Operations Management in Abu Dhabi National Oil Company - Case Study Example

Student Name: Name: Title: Operations Management: Abu Dhabi National Oil Company Course: Institution: Table of Contents Table of Contents 2 11 2 Introduction 3 Description of the current operations process and critical analysis 3 Operations Performance Objectives 6 Measures put in place to attain the objectives 7 Analytical techniques 8 Challenges in management of operations 9 Conclusion 10 References 10 Abu Dhabi National oil Company (ADNOC), (2012). Retrieved on 10th July 2012, from 11 Introduction Abu Dhabi National Oil Company (ADNOC) was established by the government of the UAE in 1972. Its main operations include the exploration and drilling of oil and natural gas. Over the years, the company has expanded its mandate and it has set up plants for oil refinery and also for manufacture of petroleum products. The company has been quite successful and it is considered as one of the most profitable and efficient company in the oil sector. The company also has other subsidiaries in the oil sector for the purpose of enhancing its production and manufacturing process (ADNOC, 2012). The operations management at the company is quite important due to the nature of products that the company produces. The paper thus discusses the operations management processes by the company. Description of the current operations process and critical analysis The production system mainly relies on the operations management process (Walters, 2007). The production system is composed of the input, the outputs and the conversion system. The outputs are mainly the raw materials that are used by the company for the purpose of manufacturing its goods and products. The company relies on the crude oil it drills at the various oil fields for the purpose of manufacturing petroleum products. Other raw materials include the chemical used during the processing and manufacturing process. The conversion system mainly converts the inputs into outputs. This mainly includes the use of heavy mechanical plants that are able to convert the chemicals and the crude oil into finished products. The outputs on the other hand are mainly the products that are manufactured by the company. The output includes the petrochemical products and other oil products that are manufactured by the company. The operational process mainly targets customer satisfaction and protection of the environment. The facility layout is configured to operate in line with the customer requirements as well as the convenience of the transportation. Most processing and manufacturing plants are located in areas that are well accessible by roads and the finished products are easily transported to the market. The configuration of machines and equipment is well designed for the purpose of ensuring that all the employees work in theory recommended sites. The machines are also configured to operate at areas where they can be more convenient to the workers (Krajewski, 2005). The production layout is also well designed for the purpose of ensuring that all the products are well manufactured. This is considering that all the products follow the same sequence of production. The personnel at the site are usually group in their areas of specialization. It is in these areas that certain machines are found and are operated by certain personnel. Unauthorized personnel are not allowed in all the areas of production. This is mainly for the purpose of maintaining safety at the site. The operations planning and control in ADNOC are mainly done by the management team. The team decides what products to produce and when. This process is mainly guided by the market demand and customer requirements. The production process may at times be changed for the purpose of improving the quality of the products (Stevenson, 2007). The production control process is mainly for the purpose of ensuring that the standards are adhered to as well as maintaining the quality of the products. The organization also invests heavily on the purchase and maintenance of equipment. This is considering that the production process is usually continuous. The employees have to work round the clock for the purpose of ensuring that the products are produced in large quantities. This is mainly due to the high demands for the products produced by the company. The employees are grouped into two categories. This includes those working on the night shift and those working during the day. The cycle continues until when the machines and equipment are being serviced. The company has also adapted top the design for manufacturing concepts. These concepts are mainly for the purpose of improving the quality of goods and services as well as ensuring that the manufacturing process runs smoothly. These concepts have ensured that the quality and the desired levels are attained and maintained. The testing and the manufacturing of the products also take less time which saves a lot of costs for the company. The customers are also satisfied by the products of the company due to the use of the concepts which are in line with the new technological means. Computer aided manufacturing process is also practiced by the company. This is mainly done through connecting the computers to the machines which monitors the manufacturing process. This concept is important in terms of reducing errors during the manufacturing process. Most of the processes in the company are also automated and manual work has greatly been reduced. This is important in terms of reducing the cost of operations while eliminating errors (Johnston, 2005). Operations Performance Objectives The main operational objective of the company is to ensure that the quality of the goods are up to standards and can satisfy the clients. This is considering that the company may suffer huge loses from compensations if the oil and gas products affects the clients. The effects could also be adverse and damages may occur to the equipment and machine consuming the oil products. The company has however been able to maintain the good quality of its products and hence becoming a major competitor in the oil industry. The other objective of the company is to ensure that the environment is protected. This is considering that the oil drilling and refinery may have adverse effects on the environment. Oil spills in the sea may cause a major calamity to the aquatic life as well as to the environment. It is for this reason that the company strives at achieving sustainable development. Customer satisfaction is also an important aspect of operations management (Schonberger, 1997). The customers play an important role in the growth of the company. If the customers are not satisfied, then it becomes difficult to maintain them and thus resulting to losses for the company. The operational processes in the company are mainly focused on the needs of the customers. It is for this reason that the company has to make changes from time to time in order to satisfy the clients. The operations management objectives are also for the purpose of ensuring that the company reduces wastage of raw materials and costs. The wastage always has negative impacts on the inventories of the organization. The wastage also increases the cost of operations and thus reducing the profit margins for the company. All the processes are thus aimed at ensuring that the raw materials are well utilized. The employees have also been trained on the importance of managing the resources well for the benefit of the company. Measures put in place to attain the objectives In order for the company to achieve its goals and objectives, measures have been put in place by the management team. To ensure that the quality of the products meets the desired standards, The Company has a Total Quality Management system in place. This plays an important role in ensuring that the operations are well coordinated and the quality checks and controls are in place. The company also received an ISO 9001 certification which plays an important part in ensuring that the international standards are adhered to during all the processes. Thorough inspection of both the equipment and products are usually done to ensure that they conform to the standards. For the purpose of protecting the environment, the company has established various initiatives aimed at promoting sustainability. All the government regulations regarding the environment are also adhered to by the organization. The company also has a customer care department that ensures that the needs of the customers are taken into considerations. Trainings are also conducted to ensure that the employees minimize wastages during the manufacturing process. The use of modern technology has also promoted the proper use of resources. Analytical techniques The analytical techniques used by the company to maintain and improve efficiency include the use of charts and graphs. The most common tool used to control the quality is the quality control chart. The weight is plotted against time for the purpose of detecting whether the products meets the required quality or not. The fishbone chart is also used for the purpose of ensuring that all the problems in the machinery are detected (Heizer, 2008). The chart is also called cause and effect diagram. The chart mainly traces the source of the problem and hence recommending the possible solutions for improvements. The Pareto analysis is mainly used for the purpose of plotting frequency of errors. This analysis is useful to the company in terms of establishing possible errors in the system. Challenges in management of operations The company at times faces financial management control. This has a negative effect on the inventory and thus affecting the operations of the company. The problem is mainly caused by bulky transactions that the company is supposed to handle and process within a limited time. This problem can however be solved by the use of modern technology. Some of the employees are also new on the concepts of using information technology during the manufacturing process. This is quite costly to the company as it has to hire experts to operate the machines for several months. The ever changing face of technology also poses a challenge to the organization. This can however be improved by conducting frequent trainings and seminars (Johnston, 1997). Conclusion In conclusion, it is evident that operations management is important for the growth and development of an organization. Operations management is mainly about customer satisfaction, maintaining good standards for the manufactured products and reducing the cost of production through minimizing wastes. It is also important to note that operations management requires the commitment of the staff and the employees. Measures should also be put in place for the purpose of ensuring the success of the operations management. Challenges also exist in the operations management and they require proper solutions in order to counter them. However with good operations management strategies in place, the company becomes quite successful. References Walters, D, 2007, Operations Management: a value chain approach, New York: Palgrave MacMillan. Krajewski, L, 2005, Operations Management: strategy and analysis, 7th edition, Prentice Hall, NJ. Stevenson, W, 2007, Operations Management, 9th edition, McGraw Hill Johnston, R, 2005, Service Operations Management: Improving service delivery, 2nd edition, Prentice Hall, NJ. Abu Dhabi National oil Company (ADNOC), (2012). Retrieved on 10th July 2012, from Schonberger, R, 1997, Operations Management: customer focused principles, 6th edition, Richard D. Irwin, Chicago Heizer, J, 2008, Principles of Operations Management, 8th edition, Pearson/ Prentice Hall. Johnston, R, 1997, Cases in Operations Management, 2nd Ed, Financial times Prentice Hall . Read More