BHP Billiton

To ensure that there is increased output among personnel in all divisions, numerous changes have been made in industries all over the world. The company management should take strict procedures to ensure that all operations have been done to achieve the key goals and objectives of the industry, despite the fact that there are some situations where risks are predicted. Additionally, the procedure will help ensure that a competitive advantage in the global market is attained. For instance, The BHP Billiton Company has been widely understood to have altered some of its operations based on globalization issues, operation outsourcing, acquisition, and mergers so as to attain its objectives and ensure that customer requirement are attained successfully. The process is essential in providing that there are growth and development of the institution, which lead to expansion and reduced risks being experienced. The study is aimed at explaining the OM strategies that can be applied in various industries across the globe including operations strategy, operations design as well as operation planning and control. Recommendations will then be provided with the best strategy that can be applied to ensure improved levels of operations in all departments.






Table of Contents
Executive Summary 2
Table of Contents 3
Introduction 5
Link between Value and Supply Chain and OM Issues in BHP Billiton 5
Application of Appropriate OM Frameworks in BHP Billiton 6
Operations Strategy 8
Customer-Driven Strategies 8
Corporate Strategy 9
Competitive Priorities 9
Core Competencies 10
Service and Product Development 10
Operations strategy in BHP Billiton. 11
Operations strategy weakness in BHP Billiton. 11
Improvement of operations strategy. 12
Operations Design 12
Operations Design in BHP Billiton 13
Operations design weakness in BHP Billiton. 13
Improvement of operations design. 14
Operation Planning and Control 14
Operation Planning and Control in BHP Billiton 15
Operation planning and control weakness in BHP Billiton. 16
Improvement of operations planning and control. 16
Appropriate OM Recommendations 17
Conclusion 17
References 19
























Operations Management - BHP Billiton
Introduction
BHP Billiton is one of the leading Australian exporters specializing mainly in commodities such as iron ore, uranium, metallurgical coal, and copper. Moreover, the company has now expanded its portfolio and ventured into oil, gas, and energy coal exportation (Fitzgerald, 2016). BHP Billiton has its headquarters in Melbourne, Australia. The aim of the company is to contribute to economic development through effective operations management (OM). However, OM does not entail a single area of decision making but rather multiple sections given the new practices introduced on a daily basis and the ever-changing landscape of operations in the diversified metals industry.
On the other hand, the increasing competition in virtually all industries has necessitated the need for operations of an organization to meet high-quality product requirements. Thus, a company, which produces high-quality products in the market than its competitors, can enhance its competitive operations (Greasley, 2013). BHP Billiton using this approach has managed in the past to introduce its products in the market at a faster pace than its competitors and at the same time delay the commodity in a bid to obtain adequate technological and market information. For this reason, OM has been significant in contributing to the success of the organization.
Link between Value and Supply Chain and OM Issues in BHP Billiton
BHP Billiton considers supply chain management as a crucial element in its ability to obtain a competitive edge over its competitors. However, one of the issues arising when it comes to the supply chain and operations management is concerning the transportation and inventory keeping in the various departments in the organization. Important to note is that inventory includes production planning. On the other hand, transportation is a major issue as there are routing problems that arise from time to time (Greasley, 2013). Despite there being an alternative which is intermodal transportation, BHP Billiton has failed to find a lasting solution to this problem when exporting its products using various means of transportation.
In particular, BHP Billiton does not only export a single type of metal but rather multiple varieties which mean some challenges come with this type of venture (Fitzgerald, 2016). For this reason, OM addresses this problem as a multi-objective multimodal multicommodity flow problem. There are time limits attached to the exportation of products by BHP Billiton as well as the need to minimize costs as much as possible. In a move to offer a solution to the underlying issue, the managers at BHP Billiton proposed the need for scheduling routing decisions depending on the delivery times set by the customers. However, the managers realized that the issue of load planning would still limit the proposed solution. Despite this not being a long-term solution, the choice of wagon settings for product transportation and assigning them in a way that there is the maximization of space used would result in lowering transport and setup costs. Moreover, BHP Billiton is currently applying both OM and artificial intelligence (AI) techniques to find a workable solution as the supply needs are becoming complex on a daily basis.
Another issue surrounding the supply chain is concerning the green logistics which aim at integrating green transport, green processing among other advanced technologies. The primary objective of BHP Billiton is to realize an eco-environmental conservation while still attain organizational growth and economic development. Therefore, emphasis by the company now lies in the industrial plants upgrading, promotion of logistics, and overall transformation of the economic structure (Li, 2014).
Application of Appropriate OM Frameworks in BHP Billiton
Globalization, business renovations, operation outsourcing, mergers and acquisitions, and contract manufacturing have seen BHP Billiton alter its business strategy to fit the global needs. For this reason, the management of business operations has become a daunting task for the organization. In a move to address the limitations and challenges posed by the never-ending shifts, some elements of OM framework. One of the ways is through expanding the functions of the company beyond the business processes to include customers, business applications, and business information. Some of the business applications elements include Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM, Customer Relationship Management (CRM), and Supply Chain Management (SCM) (Li, 2014).
The primary reason for using these OM frameworks is to realize the need for making changes for a new business need, launching a new business process or making the modification to the already existing one in a move to meet the underlying requirements. BHP Billiton specializes in the exportation of diversified metals, but due to an opportunity they have identified, they ventured into oil, gas, and energy coal exportation. Therefore, through applying the appropriate OM frameworks, the organization managed to untangle the existing operations that are complex and interrelated to the capabilities BHP Billiton has which contributed to finding a way of overcoming the constraints. In addition, through the experiences gathered over a long period, the managers managed to identify a gap given they identified the operational needs that lie in the coming days.
There is the application of the legislative framework element in the operations conducted by BHP Billiton in its daily activities. Under this element, there is the regulatory framework, which includes strategic planning, compensation management, human resources planning, performance planning, service delivery improvement, and financial planning. The regulatory framework being one of the OM critical pillars requires BHP Billiton to maintain a high standard of professionalism, account for its administration, have a development agenda, respond to the needs of its workers, and provide its services to various clients impartially, without bias, fairly, and equitably. Operations management in an organization assists in lowering the costs of products in an effective way. Moreover, the operational managers are responsible for future innovation, and this is possible through building capacity for knowledge and skills. For this reason, they improve the overall performance of the company. The elements of the OM framework in BHP Billiton deliver their roles through institutionalizing quality service delivery to their customers. Further, their responses to the needs of the customer, which are urgent, help to build the reputation of the company.
Operations Strategy
Operation strategies have been explained by researchers to incorporate diverse methods applied by company managers to attain the company objectives. Development of operational strategies assists in making certain that there is the implementation and examination of how efficient and effective the company systems operate, relative to the work process, personnel, and other resources. There are some basic operational strategies widely implemented by company managers, which are service-oriented and are aimed at linking the short- and the long-term decisions developed by the corporate management. The process is always aimed at ensuring that there is the attainment of an effective management team. The operation strategy is a method that entails diverse activities, and they include customer-driven strategies, corporate strategy, competitive priorities, developing core competencies as well as service and product development (Krajewski, Ritzman, & Malhotra, 2013).
Customer-Driven Strategies
Customer-driven strategies are methods that have been incorporated in the operational strategies, and they include approaches aimed at attaining customer requirements and needs of the market being targeted. The approaches are customer-driven, which means they are initiated by the primary needs in the society. The process involved in the customer-driven strategy is attained by company managers, who adapt to various environments after carrying out evaluations on the significance of the manufacturing activities in the immediate market and society. Based on the fact that the competition in various industries across the globe has been increasing, stern measures have been developed by company managers based on the customer-driven strategies to ensure there is an enhancement of core competencies aimed at developing new strengths on the basis of the on-going procedures. Market trends should also be analysed by company managers when an environment is being evaluated, which assists in guaranteeing that they have taken full advantage of every new opportunity in the community and that possible threat have also been avoided.
Corporate Strategy
The corporate strategy entails viewing an organization as a system of various parts interconnected. Scholars provide an example of how the body system operates and the significance of all parts in the general performance of the body. In any industry, it is also relevant to understand that all sections in an organization including the departments are essential in making certain all processes have been carried out as intended to attain customer requirements and the goals of the company that has been laid down. The application of cross-functional interactions as well as corporate strategies in an organization should always be supported by the core strategies added by the company managers (Slack, 2015).
Competitive Priorities
Competitive priorities are developed in an organization by the creation of market analysis, a corporate strategy, conducting an analysis of various requirements, defining the primary core competencies as well as other essential processes aimed at improving operations in the market. There are various components that should be evaluated in an organization to guarantee the creation of competitive priorities. The components include time taken to manufacture and deliver a product, operational costs, and quality of a service or product, flexibility of the service or the product relative to the varieties available, the customization as well as the volume of products. Competitive priorities have been ascertained to be a challenge to some company managers, as it entails providing quality services and products at fair prices and also ensuring that the primary needs of clients have been attained successfully.
Core Competencies
Core competencies in any organization are explained as the resources and strengths entailed in a company. Over the years, it has been ascertained that core competencies vary from one industry to the other, and they include having financial expertise, optimal marketing and business locations, financial expertise as well as well trained staff that can assist in attaining the company goals and the ever-changing needs of customers in the global market. Identification of core competencies assists an organization to ensure they have developed diverse processes including building a professional relationship with its stakeholders, product development, and customer satisfaction.
Service and Product Development
Service and product development entail diverse strategies related to the production and development of services and products. The process is expected to consider the addition of values, innovation, and design processes, especially when a new product is being designed. Development of a new service has been ascertained to be different from developing a product as explained by scholars over the years. According to research, it is evident that when developing a service, companies can consider packaging the products with psychological and observable support services and benefits before they can be dispatched to various destinations. The process should also entail developing a strategy that would ensure that customer wants have been taken into consideration so as to gain an international advantage across the global market. On the other hand, when developing a product, the company managers can either decide to initiate the process and become the leader in introducing the new service or product in the market or wait to ensure that the product has been tested in the market before introducing it (Zurich, 2017).
Operations strategy in BHP Billiton. One of the OM activities in BHP Billiton is laying down the strategy, which requires the managers to develop a service delivery model. In the model, they address the manner in which the operations department is prepared to analyse the available opportunities and maximize in the interest of the company and of the customer. BHP Billiton outlines its service delivery model on a yearly basis so as to update the managers and other staff of their mandate. More specifically, the current service delivery model for the organization is to own and operate diversified, large, expandable, long-life, and low-cost assets defined by the market, commodity, and geography (Sprague, 2007). Thus, the organization has managed to attain superior margins compared to its competitors given the commodity and economic cycles they operate as indicated in their models.
Operations strategy weakness in BHP Billiton. The operations strategy in BHP Billiton has been attained successfully by the company managers, as they have developed a model aimed at analysing the institution's activities on a yearly basis. The process has helped in guaranteeing that the mandate of all employees has been clearly understood and stated, which promoted effectiveness in how activities are being carried out by employees in diverse departments. There are some weak points in the implementation of the operations strategy in BHP Billiton, and they include the notion that the company managers have not adapted all components of the OM strategy in its operations. For instance, the competitive priorities and core competencies have not been taken into consideration by the managers, and they are the primary pillars of ensuring that a competitive advantage in the international market has been attained successfully. The other component that has not been adapted to the industry is the customer-driven strategy, which is aimed at ensuring that all customer requirements have been attained successfully. Therefore, it is essential that stern measures are introduced and implemented by the BHP Billiton to ensure customer requirements have been attained and the organization attains its goals and objectives (Karlsson, 2016).
Improvement of operations strategy. The operations strategy can only be improved if there are improved measures introduced by the company managers. The process should entail making certain that all components of the OM activity have been incorporated in the company operations. It particularly covers those being carried out by employees in various departments. The process will assist in ensuring the company has attained an improved production level and competitive advantage in the global market.
Operations Design
Operations design is explained as a typical process that entails how activities are carried out in an organization following a sequence. In an industry, a resource may carry out an operation, and the output is placed in a waiting area as the next operation is being awaited. The next process can only be taken into processing once the previous one has been accomplished successfully. In this case, the customer or the next process is the flow unit. The primary aim of the operations design is to ensure that the vision and mission of the company have been aligned to the new requirements of clients and stakeholders in the business. The process is aimed at facilitating effectiveness in guaranteeing optimization of services and costs that will support various operations in the industry. The operations design also helps in developing a competitive core competency that guides operations undertaken by employees in the industry (Slack, 2015).
Researchers illustrate the notion that operations design is expected to go beyond the scope of handling equipment and the layout of materials in the market. It should also incorporate introducing new designs of products and services, as well as changes to IT systems and new incentive programs that can be used to increase productivity and attain the requirements of clients in the market. Operations design has been applied by various companies and industries across the globe, including the Toyota Company, where processes are being carried out following a given sequence. Despite the notion that employees may want to be given first priority to handle their programs, it is essential that the program laid down by the managers is followed to the latter. Therefore, Toyota Company has been found to be one of the best performing organizations that have improved its operations after the introduction and implementation of the operations design (Karlsson, 2016).
Operations Design in BHP Billiton
On the other hand, developing an operations design and in particular through Business Process Management (BPM), the operations managers identify, design, execute, document, measure, monitor, and control the entire set of activities of the organization. BHP Billiton has both non-automated and automated processes, which require consistent, aligned, and targeted results for the company to meet the needs of their clients as well as the departmental goals. The business processes in the daily routine activities of BHP Billiton assist all departments in making structured and accurate decisions and thus ensuring there is standardization when delivering their products. For this reason, business process management in this organization uncovers the problems, inefficiencies, and bottlenecks, which if they remain unsolved will result in different departments performing dismally (Greasley, 2013).
Operations design weakness in BHP Billiton. The operations carried out by BHP Billiton are monitored by both automated and non-automated processes of operations design aimed at identifying, designing, executing, documenting, measuring, and monitoring as well as controlling diverse activities in the industry. According to research, it is evident that the company has attained the requirements of its clients by the implementation of the OM activities entailed in the operations design. It has also ensured in making certain that proper decisions have been developed and implemented by the company managers. Despite the notion that the OM activities have been successful, it is evident that there are stern measures that should be implemented by the company managers to ensure that decisions in the institution are not only relying on the operations design, but also on the goals and objectives of the company. The process will assist in making certain that new strategies introduced in the company are based on the requirements of the business and that there are reduced risks associated with the new processes. There should also be the development of measures that ensure customer requirements have been attained and a competitive advantage is maintained by the business in the international market through the implementation of the operations design and the OM activities it entails.
Improvement of operations design. Operations design can only be improved by the company, as they understood how various activities are being carried out in the organization. Over the years, it has been ascertained that decision-making processes are undertaken by managers so as to reduce risks associated with the introduction of new processes. Therefore, despite the notion that a process may seem essential and good for the company operations, it should only be implemented after it has been tested and approved by the company managers as well as employees. Employee role in the company is essential based on the fact that they carry out most of the tasks and understand the impact of a system in the company operations. Therefore, company managers should also work closely with employees from all departments when carrying out decision-making processes (Zurich, 2017).
Operation Planning and Control
Operation planning and control are among the OM activities and strategies needed to be implemented in an organization to ensure effectiveness and efficiency of operations in diverse departments. Every successful organization in the international market has been ascertained to have incorporated the use of operation planning and control measures. The activities entailed in operation planning and control assists in making certain that there is an increase in the levels of production and reduced levels of costs that can be termed as unnecessary in the business environment. There are various problems that have been explained to be faced by company managers and employees as they carry out their daily tasks. The problems have led to a necessity of introducing improved strategies to ensure that there are reduced losses in an industry. Production scheduling is one of the strategies that have been introduced and implemented with the introduction of the operation planning and control. The process has been aimed at making certain that the staffs have been provided with adequate information of the primary functions and principles of how activities should be carried out in the business environment.
The objectives of the operation planning and control include ensuring that there is recognition of the scheduling, balancing and sequencing problems in any system that is operational in an industry; acquisition of a comprehensive understanding of the functions and principles of the operation planning and control practices in diverse industries, especially the manufacturing industry; as well as solving various issues at the operation level with the application of production techniques that have been proved as being effective. Scheduling measures have been effective in diverse industries in the global market. For instance, the motor industry has been explained to apply the operations planning and control measures in making certain that all activities have been carried out successfully. The process has also been effective in ensuring that various requirements of clients in the market as well as the goals and objectives of the company have been attained successfully (Slack, 2015).
Operation Planning and Control in BHP Billiton
Operations planning and control are another OM activity in BHP Billiton which outlines the targets and goals for every department and thereby determining the number of resources allocated to it. Plans prepared by managers include production, marketing, and business plans. In particular, the managers at BHP Billiton develop plans to reduce risks associated with diversified portfolios of Tier one assets (Sprague, 2007). Therefore, the organization is capable of meeting the needs of the client given the fact that BHP Billiton not only supplies raw material critical for today's growth but also for the future. For this reason, the operations planning and control conducted in the organization follows world-class standards to ensure it manages to meet both the long-term and short-term needs while at the same time creating value for all the stakeholders.
Operation planning and control weakness in BHP Billiton. In BHP Billiton, the operation planning and control processes have been established to ensure that the goals and targets of diverse departments have been elaborated by the company managers. The process has helped in guaranteeing that the total number of resources required for various processes have been identified so that they can be allocated successfully. The company managers have developed strategies that are aimed at making certain that business plans, marketing, and production measures are effectively implemented to attain customer requirements and to ensure that there are reduced risks associated with new strategies that are being introduced in the company. Over the years, it has been ascertained that organizations, where company managers have implemented the use of the operation planning and control activities, have been successful in ensuring that client requirements have been attained and all resources made available when they are required by the employees in diverse departments. The company managers in BHP Billiton should strive to ensure that all company goals have been implemented successfully with the introduction of the OM activity without altering most of the activities carried out by employees. The weakness of the company is based on the fact that there are some activities in the organization that has changed based on the OM activity, which also affects the general performance of the industry.
Improvement of operations planning and control. The company managers of BHP Billiton Company should develop measures aimed at improving various activities undertaken in the industry, which can only be attained by ensuring that operations planning and control have been applied correctly. Despite the notion that the activities may be found effective in the industry, they should not be implemented and allowed to alter how activities are carried out by employees. The primary goals and objectives of the company should be the first priority of the company, which will facilitate effectiveness in attaining the requirements of clients in the market.
Appropriate OM Recommendations
The various OM activities that have been ascertained to assist in improving activities in diverse industries across the global market include operations strategy, operations design as well as operation planning and control. The strategies can be explained as significant in diverse operations undertaken in an organization, but there are some cases where other cannot be applied successfully. The appropriate OM strategy that can be recommended for all organizations is the operations strategy, since it is all rounded and can assist in improving all sections of an industry. For instance, there are some components of the OM activity that only aim at improving employee operations, while others are aimed at facilitating improved production to attain the company goals and objectives as well as customer requirements.
Conclusion
BHP Billiton is one of the leading Australian exporters specializing mainly in commodities such as iron ore, uranium, metallurgical coal, and copper. Apart from this it also specializes in oil, gas, and energy coal. The increasing competition in virtually all industries has necessitated the need for operations of an organization to meet high-quality product requirements. Thus, a company which produces high-quality products in the market than its competitors can enhance its competitive operations. In particular, BHP Billiton does not only export a single type of metal, but rather multiple varieties which mean some challenges come with this type of venture. For this reason, OM addresses this problem as a multi-objective multimodal multicommodity flow problem. However, they have combined both OM and AI techniques to find a solution to the challenges arising.
Regarding OM frameworks, the primary aim is to realize the need to make changes for a new business requirement by clients, launching a new business process or making the modification to the already existing one in a move to meet the underlying ones. Hence, managers can identify gaps. The OM activities in BHP Billiton include laying down the appropriate strategies, developing an operations design, and then conducting operations planning and control. All these activities uncover the problems, inefficiencies, and bottlenecks, which if they remain unsolved will result in different departments of BHP Billiton performing dismally. For this reason, operations management has contributed significantly to the success of BHP Billiton as one of leading company in export volumes in Australia.













References
Fitzgerald, B. (2016). BHP steps up JV controls. Theaustralian.com.au. Retrieved on April 5, 2017 from http://www.theaustralian.com.au/business/mining-energy/bhp-billiton-to-unwind-jvs-without-operational-control/news-story/b5dd80089e0ebaf61cf1e7161c793177
Greasley, A. (2013). Operations management (1st ed.). Hoboken, N.J.: Wiley.
Karlsson, C. (Ed.). (2016). Research Methods for Operations Management. Routledge.
Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2013). Operations management: Processes and supply chains. Vol. 1. New York: Pearson.
Li, X. (2014). Operations Management of Logistics and Supply Chain: Issues and Directions. Discrete Dynamics in Nature and Society, 2014, 1-7. http://dx.doi.org/10.1155/2014/701938
Slack, N. (2015). Operations strategy. John Wiley & Sons, Ltd.
Sprague, L. (2007). Evolution of the field of operations management. Journal of Operations Management, 25(2), 219-238. http://dx.doi.org/10.1016/j.jom.2007.01.001
Zurich, L. Bern. (2017). Service Operations and Management.