Operations Management of Abu Dhabi Ports Company - Case Study Example

Operations Management Case Study: Abu Dhabi Ports Company Name Institution Date Table of Contents Table of Contents 2 Introduction 2 Present Company 2 Mission 3 Strategy 3 Two Key decisions 4 Forecasting 4 Capacity planning 5 Description of Capacity planning 7 Description 10 Analysis 11 Conclusion 11 References 12 Introduction Present Company Currently, Abu Dhabi Ports Company (ADPC) deals in marine transportation services. It took over the Abu Dhabi seaports Authority (ADSA) powers and authority over assets of commercial ports and control as part of the restructuring initiative. Its major achievements to-date are the development of construction of Khalifa industrial Zone Abu Dhabi (Kizad) and construction of Khalifa port launched in last year, 2012. The company currently manages and is a master developer of all ports in Abu Dhabi including industrial zones. The management includes eleven commercials, Khalifa port deep water, community leisure ports and logistics. In general, the company provides marine transport services which in turn offer support to UAE industries such as tourism, leisure activities, fishing industry and logistics. It ensures that efficiency is observed in commercial seaports’ operations across Abu Dhabi (ADPC, 2013). Mission To be a part of the 2030 economic vision of Abu Dhabi and work hand in hand with customers both internationally and locally to achieve sustainability, preserve local values support and development of the needs in UAE community. ADPC also aims to be ranked among best employer who will attract and retain quality staff and to increase the value of shareholders. The company’s initiatives have largely contributed to both the current and future success of Abu Dhabi. Strategy ADPC conducts identification, assessment and implementation procedures for policies, technologies, systems and equipment since it is the overseer and regulator of Abu Dhabi ports. All operations of the company are directed towards efficient, fast and cost effective operations in ports. The company is initiating powerful programs aimed to improve facilities and services at the port such as vertically integrated clusters. It wants to expand its worker base by recruiting more workers. Strategies and policies are formulated based on the Company’s ability and future expectations. This ensures that the targeted objectives are achieved and that Abu Dhabi Ports Company attains its rightful place as far as the provision of services are concerned (ADPC, 2013). Two Key decisions The key operations management decisions made by Abu Dhabi Ports Company include: Forecasting Capacity planning Forecasting Forecasting involves prediction or stating predicated outcomes of events which have not been actually observed using historical or past data. Before the construction of Khalifa port and Khalifa industrial zone Abu Dhabi (Kizad), the company came up with forecasts on costs and resources for effective completion of the projects. Abu Dhabi Ports Company intended to make forecasts of future costs and capacity of expanding Kizad and construction of Khalifa Port (ADPC). Through forecasting, the objectives are attained and the company is able to move to the next level of development. As a result, the competitive advantage is achieved hence creating a niche in the as far as the provision of the services in the United Arab Countries is concerned. The forecasts included use of past data from previous projects of similar nature. Accuracy and perfection were out of the thought for the forecasts since they were not actual but just estimations. The company identified the aspects of the project to be forecast while considering time horizon needed, degree of details and units of analysis. The appropriate data was analyzed after identifying the type of data required and evaluating its availability. Since ADPC was dealing with specific projects, the selected forecasting model was tested for accuracy, ease of use and cost effectiveness. Forecasts were well generated and accuracy monitored over time. Qualitative forecasts were majorly employed while some aspects of quantitative forecasts were also incorporated in cases of costs and mathematical figures (Reid and Sanders, 2010). I agree with the procedures that ADPC employed in making the forecast decision for its new projects. It matches the company’s mission of expansion and servicing Abu Dhabi together with the UAE community. Although qualitative approach took a major part of the forecast decision, quantitative forecasts could not be avoided since there are costs included. The procedure was also appropriate for any forecast that accompany intends to make to ensure the aspects of accuracy and reliability is observed even though forecasts are usually not accurate or perfect. However, past data from projects such as construction of Kizad might totally different from aspects affecting the development of the same port or construction of Khalifa port. Still, there is room to look for the best methods that are capable of propelling the company into making inroads as far as the developments are concernd. Capacity planning Capacity planning involves determining the capacity that a company needs to produce so as to meet the demands of its customers which are fluctuating. This includes estimation of resources connecting infrastructure, computer software and hardware that will be required over a period of time. ADPC intends to develop its design capacity and maximize at it within the time periods identified. Constraints that were identified included the company’s operations systems, delays and material handling. The aspects employed included forecasts and business plans for all the ports managed and controlled by ADPC. Abu Dhabi Ports Company first determined the degree of requirements of its port services they offer. All activities of work done by the systems were categorized and the expectations of the company’s systems users were also quantified by establishing how the work will be done. A system unit for measuring incoming work was well established before service levels were set. The current company capability was also analyzed and stated. The chairman stated that, this was to decide how the needs of users will be met by the company. They measured their service levels in comparison to their objectives, measured resource usage and workloads and identified components of response time. Lastly, ADPC developed plans for its future such as its future processing requirements, and planned its future system alignment (Krajewski and Ritzman, 2005). I agree with how ADPC made the capacity planning decision. Difference between the capacity of the organization and demand of their clients is the resultant inefficiency experienced by businesses. The company’s capacity requirement in the ports that it controls and manages covers its current and future state which also involves their forecasts. This is also appropriate since meets the mission of the company which aims at increasing shareholder value and acquiring both local and international customers. Description of Capacity planning Capacity planning is categorized into three processes which can also be broken down to eleven more steps. It involves identification of service level requirements, analysis of the company’s current capacity and planning for the future. The procedures of determining requirements for service levels include establishing an overall process for identifying demands and workloads. This involves reviewing system performance in terms of business case. Classification of workloads in business terms or departments answering who, what and how questions and identification of unit of work and service levels. Analysis of the current capacity included four steps. First a comparison of service level agreement items as measured with company’s objectives. It indicated the adequacy of the company’s capacity. Secondly, the company checked usage of I/O devices, CPU and memory of its system. Then resource utilization procedure for each work load is incorporated and finally analysis of response time for each workload. Planning for the future includes forecasting future IT requirements for the company and employing TeamQuest predicator in determining the system alignment that will help meet future service levels. Process Capacity planning is the main process. First step involves identification of existing capacities and outputs which is conducted by the facility management unit under the facility manager. SAP ERP applications are employed in checking machine hours and direct labor hours. Needed capacities in terms of planned output are also identified simultaneously with the existing capacities for effective capacity planning. However, identification of needed capacities is conducted by the capacity planner who is the head of the planning department and is conducted on sales plan application of the company ERP system. Resources checked by the capacity planner include production materials. After all capacities, that is the existing ad the needed capacities have been identified, the next step involves checking such capacity with the planned output. This is solely done by the capacity planner using ERP software to compare stock items that comprise output and the current organization’s capacity. Main reason for this procedure is to identify possible gaps and device ways of filling such gaps if effective planning is to be attained. The next step depends on whether production is efficient to meet the current requirements. If production is efficient, the outcome is implemented in the SAP technology system by the facility manager using SAP software. Resources used are raw materials and produced outcome quantities which comprise of the efficient level quantity. In case it is inadequate and there is need to increase production, the facility manager again makes inquiries to the capacity planner and initiates the production process to fill the gap between requirement and available capacity. These quantities are then entered into the SAP technology system thus finishing capacity planning as illustrated in the diagram below: Description The diagram illustrates the capacity planning of ADPC. Capacity planning, identification of capacities, checking of the capacity and implementation of outcome are the main processes involved in the planning procedure. The facilitator, process and technology used are also indicated to facilitate efficient operations management and accountability. Identifying processes workloads include delivery systems to users. The company at this point identified and defined the expected satisfactory services. Classification of the work included who: the department and user, what: type of work including financial reporting and order entries and how: including backups for data base and online inquiries. Company’s unit of work illustrated quantity of work done by the system through counting numbers of customers served. A service level agreement was then established between the company and its customers. Analysis of current capacity majorly dwells in the current state of the company’s system. It involves examination of the system, comparison with objectives and resource utilization for the specifically identified workloads. Resources that are highly used in the workloads and that are likely to cause problems currently and in the future are identified through resource utilization procedure. Analysis of response time for workloads helps to identify the time each workload spends. This enables easy planning and that all the processes are taken care of. Important activities are put into consideration (Lazowska, 1984). The company has also incorporated future planning initiatives for its Information Technology systems, and application of viable procedures to meet the future service levels. Analysis The steps of the process are well arranged from analysis results and the final solutions depend on outcomes illustrated. The steps guide organization staff involved in decision making to identify the right decision at each point. Capacity requirement section at the top part of the diagram is well illustrated providing adequate information needed for decision making including parties involved. However, time horizon is not indicated all over the processes making estimated duration hard to determine. The analysis of offer placed after a shortage is identified is also provided though not adequately. Conclusion Forecasting and capacity planning is vital for service and manufacturing companies. Abu Dhabi Ports Company deals in marine service delivery and is equally in need for a well conducted forecast and capacity planning decisions. Processes used and decisions made must match with the objectives and mission of the company so as to realize success. Operations management staff needs also to participate through duty allocation in the management of company projects. This will basically help in the enhancement of growth in the company to enable it reach the next level. References Reid, R. D & Sanders, N. R. (2010). Chapter 8- Forecasting: Operations management. London: Wiley publications ADPC official website. (2013). Vision, Mission and Values. Retrieved May 23, 2013 from Goldstone, J. A. (2008).Using Quantitative and Qualitative Models to forecast instability. United States institute of peace Krajewski, L. J and Ritzman, L. P. (2005). Operations Management: Processes and Value Chains. Upper Saddle River, New Jersey: Prentice Hall. Lazowska, E. D. (1984). Quantitative System Performance. New Jersey: Prentice-Hall. Read More