Energizing Excellence: A Comprehensive Study of Total Quality Management in the South African Power Grid

Chapter 1: Introduction

1.1 Background Information

Quality management remains an essential component of organisational performance. Quality managers have developed various approaches to enhance organisational excellence and over time, these quality management practices have come to be known as total quality management (TQM). According to Goetsch and Davis (2014), TQM is a crucial source of enhancing the effectiveness and performance of any organisation, which implies that TQM plays a considerable role in the South African electricity industry. In south Africa, people’s access to power continues to rise: for instance, from 35% in the 1990s to 84% in 2011 (StatsSa 2012). This drastic rise in power consumption underscores the need for quality management practices by organisations to ensure they offer products and services that better meet the needs of consumers while promoting stakeholder vision, which is a key aspect in business dissertation help.

1.2 Background and the Situation of Eskom

Eskom Holding Ltd, hereafter Eskom, is fully owned by the South African Government making is a state-owned company. Eskom is the largest producer of electricity in both South Africa and Africa: it generates 95% of the electricity consumed in South Africa and 45% of the electricity used in Africa (Eskom Factor 2011). Additionally, Eskom remains active in all the elements of electricity supply chain namely generation, transmission, and distribution of electricity to mining, industrial, commercial, residentials, and agricultural customers as well as to those involve in power redistribution (Eskom Factor 2011).

Eskom started its operations in the 1990s but at a low level. However, the 1992 National Electrification Conference led to the establishment of a National Electrification Forum (NELF), which gave Eskom more powers and capacity to generate more electricity. Through NELF, Eskom was mandated to provide electricity to 2.5 million houses between 1994 and 1999 (Bekker, Eberhard, Gaunt and Marquard 2008). Since then, Eskom continues to grow its capacity in electricity generation, transmission, and distribution. In 2017, more than 90% of the households in South Africa had access to electricity (Eskom Company Information, 2017). In the same financial year, Eskom was able to connect 207,436 new households to electricity which was higher than the target set by the Department of Energy (Eskom Company Information, 2017). Agreeing to the achievements of Eskom, Lloyd (2012) states that at the peak of the electrification programme, Eskom has made nearly 450,000 new connections a year. However, the author adds that there are still less than 3 million homes that are yet to gain access to electricity, most of which are in rural areas.

With the high demand and expansion of electricity in South Africa, the demand started to exceed supply. Figure 1 below illustrate the demand and supply between 1994 till the load shedding period of 2007 and how the reserve margins dropped from 31% to 7%.

With the decreasing reserve margins, South Africa failed to realise that conditions for adequate investments of major energy infrastructure was needed (DOE 2012).

Eskom announced rotational load shedding in early 2008. Krupa and Burch (2011) attributed the load resulting in mass production of electricity and rapid economic growth in various industrial sectors while lack of adequate maximum load planning lead to higher demand for power than supply. In the same vein, Krupa et al. (2011) state that power outages most of which last several hours spread throughout the country, which was a clear indication that power demand would not match its supply.

In the annual report of 2008, Eskom gave reasons for the load shedding. They reasoned;

“When generator units are taken out of service for planned maintenance, the lower reserve margin means that the remaining generator units need to run harder to meet the demand for electricity. This makes the units more vulnerable to faults caused by accelerated wear and tear. As a result, we experienced an increase in technical faults during this period.

The situation was worsened by a reduction in the quality of the coal received, which necessitated the burning of increased volumes of coal for the same output of electricity. The unusually heavy rains during January and February 2008 also caused production delays at the collieries. In addition, wet coal, which turns to sludge, created coal handling problems both at the collieries and the power stations. As a result of these coal problems, a number of power stations were unable to operate at full production” (“Eskom Annual Report 2008,” n.d.)

In the quest to capacitate and meet the electrification programme, Eskom increased is power generation capacity by 17 384MW. The company embarked on three Mega Projects to meet the government mandate of electrifying houses of South African citizens, as well as other consumers like Industrial, Mining and Agricultural (Eskom Factor Report, 2011). This included building two coal-fired and one pumped-storage power stations, one wind farm as well as a concentrated solar thermal station. In March 2006, an Ingula Pump Storage Scheme was commenced with a planned end date of 2014. Shortly afterwards, Medupi construction activities started in May 2007, with a first unit planned for synchronisation by end of 2014. Kusile construction started in March 2009, with a scheduled first unit going online in December 2014. (Eskom Group Capital, 2014)

This programme has turned Eskom into the country’s largest construction company. Current key projects are the construction of Medupi and Kusile, with 4 764 MW and 4 800 MW of total installed capacity respectively. Both power plants are coal-fired base load facilities equipped with state-of-the-art technology to reduce impact in terms of both air and water. Complementary to the base load power plants, Eskom is also investing in peaking electricity generation technology as well as refurbishments and retrofits of existing stations, viz. Tutuka Power Station (Standerton), Matla Power Station (Kriel) and Duvha Power Station (Witbank). Peaking division consisted of four (4) gas/liquid fuel turbine stations, six (6) hydro-electric stations, two (2) pumped storage stations and one (1) wind energy (Eskom Integrated Report, 2011).

Construction Management takes responsibility for the execution of all capital expansion projects in Eskom. They have to maintain control over quality and efficiency of capital construction sites, ensure construction to design specifications and build standards to improve ultimate operational performance levels and asset life. At the same time, they must ensure that all safety, health and environmental and quality issues associated with projects under execution are managed appropriately. (Eskom Group Capital, 2014)

1.3 Problem Statement

As evident in the above-mentioned timelines, Eskom New Build programmes are delayed, as not all the units have been synchronised or commissioned yet. Mir and Pinnington (2014) posit that assessing the outcome of a project is extremely important to everyone involved: the project manager, customers and other stakeholders. Radujković and Sjekavica (2017) suggest that project success is the extent to which the project’s objectives are attained within budget and within the stipulated timelines. On the other hand, Todorović et al. (2015) write that a project can only be termed as successful if all its objectives are attained on time and within budget as well as it makes positive contribution to the strategic mission of the organisation. Based on these two definitions, Eskom’s new build programmes cannot be termed as successful as there were delays and the power outages implies the objectives do not match the company’s strategic mission. On a different account, Ismail (2014) reports on energy expert, Chris Yelland, on the reasons why Eskom has experienced huge delays in commissioning the new power plants, more especially Medupi. One of the reasons the author raised was the quality problems within the boilers, which required significant rework. Additionally, the author mentions that failure to meet the scheduled end date or commissioning as well as experiencing cost-overruns were factors associated with Eskom’s project failure. Among the reasons cited by Yelland, the following four are categorically essential to this research:

Geological problems during civil work phase

Inadequate level of skills and inadequate availability of skills.

Labour problems resulted in significant strikes and labour unrest

Boiler-welding issues. The contract with Hitachi saw major welding quality problems within the boilers, which required significant rework.

1.4 Aim of the Study

The ultimate aim of this study is to explore the quality management practices adopted by contractors and consultants in the power industry and particularly within the context of Eskom construction projects.

1.5 Objectives of the Study

In order to attain the ultimate aim of this study, the following objectives will be pursued:

I. To investigate the experiences of Eskom contractors regarding the quality management practice adopted by the organisation

II. To establish the effect of complying with quality management guidelines on the success of Eskom projects

III. To formulate a dynamic framework for quality management in the power industry based on the effect these practices have on project success

1.6 Research Questions

The following research questions define the direction of the study:

1. To what extent do contractors and consultancies understand quality management practices?

2. To what extent is quality management practices observed in the power industry?

3. To what extent can these quality management practices be regarded as adequate?

1.7 Scope of the Study

The scope of this study is Medupi Power Station construction project. This project was delineated into packages and the packages in turn were classified by disciplines. The disciplines are made of Balance of Plant, Civils, Control and Instrumentations, and Electrical and Mechanical. Design is found mainly in Mechanical (Boiler and Turbine) and other disciplines were managed by the construction contractors. In relation to the contract, some contracts were FIDIC and others were NEC.

Chapter Two: Literature Review

2.1 Project Management

Anantatmula and Rad (2013) define a project as any series of tasks and activities which have a specific objective and specifications that must be completed within a defined timeline. On the other hand, the authors define project management as the manner in which the project is ran in order to attain the objectives within the stipulated timeframe. The term project management was first used in 1953 in the US defence-aerospace sector but today project management is important for all organisations seeking to attain their strategic missions (Kerzner 2017).

2.2 Project Success

Traditionally, project success was seen as the extent to which a project met the set objectives and the expectations of an organisation (Chan, Scott and Lam 2002). However, today a project cannot be said to be successful if it does not meet its objectives within the defined timeline (Alias et al. 2014). Nonetheless, project success can only be meaningful if two aspects are considered namely the extent to which the project’s objective is achieved on time and within the set budget as well as the contribution the project makes to the strategic mission of the organisation (Davis 2014). In the same vein, de Carvalho, Patah and de Souza Bido (2015) write that project success has two components namely project management success and product success. Project management success entails completion of the project on time and on cost while product success focusses on the effects of the project on the organisation’s strategic mission.

In order to realise project success, Rajablu, Marthandan and Yusoff (2015) write that during the project preparation and before advertising the tender, the procuring agency should make a realistic estimate considering the costing process and the quality of the design. Chini and Valdez (2003) note the consequences of failure to make these considerations at a tender stage to be many delays, cost overruns, reworks, variations, claims ana disputes.

2.3 Quality Management Practices

Researchers have conducted extensive research of quality management practices (Sadikoglu and Olcay 2014). Even though these researchers identify and describe different quality management practices, similarities among practices can be noted. Among the most common practices are top management commitment and support, training of employees, organisation for quality, employee involvement and engagement, focus on customer, supplier quality management, continuous support, information gathering and analysis, regular improvement of the quality system, and use of statistical quality techniques.

Flynn et al. (1995) grouped the quality management practices into three main categories namely management practices, infrastructure practices and core practices. The management practices are issued by the top management, infrastructure practices and intended to support the core practices, while the core practices are intended to promote the quality of the project (Agarwal et al. 2013). According to Ingason (2015), classification of the quality management practices is correlated to the performance of any project and that of the organisation, which implies that the quality management practices adopted by the Eskom project must have significantly affected the outcome of the project.

2.4 Organisational Culture and Project Success

Organisational culture refers to shared values, beliefs, and assumptions, which defines how people behave within an organisation (Oyewobi et al. 2016). Kujala and Lillrank (2004) quoted Schein (1992, 12) in defining organizational culture as “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration…” in the construction sector, Ankrah, Proverbs and Debrah (2009) state that organisational culture significantly affects project delivery in that factors as poor communication, mistrust, antagonism, finger-pointing, and fragmentation directly affect progress. In the same vein, Rameezdeen and Gunarathna (2012) state that communication breakdown negatively affects project success in that it separates the intents of the members of the project team, in this case the contractor and the consultant. On the other hand, Waziri and Khalfan (2014) assert that diversity negative affects projects success. This study will explore Eskom’s organisational culture and examine the effects that culture has on project success. The aspects of organisational culture to be considered are effective communication, co-operative attitudes, trust between parties, a win-win approach to negotiation, knowledge sharing, and multi-disciplinary approach.

2.5 Previous Related Literature

Numerous studies seek to establish the factors associated with project delays while extensive literature considers the critical success factors for different projects (Zu, 2009; Kaynak, 2003; Kaynak & Hartley, 2005; Jung & Wang, 2006; Jaafreh & Al-abedallat, 2012; Saeed & Hasan, 2012; Gonzalez et al., 2013; Prajogo & Sohal, 2003; Choi & Eboch, 1998). A study conducted by Sunjka and Jacob (2013) reveal that wrong choice of consultants and contractors by the clients, poor coordination of subcontractors by the contractors, and late identification and resolution of drawings and specification errors and omissions by the consultants are major reasons for project delays. On the other hand, a study conducted by Mukuka, Aigbavboa and Thwala (2015) indicates that poor quality of work due to rushing the project, termination of contracts, and loss of skilled employees result in project delays. With a similar objective, Larsen, Shen, Lindhard, and Brunoe (2015) establish that different critical success factors affect project budget, schedule, and quality level, which could result in project delays.

Janipha and Ismail (2013) investigated conceptualisation of Quality Issues in Malaysian Construction Environment and their findings pointed to quality problems throughout the construction process. Global Law Firm Denton reported in 2017 that amongst other things, inadequate quality control was the reason of the delays at Medupi. It is against this backdrop that a study is carried out to explore the Quality Management practices in the construction process from the lenses of the contractor, consultant and the client within the South African context. Summarising the above cited quality problems, it is imperative to understand what constitute quality, how it is defined by each role-player and to what extent is the quality management practices are applied by each contractor.

Hoonakker et al. (2010) sought to establish the barriers and benefits of quality management in the construction industry and the results reveal that quality management is pivotal to project success. On the other hand, Jha and Iyer (2006) examined the critical factors affecting quality performance in construction projects and the results reveal that poor communication is a major factor. Another study conducted by Alaghbari, Kadir, Salim, and Ernawati (2007) explored the significant factors causing delay of building construction projects in Malaysia and the results reveal that organisational culture plays a critical role. Shehu, Endut, and Akintoye, (2014) investigated the factors contributing to project time and hence cost overrun in the Malaysian construction industry and the results reveal that poor management and poor project design result in project delays.

Informed by the reviewed literature, the following hypotheses operationalise the concept of quality management practices in the power industry:

H1: Contractors that fail on quality planning depend on inspection and correction to achieve project quality.

H2: Quality Assurance activities implemented by Contractors are related to project performance.

H3: Minimal adoption of quality management practices lowers the ability of a project to conform to project specifications.

H4: Organisational culture has a significant impact on the implementation of quality management practices in the power industry.

Chapter Three: Methodology

3.1 Research Philosophy

Research philosophy is concerned with knowledge development and the nature of that knowledge. Edson et al. (2016) argue that the philosophy a researcher adopts determines the assumptions one has about the world. Saunders et al. (2016) identify four research philosophies namely positivism, realism, interpretivism, and pragmatism. Of these four philosophies, this study adopts the positivism philosophy. Saunders et al. (2016) posit that studies adopting the positivism philosophy use observable social realities to arrive at results that are more of law-like generalisations. In the context of this study, quality management practices are observable, which enables the collection of credible information. The researcher uses existing literature and develops hypotheses, which are to be tested using the data generated during this study resulting to confirmation or disapproval of the existing knowledge. Future researchers can use the hypotheses that will be confirmed to further develop more theories in this research topic.

3.2 Research Approach

Saunders et al. (2016) identify two research approaches namely inductive and deductive research approach. In the deductive approach, a researcher develops some hypotheses and a theory and then designs a research strategy in order to test the hypotheses and confirm the theory (Woiceshyn and Daellenbach 2018). On the contrary, a researcher collects data to develop a theory based on the results of the analysed data in the inductive approach (Azungah 2018). This study adopts the deductive research approach in which the already outlined hypotheses will be put to test. The selection of the deductive approach is informed by the approach’s ability to explain the casual relationship between variables; for example, the relationship between organisational culture and quality management practices. Hashemnezhad (2015) states that in order to rigorously test the hypotheses, deduction decrees that a researcher should remain independent of what he/she is observing. This will be upheld by ensuring that the study collects information only on quality management practices and the researcher remains objective when analysing the generated data.

3.3 Research Design

A research design refers to a general plan of how a researcher goes about answering the research questions (Saunders et al. 2016). Based on the research questions, the nature of the research can be either exploratory, descriptive, or explanatory. This study adopts the exploratory design in that it seeks to explore the relationship between two variable namely quality management practices and project success. In particular, this study focuses on the situation in the South African power industry as far as quality management practices are concerned in order to establish their effect of project success. To clearly rule of the relationship, the researcher is guided by hypotheses developed from previous related studies thus aims to tests these hypotheses.

3.4 Research Strategy

This study adopts the survey research strategy. Surveys has a number of characteristics, which inform their selection for this study. First, surveys allow collection of a large amount of data from a small population, which cuts on the cost of the study (Nardi 2015). Second, the survey strategy allows a researcher to collect either qualitative or quantitative data, which he/she can analyse quantitatively using inferential and descriptive statistics (Japec et al. 2015). The generated data is essential in explaining the relationship between variables and the possible reason for that relationship.

3.5 Sampling Methods

The population for this study is all the persons involved in the construction sector in the power industry (Saunders et al. 2016). However, it would be impractical to collect data from the entire population owing to the size and the theoretical nature of the research questions, which underscores the need for selecting a sample. This study adopts the non-probability sampling technique and the purposive sampling in particular. According to Etikan et al. (2016), purposive sampling enables a researcher to use his/her judgement to select sources that will best answer the research questions such that all research objectives are attained. In particular, the research will select information-rich cases in the power industry who are the people working in the quality assurance department. This is so because people working in the quality assurance department are more knowledgeable and have a better understanding of the quality management practices expected for organisations and those that are adopted by their organisation. Additionally, these persons have a better understanding of how adhering to the quality management practices affect project success in the firm. A sample of 8 participants will be selected.

3.6 Research Instrument

Interviews will be used as the research instrument in this study as the researcher is interested in qualitative data that will best answer the research questions. Saunders et al. (2016) identify three types of interviews namely structured, semi-structured, and unstructured interviews. Of the three types, this study will adopt the semi-structured interviews whereby the researcher will have a list of themes and questions to be covered but vary them between respondents depending on the flow of information. Every interview session is scheduled to last between 30 to 40 minutes. The face-to-face approach of interviewing will be prioritised but the interviews could be completed over a phone call where the respondents are not available for a face-to-face meeting. Every interview session will be recorded and notes taken.

3.7 Data Analysis

Descriptive analysis will be adopted in this study. According to Saunders et al. (2016), descriptive analysis describes the basics of the generated information thus this technique will help in describing what information was collected and how it relates to the study hypotheses. Once the research hypotheses have been tested, the relationship might be expressed in graphical terms using Microsoft excel.

3.8 Ethical Considerations

Prior to conducting the study, a letter of approval will be sent to Eskom with an aim of seeking permission to conduct the study in the organisation. The letter will contain the purpose of the study and any other information relevant to the management. After acquiring approval, other ethics will be observed: first, the privacy of all participants will be maintained by ensuring names and titles and other personal information are not salient features of the study. Second, the study will ensure voluntary nature of participation and the respondents will be given the freedom to withdraw at will or leave out any question they might not be comfortable answering. Third, consent will be sought and no deception will be used in selection of participants. Fourth, the researcher will maintain the confidentiality of information provided by respondents while ensuring the anonymity of identifiable respondents. Finally, the research will collect data in a way that does not cause discomfort, harm, or stress to the study participants.

References

Agarwal, R., Green, R., Brown, P.J., Tan, H. and Randhawa, K., 2013. Determinants of quality management practices: an empirical study of New Zealand manufacturing firms. International Journal of Production Economics, 142(1), pp.130-145.

Alias, Z., Zawawi, E.M.A., Yusof, K. and Aris, N.M., 2014. Determining critical success factors of project management practice: A conceptual framework. Procedia-Social and Behavioral Sciences, 153, pp.61-69.

Anantatmula, V. and Rad, P., 2013, June. Linkages among project management maturity, PMO, and project success. In 2013 International Conference on Engineering, Technology and Innovation (ICE) & IEEE International Technology Management Conference (pp. 1-12). IEEE.

Azungah, T., 2018. Qualitative research: deductive and inductive approaches to data analysis. Qualitative Research Journal.

Bekker, B., Eberhard, A., Gaunt, T., Marquard, A., 2008. South Africa's rapid electrification programme: policy, institutional, planning, financing and technical innovations. Energy Pol. 36, 3125–3137.

Davis, K., 2014. Different stakeholder groups and their perceptions of project success. International journal of project management, 32(2), pp.189-201.

de Carvalho, M.M., Patah, L.A. and de Souza Bido, D., 2015. Project management and its effects on project success: Cross-country and cross-industry comparisons. International Journal of Project Management, 33(7), pp.1509-1522.

Edson, M.C., Henning, P.B. and Sankaran, S. eds., 2016. A guide to systems research: Philosophy, processes and practice (Vol. 10). Springer.

Etikan, I., Musa, S.A. and Alkassim, R.S., 2016. Comparison of convenience sampling and purposive sampling. American journal of theoretical and applied statistics, 5(1), pp.1-4.

Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Gross, C. (2012). Electricity generation options considered by Eskom. Presentation at the Energy Planning Colloquium.

Hashemnezhad, H., 2015. Qualitative content analysis research: A review article. Journal of ELT and applied linguistics (JELTAL), 3(1), pp.54-62.

Ingason, H.T., 2015. Best project management practices in the implementation of an ISO 9001 quality management system. Procedia-Social and Behavioral Sciences, 194(3), pp.192-200.

Japec, L., Kreuter, F., Berg, M., Biemer, P., Decker, P., Lampe, C., Lane, J., O’Neil, C. and Usher, A., 2015. Big data in survey research: AAPOR task force report. Public Opinion Quarterly, 79(4), pp.839-880.

Kerzner, H., 2017. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Mir, F.A. and Pinnington, A.H., 2014. Exploring the value of project management: linking project management performance and project success. International journal of project management, 32(2), pp.202-217.

Nardi, P.M., 2015. Doing survey research. Routledge.

Oyewobi, L.O., Abiola-Falemu, O. and Ibironke, O.T., 2016. The impact of rework and organisational culture on project delivery. Journal of Engineering, Design and Technology.

Radujković, M. and Sjekavica, M., 2017. Project management success factors. Procedia engineering, 196, pp.607-615.

Rajablu, M., Marthandan, G. and Yusoff, W.F.W., 2015. Managing for stakeholders: The role of stakeholder-based management in project success. Asian Social Science, 11(3), p.111.

Sadikoglu, E. and Olcay, H., 2014. The effects of total quality management practices on performance and the reasons of and the barriers to TQM practices in Turkey. Advances in Decision Sciences, 2014.

Saunders, M., Lewis, P. and Thornhill, A., 2016. Research methods for business students (Seventh). Nueva York: Pearson Education.

Todorović, M.L., Petrović, D.Č., Mihić, M.M., Obradović, V.L. and Bushuyev, S.D., 2015. Project success analysis framework: A knowledge-based approach in project management. International Journal of Project Management, 33(4), pp.772-783.

Woiceshyn, J. and Daellenbach, U., 2018. Evaluating inductive vs deductive research in management studies. Qualitative Research in Organizations and Management: An International Journal.

Continue your exploration of Empowering Strategic Decision-Making with our related content.