Improvement of ADNOC

Gathering Important Data from ADNOC

The paper presents the analysis in accordance with data collected from one of the branch manager of ADNOC. The branch manager works at the overseer in a branch of the ADNOC in Abu Dhabi, which is known as GASCO. The abbreviation stands for Abu Dhabi Gas Industries Limited. Its major operation includes processing and distribution of gas products. Even though he works in the distribution department, he has extensive knowledge of the root company, ADNOC. His name is Yousef bin Zayed. Therefore, any statistical and factual information is based on data that was collected from an interview with Zayed, as he was willing to share any evidence that was deemed important. In addition, various books and academic journal were used to compile the final report.

Management of Projects by the Abu Dhabi National Oil Company (ADNOC)

Abu Dhabi National Oil Company (ADNOC) was founded in the year 1971. The company specializes in operations in different areas of gas and oil industry. It has progressively expanded its tasks to establish more companies and subsidiaries in different parts of UAE. Moreover, the company specializes in creating an all-inclusive industry in various gas and oil fields. They include production, exploration, support services, gas processing, petrochemical, oil refinery, refined products, distribution processes, and maritime transportation. Proper coordination of the aforementioned faculties is controlled by the Supreme Petroleum Council (SPC), which is chaired by the UAE’s president and the Ruler of the Republic of Abu Dhabi. The chairman, KhalifaBin Zayed Al-Nahyan superintends proper implementation of various petroleum policies that are formulated by ADNOC.

The proper and effective management contributed to ADNOC expansion of its businesses plans and activities, thus, stabilizing its position in the market and gaining competitive advantage compared to its rivals. As a result, the company has managed to emerge among the leading organizations in the oil and gas industry. ADNOC efforts in the exploration and production has enabled it devise appropriate management strategies. Currently, the company has carried out expansion of its business activities, therefore, increasing its competitiveness in the market. Consequently, ADNOC ventured into more business making opportunities. They include transportation, distribution, marketing, and shipping.

On the other hand, the company has embarked on improving the management of its reservoir. ADNOC has pumped in more resources towards discovering new sources in addition to optimizing the process of recovering hydrocarbons. Furthermore, ADNOC has ventured in sustainable development programs. It launched an initiative referred to as ADNOC Sustainability Performance Initiative. The project has helped the company have a counterbalance between exploitation of natural resources and meeting societal needs.

In addition, ADNOC has given top priority to the education. The company has established various educational institutions in order to develop and train more human capital to join the energy production sector. One of such school is the ADNOC Technical Institute and The Glenelg School of Abu Dhabi.

Besides, the company has over ten subsidiary businesses. The establishments are distributed in various fields, which include gas, oil, gas services and transport, crude oil and the petrochemical sector. Briefly, the industries include ADMA-OPCO, ADCO, GASCO, ADGAS, TAKREER, NDC, IRSHAD, BOROUGE, ADNOC, ESNAAD, ADNOD Distributors, ADNATCO-NGSCO, as well as Al Hosn and Elixier Gas.

The indulgence of the company in a variety of business operations indicates that managers should have the capability of controlling the project (Berkun, 2008). The company depicts a very good scenario of project management strategy. The above mentioned activities and strategies shows that ADNOC has proper planning, scheduling, monitoring, as well as risk management. The last term refers to the capability of a leader to demonstrate appropriate management skills in being able to exude efficient management of cost and time.

For instance, the company has created an effective management program. ADNOC has created various project divisions. One of the latest ones is referred to as the ADNOC’s Gas Processing Directorate. Therefore, the manager in charge of the department oversees development of a sour gas. In fact, the development of gas is deemed a prominent priority that is worth evaluating. However, the company experiences challenges with regards to proper management of the project. In addition, the company had to design, as well as carry out proper implementation of the project. Moreover, there are other parts of the project that require to be done in accordance with the law. Creation of the department was going to enhance efficient reduction of harmful gases such as carbon dioxide. The manager has been able to enact better selection of production materials in order to reduce the probability of corrosion of activities. The above mentioned factors ensure that there is a strong and robust control of the product quality. Also, careful time bound observation makes the management stronger.

It is worth noting that ADNOC has carried out an effective expansion of business projects with an aim of increasing its competitive advantage. Some of the sectors, in which the company has invested more technology, include the distribution, marketing, shipping, and transportation. Use of the latest technology to improve efficiency and performance of the sector in the long run has been effective. Devising of the strategies reduces the slack time of different projects. Most importantly, they reduce the overall cost of production. As leading oil company in the world, ADNOC has to develop better management strategies that will enhance quality of its production. For instance, the company has laid down a plan that would assist in increasing production capacity. It has already invested over US$25 billion towards the plan. Investing large funds in the sector means promising returns. As a result of reduction in production cost, the company will enjoy economies of scale. Finally, the slack time will be reduced, meaning that ADNOC will have the capability of producing Just-in-Time products.

Designing of ADNOC’s Products

ADNOC is aware of the demand for oil and its byproducts, which is on the rise. On the other hand, people and organizations are continuing to demand for clean products that are environmentally friendly. The company has come up with effective production methods and policies that enhance manufacturing of high quality products. For instance, ADNOC announced that it had made an achievement of 99% in terms of recovering Sulphur from most of its products. It uses a treatment facility OGDI to recuperate Sulphur from the oil products. Sulphur is as a harmful byproduct of petroleum, which is released in the form of Sulphur dioxide with the consumption of oil in various machinery plants and vehicles. The byproduct is released to atmosphere leading to harmful effects such as acidic rainfall (Berkun, 2008). Moreover, people are becoming more concerned with the exacerbating condition of the climate change. Therefore, the company is switching to products that are deemed environmentally friendly. Therefore, ADNOC has tried to improve the quality of its products by recovering almost 100% of the Sulphur from natural crude oil. Besides, the action was to be deemed as the improvement in social corporate responsibilities. One of the principles of corporate social responsibilities relates to the capability of a company to take care of the environment. Consumers are becoming more attentive to companies that observe such environmental principles. As a result, demand for sustainable products is on the surge.

Having realized that, ADNOC has embarked on a plan of manufacturing its oil products in line with the recommended rules. It is designing the products in order to fit in modern concept of commodities. Identifying itself as a company that uses social ways to sustainable products, ADNOC will stand a chance of increasing its market share in the petroleum production industry.

Products go through a market lifecycle before they die. They have to pass through four different faces of life, which are the introduction phase, growth, maturity, and lastly the declining phase (Poirier, 2007). During the introduction phase, consumers are completely not aware of the product (Poirier, 2007). However, the product must possess superior quality than its predecessors in order to create an impressive picture to the target market. At the growth phase, the consumers have started becoming aware of the product (Poirier, 2007). Nevertheless, a large number of customers may not have yet appreciated it or they are not aware of its application. As a response to the stage, ADNOC’s management team must be fully aware that petroleum products that have unrecovered Sulphur are on the decline. The decline is a result of an intensive campaign against products that are deemed to be a threat to the environment. Petroleum substances containing Sulphur produce enormous volumes of harmful gases (Poirier, 2007). As a result, a big percentage of motorists and processing plants have switched to Sulphur-free products. Having noticed the trend, ADNOC engaged in a long-term trend of purifying its products from Sulphur. The company treats over 1000 million cubic feet of oil in a day; 35,000 up to 55,000 barrel units of oil are condensed on a daily basis. The next process involved degassing the petroleum products of Sulphur.

The recent declaration by the company’s management team that ADNOC intends to manufacture environmentally friendly products has been considered a positive move. The project intends to position the company as one embracing the social corporate responsibility. Socially and environmentally friendly products are now on the growth stage, and the project is a part of the wide plan to safe guarding the future success. Any serious company cannot risk ignoring the phenomenon. ADNOC project manager seems determined realigning with the current market trends. For instance, its decision to create mechanism that will help reduce amount of carbon emissions in the air is part of creating the good image in the market. Consequently, the company secures its future position when population chooses less polluting petroleum products. The whole move behind the idea is to creating a product design that will help the company retain or even increase its market share in the eventuality when consumers switch to less polluting products.

ADNOC’S Strategic Management of the Quality of Its Petroleum Products

ADNOC has depicted an indomitable spirit in terms of improving quality of its service delivery. As noted earlier, the company has been able to create several departments or sub-sectors in order to improve its service delivery. Moreover, separate companies have been assigned to cater for the needs ADNOC’s consumers in different parts of the world such as North America. ADNOC is fully aware that consumers of petroleum products in different regions of the world have various tastes and preference. For instance, consumers in Europe and North America are more sensitive to corporate social responsibility principles than in East and Central Africa. Therefore, the company has heightened its agenda of engaging in green energy production in order to increase the market share. The company has increased share of green petroleum products in relevant regions in order to tap large market. The wider plan of improving quality of its services and products is developed. Improvement of quality of products calls for the use of the increased rate of productivity (Stoll, 2009). Moreover, better customer response, as well as flexible pricing of products is another factor that helps increase volume of sales (Stoll, 2009). ADNOC seems to have mastered various strategies that can improve its image and reputation as part of the wide plan of delivering quality services to its consumers. First, the management team company declared that ADNOC intends going green as part of embracing its responsibility of conserving the environment. Moreover, participation in other social activities is part of improving the reputation.

Natural variations lead to common causes of problems. The processes affect the production, eventually affecting the level of variation. The situation leads to the final shift in the whole process of production. The framework has occurred in the ADNOC where the natural phenomenon has led to restructuring as well as change in its production processes. The society has been increasingly concerned with the rate of environment degradation. There have been continuous claims that petroleum products constitute some of the major contributors towards environmental pollution (Kenneth, 2012). Therefore, ADNOC management felt that the petroleum company was equally to be blamed for the menace. As a result, it has introduced better ways that could enhance environmental conservation.

Finally, strategic management with regard to improving quality of its service delivery is crucial. The products had to be transformed in a manner that will address the alarming issues. For instance, elimination of Sulphur in order to have greener petroleum products was one of the strategies that the company used in order to address the social concern. By responding to the demand and expectation of environmentalists, ADNOC improved the quality of its products and ensured that they are in line with the expected standards of 21^st century. There is a continued creation of awareness that calls for companies to engage in environment friendly production. ADNOC has restructured all of its production processes and products with an aim of ensuring conformation to the abovementioned environment standards.

The Design Processes of ADNOC

Design of various processes of production is another important factor that determines the satisfaction of a customer. The product must be designed in a manner that will ensure capability of creating attributes that will meet requirements of a customer (Ken, 2012). Moreover, design of the product should mitigate the managerial constraints, such as costs (Ken, 2012). Strategy entails four processes, which include the process strategy, strategic comparison, processes technologies, and process analysis (Ken, 2012). ADNOC has a well-organized production system that enhances the process design efficiency. The management has introduced various strategic options that has enabled it reduce the total cost of production. For instance, the company was able to save up to 20% of its production time by engaging the latest technology. Its customers use smart cards instead of the traditional OLTP. Devising such time saving measures helped to save on cost in a significant manner.

Strategic Management of Supply Chain of ADNOC

ADNOC has a well-organized supply chain, which acts as one of its major advantages. In fact, the company is one of the major distributors in the Middle East and in Arab Gulf. Moreover, the corporation is also one of the leaders in the petroleum industry in innovative ideas regarding to the improvement of its product designs. Effective supply chains have enabled the company gain support on the ground. Currently, it has over 3, 000 daily users of its products. On the other hand, over 250 transactions worth of millions US dollars are completed on an annual basis. Development of the effective supply chain has been deemed requisite due to the increase in demand of petroleum products around the world. The domestic distribution is increasing rapidly, currently estimated to be at 10% up to 15% growth on yearly. Additionally, the current transactions are expected to double up to 500 million. The success in distribution is attributed to the company’s capability of forming a good supply chain. For over 20 years, ADNOC has continued investing in effective supply chain and distribution in order to enhance and preserve its global path of sustainable growth. In short, the company believes in the general principles of supply chain management, which calls for coordination of every activity of distribution network (Ken, 2012). The company must exploit the raw materials in a more sustainable manner (Ken, 2012). The process should not end at the deployment, but the supply chain management should continue towards satisfying the end user, the customer (Stoll, 2009). Some of the major participants that perceive important include the suppliers of the raw materials, manufacturers, services providers, wholesalers, distributors, retailer, as well as the final consumers (Stoll, 2009). ADNOC has continued introducing more specific strategies that improve the supply chain. The tactics include engaging in innovative ideas, decreasing logistics time, and acquiring close locations that would reduce its total production cost.

Management of ADNOC Inventory

The company has embraced a good practice of managing its inventories. As one of largest companies in the petroleum and oil refinery industry, it has a lot of assets to manage in a proper and effective manner in order to enhance its performance. One of the best strategies is to invest most of its liquidity assets. The company has not only invested in the petroleum industry, but also in other sectors such as transport. Therefore, over 60% of its assets are capital investment (Kenneth, 2012). The venture businesses located all over the world with an aim of spreading the risk.. Moreover, building educational facilities is a part of boosting its effort to participate in social corporate responsibilities. As a result of participating in community development, the company boosts its prospective growth.

On the other hand, managers must balance the degree of customer satisfaction and the rate of inventory investment (Kenneth, 2012). ADNOC has a policy to hold sufficient inventory to avoid shortages. One of advantages of inventory management is the security from inflation rate due to the current global economic crisis.

Proposal for Solution

In order for ADNOC to realize even more growth in terms of the prospective sales globally, it needs to embrace proper management skills on full scale. The ideas of engaging in social corporate responsibilities are a good step to improve reputation. However, the company needs to continue investing in the management practice and hire experts. Firstly, ADNOC should ensure that all its products are in line with the current taste and preference. Secondly, it should segregate its products based on regional preference to respond to inventory and improve supply chain. As a multinational company, it should extend its noble idea of participating in community development such building schools and health amenities in country of its presence and potential locations. Lastly, the company should focus on improving its product brand by securing customer satisfaction. Consumers’ tastes and preferences are dynamic, so should be the products.