Logistic and Operation Management

Background As an Operations Manager for an international organisation of your choice, you are tasked with aligning and assessing their Planning and Control activities with their Performance Objectives.
1. Evaluate the organisation’s Planning and Control activities, taking into context the below: 
• Long-Term Planning and Control 
• Medium-Term Planning and Control
 • Short-Term Planning and Control 
2. Analyse and provide the organisation’s planning and control activities stages with the use of a diagram detailing the below.
 • Sequencing 
• Loading 
• Scheduling 
• Monitoring and Control
3.Discuss how your organisations planning and control activities align with the organisation’s Performance Objectives and provide recommendations.

Executive Summary

British Petroleum (BP) is an international Oil and Gas company that has one of the world’s largest operations because of its earnings in terms of revenue. The purpose of this report is to align and assess the Planning and Control activities of BP with their Performance Objectives as an operations manager. The evaluation of the organization's long-term, medium-term and short-term plans has been done, and all the plans are well-formulated and well-developed. The company also monitors and control every part of its loading, scheduling and sequencing activity and intervenes immediately when there is any deviation in the plans or the re-planning is required.  The planning and control activities are aligned to the performance objectives of the company. 

Introduction

British Petroleum (BP) is an international Oil and Gas company that has one of the world's largest operations because of its earnings in terms of revenue. The headquarters of the company is in the UK. It provides its customers with the fuel for transportation, heat and light energy sources, retail services and also the petrochemical products for their daily items. The services stations of this company are located all over the world, and almost eight one thousand people in the world are working with it. This shows that the operations of the company are spread internationally with 16 refineries in operation and production of 2.3 million barrels per day (Petroleum, 2013). All the business of the company is run on the success of its operations that are planned and controlled in a systematic way by the operations managers of the company. 
The purpose of this report is to align and assess the Planning and Control activities of BP with their Performance Objectives as an operations manager. For this, the organization’s planning and control activities will be evaluated, then the organization's planning and control activities stages will be analyzed, and finally, the alignment between organizations planning and control activities and the organization’s Performance Objectives will be discussed in this report. 

Evaluation of the organization's planning and control activities

• Long-Term Planning and Control
In the long term planning and control, the plans have to focus on what the operations managers intend to do; the resources that they need and the objectives that they wish to achieve. Here, the major emphasis is on planning and not in control because the requirement of control is very less at this stage. Basically, the forecasts of the likely demand are used here by the managers so that the financial targets are achieved by the managers at the end of the year (Olhager, 2013). Also, the operations managers put in place the budgets that help in identifying the costs and the revenue targets of the company. 
The long term plans of BP involves (Strategic report, 2015)-
1.    To create value for the shareholders by helping the people in meeting the growing demand for energy in the safe and responsible way.
2.    To rebalance the sources and the uses of cash so that the company can ensure that they are covering their capital expenditure and the distributions of shareholders with the help of operating cash flows. The rebalance aimed to go below $60 per barrel.
3.    To invest in the balanced range of geographies and resources across the up and downstream segments.
4.    To explore areas of reservoir fluid flow to novel lubricant additives and lower carbon energy sources. 
The above points show that the planning and control activities of BP for the long term are apt, valid and justified with reasons. They have majorly focussed on meeting their financial targets and the things that are in line with their achievement of competitive advantage and long-term growth and success.
• Medium-Term Planning and Control
In the medium term planning and control, the operations manager has to make the most detailed plan. Here, the overall demand is assessed that is required to be met by the operations in the partially disaggregated manner (Heizer, 2016). Also, the resources and the contingencies are determined here, and the managers have to set the objectives in financial as well as operational terms.
The medium term plans and controls of BP involve (Strategic report, 2015)-
1.    To optimize the deployment of capital and its allocation and continue to simplify the business along with maintaining the commitment towards safety and reliability. For this, it plans to get a consent decree with the federal government of US and come to settlements with the US Gulf States. 
This has enabled the company to look at the future with more confidence. The control will depend on the current price environment so, for dealing with this contingency, the company plans to set its financial path for the next two years. 
• Short-Term Planning and Control 
By the time operations managers arrive at short term planning and control, many of the resources have already been set, and large changes cannot be made now. This planning is required for introducing the short term interventions if the things are not going according to the plans (Heizer, 2016). Here, the managers’ use totally disaggregated forecasts and the actual demand. 
The short term plans and controls of BP involves (Strategic report, 2015)-
1.    To reduce the safety and operational risk. For this, the number of spills and leaks will be controlled ad they will be reduced, the reduction in the most serious process safety events will be ensured, and the work-related injuries will also be monitored and controlled.
This is the most important control that is required in the short term because all the medium and long term plans and controls are based on this. 

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Analysis of the organization's planning and control activities stages 


• Sequencing 
Sequencing means deciding the order in which the work is done in the company. BP has a set of predefined rules, and they schedule their activities as per the rules and priorities. They sequence their activities in the following ways:
a.    The company sequences as per the priority of the customers. In this, the aggrieved customer is processed prior to others, no matter what is the order of arrival. Since the company has operations in all the countries, therefore sometimes the needs of different countries differ. So, the operations are based on those varied needs. This sometimes erodes the service that is given to other customers (Schönsleben, 2016). 
b.    The company sequences as per the physical constraints that it faces. It has to get the resources from various geographical locations, so it prioritizes that area where the amounts of resources are limited because if that area is not utilized, then he competitor may use that resources. 
c.    The company also sequences as per the due date of delivery. This helps the company in improving its reliability of the delivery and also improves the speed of delivery. But, the optimal productivity sometimes suffers when the most efficient sequencing reduces the total costs.
 
• Loading 
The amount of work that is allocated to one part of the operation is called as loading. Suppose the machine that is available for drilling is available for 168 hours on the shop floor in a week but, it is not necessary that BP is loading the work equivalent to 168 hours on that machine (Brown, 2013). In between the week, it may not work due to holidays. So, the company considers the load that is put on that machine. This involves the time when it is working, the time when it is not working, etc. The company suffers some amount of loss when it is not working. The loading activity of BP considers the rest breaks, the idle time, the time invested in changing one task to another, etc. and it manages operations accordingly. But, the valuable time of operation that is available to the company for extraction is below the maximum amount of time which is available.

• Scheduling 
The date and time of start and end of each activity in operations are called as scheduling. This is one of the most complex tasks for BP as it has to deal with various resources simultaneously. Also, the machines that are used by the company have different capabilities and capacities; the staff also have varied skill sets that are taken into account while scheduling. If the company has ‘n’ number of jobs, then they can schedule it in n! ways using a single process. When there are ‘m’ numbers of machines, then the possible schedules that it develops is (n!)m (Yusuf, 2014). The company rarely gets an optimal schedule in this case but, it is able to arrive at a solution that is acceptable as well as feasible. The scheduling is done using Gantt chart.
 
• Monitoring and Control
The company monitors and control every part of its loading, scheduling and sequencing activity and intervenes immediately when there is any deviation in the plans or the re-planning is required. This is not the last stage; instead, this is continued throughout the cycles and stages. The company measures the output from the work center and then compares it with the plan. After this, the required interventions are made. The monitoring activities of BP are very efficient.

Discussion of the alignment between organizations planning and control activities and the organization’s Performance Objectives

The performance objectives of BP involves increasing the level of profitability of the company, increase its level of production, serving to the increased demand in the economy of various countries, and building a greater brand value after the oil spill incident. 
The planning and control activities are aligned to these objectives because the activities are designed and monitored in such a way that the company ensures an increase in the level of production by properly scheduling, sequencing and loading the activities. Also, the company has incorporated the monitoring activities at every step. This shows that interventions are made as and when required and not at the end of every activity. This helps the company in fulfilling its objectives in the proper way.

Recommendations

It is recommended that the company should not collect all the information related to demand of products from public information sources; instead, it should conduct its own market research in those economies where it sees greater opportunities. Also, the company must try to reduce the amount of wastages that are created from the idle machinery time and the oil spills.

Conclusion

From the above discussion, it can be concluded that BP has efficiently planned and controlled all its operational activities. It has efficiency planned its loading, scheduling and sequencing activities. The planning and control activities are aligned to the performance objectives of the company. 

References

Anon, (2016). [online] Available at: http://www.bp.com/content/dam/bp/pdf/investors/bp-strategic-report-2015.pdf [Accessed 13 Nov. 2016]
Brown, S., Bessant, J.R. and Lamming, R., 2013. Strategic operations management. Routledge.
Heizer, J., Render, B. and Munson, C., 2016. Principles of operations management: sustainability and supply chain management. Pearson Higher Ed.
Olhager, J., 2013. Evolution of operations planning and control: from production to supply chains. International Journal of Production Research, 51(23-24), pp.6836-6843.
Petroleum, B., 2013. BP Statistical Review 2013. London: BP.
Schönsleben, P., 2016. Integral logistics management: Operations and supply chain management within and across companies. CRC Press.
Yusuf, Y.Y., Gunasekaran, A., Musa, A., Dauda, M., El-Berishy, N.M. and Cang, S., 2014. A relational study of supply chain agility, competitiveness and business performance in the oil and gas industry. International Journal of Production Economics, 147, pp.531-543.

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