Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing Description

It was the cold winter of 2010 in Shanghai, and Dr. Zeb Feng was becoming increasingly frustrated. As procurement director for Asia at British Petroleum (BP), Dr. Feng was acutely aware of the growing burden that quality control imposed over his company's global operations. Chinese suppliers were masters of cost-cutting, but quality often suffered as a result, which led in turn to increasing needs for inspection and development efforts. Almost five years ago, Dr. Feng's company established an international procurement office (IPO) in Shanghai, which served as a shared service centre for internal customers throughout the BP organization worldwide. Since that time, the IPO had been mainly sourcing non-hydrocarbon goods and services, such as manufacturing equipment and materials, packaging, catalysts, chemicals and additives, marketing products and retail equipment, as well as drilling services and well-completion services. After a corporate board meeting with Christina De Luca, the vice-president of procurement and supply-chain management for BP's downstream operations, it had been decided that the company would start to enhance its global competitive sourcing. As the number one supplier market in the world, China was naturally highly prioritized for further exploration. The pressing point that concerned Dr. Feng was whether Chinese suppliers were sufficiently ready to supply mission-critical supplies for oil drilling, extraction and refining. During a recent conference call, De Luca had reiterated, "Zeb, our competitors are way ahead of us in their sourcing operations, and they have achieved much lower costs. We've got to do something!" Dr. Feng put down the receiver and went back to his office to gather his team for a planning meeting. He knew that supply quality was the key issue, but how could it be resolved?

Case Description Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Strategic Managment Tools Used in Case Study Analysis of Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

STEP 1. Problem Identification in Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study

STEP 3. Industry Specific / Porter Five Forces Analysis of Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study

STEP 4. Evaluating Alternatives / SWOT Analysis of Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study

STEP 6. Recommendations Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study

STEP 7. Basis of Recommendations for Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study

Case Analysis of Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing is a Harvard Business (HBR) Case Study on Strategy & Execution , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Strategy & Execution, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Strategy & Execution Solutions

In the Texas Business School, Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Step 1 – Problem Identification of Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing - Harvard Business School Case Study

The first step to solve HBR Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Feng Dr is facing right now. Even though the problem statement is essentially – “Strategy & Execution” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Feng Dr, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing.

The external environment analysis of Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study. PESTEL analysis of " Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

To do comprehensive PESTEL analysis of case study – Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Government policies have significant impact on the business environment of any country. The firm in “ Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Feng Dr is operating, firms are required to store customer data within the premises of the country. Feng Dr needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Feng Dr in case study Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Feng Dr in case study “ Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Feng Dr in case study “ Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Feng Dr can compete against other competitors.

Government Scheme & Subsidies Impact on Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Feng Dr needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Social Factors that Impact Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Technological Factors that Impact Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Environmental Factors that Impact Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Legal Factors that Impact Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study. PESTEL analysis of " Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: Quality Management in the Oil Industry: How BP Greases Its Machinery for Frictionless Sourcing case study solution