Application of Total Quality Principles at Saudi Aramco - Case Study Example

Name) (Instructor) (Institution) (Course code) (Date) SAUDI ARAMCO Introduction about Saudi Aramco Saudi Aramco is an international chemicals and petroleum enterprise. This company is state-owned by the Kingdom of Saudi Arabia. For the last eight decades, Saudi Aramco has established itself as a world leader in not only hydrocarbons exploration but also as a leading entity in shipping, marketing, distribution, refining, production as well as the top global exporter of crude oil and natural gas liquids (NGLs) The company head office is located in Dhahran, Saudi Arabia. The company has many other offices within the Kingdom and across the globe in 77 countries. It employs more than 61,000 workforces across the world from the 77 countries. Saudi Aramco’s subsidiaries and affiliates are located in India, Japan, Egypt, Singapore, the United Arab Emirates, China, United States, Egypt, the Netherlands, the United Kingdom and the Republic of Korea among other countries (Saudi Aramco, 2014) The oil and gas exploration infrastructure of the company tops the industry regarding technical advances, operational reliability and production. Saudi Aramco boasts of its infrastructure and employees who ensure the company becomes the global largest producer and exporter of crude oil. Saudi Aramco produces one in every eight barrels of the global oil supply. Saudi Aramco has been a good player in the crude oil market. This is because; the company is known to stabilize the world oil market whenever there is a disruption. They can do so by maintaining the world largest spare oil production capacity. With a condensate reserve of over 261 billion barrels, Saudi Aramco is a proven manager of conventional crude oil. The company produces more than 9.5 million barrels per day (BPD). The entity has a stewardship of natural gas reserves of about 294 trillion standard cubic feet (Saudi Aramco, 2014) Currently, Saudi Aramco is burning the midnight oil to ensure the build and maintain their reputation as the reliable and stable supplier hydrocarbon resources. The companies do so by developing export refineries, producing petrochemicals and advancing the development of technologies that will lead to the production of cleaner fuels meant the new generation of internal combustion engines. This is a positive step towards enhancing lives while safeguarding the environment and our planet (Saudi Aramco, 2014) TQM For Saudi Aramco to be globally competitive, the management is aware of the need to be applied TQM practices in their day to day activities. Some of the details are discussed below in the report. Total Quality Management (TQM) is a management philosophy aiming to boost the both the performance and quality of all processes, departments and functions across the organization (Charantimath, 2011, pg. 79). The goal total quality management is produce and provides services that exceed customer expectations. Total quality management principles cut across all the departments and levels of the organisation including the lower level employees and the top level management (Render and Heizer, 2004, pg. 127). TQM is paramount as it ensures that the management adopts a strategic approach to quality. Adoption of strategic approach means that the more energy is directed to prevention as opposed to inspection leading to much lower cost and production none defective goods and services (Mukherjee and Kachwala, 2009, p. 87). To achieve total quality management, the employees are given the liberty to make the decisions on their own (Tønnessen, 2014, p. 185). The members of staff need also to be trained in a professional manner. By so doing, the employees have the capacity to improve the overall quality as well as attain higher standards. The reason behind such approach is that the employees feel to be part of the company making them empowered. The overall result is that the company will be swimming upstream. TQM practices foster teamwork reduces running and production cost and increases customer satisfaction creating customer loyalty and more market share TQM is guided by five principles to ensure its goals are met. These principles are: encourage mutual respect and teamwork, focus on the customer, improve continuously, produce quality the first time and have a strategic approach to improvement How Saudi Aramco integrate TQP Practices to its work Strategic approach to improvement With Saudi Aramco producing 12.5% of the global barrels of crude supply, the company is designing revolutionary energy technologies that drive the company belief that energy is the opportunity. With the world population increasing to grow, the standard of living continues to rise and the world economies growing, Saudi Aramco opportunities expand. For this reason, Saudi Aramco is strategically positioning itself to ensure they meet its market demands. The company carries out market demand before designing a broad range of strategies that will position the above its competitors in the market – currently and in the future. Saudi Aramco is guided by its Strategic Intent, which focuses on five crucial areas. Each of these areas work around the clock to offer the most opportunities for all its stakeholders (Saudi Aramco, 2014) Generate and nurture ideas with potential When it comes to innovation, we know a good idea can come from anywhere. Saudi Aramco collaborates and partner with other industry stakeholders to transform ideas into sustainable solutions to provide long-term value for the greatest number of stakeholders. Saudi Aramco is the pack in technology development and innovation. The company is aware that lives can be transformed for better through the advances in research spheres. As a result, it is working to realize its dreams of offering more reliable access to more fuel-efficient vehicles, reduction of carbon dioxide emission, conservation of water resources, affordable energy, making future materials that not only make lighter but stronger consumer products (Saudi Aramco, 2014). To meet its innovative targets, Saudi Aramco adopted an open network innovation market that incorporates ideas across the globe, capabilities and objectives. The company is aware that it cannot achieve its goals on its own, to ensure its growth in scale and scope, Saudi Aramco works in collaboration with research alliances and world research centers to develop strategic hubs Encourage mutual respect and teamwork To ensure this principle of total quality management, Saudi Aramco is developing and enabling workforce of the future. The company is aware the need to maintain its world-class ambitious by attracting top cream talent in the market. People who are looking for opportunities that enable them to best work of their lives find home in Saudi Aramco. Saudi Aramco is position itself an employer of choice. The company is guided its philosophy of offering a lot of opportunities to a large number of people. All its employees are provided with numerous opportunities to be engaged in worthy projects that have impact on the global scale. Saudi Aramco is aware of its ability to attract, develop and retain the best talent in the market is crucial to meeting set goals and objectives. The entity nurtures a culture that rewards high performance, drives accountability, empowers employees, manages risks and encourages collaboration and teamwork. The culture is very appealing to professionals who are ready to work on a high-functioning teams and individuals. Saudi Aramco has a soft spot for young professionals who are who are aware of the current trends in technology that will boost the performance of the company. It is for this reason that the young talents are mostly attracted to Saudi Aramco culture of continuous development and internal mobility. As a result, the number of young employees has significantly increased. Currently, the talents of 35 years and below account for about 50 percent of the workers in Saudi Aramco Company. Focusing on the customer This is an important aspect of the TQM principles. Customers are final judge who determine whether the products or service provide by the business are of superior quality or not (Cook, 2002, p. 56). Any business that is providing goods and service that does not focus on the market and customer demands is doom to fail. Some of the needs that enable the companies to succeed in the market are paying attention to the current trends like caring for the environment and producing products and services that do not pollute the environment. Any business that does not pay attention to this can experience products boycott which is very hard to recover and build the company image (Hamme, 2014, pg. 43). Saudi Aramco is therefore on the forefront with its technology development, long-term outlook on research, strategies with the reliable development of oil fields. This has resulted in the maximum exploitation of reservoir performance adding more value to the company’s integrated energy value chain. Saudi Aramco needs to play its roles very diligently as they are entrusted with vast responsibilities which include the management of the largest reserve in the on earth. To meet the market needs and the impact, Saudi Aramco has a long-term plan on how to meet the market demands as well as how to maximize recovery with sound sustainable plan ensure the future generation enjoy the fruits of the effort and strategies. The company has put in place some of the most innovative and cutting edge technologies to ensure this is achieved (Saudi Aramco, 2014). Human Resource development The human resource department is responsible for the training and the development human resource. Training and development is aimed at the improving the performance of the employees (Wilson, 2005, p. 93) This is a mixed use of organizational development, training, and career development efforts with the aim of improving organizational, group and individual effectiveness Saudi Aramco Company typically prepares their workforce for the challenges ahead of them. Curricula for Upstream Professional Development Centre is in place ensure the company’s talent is continuously being developed. These employees are retained by the corporation to ensure that they add value to the enterprise. The employees have the security of tenure. Therefore, they are dedicated to giving all to Saudi Aramco. This is vital as the company is exploring complex fields like tight gas formation. Saudi Aramco is the utilizing the UPDC - the Upstream Professional and Development Centre with its latest technology to ensure the workforce are in a position to develop the required competencies (Saudi Aramco, 2014) The UPDC has the state-of-art 3-D imaging facility which is the basis for professional development for its senior staff and new recruits for its nine upstream disciplines. These disciples are; upstream computing, petrophysics, geophysics, drilling, reservoir engineering, facilities engineering, production engineering, unconventional resources and geology. Most of the courses have been developed by Saudi Aramco. So far, UPDC has been very useful to the development of human resource development. Since its establishment in the year 2010, over 1,000 employees have been on-boarded. More 6,000 participants have been trained in more than 450 training sessions. The UPDC in line with the Saudi Aramco’s strategic vision of developing and retaining of the talented human resource as they prepare for the challenges ahead of them (Saudi Aramco, 2014) Systems (design, control and improvement) Saudi Aramco has relentlessly continued to demonstrate leadership in developing standards in the sector that aim to promote both efficiency and safety across the world. This effort led to awarding of the engineering specialist Joseph Thorp being honored at an ISO Technical Committee in Rome. This was through his tireless contribution to the development of American Petroleum Institute (API) standards within ISO. Joseph Thorp, Saudi Aramco engineering specialist, has been part of API/ISO machinery standards development team for gas, oil and petrochemical industries used a yardstick in ISO certification across the world (Ottmann, 2010). Capable Leadership Saudi Aramco has demonstrated leadership in protecting the environment and biodiversity in the working jurisdiction. To conserve the biodiversity, Saudi Aramco is establishing a wildlife sanctuary in Rub’ al-Khali near Shaybah facility. Saudi Aramco has developed artificial reefs, planted hundreds of thousands of mangrove along the Arabian Gulf among other actions . Back at home, Saudi Aramco is the front runner in the promotion of reduction of energy intensity. They have achieved this through public education, energy innovation and advocating for responsible policies. The company has been working hand in hand with the Saudi Kingdom government. More advances are being developed and implemented in other areas to minimize energy in the running and running of the company processes. More cleanly burning natural gas for home use, water recycling and conservation and as well as reduction of flaring are being implemented to conserve the environment. Saudi Aramco’s efforts to preserve the environment have ended there. The company managed to replace more than half a million of incandescent light bulbs with LED bulbs in both commercial offices and residential communities. As a result, more than 30 million of kilowatt hours of energy are being saved (Saudi Aramco, 2014). The company is also educating the Saudis on energy efficient strategies through public awareness. Saudi Aramco is sponsoring studies on ways commercial-scale production of a renewable source of energy – wind power and primary solar. This will lead to the boost a clean energy sector Saudi Arabia (Saudi Aramco, 2014). Work environment involves all the physical environment geographical location as well as immediate surroundings like an office building or construction sites. A conducive workplace motivates the workforce to come to work and become motivated to the day. Saudi Aramco provides a conducive work environment for its human resource (Friedrichs, 2012, pg.102). The company is committed to the provision of a safe and respectful environment. Safety policies and procedures are provided both in the place onsite as well as within the community. In so doing, Saudi Aramco is protecting itself, others and its future operations. Saudi Aramco requires its employees to maintain a high level of integrity. Integrity is necessary for the maintenance of the business’s reputation (Saudi Aramco, 2014). Saudi Aramco treated its people with fairness and respect. Every employee is given a chance develop. The company does not tolerate misconduct. Diversity is embraced. Citizenship Saudi Aramco conducts its business around the globe as a good corporate citizen. The company is aiming to be a positive influence in its area of operation. The company takes this role seriously. According to the enterprise, citizenship is a facilitator for economic growth, supporting the communities, demonstrating social responsibility and acting as an example of developing a solid relationship both the customers and partners (Saudi Aramco, 2014) References Charantimath, P. (2011). Total quality management. New Delhi, India: Dorling KIndersley (India). Cook, S. (2002). Customer care excellence. London: Kogan Page, p.56. Friedrichs, C. (2012). Seven simple tools to build a motivating work environment. Hamburg: Diplomica Verlag, p.102. Hamme, D. (2014). Customer focused process innovation : linking strategic intent to everyday execution. New York: McGraw Hill Professional, p.43. Mukherjee, P. and Kachwala, T. (2009). Operations management and productivity techniques. New Delhi: PHI Learning, p.87. Ottmann, J. (2010). Aramco ExPats Articles | Company Recognized for Global Standards Development. [online] Aramcoexpats.com. 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