Operations Management in Abu Dhabi National Oil Company

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Table of Contents

Introduction
Managing Quality
Human Resources and Job Design
Supply Chain
Conclusion
Works Cited

Introduction

Management is an important part of any organization. All successful organizations employ successful management procedures in all their functions. The application of operations management in the areas of quality control, human resource, and supply chain is an important practice in management.

According to Mentzer, the control of quality in an organization is influenced by the existing structures that are intended at serving these functions (9). The quality of products and services produced in an organization dictates the success that the organization enjoys in comparison with its competitors.

Areas such as human resource and job design management constitute other aspects of an organization that determine the level of organizational success. Human resource management ensures that an organization has employees who are devoted to the aims of the organization. Such employees have the skills that are necessary for operating in the respective industry (Mentzer 21).

The third area of management that contributes significantly in determining success in an organization is supply chain management. The distribution of goods and services to and from organizations should be managed efficiently.

One of the organizations that enjoy success in management of the above areas is the Abu Dhabi National Oil Company (ADNOC). This essay looks at the operations management in the areas of managing quality, human resources and job design, and the supply chain.

Managing Quality

Management of quality contributes to the output of organizations. The output is only significant when the quality control and management are utilized. ADNOC is located in the mining and distribution industry of petroleum in Abu Dhabi. It is considered one of the global leaders in the petroleum technology.

This company is a leader in the provision of petroleum services, with quality control being key in its operations. According to Gitlow, quality control entails putting in place measures that are aimed at enhancing the output in organizations (23). This process begins with setting up a department that is charged with the mandate of overseeing the success of the organization.

ADNOC has a quality control department whose objective involves the provision of standard petroleum products and/or the provision of services along these lines. ADNOC has branches and subsidiaries in different parts of the country.

The ancillaries keep the necessary quality control procedures written in the policy statement of the company. After its establishment in 1971, ADNOC set out to establish many companies, affiliates, and subsidiaries, all of which have quality control departments.

ADNOC has branches in the oil industry. These branches stretch in the areas of exploration, refining, gas production, and transportation of products. The company also distributes crude oil, gas, and refined products to overseas markets, with local distribution forming a significant part in its operations.

The management of quality in production, distribution, and storage of products from this organization requires a dedicated workforce with the ability to handle quality control functions of this organization.

Quality control in the production of the organization’s chief products is indicated by the organization’s position on the global and local markets. This organization is among the most successful of its kind. ADNOC has a quality control representative in each of its subsidiaries, including the main company.

The quality control representative is in charge of the quality control program in each of these subsidiaries. The quality control representative who is responsible for control of the company’s output coordinates activities under the quality control department.

Aside from the management of these activities directly in the organization, ADNOC’s quality control representatives and departments have additional functions.

The organization requires the quality control and management department to provide information on the latest requirements for suppliers, relevant government affiliates, investors, and other organizational affiliates. The other function of quality control representatives is the provision of modifications in the processes in ADNOC to ensure that the outputs are according to the international standards.

Top managers and quality control bosses hold frequent meetings to ensure that the department is operating as it should in terms of making the right decisions. The quality control department is required to provide its findings to the senior management, which makes its adjustments to the organization as deemed possible.

Gitlow states that quality control should be focused on ensuring that the output is above or equivalent to the global standards (24). Organizations should seek not only to achieve quality control targets but also to set targets for other organizations in the industry. This function of quality control departments is one that ADNOC has carried out over the last few years.

Employees in the organization are part of the quality control management process. Therefore, the organization has developed and implemented training and education programs for its employees who are required to provide feedback to the different departments of the organization.

This information contributes to the development of standards in the organization. Quality control managers and representatives in this organization also follow up with the findings of quality control department in the organization.

Aside from the quality control department in the organization, ADNOC outsources quality control services from third parties. The program in the organization is successful with the combination of internal and external quality control parties.

The work of quality check programs in ADNOC is to ensure that the output is acceptable and up to the necessary standards. ADNOC has a dedicated management team that takes value as an important part of the production process.

The mining part of the company is an important one. The quality assurance role in this area includes the promotion of safe mining activities. The company has engaged on a campaign to reduce pollution along the process of oil drilling and mining and in the transfer of this product to the local and international markets.

The organization has a crisis and emergency division that is charged with the responsibility of ensuring that the activities that the organization undertakes are safe for the local environment. An oil spill is one of the major disasters that the organizations can face. The prevention of this disaster is a priority of its crisis and emergency management team.

The other activity in the management of quality at ADNOC is the frequent surveys that the organization undertakes. According to Ayish, organizations should participate in feedback activities that allow them improve on their service provision or quality of goods and services (33). ADNOC participates in the provision of feedback to promote the provision of better products and services.

Surveys are sent to the other companies that interact with the organization. Individuals and organizations that are affiliated to the origination add to the employee feedback, which is used to improve the quality of goods and services in the organization.

Gitlow states that employees are important in quality assurance and that organizations should ensure that they participate in the process (29). Some of the ways that organizations may improve the quality of their goods and services is through the promotion of better terms for their employees in terms of providing motivational activities and/or offering the best financial terms.

ADNOC has thousands of employees in the many subsidiaries and groups of companies that it operates. These workers are guaranteed good employment terms. This plan has led to the high quality of output.

The reduction of flaring on the organization is another achievement that adequate quality control has implemented. Flaring is a big contributor to environmental pollution. Initially, the organization had a significant flaring, which led to significant pollution.

Measures to reduce pollution that is related to flaring have been effective for this business and its affiliated organizations. Gitlow states that environmental protection for major organizations is an important part in the assessment of their quality control measures (29). Therefore, ADNOC is well placed to achieve quality control and management targets that make it an international company.

Human Resources and Job Design

Human resource management is an important part of organizations. Many institutions are dedicated to the provision of adequate human resource management practices. According to Mentzer, an organization is as good as the human resource that it recruits and manages (19).

The job design for any organization should correspond to the needs of the employees. Job design management in an organization consists of a team of employees and managers who are dedicated to the fulfillment of organizational goals in terms of production.

Human resource management entails the recruitment, training, motivation remuneration, and other services that are related to employees. Organizations that recognize their employees as the most important stakeholders often have significant levels of success.

These organizations also have significant levels of competitiveness. Organizations that wish to succeed in their respective industries should have a human resource department that has human resource managers who are charged with the assurance of employee needs and rights.

ADNOC has a human resource sector in place that takes charge of employee needs in this organization. The department plays the role of recruitment of employees, training, motivation, and promotion of employee rights. The organization recruits employees that are highly trained and experienced.

These workers proceed with training while still at the organization. ADNOC offers training for internship students who wish to join the organization in pursuit of employment. Some of these students are absorbed into the organization where they get a chance to bring their experience and training to the organization.

Experienced individuals who include human resource managers should run human resource management. ADNOC is one of the organizations with an experienced team of human resource managers who serve different functions in this department. The senior human resource manager is involved in policy formulation, including the determination of individuals who the organization can recruit and employ.

Employee remuneration is a significant part of human resource management. It ensures motivation within an organization (Mentzer 17). ADNOC offers competitive remuneration for its employees, with this strategies being one of the reasons for its success in the respective industry.

The human resource department within the organization or its subsidiaries is charged with the promotion of employee rights and the provision of services. The department ensures that the employees constantly get their remuneration, which has been reviewed in their favor.

An organization with the desire to succeed in its respective industry should respect the rights of its employees whilst ensuring that their salaries are competitive in the industry (Ermida 271). The organization with the best employee policies usually enjoys success in the industry and market within which it is located.

ADNOC is located in an industry that is considered risky for any employee. Job design in this organization ensures employee safety. The company considers fatality of one of its employees an urgent matter that needs attention. The company has previously had accidents at its places of work, with seven employees dying in 2009 because of work-related accidents.

The company investigated these incidents as a way of assuring its employees of future safety at the organization and its affiliate companies. The measures put in place at the organization have ensured that no accident is reported since the death of these employees.

ADNOC considers its employees one of their important stakeholders alongside its customers, government organizations, suppliers, and the public. These stakeholders enjoy a variety of engagements with the organization.

Employees get team meetings where they contribute to the development of the organization. As a result, they feel motivated. According to Mentzer, these team meetings are important in communicating the organization’s goals and objectives whilst motivating employees towards the achievement of these goals and targets (19).

The other way that ADNOC engages its employees is in employee appraisals. The organization carries out frequent employee appraisals that are aimed at improving the performance of these employees in the various areas of work.

Employee appraisal is important in the determination of employee output. It works through the improvement of their terms and services. The company also has a suggestion scheme in place for its employees, with this plan helping them attain organizational goals. The scheme is run in all affiliate companies of the organization. The intention is to improve the services of the employees and their total output.

An organization that embraces technology in its human resource management is often successful in its venture (Mentzer 12). ADNOC is one of the organizations with extensive use of technology in its human resource management. The organization runs online surveys for its employees.

It has personalized e-mail accounts for workers (Mentzer 13). Aside from the personalized email services, this organization has an intranet that ensures that the digital platform is fully utilized and exploited in the organization.

Employees have access to newsletters and company magazines that it produces. These resources contain the description of the job design of the organization. The newsletters provide information to employees on how they should run different parts of the organization.

According to Mentzer, organizations should provide continuous education and training for their employees to ensure that they give their best to the business (14). ADNOC has training programs in place for its employees. The human resource department in the organization coordinates these programs. The training is carried out in the form of seminars and workshops alongside other training activities.

The other aspect of human resource management that is prominent in ADNOC is the promotion of social and environmental activities. The organization is located in an industry that interacts heavily with the environment in the process of mining. Industries in the mining industry particularly have their employees participate in the environmental sustainability and protection.

Job design in this organization entails ensuring the most output with the least destruction of the environment. The promotion of social and environmental activities in the workforce ensures that they maintain a safe operating environment and protection of the environment in general.

ADNOC is a key player in environmental protection, which leads to its prevention of environmental degradation. Some of the risks include the spillage of oil, which may lead to destruction of marine life.

Job design management in the organization is a function of the executive management. It entails a description of the various jobs and slots in the organization. The human resource department also plays part in the job design management, which determines employee numbers and their respective areas.

Mentzer states that the job design determines the success that organizations enjoy in their respective industries (17). Organizations that have effective job design management have a better output. ADNOC is a leader in its respective industry, with the products and services in their output being the best in its class.

Supply Chain

Supply chain management is another vital part of an organization. Companies are currently recognizing the need for this new aspect of competitive advantage (Mentzer 72). Supply chain management consists of processes and activities that contribute towards the provision of the products to the end users (Mentzer 72).

The most vital area in supply chain management includes purchasing, manufacturing, transportation, distribution, and warehousing (Mentzer 78). Supply chain is an aggregate of all these functions that lead to the provision of products and services to the end user. The management of all processes in the supply chain is what encompasses supply chain management.

Supply chain management at ADNOC is carried out in a professional manner, with the main method used being the fragmentation of the different functions. The different organizations that constitute ADNOC operate at different levels in the supply chain of the organization.

The organization is involved in mining oil and gas in the many oil and gas fields in Abu Dhabi while these products are transported to the refineries by a different section of the organization. The company is involved in the management of processes that occur upstream and downstream in the industry.

ADNOC has separate groups of companies within it in addition to a host of independent operators that run different parts of its supply chain. This form of supply chain management has worked towards the organization’s advantage, thus ensuring that it distributes petroleum and gas to the readily available markets.

Companies that are mainly involved in the exploration and production include the Abu Dhabi Company for Onshore Oil Operations (ADCO), Abu Dhabi Gas Development Company Ltd, Abu Dhabi Gas Liquefaction Company Ltd. (ADGAS), Abu Dhabi Marine Operating Company (ADMA-OPCO), Abu Dhabi Gas Industries Ltd. (GASCO), and ELIXIER.

The other constituent companies that are involved in mining and exploration include the National Drilling Company (NDC) and the Zakum Development Company (ZADCO).

The other part of ADNOC’s supply chain that is also managed by constituent companies and affiliates is the marketing and refining part.

Companies that are involved in the marketing and refining of petroleum products for ADNOC include ADNOC Distribution, Distribution, the Abu Dhabi Oil Refining Company (TAKREER), and the Abu Dhabi National Tanker Company and National Gas Shipping Company (ADNATCO-NGSCO) (Mezher, Dawelbait, and Abbas 319). These companies are involved in the refining of oil from the oil fields.

Companies in the UAE and other parts of the world run the petrochemical directorate at ADNOC. They include companies such as Borouge whose affiliate businesses include Petrochemicals Abu Dhabi Polymers Company Ltd and Borouge PTE Ltd.

The other company in the petrochemical directorate is the Ruwais Fertilizer Industry (FERTIL). Apart from the mining and distribution of petrochemicals, other companies such as ESNAAD and the Abu Dhabi Petroleum Operating Company (IRSHAD) are involved in the shared services directorate.

Some companies have teamed up with ADNOC in its supply chain. These companies are found at different areas in the supply chain. Examples of these independent operators that are affiliated to ADNOC include Abu Dhabi Oil Company (Japan) Ltd. (ADOC), BUNDUQ, and Total Abu Al Bukhoosh (TOTAL ABK).

The above institutions are involved in the supply chain for ADNOC. The organization also runs training services through the numerous academic institutions that it has established or is involved in their support.

The presence of different companies along ADNOC’s supply chain ensures that the company’s functions are carried out in an effective manner. According to Mentzer, diversification of the supply chain may be achieved through the involvement of many companies in the process (72). The supply chain with different players often requires efficient management to ensure that they interact in a positive manner.

The existence of many organizations as intermediaries in the supply chain often results in reduced efficiency. If unchecked, it may lead to a reduction in the organization’s output (Morsi and Key 23). There is a loss of time and resources in the increased number of intermediaries.

Hence, organizations should target to reduce the number of intermediaries. ADNOC is successful in its supply chain management because all organizations within this supply chain are affiliates or part of the larger organization.

Automation is another part of the supply chain that contributes to the evident success in organizations. Organizations that apply technology in their supply chain often end up being successful (Abdelal 31). ADNOC has extensively applied technology in its supply chain, with transportation of petroleum products and crude oil being carried out through advanced methods.

The company has extensive use of modernized fleets in the transportation of its products to their markets, especially in the shipping of oil to the international markets. The management of any supply chain requires a dedicated workforce and the utilization of all cadres of employees. These measures are practiced in the ADNOC’s supply chain management.

The other aspect of the supply chain management in relation to ADNOC is the cost of managing this supply chain. ADNOC is one of the global organizations that invest significantly in their supply chain management.

According to Mentzer, supply chain management should be an integral part of any organization, with adequate funding to ensure a swift flow of goods and services from suppliers to the end consumers (72). ADNOC has a board in place to manage the supply chain. This committee is charged with the investment into the right measures for the maintenance of an intact supply chain.

The global market for ADNOC’s products has a number of competitors, with branches in different parts of the world including Abu Dhabi and the UAE. To ensure that the company is competitive enough, the supply chain management practices include control of pricing and amount of the produced petroleum products. ADNOC is an example of an organization that has effective supply chain management.

Employees in the organization and its affiliate companies are trained on how to manage the supply chain whilst maintaining a constant flow of products produced by this organization. A fully-fledged department is charged with the management of ADNOC’s supply chain. The manager does reporting to the board of the organization.

Conclusion

In conclusion, the success of any organization is determined by factors such as the management of human resource, supply chain, and the quality of their output. The paper has confirmed that these areas are crucial in terms of determining whether an organization achieves its goals and objectives. This paper has also looked at one of the most successful companies in the UAE and on the global front.

It has highlighted how it has managed its human resource, quality, and supply chain. ADNOC is one of the most successful energy companies in the world. It has recorded profits in the range of billions of dollars each year. The company has efficient quality control methods in use. Examples include the use of technology and recruitment of experienced and highly trained employees.

The human resource management at ADNOC is run by the human resource department, which ensures that the right employees are selected for the right work. The supply chain is run in a fragmented manner, with a variety of organizations being involved in different parts of the chain. The organization has effective management practices in all areas as discussed in the paper.

Works Cited

Abdelal, Rawi. “Sovereign Wealth In Abu Dhabi.” Geopolitics 14.2(2009): 317-327. Print.

Ayish, Muhammad. “Virtual Public Relations In The United Arab Emirates: A Case Study Of 20 UAE Organizations’ Use Of The Internet.” Public Relations Review 31.3(2005): 381-388. Print.

Ermida, Graça. “Analysis: Strategic Decisions Of International Oil Companies: Arctic Versus Other Regions.” Energy Strategy Reviews 2.Sustainable Energy System Changes 1.1(2014): 265-272. Print.

Gitlow, Howard. Quality management. Boston: McGraw-Hill/Irwin, 2005. Print.

Mentzer, John. Supply chain management. Thousand Oaks, Calif.: Sage Publications, 2001. Print.

Mezher, Toufic, Gihan Dawelbait, and Zeina Abbas. “Renewable Energy Policy Options For Abu Dhabi: Drivers And Barriers.” Energy Policy 42.2(2012): 315-328. Print.

Morsi, Mozzart, and Antonio Key. “Rehabilitation Of Gas Pipelines: The Experience Of ADNOC In Abu Dhabi.” Corros. Prev. Control 1.1(1994): 5. Print.

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