Total Quality Management - Borouge Pte Ltd - Assignment Example

TOTAL QUALITY MANAGEMENT Introduction Total quality management (referred to as TQM henceforth) consists of a framework of effort and changes within an organization that is geared toward installing and making permanent an environment in which an organization continuously improves its delivery of high-quality services and products to customers. Though there is no existence of widely agreed-upon approach for TQM, individual organizations normally depends heavily on the previously developed techniques and tools of quality control in order to achieve TQM. It should be emphasized here that businesses that are accredited for implementation of TQM have accrued customer loyalty and retention in large measures. As such, heavy investment has been made to ensure that extensive research is made to identify areas that need rectification so as to allow customers enjoy maximum utility of a given commodity (or service). Further, the wake of globalization has made it necessary for companies to reconsider their strategies and approaches so as to increase volumes of sale and hence profitability. In this case, it has necessitated the assimilation of TQM, Renko, El Tarabishy, Carsrud, & Brännback (2015). This article describes how Borouge Pte Ltd has adopted the TQM techniques in order to achieve various targets in relations to customer satisfaction and retention. In addition, the coursework will analyze the rationale behind the assimilation of TQM by Borouge Pte Ltd. Still, the essay will examine various requirements for improving quality in the Borouge Pte Ltd. Background of the Company Borouge Pte Ltd is situated in Abu Dhabi, the capital of United Arab Emirates (UAE). Being the capital of UAE, Abu Dhabi occupies approximately 87% of the total area hosting a population of 1,967,659 million residents of whom 70% are immigrants. Abu Dhabi is the richest of all surrounding regions across the whole of UAE with a GDP of $168.8 billion, which forms a 61% of UAE total GDP. Borouge has developed expansively due to innovativeness in branding, management, marketing and other strategic policies. Furthermore, the availability of oil as a raw material for petroleum products has also favored its expansion, (Chang, 2015). Formed in 1988 with headquarters based in UAE and Singapore, it consists of a joint venture of two companies, Abu Dhabi National Oil Company (ADNOC) and Australia’s Borealis. The UEA branch is responsible for petroleum, chemicals production, while the Singaporean branch carries out the marketing and sales. The company currently employs over 3000 employees from more than 40 nationalities. Borouge serves in 50 countries with their sub-branches in Africa, Middle East and Asia. Borouge has a high production capacity. In 2010, the company through its management team management tripled their products in the main manufacturing plant in Abu Dhabi to 2 million tones product. The 2014 production projection is expected to rise to 4.5 million tones. Borouge and Borealis are expected to increase their annual production to 8 million tons of polymers. The company is engaged on expansion plans across the Middle East and Asia market. Apart from the production process, the company in devising ways of addressing water and sanitation problems that is affecting people. The company engages in various corporate social responsibilities. According to Abdulaziz Alhajri, the CEO, Abu Dhabi Polymers Co. Ltd (Borouge), the company embarks on measures does not only cater for their customers, but also extends their care to the community and other stakeholders. For sustainability, the company ensures that they carry out activities that are environmentally friendly and that promote the wellbeing of the natural environment, (Chang, 2015). Borouge has set their main aim as value creation through innovation. All activities within the company are correspondent to their key aim that is achieved through well-structured innovative production technology that encourages sustainability. Borouge extends its respect to ethics, promotes multi-cultural diversity, health and environmental safe practice, reward and motivation. In addition, the company values, commitment, setting high goals and continuous raising of the company benchmarks. Finally, the company ensures sustainability, ensure our customers’ needs are addressed and focus on our stakeholders as a corporate organization that values all walk of life. SWOT Analysis for Borouge The performance of Borouge can be assessed through the SWOT analysis that focus on the strengths, weaknesses, opportunities and threats of the company in the market. Strengths The B3 expansion is expected to result to double growth in the Company’s annual manufacturing and production capacity that will lead to increase in revenue by increasing the company’s capacity to an average of 4.5 million tons per year, which is an additional 2.5 million tons every year. The company is expected to become the world’s largest producer of the polyoleofins in the globe. The expansion project by the company is expected to not only increase the revenue, but also to increase their production and market share expansion. In addition, the economy of scale is evident due to the joint venture that formed Borouge between ADNOC (Abu Dhabi National Oil Company) and the Borealis. The company has a sustainable supply of raw materials due to partnership between the company and Abu Dhabi Gas Industries Limited. The expansion will require higher demand for raw materials for the company that will be supplied by these suppliers. Borouge has a well-structured technology infrastructure that ensures that the company is able to compete with its competitors in the market. Weaknesses The expansion project requires huge capital investment in purchasing the 1.72km² of land for the project. In addition, this does not only increase the cost of operation, but also increases the cost of running activities such as maintenance, infrastructure and logistics, and security. The products of this company being polyethene compounds that are non-biodegradable has significant effects on the environment. In addition, it is noted that the raw materials are got from non-renewable sources that puts a challenge to long-term performance of the company if these resources may be depleted. The increase in production of Borouge will influence the market in terms of demand and supply of the products. Opportunities From 2009 to 2013, there has been increase in the use of crude oil in the world by over 5000 barrels each day. The increase in demand for oil products has also affected the company by increasing its ability to supply the increased production to the underserved markets. The company has also benefited from the reduction in global oil prices between mid-2014 to 2015. This reduction in crude oil price has lowered the cost of raw materials for the company. Threats The global green movement that is discouraging the use of plastic products due to the effects they have in the environment is a threat to the company future performance. In addition, the campaign on the use of multiple use plastic bags has reduced the demand for these products. In addition, the increase in competition in the petroleum products companies has also posed threat to the performance of the company. Task 2 Rationale for adopting TQM From the time a customer decides to purchase a product up to the delivery of that particular product, there are dozens or hundreds of processes that are involved: placing an order, making a requisition, ordering for raw materials is done, Items are manufactured and then finished goods are inspected. If these goods are of a desired quality, they are delivered to the respective customers in accordance with terms and conditions of sale. Though this is just a simplified model of production process, it is important to note that the process involves a complex structure that changes raw material to finished goods and services of increased utility. All of these activities around manufacturing and processing impact the quality of the goods delivered. As such, a miscalculation or mistake in any small area can affect the outcome of the process, (Chang, 2015). Poor quality is habitually as a result of poorly, deliberated, planned and executed processes. With the correct and effective systems in place, quality utilities are created and checked and hence there is a much higher prospect of obtaining the order right for the satisfaction of customers. The model described above clearly points to the fact that each activity contributes to the final service or product, that implies that virtually every section is involved – not just operations or manufacturing, but also accounting, human resources, and marketing among others. This basically demonstrates the essence of TQM. From its definition, TQM is essentially a management philosophy such that everyone in the company strives to continuously advance customer satisfaction. TQM fundamentally emphasis on planned improvement and a continuous cycle of feedback and improvements that gives the best possible products and services. For TQM to produce the desired results, everyone in the company has to be involved. It takes a "culture of quality," where individuals are constantly seeking ways to improve the product and process in totality. With a TQM approach, three main opportunities are involved to make increase efficiency and improvement: External customers This opportunity seeks to ensure that clients are completely happy and satisfied with the product and services that the company produces. In this case, the company applies TQM tools and techniques to increasingly and constantly improve the utility of a commodity in order to fully satisfy the customer and hence beat the competitor. Internal customers This opportunity facilitates the company to establish a culture where staff, suppliers and other manufacturing stakeholders have the responsibility of manufacturing products and services that exhibit increasingly superior quality. Basically, the company cultivates the culture of appreciating quality and instilling a sense of commitment to quality. Business processes This opportunity provides the answer unto whether the organization is laying strategies that rhyme with high quality production. In this case, the philosophy requires the company to provide an enabling environment that facilitates production of quality goods and services. The case of Borouge Ltd Borouge is accredited for proper application and total assimilation of TQM techniques. In this case, TQM is considered as a participative and systematic approach for planning and implementing a constant improvement process in Borouge. Its approach is aimed at identifying problems, building commitment, exceeding customers’ expectations, and promoting open decision-making among managers and workers. There are five significant rationales behind successful implementation TQM, Renko, El Tarabishy, Carsrud, & Brännback (2015). ENHANCES Understanding and Commitment from Employees TQM is key to ensure that employees within the organization understand about policies and make them a fundamental part of their duties and responsibilities. TQM communicate to the employees on corporate goals and hence it enables them to recognize the imperativeness of these goals to the overall success of the organization. Accordingly, the employees understand what is expected from them and the reason why it is important for them to accomplish their responsibilities and targets. TQM may sound like a no-brainer technique without immediate implications but too often it is not instigated by the management. When employees comprehend and share the same vision and goals as management a world of potential success is unleashed. If they are in the dark, commitment is lacking and hence policies will not be effectively deployed. TQM CREATES A Quality Improvement Culture A well elaborated TQM creates an organizational culture that constantly reminds the staffs of an important calling for quality services. in this case, the organization needs to be modernized and rationalized on a continuous foundation to encourage employee feedback. The feedback will be significant in ensuring that the company increasing work on the quality report given through the elaborate feedback system. TQM recognizes that employees endowed with valuable knowledge and hence the company will embrace it. In addition, TQM listen to those executing the policies that keep your organization running daily. TQM dictates that employees have an idea on how to improve operations and hence the management needs ti respect their ideas or they will not share. TQM Focuses on Customer Requirements In today market of globalization, customers expect and require perfect goods and services with negligible defects-if any.  Focusing on customer need is significant for sustainability and essential so as to build relationships with clients. People carry out business based on emotion. Competitors will always be at jeopardy should the business bring in TQM technique. As such, Bouroge keep its customers close and happy by documenting their unique characteristics and hence producing goods that match their requirements, (Chang, 2015). TQM ENSURES THAT Effective ControlOF POLICIES IS ACHIEVED TQM essentially monitors and measures the performance of the company.  It is easy to forget the number of times in a particular period a worker does not conform to a controlled policies and procedure, Still, it is hard to explain how many times a piece of equipment or tool was down due to unpredicted maintenance. This is where TQM comes in: the tool ensures that documentation is maintained. This documentation will ensure that the management will objectively quantify areas for improvement and hence focus all efforts where they will bring about the greatest return of both your financial and time resources. Implementation of ISO 9000 at Borouge Pte Ltd ISO 9000 has been credited for bringing a turn-around in business environment. In this case, it has very effective strategies that if implemented, TQM will have a perfect compliment and hence organization goals are achieved using less effort and technicality. According ISO 9000, the accomplishment of goals: affects the entire organization starts with individual employee requires dedication causes a cultural evolution and lastly creates an atmosphere of continuous improvement Implementation of ISO 9000 depends on: The intricacy of your processes. The size and extent of your organization, and The complexity and existence of quality system The implementation of ISO 9000 in Bouroge Ltd has taken various steps. The model below represents the steps that Bouroge Ltd has taken to ensure that ISO 9000 policy is effectively implemented: Task 3 (Sustainability report, 2013, 2013) The figure shows implantation model for ISO 9000 at Borouge Company Quality management practices such as TQM are continuously employed to improve firm performance. However, recent quality research have concluded that success of TQM depend on a number of contextual aspects. An overlap between TQM and innovation practice has been reported (Weingarten, et al., 2013). To most firms around the world, this new confirmation may change the approach to TQM with the Exception Borouge. Borouge’s TQM is built in the basis of innovation and that is the reason why the company is successful. Bourouge being a product of strategic matter maintains competitive advantages that are accessed by maintaining highly mechanized and efficient supply chain (Borouge to move product by sea in sustainability drive 2014). To stay afloat in today’s business environment, the company should also focus on quality improvement. Two major players who were successful in their own right came together for innovative and raw materials access. The result of such merger is a highly efficient company. Chart showing the balancing of business aspects Borouge is a customer oriented company and most of its inventions are associated with needs of the customer. Innovation and inventions have separated a firm from its competitors. Quality improvement has been achieved through commitment and to company policies which are focused on the customer, the planet and profit. In most cases it is difficult to align the expectation of the investor, with that of the general public. Bourouge pte has adopted mechanisms to ensure its philosophy and intentions are achieved (Chang, 2015). Complaints as defined by Borouge Borouge defines compliances as the foundation of all activities and decisions. Borouge considers doing business with high standard of integrity an important commitment of the company. Figure showing process of evaluation of requirement. As extracted from annual report of Borouge 2014 Sustainability is a major trend in the manufacturing sector this decade. Buyers are even getting sensitizes to the matters of the environment. This cause the company to actively adapt greener options. Bourouge in 2012 released a sustainability report that embraced the need for innovation and sustainable development. Sustainability objectives and structure for Bourouge consist of philosophy, policy, framework, Roadmap, Management manual and operating model (Sustainability Report 2013, 2013)supply chain remains the most competitive aspect of business. The company should carefully choose the mechanization of the supply chain manage. A balance between profits and environmental issues should be struck. Philosophy Sustainability is a management concept that ensures maximum gains are made by striking a balance between sustainability and people planet and profit. Borouge considers sustainability as long term success of the company, wellbeing of the societies. The company’s philosophy is aimed at long term prosperity and puts into consideration environmental, sustainability and social responsibility aspects. Every business and process conducted by Borouge is aligned towards sustainable development. Leadership factors necessary for success Quality program in the company is essential for attaining competitive standards and maintaining it. Quality of the products is raised and improved with availability of technology and innovativeness. The leadership factors that are critical for success in such a competitive environment include: Characteristic Leader’s characteristic in some cases cannot be substituted by training or anything else. Borouge has done its best to match talents to positions. These way employees remain highly motivated and they are able to give the most to their work Motivation Employees are expected to continually improve on the quality as well as creating new product. This requires a highly motivated team from leaders who meaningfully engage the employees while keeping the motivated and open to ideas and possibilities. Continues improvement of quality is the key success aspect of Borouge. Leadership should therefore be able to keep the team highly motivated. Experience The company selects most of its managers and team leaders from its employee. This way, skills learned overtime are put into use with little requirement for training. Apart from experience, internal hiring plays a vital role in motivation of employees. Leadership requires that a lot of decision is made and someone with previous experience and the technical skill is better position to make correct choices Policies adopted in order to operate ethically Borouge sustainability policies guide business aspects in the company. Such policies as commitment to environment issues enables the company achieve the strategic goal and show its commitment in action. Borouge is a producer of the leading pollutant in the planet. Its products are not biodegradable but yet important for the economy. Committing to sustainability and environmental mattes cannot be the stoppage of production but creation of lighter plastic solution. In 2014 the company policies were updated to demonstrate commitment to energy and water conservation. The company’s commitment to sustainability policy is demonstrated by continues investment in innovation, people and assets and a proactive sustainability culture. Culture and its appropriateness to the quality The company has a sustainability and proactive culture that is inherent throughout the company. The enables the company to keep a vibrant working force that is open to ideas and every prepared to bring solutions to dynamic business environment. For the maintenance of such desirable culture the company does most of its hiring internally. Such culture as adopted by the company is appropriate for the quality system because the employee is highly motivated and willing brings solutions to even difficult tasks. Borouge employees are aware of company’s policies on sustainability and are always committed to adhere to such policies or find better ways, methods or products that will ensure the upholding company’s commitment to sustainable growth. Keeping motivated work a force Borouge understand that its employees should work at optimality and they should understand and willingly contrive to achievement of a common goal. Pay and working conditions are the major aspects of motivation but Borouge has a defend approach that works perfectly with the type and the level of employee engagement. The company uses the following strategies to keep a motivated work force Training and development Apart, from pay most employees are becoming concern with the future of their care are. The company has offered training and opportunities for existing employees. There are different training programs in the company designed to equip the employee with the right mind and skills to work within the company. Apart from motivating the employees the company is also able to keep talented employees for it. In 2013 the company opened a new training center at Ruwais (Sustainability Report 2013, 2013). This was a demonstration of firm’s commitment to sustainable development of the work force. Remuneration Payment is an important aspect of motivation. Well paid employees tent to love and keep their work. Borouge fairly remunerates its employees irrespective of age, gender and ethnicity. Detecting Customer’s changing needs and expectation Borouge is always endeavoring to inquire of customer’s satisfaction. The needs of the customer are regarded by the company as the key to satisfaction. The company performs a regular customer satisfaction survey to understand customers need and expectation. This helps the firm to proactively tailor a solution. The responses from the customer are shared by decision making entities and the innovation team. As part of continuous customer feedback handling process, a customer feedback closure questionnaire is relayed to the customer upon closure of their feedback (Sustainability report 2014, 2014.) relaying back the information or report of how customer’s compliant, feedback was handled is not a common phenomenon in today’s business bus has proved to be effective and reliable. Customer loyalty is also attained after this communication process. In 2014, the company improves customer feedback system to a digital platform. The digital platform is expected to reduce logistical cost and time and enable the company to respond complaints and feedbacks within a short span of time. There are also economic advantages associated with the digital platform. The problem is that the customers are not used to the web based communication and may ignore sending feedbacks which are being relayed upon by the government. Mechanism adopted by the company to build partnership Borouge parse is a result of a strategic merger. The company has expanded is ability to continuously improve on quality by partnering with key stakeholders that include the local authorities, NGOs, other companies and most importantly value chain customers. In order to achieve its mission, the Borouge has reaffirmed its corporate mission by partnering with value chains. Partnering with the industry and society will see the achievement of mutual benefits. The industry gets an opportunity to give back to the society. The society develops a sense of belonging and commit to the objectives of the company. Partnership between Aon Hewitt and Borouge is intended to create a dependable opinion of the employee upon appraisal. This partnership is a strategy to improve the capacity and values of employees without prejudice (sustainability report, 2013, 2013) Description of current quality system Borouge’s current quality system is rooted to innovation and firm’s philosophy. The firm is determined to offer the best quality and innovative products while leaving minimal its footprints on the environment. It can therefore be concluded that Borouge’s TQM is anchored upon innovation and sustainability commitment. Borouge is a customer oriented Business and always puts the customers’ expectation into consideration while improving products or creating new ones. The company recently introduces a web based collection of customer feedback. The sidelining of its traditional method may stagnate the process of quality management especially if the clients are hesitant to use the digital platform in communication. Implementation plan with justification Borouge has employed partnership, innovation and communication strategies in its endeavor to continually improve on the quality. There are many aspects that may claim part TQM but having a motivated employees and partnering with value chains has proved Borouge strategy to be workable and convenient for the type of business here dealt with. Partnering with value chains increases logistical reliability and may also reduce the cost of doing businesses. Using customer’s feedback as an input of innovation ensures customer satisfaction and leads to loyalty. Commitment to citizenship and environmental matters despite the nature of company’s products sent the right signal to the societies and markets which are increasingly becoming environmentally sensitive. Reference Borouge highlights its growing contribution to the Indian plastics industry at Plastivision 2013. (2014). Popular Plastics & Packaging, 59(1), 64-65 Borouge to move product by sea in sustainability drive. (2014). ICIS Chemical Business, 286(18), 6 Chang, J. (2015). Borouge 3 ramp-up by 2015-2016. ICIS Chemical Business, (3538), 1 Fadhil, M. (2014).UAE Borouge 3 commercial output seen to hit markets by end-14.ICIS Chemical Business, 285(20), 16. Sustainability Report 2013.(2013). Enhancing Growth, Innovation and Sustainable Development. Retrieved July 1, 2015, from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAA&url=http://www.borouge.com/Config/PDF/Borouge_SustainabilityReport2013_EN.pdf&ei=WSObVZfUE8-d7gbgkY_AAg&usg=AFQjCNETKSm5hqRHIgr8VhXIqedmzWNLFg&sig2=Rs Renko, M., El Tarabishy, A., Carsrud, A. L., &Brännback, M. (2015).Understanding and measuring entrepreneurial leadership style. Journal of Small Business Management, 53(1), 54-74. Sustainability Report 2014.(2014). Enhancing Growth, Innovation and Sustainable Development. 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