The Abu Dhabi National Oil Company - Quality Management at Work - Case Study Example

Student’s Name: Instructor’s Name: Class Name: Date Assignment is due: Quality Management at Work Table of Contents Contents Contents 1 Project summary 2 Products ADNOC company deals with 2 Customer focus 3 Continual Improvement 4 Involvement of People 5 Process Approach 6 International Standards 7 What was learned? 8 Suggestions and recommendations 8 Conclusion 9 Works Cited 10 Project summary This project focuses on Abu Dhabi National Oil Company (ADNOC), a state-owned company that supplies oil to the United Arab Emirates. The project dwells on aspects of customer focus, continual improvement, of people, process approach, and international standards. The project reports ends with remarks on the key issues learned. Finally, suggestions and recommendations are made on how the company’s operations can be made more effective, while the conclusion sums up the main issues arising in the company analysis. Products ADNOC company deals with Abu Dhabi National Oil Company (ADNOC) is owned by the state and it deals in oil. It has a complex, elaborate holding company structure that involves equity links with many large Western oil enterprises. The company is headquarters in Abu Dhabi, the largest of the seven states that make up the United Arab Emirates, and the heart of the country’s oil industry. The company was established in 1973 and it was the first government-owned enterprise that specialized in distributing oil throughout the UAE. Today, the company’s distribution oversees the management of a vast network of filling stations that cover all corners of the UAE. The oil that ADNOC distributes is produced in five main oilfields, and there are 12 onshore rigs that are owned by the National Drilling Company. The fuel products of the company are distributed exclusively by its own fleet, comprising of cargo tankers as well as pipelines for the transportation of petroleum products to all the main depots. The main objective of ADNOC is to follow strict health, environment, and environment code of code of conduct in order to supply oil products to the country in a sustainable manner. Indeed, the safety objective of the company is aimed at ‘doing no harm to people, be they contractors, employees, or third parties’. The company is also committed to progressive and continual improvement in the country’s road safety performance. The company’s transportation services are always closely monitored in order to ensure that safety standards are maintained at all times. This is the best approach that the company’s management uses to build trust and do away with fear. The main success factors for ADNOC include the implementation of the company’s strategic objectives, and demonstrating the company’s success. It also includes the effective utilization of resources, including physical assets, knowledge and competencies, and achieving targets. Satisfaction of stakeholders’ expectations is also another success factor for the company, whereby the main stakeholders include the employees, customers, and the community. Customer focus The company maintains customer focus by ensuring that shareholders are satisfied at all times. This, according to Alkendi, takes the form of high investment earnings, a high return on capital, good dividends, and high earnings per share (9). Customer satisfaction is also a fantastic process through which the company maintains focus in its activities. ADNOC addresses claims, requests and complaints promptly, particularly with issues relating to reliability, quality, and ‘time’ factors in the delivery of service. Customer satisfaction is also an integral part of customer focus, where the main aim is to avoid staff turnover, absenteeism, grievances and complaints. Resource utilization remains a core aspect of the company’s goal of ensuring that all the customers’ needs are catered for. The company has a clearly set-out human resource utilization, financial resources management, machines utilization, and information systems management systems in place. Through customer satisfaction, notes Guidoum, the company has undoubtedly recorded an increase in both revenues and sales (6). With these policies in place, the process management activities of the company go on without any hitches, and employees are able to complete their tasks faster, thereby fulfilling the needs of customers more promptly. When customers see the company’s employees performing their tasks efficiently without harming themselves or interfering with the environment, the trust that is built along the way makes people feel confident about continue to use the company’s products. Continual Improvement For ADNOC, there are many opportunities and space for actions of ensuring that there is continual improvement in the quality of the products offered by the company. For instance, the company’s management understands the spill threats as well as the essential requirements in terms of the response plans that are require of the company’s human resources. In June 2004, the company established the Code of Practice, which governs ADNOC’s response preparedness as well as mandating a fully integrated tiered response system within the organization. This ADNOC tiered response structure enables every facility to offer an immediate response capability that is directly supported through a corporate response organization as well as Mutual Aid. This initiative has not been without changes and conflicts, particularly the issue of the risk of spills. For instance, the comprehensive process of assessing the opportunities available for the company has tended to face the close scrutiny of the UAE government, sometimes hampering the speed with which the company implements its Code of Practice. The main aim, however, has been to ensure that a comprehensive assessment of the opportunities open to ADNOC are properly identifies and the right logistical structures put in place in order to pursue them to a successful end. In the course of pursuing such ends, there has been a need for review of equipment, staffing, logistics, as well as specialized support services that are applicable to all the company’s Tiers of response. Involvement of People The company involves the employees in decision making and solving problems a great deal. The employees are part of the company’s distribution values and policies. Without the participation of the employees in decision making, it is impossible for the company to implement its accident-free environment policies. When the company won the British Safety Council International Safety Award for the second year running in 2005,the company’s top management reiterated the role that the employees played by being part of decision making and problem solving process at all levels. Al Mansouri notes that ADNOC has a strong relationship with suppliers, in line with the company’s strong mission statement on distribution (12). The distribution mission of the company is to become a leader in the region in the marketing and distribution of highly refined petroleum products as well as associated products. This is achieved through service excellence to customers, and continued development and involvement of all employees. It is also achieved through respected earnings for all shareholders. Additionally, it is being achieved through operational excellence in all the company’s business processes. The National Marine Services and Abu Dhabi Drilling Chemicals & Products Limited are two of the companies that are involved in ensuring that the supply chain of ADNOC functions in the right manner. The companies offer comprehensive, integrated support services to various offshore oil and gas companies, and ADNOC is one of these companies. Currently, ADNOC is in talks with Shah, one of its partners in the development of a gas project worth $10 billion, following the withdrawal of ConocoPhillips, a US-based company. Projects that are of great significance to the company and the customers such as this one traditionally require the collaboration of many partners for purposes of streamlining the company’s supply chain. The relationship that the company has with its suppliers is a friendly one, and Conoco Phillips withdrew from the project simply because its managers to avoid investing in a business where billions of dollars are put at stake. Process Approach I agree that the desired result at ADNOC is achieved most efficiently if activities and all related resources are managed through a process. This is because such an approach makes it possible for the company to maintain business continuity plans all the time. When activities are pursued as if they were projects that will come to an end, employees may get the perception that a certain phase in their career has come to an end. This may increase the rate of turnover in the company. When the activities of the company are viewed as a process, the tasks become an integral part of employees’ lives. The analysis and measurement of the capability of the company’s activities is done with the greatest amount of focus being put on exploration work. Special attention is focused on this area owing to the many operational technicalities involves, particularly when issues concerning seismic surveys, rig activities, and development drilling are being addressed. The company has a comprehensive performance appraisal and project monitoring plans and guidelines in place for use by managers at different of the company’s corporate engagements. In the field of exploration, for instance, focus is on optimization of reservoir management, optimization of hydrocarbon recovery, and upgrading exploration opportunities that utilize leading edge technologies. New oil developments that involve installation of new gas facilities require strict operational guidelines against which performance levels are appraised. The operational guidelines are spelt out in such a waymanner that the company’s activities are easy to monitor and all employees, including non-specialists, can follow the processes being undertaken in order to achieve the objectives set out, and the contribution of the work to the objectives of the company. International Standards Quality is regarded as the first priority at ADNOC. All the company’s products in general, greases, aviation fuels, and lubricants, meet all the latest international product quality specifications. Extensive testing is done at various stages of product handling. Such measures need to be pursued as an ongoing undertaking by the company in order for it to meet its goal of maximizing revenues, reducing risks such as oil spills, and nurturing trust among customers. Currently, the company is pursuing the ISO 9002 Standard certification. This certification is being sought on a company-wide scale, through the adoption of various tools and techniques for business improvement. Customer requirements and needs are constantly being sought in efforts to meet the requirements for this standard. Mechanisms of ensuring that these requirements and needs are met have already been put in place. ADNOC employs benchmarking measures mainly through setting the ideal price standards for oil products. Benchmarking was employed widely in 2008, when the company cut the official selling price of its Murban crude benchmark . This was the first time during that year that the monthly price had not succeeded in hitting a record high. The ADNOC-instigated fall came amid sharp declines in the benchmark international oil prices. The total quality management initiatives of the company are best spelt out in the way activities relating to berthing, material handling, well services, and bunkering and bulk supply are carried out. The goal is to ensure that the company is a one-stop shop for a wide range of supplies, facilities, and services, including hire of manpower, offshore support/marine services, specialty chemicals, hire of equipment, and human resource management. What was learned? This project was highly enlightening; I learnt a lot about the operational activities of ADNOC, its benchmarking activities, conformity to international standards, and the way the company engages its employees and all other stakeholders in its management activities. I also learnt about the ongoing efforts of achieving international standards certification, the initiatives being made to bring new suppliers on board, and the culture of trust that ADNOC strives to maintain with its customers, who are an integral of its short, yet rich history. Suggestions and recommendations 1. The company needs to fulfill all the required international standards in order to succeed quickly in its pursuit of ISO-9002 certification. 2. As a state-owned company, ADNOC needs to undertake many benchmarking initiatives in order to play a vital role in stabilizing oil prices both locally and internationally. 3. The company should pursue better ways of maintaining involvement with people, mainly through corporate social responsibility undertakings. 4. The company’s total quality management standards are in need of review, particularly the areas of the standards that need to be met in the process of supplying refined oil products to customers. Safety, health and environment awareness standards need to be stipulated clearly in order to reduce the risk of spills. Conclusion The Abu Dhabi National Oil Company has undertaken significant steps to facilitate the supply of oil products to the people of the United Arab Emirates. The company has performed well in being a pacesetter in quality standards both in the UAE in particular and in the oil-rich Middle-East region in general. However, like all other companies today, ADNOC faces the daunting challenge of maintaining a quality, environment and health standards in a world of many global challenges and stakeholder expectations. The company needs to stipulate its goals and objectives before setting out the standards and processes required to achieve them. Works Cited Al Mansouri, M. Towards 2000: ADNOC's Plans for Health, Safety and Environmental Impact Assessments, Abu Dhabi International Petroleum Exhibition and Conference, 11-14 November 1998, Abu Dhabi, United Arab Emirates. Alkendi, Mahdi. ADNOC Environmental Impact Severity Matrix: An Innovative Impact Rating Matrix, SPE International Health, Safety & Environment Conference, 2-4 April 2006, Abu Dhabi, UAE. Guidoum, Mohamed. Strategy Formulation and Balanced Scorecard Implementation Adnoc Distribution Case Study, Abu Dhabi International Petroleum Exhibition and Conference, 13-15 October 2000, Abu Dhabi, United Arab Emirates. Read More