Strategic Analysis A Structured Approach Essay

Question:

Discuss About The Strategic Analysis And Choice A Structured Approach?

Answer:

Introduction

The organization that is taken for analysis is a maintenance contractor in the Oil and Gas industry called Altrad. They have a specialization in protective coatings (paint), scaffolding, insulation and fireproofing. They have been chosen due to their distinctiveness of operating on Barrow Island which causes unique processes regarding supply chains, quality control, and training (Altrad, 2018). Altrad has also been chosen due to its lack of training and lack of cohesiveness between departments (relationships).

Altrad aims to be a leader in the maintenance sector of the oil and gas industry. The goal is to achieve a high quality of work, efficiently and safety at a reasonable cost.

The altrads target market is the 11 gas plants in Australia as well as the offshore rigs that compliment these plants. They aim to the employee over 1500 people from 4 different chore trades. If successful then they could potentially branch out into the mining industry throughout the Pilbara in the North West, Western Australia.

Strategy

To become an industry leader Altrad has identified 5 key elements to achieve its mission

  • To educate and train its workforce
  • Improve its communication and adhesiveness between branches
  • Cost-effective purchasing and delivery methods
  • Retain its workforce
  • To provide new products to the industry that will significantly increase their quality and give them a competitive advantage.

The 3 areas of focus for the next 12 months for Altrad are;

  • To give education to workers in the industry and to improve quality and reduce re-work and costs.
  • Improve supply processes to ensure there are sufficient products and equipment on site always.
  • Gain knowledge and experience in new products that have a potential to create new work opportunities throughout the oil and gas industry

Business process identification

Business processes involve several different departments and rolls that create one overall product or service. The overall process fixates on each specified roll in the process and what inputs and outputs are required, as well as supplies and values, to recognize strengths and weaknesses in the organization. Business processes provide a clear understanding of the workflow and structures involved in the operations of a business.

Education

The education process for Altrad occurs before the employee gets to site. As Barrow Island is a class a nature reserve, the organization educates its employees on what is and isn't accepted in the accommodation camp as well as the gas plant. This is to protect the class A nature reserve and to adhere to the clients (Chevron) demands of protecting the flora and fauna of the island. These inductions are compulsory for all employees as the client won't allow employees on site without the strict education.

The process has cross-functional and crosses relationship processes. As well as educating the employees on site requirements they are also educated on safety issues. The Gorgon project has strict safety rules and regulations which must be adhered to. Altrad education process involves courses in working at heights and confined space entry, however, there is a serious lack of education into the requirements of the actual job. These inductions are generic, and the education process needs to involve specific trades also. The trade education will be the focus of this report.

Application of protective coating

The application of protective coatings process is a core function of this organization process. It is the primary financial for protecting structural steel, pipes and water tanks. The protective coatings department has cross relationships with the scaffolding and insulation department. They work with the support of human resources, purchasing/stores, and trades assistants.

Applying protective coating has strict quality control standards that must be adhered to. The applicator must apply the protective coating to the steel within site (Barrow island, Gorgon project) standards and within strict time frames (Yang, 2008). This allows the other processes such as scaffolding and insulation to work around the protective coating applications and flow with coherency.

Purchasing/ Stores

The store's department which purchases protective coatings, personal protective equipment and supplies have a combination of standard purchasing and individual purchasing. The protective coating has been negotiated with a contractor to supply paint at a discounted price. The challenge for stores is to find time and space on the supply ships that deliver to Barrow Island can be challenging and expensive (Bahadori, 2015). The process involves having all deliveries being checked by quarantine for flora, fauna, and defects before being loaded into the supply ships that only travel to the island bi-weekly. Stores purchase products for all departments, however, this report will focus on the protective coatings department.

After analysing the relationship maps it is clear to disconnect and interfaces in the protective coating process. The inputs and outputs have recognized the inefficiencies, communication breakdowns, and departmental rivalries.

The protective coating department does not have a disconnection with the purchasing/stores department due to the lack of education and understanding nor do they operate with standard work procedures. The store's department runs out of protective coatings and due to the uniqueness of being on an island, it takes time to receive the paint. This causes a backlog of unfinished work fronts and deadlines being missed. Ordering the minimum amount of product increases transportation bills and affects the painter's ability to complete jobs on time and to standard.

The other disconnect is between the protective coatings department and human resources. This is the typical white collar, blue collar differences with human resources, unique work practices and rules regarding annual leave, public holidays and communication. This has caused an ‘us vs them' attitude which denigrates the coatings department and causes poor morale, work quality and retention issues. It also affects the Altrad brand amongst the workforce in the industry. Being forced to take five days annual leave at a time as opposed to one or two, or not being paid for a day's work because the employee hasn't signed off at the end of the day add an unnecessary stress to an already stressed workforce.

The communication breakdown comes from human resources only communicating with blue collar, protective coating applicators, via email. Tradesman doesn't check their emails regularly and employees have missed travel arrangements (flights) due to human resources stubbornness to only email employees to notify them of roster or flight changes (Newman & Ober, 2012). This suggests that human resources personnel have personal agendas and relationships with owners

Tightness and Dependence

The reliance on related departments within the process and how they depend on each other is critical in the protective coatings process. The store's department is dependent on its suppliers and without the protective coatings being supplied then the job won't go ahead. Every part of the process is vital including manufacturing the product, transporting it to the island, paying the accounts and storing the correct amount of paint (Chopra, Meindi & Kalra, 2016).

Bottlenecks

A bottleneck occurs when the capacity is equal or less than the demand requested. It slows production and output. Altrad has the potential to bottleneck at the store's stage of the process if they do not order enough paint required for the job. If it happens then island runs out of paint and it create the entire protective coatings process bottlenecks.

Service blueprinting

Service blueprinting has a connection with the line of visibility. The line of visibility is what the customer witnesses and what they don't. When a customer is present then the focus should be on providing a good service.

The client (Chevron), rarely witness Altrad applying the protective coatings. However, they do inspect and scrutinize the quality of the work. No job gets completed without chevron inspecting the job and approving the standard of application (Frauendorf, 2007). Although blueprinting suggests that efficiency should be an Altrads priority as most of its work is done without the customer watching, in this case, providing a good service is more important

Process measurement

Without a form of measurement then a process is impossible to analyze. (A) Measure performance through its

Discussion

After analysing the protective coatings process several issues have arisen that could impact both the overall process as well as the financial viability of the business. These include quality control, education, retention, communication, and efficiency.

The key areas that need to be addressed are retention and education. Due to the disconnect between human resources and the protective coating struggle to retain quality employees. The ‘us vs them' competition between these two departments leads to a high turnover and poor morale. Quality employees feel they are mistreated and unappreciated and constantly leave to work elsewhere. Poor moral leads to poor work quality, which flows on to deadlines not being met and budgets not being followed (Frauendorf, 2007). This could lead to unhappy clients and the potential for the client (chevron) looking for other contractors to fill the void.

Due to the high turnover, the ( A ) brand is poor within the industry and therefore they have to settle for unqualified or inexperienced workers. The connection is not between education and protective coatings are clear through its output of the final product. With HR being unaccountable to anyone, the process, personnel, and quality should be discussed and reviewed (Yin, 2016). If HR cannot hire the most experienced and knowledgeable employees, (A ) should consider adding an interface with education to their process.

Conclusion

To run a successful operation and business then all departments and sub-departments need to be aware of the overall process. All areas of the business need to work coherently and effectively to provide a quality and efficient service. Competing with other departments and working selfishly can be toxic and detrimental to an organization. This can ultimately lead to failure through poor branding and loss of contracts.

Hiring the right employees and retaining them to successfully run a job on time and on the budget is key to maintaining a good relationship with your clients. Human resources are responsible for the hiring of employees and implementing rules and conditions. For this reason, then a review of the human resource department is essential to identify why unnecessary rules and conditions are being forced upon the workforce leading to a high turnover. This department has a serious problem of the workforce.

The other disconnect happens between protective coating and stores. There is a communication breakdown between these two departments. Due to long waits between ordering and receiving the product a review of the communication process is necessary to rectify this issue.

Develop a trade specific education program- Due to (A) poor brand within the industry then there is a need to train and educate from within. An increase in knowledge from the workforce will improve standards and outputs. By increasing quality outputs, the workforce's morale increases as a bi-product of doing a good job. Good moral flows on to better retention.

Remove unnecessary work practices- An improved relationship between human resources and the workforce is essential. There is no apparent reason to force employees to take 5 days annual leave at a time, not pay them for public holidays, not paying them for not signing off at the end of a day's work or to threaten them with their jobs for having a sick day. This is just an authoritarian way of operating and is completely outlined in this day and age (Chopra, Meindi & Kalra, 2016). Removing these rules would eliminate arguments and resentment between departments.

Implement a reward system for work quality- a reward system should be for work crews and not individuals. By doing this it would help promote teamwork, increase morale and create a bond between the workforces that would help with retention. Team awards should be handed out so there is no spitefulness and bitterness towards individuals that could create a rift amongst workers (Bahadori, 2015). Awards such as dinner at a restaurant for the crew, a fishing charter or gift cards will be effective and show the employee that the business cares about them.

References

Altrad. (2018). About Us. Retrieved 3 February 2018 from

Bahadori, A. (2015). Essentials of Coating, Painting, and Lining for the Oil, Gas and Petrochemical Industries. Gulf Professional Publishing.

Chopra, S., Meindi, P., & Kalra, D.V. (2016). Supply Chain Management. Pearson Education.

Frauendorf, J. (2007). Customer Processes in Business-to-Business Service Transactions. Springer Science & Business Media.

Friedmann, S. (2009). The Complete Idiot's Guide to Target Marketing. Penguin.

Newman, & Ober, S. (2012). Business Communication: In Person, In Print, Online. Cengage Learning.

Warner, A.G. (2010). Strategic Analysis and Choice: A Structured Approach. Business Expert Press.

Yang, L. (2008). Techniques for Corrosion Monitoring. Elsevier.

Yin, R. (2016). Theory and Methods of Metallurgical Process Integration. Elsevier.

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