OPERATIONS MANAGEMENT

SABIC Operation Management

Table of Contents

Introduction3

Purpose of the Case Study3

Company Background4

The Problems6

Problem 1- Inventory Management7

Identification of the Problem7

Literature Review8

Recommendations10

Maintaining Reserve10

Function of Reserves11

Maintaining Cost of Inventories12

Problem 2- Supply Chain Management13

Identification of the Problem13

Literature Review14

Recommendations16

Problem 3- Risk Management17

Problem Identification17

Literature Review17

Recommendations19

Problem 4- Lean Management20

Problem Identification20

Literature Review20

Recommendations22

The Quality Needed for Operations Manager in the Future23

Conclusion and Recommendations23

References25

SABIC Operation Management

Introduction

Operations management relates to the design and management of services, supply chains and products, and their supply (Shim 1995, p. 289). The focus of operations management is to make efficient delivery of goods and services to clients possible through development, acquisition and utilizations of various resources. Operations management takes place at all levels in the organization. For instance, it can take place at the tactical, operations and even strategic level. Many companies around the globe are focusing on employing operations management as a tool to provide their valued customers with better products and services, so that they can get their customer lifetime value. There are several issues related to the field of operations management. Operations management is an attempt to improve plant management and its layout, better control of production scheduling, rapid inventory management, expedition of production processes and better equipment maintenance (Carpinetti 2003, p. 542). On a broad scale, we can say that the goal of operations management is to achieve effectiveness and efficiency of different operations of the organization. The paper is based on the case study of Saudi Basic Industries Corporation (SABIC) which is a petrochemical company that operates in the non-oil industrial sector within Saudi Arabia and worldwide. The paper identifies some of the operational management problems and recommendations to avoid these issues.

Purpose of the Case Study

The case study for this assessment will provide a detailed account of SABIC'S aims and objectives, theoretical concepts to be used to analyze the organization, evaluation of the organization using the concepts identified, lessons learnt and recommendations. The case study aims to identify the significant operation management issues. The new business model of SABIC is all about the global expansion and operations and for this purpose the company needs to overview the areas where it wants operational efficiency.

Company Background

Saudi Basic Industries Corporation (SABIC) is a petrochemical company that operates in the non-oil industrial sector within Saudi Arabia and worldwide. The company operates in several countries across the world and has its operations in the Middle East, Asia, Europe, and the Americas. The company operates through four segments: chemicals; metals; fertilizers; and corporate. The chemicals segment of the company operates through four business units: chemicals, polymers, innovative plastics, and performance chemicals. Products of the chemicals business unit are produced from hydrocarbon feedstocks including methane, ethane, propane, butane, and light naphtha. These chemicals constitute the basic building blocks of a range of other chemicals, plastics and advanced materials. In FY2010, the chemicals business unit achieved production of 42.3 million metric tons. The chemicals business unit's products are divided into four groups, namely, olefins and gases, aromatics and chlor-alkali, oxygenates, and glycols (Carpinetti 2003, ...