I. INTRODUCTION
Operations management refers to the activities, decisions and responsibilities of managing the resources which are dedicated to the production and delivery of products and services. Operations basically are activities, but it is usually considered that these activities are planned and coordinated since they normally require a certain scale of capital and human resources. Managing operations involves structuring and coordinating work. While this also includes and is applicable to most human activity, operations management is mostly concerned with the production and delivery of products and services.
The part of an organisation that is responsible for this activity is called the operations function and every organisation usually have one, or a similar version of it, as delivery of a product and/or service is the reason for existence.
Operations Managers are the people who are responsible for overseeing and managing the resources that make up the operations function. The operations function is also responsible for fulfilling customer requests through the production and delivery of products and services.
To illustrate the importance of Operations Management to the success and continuity of a business venture, it is best to analyze an existing business as a starting point. In doing so, we are able to harvest actual accounts which can be assessed towards the principles and practices of a sound business operation.
For this purpose, we will be studying a company called Saudi Makamin. The Company is principally involved in the business of chartering of full offshore support vessels to support our clients’ offshore oil and gas operations although they offer a range of support services to oil and gas companies. It is more of a service provider rather than a sales-based venture. Their services include technical consultancy, engineering, and design.
Their mission is to be a premier Oil & Gas services provider on national and international levels with a high standard of Corporate Social Responsibilities while maintaining profitability and growth and safeguarding shareholders’ interests. In the furtherance thereof, they aim to implement effective technologies, adopt progressive and best business practices and invest in Research & Development.
To fully realize these objectives, they have an Operational Management department that monitors the flow of business and asses the efficiency of operational plans. This department is headed by the Operation Manager who will be responsible for overseeing the management and control of the operations for the company’s project by delivering the key targets and milestones. In addition, the Operation Manager ensures that the operational plan is executed.
II. THE COMPANY’S OPERATIONS, TARGETS, AND STRATEGIES
In order to determine the operational targets of the company and what strategies they employ, it is necessary to equip ourselves with the services they provide. As a premier oil and gas service provider, Saudi Makamin offers the following:
1. Exploration and Integrated Studies
Saudi Makamin supports their clients in the oil and gas exploration through its Geosciences Division which provides scientific geological, geophysical and petrophysics studies to assist the clients in the subsurface related challengers and projects.
The Division currently provides a wide range of services including Log Scanning & Digitizing for various types of legacy logs. Integrated studies and analysis derived from Hi-Resolution 3D Digitizing & Imaging for core samples which includes Porosity and Porosity Partitioning, Effective/Absolute Permeability, Elasticity, Fluid and Wettability mapping, Mineralogy/Clay content, Asphaltenes/Bitumen content, and the dynamic properties of rocks (i.e. special core analysis such as relative permeability, capillary pressure, and imbibition and drainage curves). Other services include Supplementary Manpower and Consultancy in Geophysics, Geology, and Petrophysics.
In addition, the Division through its investment and affiliation with Spectraseis, offers broadband technology applications for unconventional resource development and reservoir fluid monitoring achieved through delivery of new datasets derived from cutting-edge innovations in surface array and borehole passive seismic acquisition, processing and Imaging.
The Division is associated with various local and international G&G specialized companies including Digitalcore, Spectraseis, Dedilog, KA CST, KFUPM among others.
Their strategy to meet client satisfaction is to partner with other providers who are expert in these particular fields such as Upstream and Spectraseis. In general, this service is delivered through outsourcing.
2. Engineering, Designing, and Manufacturing
Saudi Makamin; through Hunter Well Science (HWS); designs, manufactures and supplies downhole technologies for the Oil and Gas service industry. Their research and development team include experienced physicists and engineers located in Europe, USA and Canada. This highly experienced team has many patents and publications and all members have previous downhole design experience. HWS is the only independent supplier of a full featured Sigma and Carbon Oxygen Pulsed Neutron logging tool. It is fully combinable with all other HWS sensors therefore allowing users to compete in the high-end Advanced Reservoir Monitoring business.
Aside from outsourcing, the company also employs supporting strategies to meet client satisfaction. They claim to have the following in place:
All products designed in house by their highly experienced design and development team. Extensive development and manufacturing tests are done to deliver world-class products.
Their products contain the most advanced electronics in the industry and operate on the fastest mono-conductor telemetry (communication) system on the market.
They utilize a fully combinable PN & PL solution, a simultaneous Sigma and CO measurement from 3 unique detectors along with full Reservoir Geosciences support.
They use standard Cased Hole Production Logging sensors supported by just 3 PCB’s.
Internal temperature is recorded every 5 minutes when tools are powered allowing an accurate performance database to be developed therefore allowing scheduled board replacement to be implemented, avoiding costly in hole failures.
Apparently, their main operational strategy in this particular service is to infuse the latest technology in their projects. They also practice proper recording of temperature of tools to avoid breakdowns therefore minimizing the cost of replacement and repairs.
3. Drilling and Wells Services
Makamin provides workover, deep water drilling and top hole services to its clients. It has Four Rigs with capacities of 300 and 600 horse power (‘HP’). The Company is currently drilling water wells, but eventually plans to expand its services to the oil drilling segment. The Company also envisions to align its real time well monitoring services to its drilling services to enhance the value addition to the client.
Additional provided services include; Oil Wells Workover, Shallow Water Wells Drilling, Water Wells Re-Habitation, Soil Testing, Pile Drilling, Auger Drilling, Reverse Circulation Drilling, Core Drilling (Mud or Air) and Seismic Purposes Drilling.??
As a quality control strategy, they aim to further enhance their monitoring procedures, knowledge, and technological support. The Company is also focussed towards the quality of work and follow high standards on health and safety of personnel. ??Saudi Makamin was awarded various drilling contract primarily by Saudi Aramco.
Additional strategies are likewise in place to ensure client satisfaction. They include the following:
Ability to provide the drilling need for various industries such as Civil, Agriculture, Oil & Gas, and Mining.
Brand new fleet of rigs that meets International Standards & tough Aramco requirements.
Distinguished by implementing strict HSE Policies & Procedures.
Applies latest technologies in real time drilling operations monitoring remotely, which has been tested by Aramco.
Portable rigs for fast mobilization and movement.
4. Marine Services
Saudi Makamin Ventured with an integrated group of Specialized Marine and Offshore companies from around the world specifically from Singapore and Malaysia to create ‘Makamin Offshore’ which is a value added integrated Marine Company in Saudi Arabia.?? Saudi Makamin’s partners have a strong asset base and extensive international experience.??
Makamin offshore services includes Vessel supply and management, Diving support vessels and services, including Remotely Operated Vehicles (‘ROV’), Geotechnical vessels and survey, Marine construction and engineering services, Dynamic positioning diving support vessels, Work and accommodation barges and Crew boats, utility vessels and supply/support vessels.
Aside from outsourcing or partnership with other companies which are regarded expert in these fields, the company ensures the quality of service through the following:
Specialization in Remotely Operated Vehicles(ROV) Services and has available state of the art ROV’s for multipurpose use that can be mobilized to location in short turnaround time
They maintain access to a fleet of various types of Support Vessels well equipped with Dynamic Positioning
They provide add-on services such as Diving Support Vessels, Divers, and related services
They employ fully experienced, IMCA & ADCI qualified personnel
Maintain focus on meeting and customer expectations for quality, completion time and HSE
5. Production Services
Pipeline Services Division
The Oil and Gas pipeline services are capable to provide vertically integrated activities for oil, gas and water pipelines, including fabrication, utility installation, well site preparation, compaction, leveling and fencing.The Company has skilled and qualified workforce to accomplish its activities along with the necessary equipment and assets. Whereas the Division has the capability to carry out Lump Sum Turnkey Project (LSTK) engineering, procurement, and construction for niche pipeline projects and various specialized jobs such as Permanent Down Hole Measurement Systems (PDHMS) installation. Capability to undertake LSTK engineering, procurement, and construction for niche pipeline projects.
Capability on undertaking various specialized jobs such as PDHMS installation.
Adoptation of strict HSE and QA/QC programs.
Diversification to include Cathodic Protection & Corrosion Services.
Pioneering in RTR installation as replacement of carbonated pipes for Oil & Gas.
Industrial Inspection Division
The Company provides conventional and Advanced Non Destructive Testing (NDT) services to Major clients such as Saudi Aramco, SABIC and many others. They recognize the fact that the industry is in need of Advanced Technologies & Services that can fulfil its current requirements and challenges; therefore, while the Company is enhancing and increasing its operational capacity for conventional NDT services, it is also investing in additional Advanced NDT technologies by increasing the qualifications of employees through training & certifications, cooperating with international NDT consultants to improve knowledge transfer and supporting local NDT industry by sponsoring seminars, workshops, conferences and empowering Saudization.
The Division mission is to develop and sustain value-added partnership with thier clients by providing professional, cost-effective, precise and proactive NDT services.
The Industrial Inspection Division has the capabilities to undertake all types of conventional industrial inspection services include RT, UT, MPI, PT, VT, VBT and PMI. The Division is also capable of providing Advanced NDT works, such as MFL, Phased Array, TOFD, Guided Waves and Tube Inspection. Additional strategies employed include:
Implementation and adaptation of Advanced New Technologies & Methods to conduct NDT works along with conventional methods.
Being one of the few in providing Tank Inspection through MFL Technology.
In house capability & Certification to handle Radio Active Material.
Ensure access to strong International Industry Network.
i-Fields & SCADA Services
Saudi Makamin has capabilities to deliver secure, real-time production data to the corporate desk-top via proprietary web-enabled Data Visualization software. No application software needs to be installed on the end-user’s computer. The service uses either conventional Hardware and/or wireless technology and web enabled data visualization tools.
The operation’s success is guaranteed by the following:
The Mono Transmitters can be installed in minutes into existing field instrument connections with no need for electrical power, cables or conduit.
The Data Acquisition system is ideal for retrofitting existing "brown-field" sites as well as new field installations.
A single unit can receive and manage data from 100+ field instrument transmitters.
A variety of transmission options is available to reliably transmit field data.
A single-source "end-to-end" solution for field data acquisition and visualization for the oil and gas industry.
The Data Acquisition system has the ability to configure the system to interface with third party well site equipment.
It is an integratable with Aramco internal network & security.
It can be tailored to suites specific clients’ operational problems or requirements.
It meets the Aramco’s latest wireless specifications.
Nitrogen Services
Nitrogen Services Division is Saudi Makamin latest newly launched business line; the division provides services which include Water Filling & Hydro Testing, Nitrogen De-Curding, De-Watering, De-Gassing, Nitrogen Purging – Cutting/Welding and Pressure Testing. Moreover, the division has skilled and qualified workforce and management with experience of more than 25 years in this speciality to accomplish its activities along with the necessary equipment and assets such as Skid Mounted 180K, 270K Heat Recovery Nitrogen Units, LIN Road Tankers and Tanks in different sizes to meet projects’ requirements. The Division assets are Brand new and equipped with the latest technology in the market.
They have a wide range of pumping rate in the Onshore and Offshore – Zone II.
Ensure capability of vaporizing and pumping Nitrogen at high rate/high pressure
Ensure capability of vaporizing and pumping Nitrogen at high rate/high temperature.
Comply with the onshore/offshore industry HSE safety standards.
III. CONCUSSION AND ASSESMENT
In general, Saudi Makamin’s Operational Management can be summarized into four key strategies namely the following:
1. Utilization of new and updated technology in the delivery of their services. The aim of which is to be a pioneer amongst its competitors. This is managed through constant upgrades and efficient maintenance to minimize the cost of breakdown.
2. Outsourcing from other expert providers and partnering with other companies that are known to provide quality service in a particular field covered by their offer. This is managed through maintaining a good relationship with these partners and to a great extent, ensuring a mutually beneficial working environment.
3. Updating personnel knowledge of the trade and ensuring that Health and Safety regulations and other policies are observed.
4. Planning based on the the forecasted market requirements, in accordance with the plans and requirements of the clients.
Short-term planning: Meeting deadlines, commencing operations as per clients’ targets, meeting and mobilizing the necessary crew, equipments and vessels to execute the project on time and within budget.
Long-term planning: Stability of operations, achieving profitability from the project and continue to position the Company as the preferred contractor of choice through generating recurring businesses with the client
Considering that the company is involved in a venture where the target market is lesser than that of a mainstream trade such as sale and production, it is easier to cope with fluctuations in demand. They are dynamic in responding to these fluctuations through a continuous process of planning, budgeting and forecasting for every department’s requirements to enhance control and flexibility on the execution of its various projects; and to enable adaptability and allocation of the resources to the business.
Their main measure of ascertaining client satisfaction is the number of recurring contracts they successfully enter to within the fiscal year. On this basis, we can assume that client satisfaction is relatively high as evidenced by recurring contracts with one of the worlds’ biggest oil and gas company which is the Saudi Aramco. They have also maintained contracts for service provision with other noted leaders in the oil and gas industry.