Analysis of Borouge Company - Essay Example

Borouge company report Company Background Borouge Company is a joint venture company of Abu Dhabi National Oil Company and Australia’s Borealis. The company manufactures Polyolefin based products. Polyolefin products have a huge market. The global demand for energy production shows that oil is the major energy source for the world. Global energy consumption (Source: Rembrandt, 2012) But the problem with oil or gas production is that it has to be transmitted over long distance through pipe lines. Traditionally steel pipes have been used to transmit the oils or gas. However the problem with steel pipe is that they are very prone to corrosion which causes huge losses to the industry. The losses incurred are to the tune of US$ 57.96 billion. Boro0gue through their long years of innovations have been able to design coatings in order to protect these pipes from corrosion. Borogue Company is global leader in manufacturing these pipes required. Borogue designs packaging materials, pipes, automotive components, and Energy and communication cables. It is the market leader in automotive components and Energy and communication cables market. Vision- Borogue Company’s vision is to shape future with plastics. Mission- the Company’s mission statement states that the company wants to create value through innovation. Borogue Company wants to be the market leader in global supply and demand of polyethylene products. After analyzing the global market share of demand and supply of polyethylene products one finds that the supply of polyethylene product is much higher in America market than the demand that exist there. However there is much scope for polyethylene products in Asia. Figure 1Global market for polyethylene (Source: Perniceni and Asch, 2014) Borogue Company is increasing its production capacity to 2 million MTA by forming a new company after going in for expansion. The company wants to be a market leader in polyethylene market. The company wants to be the market leader through innovation. The strategic objectives of the company are to increase the market share through innovation and increasing production capacity. They want to go in for expansion. SWOT analysis Strength Good market share in Europe, Middle East, Asia and Africa Good innovation background will be helpful in developing new cutting edge products Production have been enhanced after recent expansion Backed by innovation and market share of Borealis and raw material from ADNOC Weakness Weak presence in America Lack of optimal use of resources Opportunity Opportunity to expand in different market Opportunity to further increase production Opportunity to use the innovation to build and develop more lines of production Threat The ethylene production in America has increased and is thus poised to become the leading manufacturer of polyethylene products. Other polymer products may dominate the market share and pose to be a threat for Borogue. Entry of new companies Rationale for adopting TQM TQM or total quality management is made up of organization wide efforts to improve quality. Before the advent of TQM quality was treated as an isolated issue. But TQM tries to implement quality in every respect so as to improve the quality of goods and services provided to the customers. The main objective of TQM is to provide customers with high quality goods and services and reducing cost by eliminating or reducing waste at the same time. TQM helps supplier provide products which are marked by quality, it gives its customers high quality products thus satisfying them. At the same time it helps in maximizing profit by reducing cost due to wastage. The company using and implementing TQM will thus have a distinctive advantage over other competitors who do not use or implement TQM in their company. The ability to reduce cost gives the company a great strategic and competitive advantage over its competitors. The three areas where implementing TQM can reduce costs are procurement of goods, making products and manufacturing costs reduction. For example wall mart has been able to beat its competitors by implementing TQM in procurement. They have been able to significantly lower their procurement costs and have been able to use them in their strategic advantage. TQM also helps suppliers provide quality products and workers in providing and delivering quality service to the customers. By implementing TQM Borough company can strive to improve their quality of products that they provide to the customers. Research shows that in the current global environment it is very hard to achieve and sustain competitive advantage over a long period of time (Economou and Chatzikonstantinou, 2009). So Borough Company by implementing continuous incremental improvements through application of TQM can hope to satisfy its customers and increase its market share and profit margins. For the successful implementation of TQM three factors are very essential. Participative management such that everybody takes part in decision making, continuous improvement, and using teams to do work. In recent years however TQM has made way for ISO 9000 and Six Sigma. ISO 9000 requires that the company should manufacture and sell only those products which conform to the standards as decided by written or implied contract with the customer and other government needs and protocols. Requirements for improving quality There is a deep relationship between strategic management and TQM. Strategic management aims at utilizing the resources that the company has in the most efficient ways so that it produces value to the customers. TQM on the other hand aims at improving quality in all the processes of the organization so that it provides value to the customers. Thus both are organization inclusive and both require a dedicated a committed effort by the entire organization. However Strategic planning and strategic management requires that the change should flow in a tom down approach and the TQM requires just reverse of that. For adopting TQM the workers of the company has to be divided into groups or teams and focusing on continuous improvements. TQM starts with procuring quality products from suppliers and then using quality producing and manufacturing techniques and quality workforce to deliver quality service to the customers. Strategic management on the other hand starts with developing an overall strategy aimed at providing value to the customers. The system is top down as the top level people of the organization first develop a strategy which in turn is implemented by the lower level. Leadership plays a key role in the implementation of any quality program or any other improvement programs to occur in an organization. Without the positive intent and efforts by the leadership no improvement programs can see any success. Leaders should be proactive, supportive and welcoming to the change and expert in facilitating change. The culture of the organization should be such that it facilitates and welcomes change. Because in the process of implementing either TQM or strategic management or ISO 9001 for that matter requires implementing change and the organization culture should be such that it welcomes this change. For TQM to be successful role of ethics cannot be underestimated. As the quality of corporate ethics the effectiveness of TQM decreases with the decrease in quality of ethics followed by the company. The following of ethics create an atmosphere of positivity in the organization. This environment of positivity is a requisite requirement for the employees to work with full motivation and that leads to better quality. Borough Company implements several strategies to achieve employee motivation. The company encourages diversity in the workplace; the company encourages new ideas to come from employees. The company encourages relationship building with the customers and between the employees. Borough Company’s main focus is to build relationship with the customers. In the highly competitive world of polymers where new technologies emerge almost on a daily basis, it is very important for the company to access its customers’ needs in advance and develop products and qualities in conformation to their needs. In this case using TQM and ISO 9001 tools becomes useful to provide customers with quality products at lower cost. Implementation plan with justification Services Borough Company commits to quality in order to build successful business for achieving maximum benefits for all categories of stake holders. By all categories of stake holders here employees, customers, shareholders, society and environment at large is implied. The company by means of continuous improvement the company is reinforcing its commitment towards operational and commercial excellence and developing the workforce to their full potential. In order to achieve these objectives the company Aspiring to achieve total customer satisfaction by providing customers with highest quality of products Striving to continually improve their processes and behaviors Maintaining a quality management system in lines of global standard and developing the employees of the company through hr practices Providing resources to achieve assured goal To improve quality and implementing TQM the company should focus on continuous improvement. The company already focuses on continuous quality improvements in order to provide its customers with high quality products. The company should start from procurement stage and procure high quality products. The quality should also be implemented in manufacturing processes and quality should be reflected in the workers so that they provide the customers satisfaction in their goods that they receive. References Economou ,V. P. and Chatzikonstantinou P. G. (2009). Gaining Company’s Sustained Competitive Advantage, Is Really a Necessary Precondition for Improved Organizational Performance? The Case of TQM. European Research Studies. XII(3).pp.83-100. Kantardjieva, M. (2015). The Relationship between Total Quality Management (TQM) and Strategic Management. Journal of Economics, Business and Management.3(5).pp.537-541. Perniceni, A. and Asch, W. V. (2014). Shale Gas: Threat or Opportunity for the GCC?. Retrieved from: http://www.atkearney.com/oil-gas/featured-article/-/asset_publisher/S5UkO0zy0vnu/content/shale-gas-threat-or-opportunity-for-the-gcc-/10192?_101_INSTANCE_S5UkO0zy0vnu_redirect=%2Foil-gas Rembrandt. (2012). Human Energy Consumption Moves Beyond 500 Exajoules. Retrieved from: http://www.businessinsider.com.au/human-energy-consumption-moves-beyond-500-exajoules-2012-2. Read More