on the quality of services rendered by the organization, the major objective of the study is built around the determination of the effectiveness of the inspection programs employed by the organization.

The study is therefore, aimed at:

i)                   To determine if inspection is carried out.

ii)                To determine how specification is communicated to suppliers.

iii)              To determine how substandard materials are treated.

iv)              To determine the method(s) of inspection.

v)                To determine the effectiveness of the procedure.

Significance of the Study

The significance of this study is enormous. First, the researcher will be the first beneficiary as it is a prerequisite requirement in partial fulfillment for the award of Higher National Diploma [HND] in the Department of Purchasing and Supply Management, Port Harcourt Polytechnic, without which the researcher cannot graduate.

Secondly, it will serve as a store of knowledge and guide for which future researchers can consult. Students will also benefit as it will help to expand their scope of knowledge.

It will also benefit the organization understudied, as they can utilize it to improve or ensure that defective materials, substandard materials do not enter the production process.

Finally, the general public will also gain from its depth to utilize against purchases or orders they will place from time to time since everyone buys one material, product or components or parts at times.

Scope of the Study

The focus of this research work is on the effect of inspection on the quality of services in Power Holding Company of Nigeria (PHCN), Port Harcourt, located in the heart of Port Harcourt, along Ahmadu Bello Way, Central Area Port Harcourt. The periods of 2009-2012 were considered and concern was given to the Material Management (Purchasing and Store), quality control and the inspection departments of the organization.

Research Questions

i)                   Where in the organization are material supplied inspected?

ii)                 How are materials required specified ?

iii)              How are substandard materials treated?

iv)              What are the methods of inspection?

v)                 How effective is the inspection procedure?

Definition of Terms

Ø    Supplier: This means a company an organization or an individual that can agree to supply or release goods or services to a buying organization.

Ø    Vendor: This is another term for a supplier.

Ø    Material: Anything that can be offered to the market for attention, acquisition, use or consumption that might satisfy needs.

Ø    Specification: This is a detailed description of materials needed from a supplier, which the supplied item must conform to.

Ø    Standardization: This is the process of formulating and applying rules for an orderly approach to a specific activity.

Ø    Standard: A standard is the result of a particular standardization effort approved by a recognized authority.

Ø    Defect: A defect is where a component does not meet its requirement or specification and needs to be replaced or repaired.

Ø    Quality: This is the degree to which a set of inherent characteristics fulfill requirements.

Ø    Inspection: This is the examination of a work product or service or materials to determine whether it conform to standards or not.