Evaluation WITH THE 5 Procedures Management Objectives Information Technology Essay

Ranhill Worley Parsons Sdn Bhd (RWP) can be an Coal and oil engineering consultant servicing the major operators both local and internationally and focuses primarily on EDC(Anatomist Design Deals) and EPCM(Executive, Procurement, Construction Management Agreements). The assistance rendered include a full selection of Process, Mechanical, Instrumentation, Electrical, Civil, Structural, Pipeline Dynamics, Protection and Environmental, Subsea and Sea engineering. Their Procedures are service orientated which revolve mainly around the various Offshore and Onshore executive projects that they are granted. Their total labor force in Malaysia is about 1200 personnel.

2. 0 - Operations

In RWP corporate and business structure, the business development team together with the proposal division are accountable to bring in projects and while the main procedures management function are completed by PMT (Project Management Team, refer Appendix 2 for Org Chart) consist of engineering personnel that are high skilled and trained and has capacity to deliver their respective deliverables to your client satisfaction. The Functions support team will be the Project Services, Information Technology, Engineering, Prime Agreements, Procurement and Cost Estimation Departments. The primary Operation supervisor is the Task Manager who has the final say on all task related concerns from specialized to commercial. The PM accounts to the MOP and MOP records to SOM in the corporate organization graph (Appendix 1). This newspaper will discuss functions for the EDC as 95% of customers both local and abroad go because of this type of contract,

2. 1- Operation attribute and Process Management

In the RWP procedures, the source process starts with the project contract reward. Stand 1. 0 below shows the brief summary of processes (Operation Management) from agreement award to project close out.

2. 2- Charting RWP steps using the four Vs

Typology of RWP current operations

Figure 1. 0

Using the 4V's in physique 1. 0, RWP procedures are considered all Low Level, High Variety and High Awareness apart from Variance (Medium) and RWP are in a distinct segment market with only 4 other rivals in the local market. RWP are given typically about 30 nos to 40 nos of EDC per yr (that about 2-5 nos are EPCM type contract) and each contract period is between 2 to 8 months depending on work opportunity. The agreement value for every project can vary from RM 5. 0 million to RM 10. 0 million.

2. 3- Operations and Process Management General

Model for RWP in Fig 2. 0 below:

2. 4- Implementation and Bettering the five main operations

management performance objectives

In RWP, the 5 main operation management performance objective's (quality, rate, dependability, flexibility and cost) are applied as mentioned below

2. 4. 1 Quality:

The quality size is assessed by four (4) items that are

Conformance to specification

Client retention

Service recovery

Company image

(Prajago & McDermot, 2008)

The Task Execution Plan (PEP) is the driver for the whole service quality of the project and one of the elements in the report is the project quality plan where there are types of procedures and quality guarantee procedures which has to be adhered to and at the mercy of internal and exterior audits. The reviews listed below are intended to confirm that estimates, anatomist designs and constructability adhere to the job design basis and performance requirements. Typical activities in the Assurance Schedule are

HAZIDs( Hazardous Recognition analysis), HAZOPs( Hazard and Operabality research).

Design and model reviews- See process in Appendix 6

Value improvement workshops.

Maintainability and operability reviews.

Constructability reviews.

Operational Assessments

Quality assessments (audits)

HSE assessments (audits)

Peer reviews of process, estimates, procurement strategy.

Technical Peer Reviews

Quality controller and checker in every the reviews stated above are Lead Designers (for any disciplines except Process where it's the Principal Engineer) concerning check the design integrity and conformance to customer expectation. You will discover 3 degrees of check for each engineering file or drawings that are the - Initiator, Checker, and Approver before last review by customer. For Model review 3D, which is the building blocks of the executive design concept is performed by Principal and Lead Technical engineers and Project Director as well as Customer representative. Tech integrity of documents and drawings are examined and verified by lead technicians whereas the report integrity is performed and approved by the Project Manager.

Figure 3. 0) below exhibiting the product quality benefits in RWP functions

2. 4. 2 Quickness:

Speed in terms of Engineering Deliverables at the designed time are achievable through the use of world class engineering software that are able to reduce the human mistake and faster computations, thus faster information processed between inter willpower (with conformance to technical specs) and faster delivery of anatomist deliverables. The info technology department helps the PMT upon this function in functions.

**The main anatomist software (eventhough the license fees are high, but it can be an industry standard and worldwide popularity) are as follows

PDS-Piping Design Software- (www. intergraph. com)- For Piping Modeling(2D & 3D)

PDMS(www. aveva. com)- For Piping, Structural, Electrical & Instrumentation Modeling(2D & 3D)

Aspen Hyss(www. aspentech. com)- Process equipments Modeling and calculation

Primavera (www. oracle. com)- Planning software - Job Progress Dimension(Plan vs Actual)

AutoCAD(usa. autodesk. com)- Drafting software

PV Elite - (www. chempute. com)-Pressure Vessel software

**All the software cost above are usually accounted in the respected man-hour rate of the businesses team that are recharged to the customer.

Figure 4. 0) below exhibiting the swiftness benefits in RWP businesses

2. 4. 3 Stability:

Dependability is another good thing about RWP engineering service. Its worldwide corporate and business policy encourages personnel retention especially those very skilled engineering personnel which is essential and necessary to the success of the task operations. Staff retention is achieved by consistently fulfilling them because of their exceptional work quality giving a) bonus, stock options and salary raise and b) providing continuous learning & development in new technology and delicate skills. This equates to regularly high quality of anatomist design deliverables at appointed times that benefits customers like Petronas when the design is produced and put into procedures at sea(Offshore framework or Processing Program). If the design is viable, that means income for the satisfied customer and duplicate orders for the consultant.

Figure 5. 0) below displaying the stability benefits in RWP operations

2. 4. 4 Versatility:

There are four dimension in operation management flexibility that is

Volume- Externally motivated by customer

Variety- Externally driven by customer

Process- Internally driven scheduled to a) and b)

Material controlling- Internally influenced credited to a) and b)

(D'Souza and Williams, 2000)

For RWP functions, all except item (d) is not suitable. In Project procedures flexibility do appear when there are changes in design notion credited to a) customizing existing procedure conditions at offshore site and b) catering to additional work scoping from customer. This can lead to designers and drafters modifying their executive drawings- re-routing piping, electrical and instrument cables, re-locating gadgets, etc. Usually this flexibility will equate to additional cost incurrence on the customer. This versatility is not really a common occurrence in EDC.

Increase in Volume level and variety is not an issue for the PMT businesses as it only requires increase in manning and anatomist software certificate.

Figure 6. 0) below exhibiting the overall flexibility benefits in RWP procedures

2. 4. 5 Cost:

Cost are meticulously related to service quality as all the RWP deals (whether Lump Sum or Reimbursable)with customer are derived from total man-hours necessary for the engineering opportunity. It is vital that the Procedure Manager(Project Administrator) must work/control within the approved man hours allocated to ensure profitability and quality. The crucial factor here is the production factor which is checked by the Operation Manager over a weekly basis through the use of the project planner software called Primavera. The regular progress survey (Appendix 3) will show executive activities that are lagging and advanced and the percentage what was planned against genuine. With regular high quality and repeated works from customer, the cost can be lowered providing RWP a competitive advantage in the outside market. Cost and quality are important factors in the goods/service industry as customers expect high quality at competitive cost. (Tiwari, Turner and Sackett, 2007). Operation Cost are high(and accounted for in the Final awarded value) scheduled to high salary rates and software licensing cost compare to other consulting anatomist servicing companies(non -Olive oil & Gas).

Figure 7. 0) below demonstrating the cost benefits in RWP functions

2. 4. 6 Key Performance Indicator:

The most crucial aspect for RWP current procedures are quality, velocity, dependability, and cost as shown table 3. 0 below
The KPI's measurement for each of the five targets are shown in table 3. 0 above The Customer KPI and Internal operation KPI are shown in Appendix 4 and Appendix 5. Below are overview of the not meeting the minimum KPI

Quality- Design Failure

Speed, Dependability, Overall flexibility and Cost -Job loss

Reputation in Local and overseas market influenced leading loss of revenue and self-assurance from customers.

2. 5- Improvement and Challenges

Based on the Track record of Engineering contracts that is acquired both locally and globally by local design contractors from 2000-2010, the rating are as below

Technip Geoproduction Sdn Bhd ( they have got the EPCC ability)


Aker Kvaerner(AK) & MMC O & G

R & Z

RWP are on par with Technip in terms of Offshore & Onshore Engineering capacities for both local and global market segments however in some countries the strategy of the providers are to award EPCC type deals which RWP do not have the ability yet, hence its no 2 position in the past decade. As can be seen the cost competitiveness of the AK, MMC and R&Z are slightly much better than both RWP and Technip as their specific personnel (Lead and Primary Engineer) are typically local and the percentage of local/expatriates are lesser compared to RWP and Technip.

2. 5 (a) Improvement

The main areas of Improvement required for RWP operations will be in the regions of Cost and Versatility as shown in the Polar diagram in Fig 8. 0 in the next pages

2. 5. 1 Cost:

a) Localization of the Senior Specialist Category (Business lead and Primary Engineer)

The evolution of any graduate engineer to the main engineer are as follows

The Main and Business lead Engineer in RWP are 70% foreigners and 30% local Malaysian.

Even with local personnel retention policies in place due to the volatile market condition of the Coal and oil Industry at certain time period (year), the demand for skilled designers will outdo the Source.

Most of the neighborhood mature specialist category are based in the center East market because of the higher salaries and free of tax benefits.

Localization of the older specialist category will provide a lesser cost rate for designers in the category and this will lead to more price competitiveness in the neighborhood and global market. Issues for RWP is to influence the local that their remuneration is justified for the Local market. To triumph over this management can offer this category of specialist an employment contract based on hourly rates. Which means the rate is an all inclusive rate that protects the staff medical, overheads, EPF, etc. It has been proven to be effective method of attracting locals from overseas markets.

b) Copy of Knowledge

The localization strategy will also assist in knowledge transfer in engineering from the experienced to the non-experienced. It is common practice in this industry would be that the foreigners will only train and guide their individual professionals rather than others (local or other foreigner).

2. 5. 2 Flexibility

a) The market portion for RWP is entirely on the Engine oil & Gas Sector. As more capable competitors enter the market either through JV or acquisitions, RWP should develop further into the Mineral and Pharmaceutical sections as the demand in this market are forecasted to increase internationally for the next 5 years.

b) At present the RWP agreement award types are EDC only but for the long-term strategy in terms of progress and sustainability is to look for EPCC or what's called Turnkey contract.

RWP gets the Engineering & Procurement & Development Management jogging in its Operation, and also to add the Development (Split PMT) and Commissioning (Different PMT) with their operations shall be either by Jv or buying into an EPCC company. Obstacle is that finance must do Joint venture acquisitions but also for the permanent goal and plan it will be profitable as studies shows worldwide client are going into EPCC type contracts to reduce their risk and copy to the successful EPCC builder. The value for an EPCC contract for Offshore composition can vary from USD 100 million to USD 2. 0 billion. High income revenue and another niche market.

2. 5 (b) Challenges

The challenges in implementing the price and overall flexibility change are tabulated in the table 5. 0 below

3. 0 Conclusion

To move forward in the ever competitive marketplaces of anatomist consulting services especially Oil and Gas sector both locally and internationally, RWP must make the changes internally and externally in relation to Cost and Versatility in its Operation Strategy to become the preferred anatomist service provider of the major Essential oil & gas providers both local and internationally.

4. 0 Salient Point

Operation Management is crucial for business organizations like RWP because they are in the niche market, its operation strategy and function should be synchronized with current and future market developments to keep up it edge among the industry leader.

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