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32503821 project-report-final-org-study-mba-mgu[1]

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Dear Friends, …

Dear Friends,
This is my first Project Report in connection with the Project study of my IIIrd semester MBA programme. Here i am uploading my project report for the students who are doing their project work in organization study. I hope my efforts also will give a little support in your efforts. I wish you all the best.
With regards...nairskrmr@gmail.com.(Sasikumar.R.)

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  • 1. CHAPTER 1 INTRODUCTION 1
  • 2. 1 INTRODUCTION Arabian Industries LLC, is a leading 100% Omani owned Contracting Company with active participation in Oman’s Hydrocarbon, Petrochemical and Energy Sector industries since 1990. The Company posted a growth of approximately 330% during the period from 1990 to 2006 and is currently rated one of the leading EPC Contractors in the Region. 2 I underwent an organizational study at Arabian Industries LLC to acquaint myself with the business environment for a period of two weeks during the period of Nov. and Dec. 2009, as a part of the MBA curriculum at the Mahatma Gandhi University, Kottayam, Kerala. This study was conducted to understand the structure, function and processes of various departments and their inter- dependence. During the course of study I was able to successfully interact with the employees of the organization and they were happy to give me all possible information regarding the company. They also took me to the plants and worksites where I got the first hand information about the organizational processes and its functions. The methodology consists of data collection through interview, observation and company periodicals review. The data collected from different sources are classified, analyzed and interpreted. Based on which an organizational structure, its functions and various departments are identified. The various departmental functions are clearly identified and their processes & activities carried out are recorded. An in-depth analysis is made me to understand the departmental process based on which a process chart is prepared. The analysis further formed the basis for identifying the departmental interdependence. 2 OBJECTIVE OF THE STUDY The organizational study was carried out at Arabian Industries LLC to achieve the following specific objectives:- a. To understand the organizational framework & it’s functioning. b. To gain knowledge about different departments of the organization and the functions. c. To study about the procedures of purchase and sales. d. To study the interdependence of different departments. 2
  • 3. e. To make a SWOT analysis of the organization f. To understand the difference between theoretical & practical aspects of functioning organization 3 METHODOLOGY This study is descriptive in nature. This is also a grouping, which includes many particular research methodologies and procedures, such as observations, surveys, self-reports, and tests. 3.1 Data collection a. Primary data Primary data have been collected through observation, personal interview and discussion with managers and employees of the various department of the organization. b. Secondary data. Secondary data have been collected from company’s internal records, Publications, Annual report, Journal, statutory report etc. 4 SCOPE OF THE STUDY The study is being conducted for Arabian Industries LLC, Sultanate of Oman. And this study tells us an overall view of organization and functions carried out by different departments like Manufacturing, Maintenance, Marketing, Human Resource, Sales, and Finance etc.. 5 AREA OF STUDY: The study was undertaken at Arabian Industries LLC and the respondents were the Finance Manager, Department heads and employees from different departments like finance, maintenance, fabrication, manufacturing, and marketing etc. 6 DATABASE The research efforts employ both primary and secondary research techniques to ensure that the foundation of business intelligence and insight is accurate, current, and reliable. To conduct this study, both Primary and secondary data have been used. 7 LIMITATIONS OF THE STUDY a) Time was a major limiting factor. b) Secondary data available from company manuals were c) Lack of co-operation from certain departments due to their work load. 3
  • 4. d) The information provided by the company is assumed to be authentic. e) The information provided by the company is assumed to be authentic. 8 CHAPTERISATION Chapter : 1 - Introduction Introduction chapter gives an idea about the, organization where the study has conducted, the nature of the study, the method of the study, scope of the study and it’s objectives and the limitations of the study. Chapter : 2 - An Overview of Oman Economy and Petroleum Scenario. This chapter gives us a picture of Oman’s natural resources like crude oil reserves, Natural gas reserves, it’s production and consumption and exports and imports etc.. Chapter : 3 - Profile of Arabian Industries LLC This chapter discuss about the history, growth, activities, it’s subsidiaries, joint ventures, projects, products, vision and it’s quality and responsibilities towards the environment and society. Chapter : 4 - Functional Departments. Functional departments discuss about the various departments in the organisaion, it’s functions and responsibilities and the functional of interdependence of departments Chapter : 5 - SWOT Analysis SWOT analysis of this study reveals the present position of the organization. It is the assessment of the organization’s internal Strengths and Weaknesses and Opportunities and Threats posed by its external environment Chapter : 6 - Findings-Suggestions and Conclusions. 4
  • 5. This the last chapter of this report and it discuss about the findings of some major problems identified during the study and certain remedial measures to be taken to overcome the identified problems and conclusion of this report. CHAPTER 2 AN OVERVIEW OF OMAN ECONOMY AND PETROLEUM SCENARIO 5
  • 6. OMAN ECONOMY & PETROLEUM SCENARIO The twenty third of July 1970, the date of accession to the rule of the country by His Majesty Sultan Qaboos bin Said, Sultan of Oman, is of prime significance in Oman's history. It forms a watershed between traditional and modern Oman. Since then the Sultanate, under the leadership of His Majesty Sultan Qaboos bin Said, Sultan of Oman, started establishing the pillars for its modern The Vision for Oman's Economy: Oman 2020 aims at carrying out a substantial transformation in the structure of the national economy by developing a multiplicity of income sources, instead of depending mainly on a depletable source like oil in order to achieve economic balance and sustainable growth. Accordingly, it is expected that there will be a gradual decrease in the contribution of the oil sector to the GDP while the contribution of the non-oil sectors to GDP will increase gradually. It is expected that by 2020 the oil sector contribution to GDP will be 9% while the contribution of the gas sector will increase to 10 %. This significant transformation of the structural composition of the production base of Oman's economy is what we mean by economic diversification Now Oman is a middle income economy that is heavily dependant on dwindling oil resources. Because of declining reserves, Muscat has actively pursued a development plan that focuses on diversification, industrialization, and privatization, with the objective of reducing the oil sectors contribution to GDP to 9% by 2020. The drop in oil prices in 2008 and the global financial crisis reduced Oman’s budget surplus in 2008 and slowed the pace of investment and development projects, but GDP growth still was positive, in part because Muscat implemented an expansion fiscal policy. The global financial and economic crisis of 2009 was a major test for all the Gulf countries, but Oman’s steady and careful development policy and it’s long term vision kept it immune from the worst implications of the crisis. Now the world economy is on the path of recovery and oil prices are on the rise again, the Sultanate is geared for further economic growth and development. Despite a sharp fall in average oil prices in 2009, the Omani govt. has managed to keep it’s fiscal amount close to balance. Oman’s economy has navigated through the global economic crisis in 6
  • 7. relatively good shape. Although country’s real non oil growth fell sharply in 2009, it remained in positive territory. Oman’s financial sector was less affected by the global economic crisis and the countries modest level of indebtedness has limited it’s external vulnerability. Petroleum Development Oman Petroleum Development Oman is the foremost exploration and production company in the Sultanate. It accounts for more than 90% of the country's crude-oil production and nearly all of its natural-gas supply. The Company is owned by the Government of Oman (which has a 60% interest), Royal Dutch Shell (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a 2% interest). The first economic find of oil was made in 1962, and the first consignment of oil was exported in 1967. Details Oil and Gas. Production and Consumption Oil Production : 806,000bb/day.- (2008) Oil Consumption : 81,000 bb/day.- (2008) Oil Exports : 593,700 bb/day- (2008) Oil Imports : 17,290 bb/day - (2007) Oil Proved Reserves : 5.5 billion bbl - (Jan-2009) Natural Gas Production : 24 billion cu – (2008) Natural Gas Consumption : 13.46 billion cu m – (2008) Natural Gas Exports : 10.89 billion cu m – (2008) Natural Gas Imports : 350 million cu m – (2008) Natural Gas proved Reserves : 849.5 billion cu m (Jan-209) Chart No.-1 Oman Oil-Production and Consumption 7
  • 8. CHAPTER 3 Mr.Amer Al Suleimani (Managing Director) 8
  • 9. ARABIAN INDUSTRIES LLC – A PROFILE Managing Director HR Joint Venture (JV) Finance WPAI Manager Internal Chief Auditor Operating Officer Logistic & CMGR. Head Head Head Procureme Asset HSEM QAQC AIMLLC AIPLLC AITSLLC nt Control Manager Manager Corporate Planning Marketing Proposal Engineer ORGANISATION CHART OF ARABIAN INDUSTRIES LLC 3.1 PROFILE OF ARABIAN INDUSTRIES LLC Arabian Industries LLC is a leading engineering company catering to the needs of the energy sector for the MENA region. It has facilities and expertise to meet the varied client needs of the Oil/Gas and other energy sectors in the production, Processing and delivery phases. Started in 1991 in The Sultanate of Oman, they have grown steadily and won many accolades and appreciations. The most prestigious 9
  • 10. achievement is the Year 2008 “His Majesty Cup award for best five factories”. Their commitment to the job, quality of work, earnestness to provide Total Solutions and desire to surpass client expectations has consistently earned repeat business from their esteemed clients. These qualities enable them to compete in international markets and succeed. 3.2 THEIR CAPABILITIES INCLUDE: 1. Engineering – EPC projects, Design and Engineering of Vessels, Skids and Tanks. 2. Manufacturing – Fabrication of Pressure vessels, Skids, Tanks, Heat Exchangers, Columns, Process piping and Structural works 3. Construction – For the Oil and Gas industry, Refineries, Petrochemical projects, 4. Power plants as well as Power transmission & distribution networks and associated works 3.3 ACCREDITATIONS TO ARABIAN INDUSTRIES LLC. • ASME ‘U’, 'U2' ‘S’ & ‘R’ Stamps: For the manufacture and repair of Pressure Vessels at their state-of-art facilities at Rusayl & Sohar work centre. • Society is their cradle so they need to preserve and enrich it; Customers are their Patrons so they need to honor their commitments with them; • The employees are their biggest assets, so they need to nourish and help them grow. “Arabian Industries LLC and its subsidiaries are committed to become one of the leading companies providing complete solutions to the energy sector by enhancing customer satisfaction, strengthening employee & supplier relations and continually improving its product & services through the Quality Continuous Improvement, Enhancing Employees Safety, Providing proper resources & suitable working environment, achieving national development and improving profitability and budget”. Chart No.2 M th Sales G ow on ly r th 3 ,00 ,00 0 0 0 12 11 2 ,00 ,00 0 0 0 10 9 Sales 8 7 1 ,00 ,00 0 0 0 6 4 5 S rie e s1 3 1 2 0 1 2 3 4 5 6 7 8 9 1 1 1 S s1 erie 1 2 4 6 6 9 11 1 1 1 2 2 , , , , , , 3 7 9 1 5 Mn o th 10
  • 11. Monthly Sales for 2010 JAN 1,882,085 MAY 6,959,717 SEP 17,110,852 FEB 2,790,538 JUN 9,208,672 OCT 19,076,943 MAR 4,029,629 JUL 11,125,912 NOV 21,301,852 APR 6,190,402 AUG 13,951,489 DEC 25,966,417 Chart of Monthly sales for 2009 3.4 Prestigious Product Range of Arabian Industries • Production & Test Separators • Pressure Vessels & Scrubbers • Reactors & Regenerators • Heat Exchangers & Coolers • Storage Tanks (Shop built) • Fuel treatment packages 3.5 Arabian Industry sincerely believes in: • Society is their cradle so they need to preserve and enrich it; • Customers are their Patrons so they need to honor their commitments with them; • Their employees are their biggest assets, so they need to nourish and help them to grow. 3.6 SUBSIDIARY COMPANIES & JOINT VENTURES 3.6.1 SUBSIDIARY COMPANIES 3.6.1.1 ◙ARABIAN INDUSTRIES MANUFACTURING LLC –(AIM-LLC) Arabian Industries Manufacturing Co. LLC (AIM) (a subsidiary of Arabian Industries LLC), is the manufacturing division providing complete solutions for engineering, procurement and fabrication of equipments to cater to clients in the Oil & Gas, Petrochemicals, Power , Fertilizer, Chemicals, and Refinery industries. The nature of activities focuses on experience, expertise, performance, safety, reliability and quality. ◙ ARABIAN INDUSTRIES PROJECTS LLC –(AIP-LLC) Arabian Industries Projects LLC (AIP), a subsidiary of Arabian Industries LLC, is the Projects Division providing Engineering, Procurement, Construction and commissioning 11
  • 12. services, to cater to clients in the Oil & Gas, Petrochemicals, Power, Fertilizer, Chemicals and Refinery Industries. The nature of activities involves Management and Execution of Engineering, Procurement, and Construction projects including associated Health, Safety and Environmental systems. AIP has a sound Management policy with emphasis on teamwork, efficiency and personal relations at all levels. 3.6.1.2 ◙ ARABIAN INDUSTRIES TECHNICAL SUPPORT LLC –(AITS-LLC) Arabian Industries Technical Support LLC (AITS), a subsidiary of Arabian Industries LLC, is a provider of total maintenance solutions under one roof to cater to clients in the Oil & Gas, Petrochemicals, Power, Fertilizer, Chemicals and Refinery Industries. With the strategic location of its Machine Shop facilities, AITS is well poised to deliver its services promptly on time to its valued clients. Arabian Industrial Technical Support LLC has its own Fabrication, Machining, Thermal spraying, grinding and NDT facilities. 3.7 JOINT VENTURE Arabian Industries LLC has entered into a JV with two foreign companies. They are listed below. 3.7.1 WORLEY PARSONS –ARABIAN INDUSTRIES J.V. (WPAI J.V.) The WPAI - J.V. was formed between Arabian Industries LLC. and Worley Parsons (Oman) during the middle of 2005 as a framework to cater to the Engineering, Maintenance and Construction contract for Petroleum Development of South Oman, awarded by PDO. This is a five year contract which can be extended to 7 years. The major scope involves the following: 12
  • 13. Design, Detailed Engineering, Procurement, Construction, Pre-commissioning and commissioning of Oil and Gas facilities covering the complete Civil, Mechanical, Electrical & Instrumentation works involved in new and developmental projects 3.7.2 NORM PROJECT J.V. This is another J.V. formed between Arabian Industries LLC. and an International institution (specializing in the treatment of radioactive contamination). NORM STANDS FOR : “Naturally Occurring Radioactive Materials” which are found in the PDO sites during production of Oil from oil-wells. This project involves a patented process of decontamination of such NORM contaminated equipments used in Oil processing, to the Environmental criteria required for releasing them for reuse or scrap. This entails suitable investments in setting up decontaminating facilities and developing the required infrastructure in PDO sites for the said purpose. 3.8 PRODUCTS, CAPABILITIES AND SERVICES LISTING 3.8.1 OVER VIEW Arabian industry is a leading EPC Contracting Company, specialized in design, engineering, project construction, fabrication, and testing activities in Oil and Gas, Refineries, Petrochemicals and Power sectors. EPC Projects • EPC Projects: Gas Treatment Plants; • Gas Pressure Reducing Stations; • Steam and Water injection facilities; Power Plants 13
  • 14. Maintenance Support • Valve Testing , Repair & Maintenance services • Repair & maintenance of choke valves • Maintenance of static equipments • Maintenance... Process Equipment • Engineered Process skid packages • Pressure Vessels • Heat exchangers & coolers • Heaters (direct/ indirect) & Shop built storag. Etc.. 3.8.2 FACILITIES ARABIAN INDUSTRIE’S MANUFACTURING AND FABRICATION facilities are located at the capital city of Muscat and the port city of Sohar, in The Sultanate of Oman. SOHAR WORKSHOP Situated in an area of 12000 m2. High roof bays can handle a single section weighing up to 100 Ton under the shed and 250 Ton in the yard, with thickness up to 150 mm in mono block construction. RUSAYL WORKSHOP The Rusayl workshop houses a fabrication facility with a well equipped covered bay and an open yard which can handle a single section weighing up to 200 Ton in the yard with thickness up to 80 mm in mono block construction. PROJECT FACILITIES are located at their sites and these include temporary facilities like camps with associated utilities. Other resource mobilizations include Plant, Equipment and Manpower suited to the typical requirements of each project and client. Support services like procurement, contract administration, cost control, manpower recruitment, etc. are rendered from Head Office in Muscat. All 14
  • 15. the operations are backed by a logistic management system overseeing the deployment of a well maintained fleet of vehicles and equipments. ARABIAN INDUSTRIES TECHNICAL SUPPORT LLC has its own maintenance facilities at two locations – one at Rusayl (In Muscat) and another on the coastal city at Sohar. RUSAYL WORKSHOP Rusayl Workshop, has its own Maintenance facilities in Rusayl Industrial Estate. ITS-LLC is under certification process for API Monogram License (6A & 6D). ITS Rusayl workshop has an overall area of 6550 square meters out of which 900 square meters are covered. SOHAR WORKSHOP Sohar Workshop, at Plot No: 257-259,261 &262, P. O. Box 93, Postal Code 327, and Sohar Industrial Estate has its own Maintenance facilities in Sohar Area. ITSLLC is under certification process for API Monogram License (6A & 6D). ITS Sohar workshop has covered area of 2310 square meters and material storage facilities. 3.8.3 CAPABILITIES ENGINEERING & CAPABILITIES • Mechanical design of process equipments like pressure vessels, heat exchangers, separators, manifolds and pre engineered skid packages and columns as per International standards ASME Sec VIII Div1 & 2, PD 5500 Shell standards. • Design of Shop and site Storage tanks as per international standards API 650, 653, EN 14015 and Shell standards & Design of direct and indirect heaters, fuel gas treatment plants • Regular association with reputed international process owners and licensors in the Oil & Gas, Refinery and Petrochemical industry for the design of equipment internals. MATERIAL HANDLING, PREPARATION AND FORMING • In-house mobile cranes of 25,50 & 80 MT capacities , and Over head cranes of single piece handling capacity up to 50 MT . • Hydraulic lifting and jacking arrangement for heavy loads up to 250 MT and CNC operated multi torch profile cutting machine. 15
  • 16. • Hydraulic rolling machines capable of rolling up to thickness range of 110 mm in cold condition • Heavy thick plate shearing and bending machineries and Fast cutting and pipe beveling machines up to diameter 64” etc. WELDING AND JOINING TECHNOLOGY • Core competency and expertise in welding and joining technology of all construction metals, especially in DSS,CRA and special alloy steels • Qualified for a wide range of welding procedures up to 200 mm thickness Machining Arabian Industries workshops are fully supported by in house machining facility with modern lathes, milling, grinding, drilling, boring and press machines. Testing • Hydro/pneumatic testing bays and facilities and RT/MT/UT/PT/PWHT/PMI and other NDT facilities. • Tie ups with authorized testing laboratories for the mechanical and chemical testing etc. Heat Treatment • PWHT facilities by Internal and external firing methods • Local stress relieving facilities by electrical methods • Gas fired PWHT furnaces adjustable to equipment sizes. Painting and Coating Qualified and certified for specialized painting, coating systems like GRE, Belzona, glass flake, customized internal linings and corrosion resistant coatings. Support Services All their operations are backed up by a well managed fleet of vehicles and logistics existing at both their facilities. EPC and CMEI Construction works in: • Oil & Gas, Refineries, Fertilizers, Petrochemicals, Steel Industries, Ports etc. Major Services Offered 16
  • 17. • Maintenance of Static Equipments and Heat Exchangers including Tube Cleaning, Re-tubing and Plugging • Maintenance, Overhauling and Condition Monitoring of Compressors, Pumps, Turbines and DG Sets. • Choke Manifolds , Mud Pumps , Blow out preventers , and Well Head Equipment & X-Mas Trees. • Other Equipment pertaining to API 6A & 16A , and Valve Testing, Repair & Maintenance Services etc. Other Services • Workshop Based, Metallic and Ceramic Spray Coating , Hard Facing , Dynamic and Balancing • Crossover & Spare Parts Manufacture , Stellite Coating , All types of machining jobs. • Heat Exchanger internal tube coating using etc. Site Based • Bolt Tensioning , Flange Facing (on Site Machining) , Hydro Jetting , Fast Cutting of Pipes etc. • Turn Around and Shut Down Maintenance of Plant Facilities etc. 3.8.4 EQUIPMENTS SOME OF THE MAJOR EQUIPMENT & MACHINERIES UNDER ARABIAN INDUSTRIES LLC Description of Equipment Machine Capability & capacity CNC Profile Cutting Machine CNC operated gantry type multi torch ( 6 No Oxy fuel torches and 1No plasma torch ) profile cutting( Flame and plasma)machine for plate(CS) thickness up to 180 mm equipped with programmable CNC controller 4-Roll and 3-Roll Plate Rolling CNC Operated electronic synchronized 4- roll high thick plate rolling Machines machine(DAVI Make) for cold rolling up to 110 mm and hot rolling up to 212 mm thickness for 3.0 m width plates. 2 Nos. 3 Roll hydraulic plate rolling machines Heavy Duty Fast Cutter Heavy duty fast cutting and pipe beveling machines in diameter ranges 2 to 36 inches for CS/ SS/ LTCS/ DSS/ SDSS/ Inconel/ CRA (Make – DL RICCI, USA ) with pneumatic/hydraulic drives Cranes and Lifting equipment In-house mobile cranes of 25 & 50 MT capacities. Over head EOT cranes of capacities 5/10/25 & 50 MT with single piece handling capacity under the shed up to 100 MT.Hydraulic lifting and jacking arrangement for heavy loads up to 250 MT.Jib cranes of 2 Ton and 3 17
  • 18. Tons el. Hydraulic Pipe Bender Hydraulic pipe bending machines capable to roll 20D and 40D bends upto 12" Sch 40 3.8.5 PLANT AND MACHINERY SOME OF THE MAJOR PLANT AND MACHINERY ITEMS : Equipment Type Available Qty Model Make Welding Rectifier 8 Nos XMT400, CST380,TB/10S/1000 Miller, Techsol High Frequency/ Tig 2 Nos HF251-D1 Miller Machine Magnetic Drilling 2 Nos A100, 1150W Unibore, Bosch Machine Power Generator 5 Nos 108KV, P12.5P2/PETP3, GEP 33-1/30 Caterpillar, FG Wilson, KVA-24KW, GEP 65-5/60KVA Olympian 48KW Portable Generator 4 Nos RGD 500, SDV 7000S Robin, Potenza Air Compressor 4 Nos XA 136, XAHS 710 CD7FB, XATS- Atlas Copco 156, XA-186 Blasting Pot 1 Nos 24650 Blastline (CE) 3.8.6 STRENGTH OF MANPOWER Man Power Category 2009 2008 2007 2006 2005 Managers: 30 25 22 18 15 Engineers: 120 110 95 75 60 General Support Staff: 55 45 38 35 25 Supervisory workforce: 750 700 690 600 550 General workforce: 1800 1725 1600 1475 1400 Total Manpower: 2755 2605 2445 2203 2050 18
  • 19. M nP w r a o e 20 09 20 09 20 08 20 08 20 07 20 07 S rie 1 e s 20 06 Stren th g 20 06 S rie 2 e s 20 05 20 05 S rie 3 e s 20 04 20 03 S rie 4 e s 1 S rie 5 e s Ya er 3.8.7 SOME OF THE MAJOR PROJECTS OF ARABIAN INDUSTRIES LLC “Over the last few years, AI-LLC, own a strong market presence and customer recognition with endless capabilities, resources and dedicated manpower. “ 1-Petroleum Development of Oman Petroleum Development Oman is the foremost exploration and production company in the Sultanate. It accounts for more than 90% of the country's crude-oil production and nearly all of its natural-gas supply. The Company is owned by the Government of Sultanate of Oman (which has a 60% interest), Royal Dutch Shell (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a 2% interest). Project-1 1Project C31/0606: Engineering and Maintenance Contract - PDO JV Partner Worley Parsons Type of Contract Service Contract Project-2 Name of Project DCME & I Engineering Service Contract No. C-680046, -PDO Duration of the project 4 Years Type of Contract Main sub-contractor for complete mechanical works + 19
  • 20. Project-3 Name of Project Fahud Steam Injection Project - PDO Duration of the project 12 months Type of Contract EPC Lump sum Project-4 Project C31/1097: Hubara -Saih Rawl - 132 kv Overhead line, South Base Duration of the project 25 months Type of Contract EPC , Lump sum Project-5 Name of Project Pressure Reduction Terminal -PDO Duration of the project 25 Months Type of Contract Main EPC Contractor Project-6 Name of Project Conversion of Propylene sphere to LPG services -PDO Duration of the project 24 months Type of Contract Main Contractor lumpsum 2-Petrofac Engineering & Construction Ltd Petrofac is an international provider of facilities solutions to the oil & gas production and processing industries. 1-Name of the Project LP Vessels for Kauther Gas Plant -Kauther Gas Project, PDO 2-Name of the Project Storage tanks ( CS/SS) for Kauther Gas plant (8 No), 3-Name of the Project DSS/SS Heavy wall piping for Kauther Gas plant 3-Worley Parsons Oman Engineering LLC 3.1 Name of the Project EPC of Gas floatation & Degassing tanks Design code DEP 34.51.01.31 & EN 14015-2004 3.2 Name of the Project EPC of two no of Settling tanks Design code DEP 34.51.01.31 & EN 14015-2004 3.3 Name of the Project PDO – Fahud Production & test Separators 20
  • 21. Steam Injection Project 3.4 Name of the Project DSS/SS Heavy wall piping for Kauther Gas plant-(8,000- Inch.dia), Kauther Gas Project, PDO 4-KEMPE Engineering LLC 360 T Silos Name of the Project Sohar Aluminium Smelter Development Project 10 nos. LP Vessels for PDO Saih Nahada Gas Plant- Name of the Project Qarnalam . PDO-Contract C 31/0090 SOME OF THE PRESTIGIOUS PRODUCTS FROM ARABIAN INDUSTRIES LLC. 1-BURHAN THREE PHASE PRODUCTION SEPARATOR. 2-BULK SEPARATOR FOR MARMUL PDO PROJECT. 21
  • 22. 3-LP/HP VESSELS FOR SOHAR REFINERY PROJECT FOR JGC CORPORATION JAPAN. 4-PRODUCTION SEPARATOR – PETROLEUM DEVELOPMENT OMAN PROJECT. 5-WATER INJECTION UPGRADE FOR AXIA HAWMAR-UK PROJECT. 22
  • 23. 6-GAS TREATMENT PLANT-BHEL PROJECT FOR PETROLEUM DEVELOPMENT OMAN. 1 2 23
  • 24. ENGINEERING PROCUREMENT AND CONSTRUCTION OF SOHAR REFINERY PRESSURE REDUCTION TERMINAL.. CLIENT: OMAN GAS COMPANY.. 1 2 24
  • 25. 3.9 QUALITY POLICY OF ARABIAN INDUSTRIES LLC. A dedicated team of Quality Assurance and Quality Control Engineers (lead by the Company’s QA/QC Manager and Quality Systems Engineer) supports the implementation and monitoring of Quality Management of the Company. All departments in the Company are certified to ISO 9001 and regular internal and external audits are conducted to check the compliance and renewal of certificate. 25
  • 26. ISO 9001:2000 requires that an organization’s quality policy provide a framework for reviewing the company’s quality objectives. The policy should give an overall direction for the organization, and its objectives should flow in that direction. But because of outside forces such as customer requirements and market environments, business conditions can change. If this happens, the alignment between quality policy and objectives can become off-centered. So, the standard requires that management periodically review changes to both the policy and objectives. An organization’s objectives must be measurable and its quality management system processes designed to meet those objectives. 3.10 MISSION AND VISION 3.10.1 MISSION AND VISION OF AI-LLC 1 Mission To achieve market leadership through excellence in the quality of product and services by adopting state of the art technologies and innovative management approaches aim towards customer satisfaction. 2 Vision Arabian Industries LLC is committed to providing their clients with the best possible service and results at a competitive price, without compromising on quality, health, safety, environment, business ethics or welfare of their staff. “As a recommended supplier, and a preferred employer, AI LLC is meeting the objectives and needs of their clients & employees.” 3 Policy Arabian Industries LLC and its subsidiaries are committed to become one of the leading company providing complete solutions to the energy sector by enhancing customer satisfaction, strengthening employee & supplier relations and continually improving its product & services. AILLC and its subsidiaries strive to achieve this through the following objectives: 26
  • 27. • Continually improving the effectiveness of quality Management System • Enhancing safety of employees and protecting the Environment • Timely delivery of products • Providing adequate resources and suitable work environment • Training & Development of work force and meeting statutory Omanaization target • Improving profitability 4 Strength Integrity in diversity. Though their business expands to diverse sectors they still abide by their vision & policy and maintain integration of their Quality management system and consistency of operations through empowerment, motivated & dedicated peers and strong leadership 5 Approach AILLC is a customer-focused organization nurturing the culture of internal-customers & external- customers through out the organization. They achieve this through team-building, supply chain management and continual training & development of their employees. 6 Credentials AI LLC’s quality management system established since 1996 has been certified to ISO 9001 – 2000. Their pressure equipments manufacturing facilities are accredited by ASME for U, U2, S and R stamps. Oil & Gas field equipments manufacturing facilities are certified by API for conformance to 6A, 6D and 16A requirements. ISO 9001: 2000 AI LLC’s Quality Management System is certified to ISO 9001: 2000 by M/S. Velosi Quality Management International Limited. The scope of accreditation includes: 3.11 ARABIAN INDUSTRIES MANUFACTURING LLC Design, manufacturing and installation of process equipments like columns & reactors, pressure vessels & separators, heat exchangers, gas treatment packages, manifolds, piping pre-fabrication and storage tanks in accordance with ASME/U/U2/S/R symbol requirements / BS & other international standards. 27
  • 28. 3.12 ARABIAN INDUSTRIES PROJECTS LLC Engineering, procurement, construction, project management (involving project planning execution, monitoring, installation, commissioning and post delivery maintenance activities) for oil & gas, desalination & power plant, fertilizer plant, storage tanks, pipeline construction, flow line construction, electrical over head lines. 3.13 ARABIAN INDUSTRIES TECHNICAL SUPPORT LLC Manufacturing of products according to API monogram maintenance of pumps, compressors, turbines & wellhead equipment repair and re-manufacture of all types of valves pressure vessels, tanks, heat exchanger cleaning and re-tubing, machining of oil & gas field items, calibration, pressure gauges, on site service like bolt tensioning, flange facing, cold cutting, on-line repairs of valves. 3.14 CORPORATE OBJECTIVE 3.14.1 To be of service to the nation and to contribute effectively to its economic well being and growth through the production, supply and marketing of infrastructure facilities to Petroleum Production and it’s allied industries in Sultanate of Oman. 3.14.2 To sustain and improve its pioneering role in the development of engineering and technology in manufacturing industry through continuous research and development. 3.14.3 To improve productivity and maintain high standards of quality and adopt effective measures for controlling cost in all aspects. 3.14.4. To ensure for its customers the availability of its products and services on reasonable terms, for its shareholders a fair return on capital invested and, for itself, development of adequate internal resources for continual growth and expansion. 3.14.5 To develop, train and maintain a team of motivated and disciplined personnel with required skills and abilities, and to encourage innovation and to create a condition for their functioning and career development so as to improve their overall quality of life 3.15 CORPORATE GOALS 3.15.1 To achieve a net profit of OMR: One Million per year with a turnover of OMR: 100 Million by the year of 2010 3.15.2 To focus on cost reduction and technology up gradation in order to become competitive in each line of business. 3.15.3 To constantly innovate and develop new technology and services to satisfy customer requirements. 28
  • 29. 3.15.4 To invest in new business lines, where profit can be made on sustainable basis over the long te rm. 3.15.5 To compete through speed, agility and flexibility in recognizing and capturing opportunities in existing markets. 3.16 ARABIAN INDUSTRIES LLC AND IT’S CORPORATE SOCIAL RESPONSIBILITY 3.16.1 CORPORATE SOCIAL RESPONSIBILITY-(CSR)” Corporate Social Responsibility a concept whereby organisations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organisations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large.” • Reduced costs, Increased business leads, • Increased reputation, staff morale and skills development • Improved relationships with the local community. 29
  • 30. • Innovation in processes, products and services • Managing the risks a company faces. 3.16.2 ECONOMIC RESPONSIBILITIES: The first criterion of social responsibility is economic responsibility. The business institution is, above all, the basic economic unit of society. Its responsibility is to produce goods and services that a society wants and to maximise profit for its owners and shareholders. Economic responsibilities, carried to the extreme, is called profit-maximizing view; it was advocated by Nobel economist Milton Friedman. This view argued that a company should be operated on a profit-oriented basis, with its sole mission to increase its profits so long as is stays withing the rule of the game. The purely profit-maximizing view is no longer considered an adequate criterion of performance in the world in general. Treating economic gain in the social as the only social responsibility can lead companies into trouble. 3.16.3 LEGAL RESPONSIBILITIES All modern societies lay down ground rules, laws and regulations that businesses are expected to follow. Legal responsibility defines what society deems as important with respect to appropriate corporate behavior. Businesses are expected to fulfill their economic goals within the legal framework. Legal requirements are imposed by local councils, state and federal governments and their regulating agencies. Organizations that knowingly break the law are poor performers in this category. Intentionally manufacturing defective goods or billing a client for work not done is illegal. Legal sanctions may include embarrassing public apologies or corporate ‘confessions’. 3.16.4 ETHICAL RESPONSIBILITIES Ethical responsibilities include behavior that is not necessarily codified into law and may not serve the organization’s direct economic interests. To be ethical, organization’s decision makers should act with equity, fairness and impartiality, respect the rights of individuals, and provide different treatments of individual only when differences between them are relevant to the organization’s goals and tasks. 30
  • 31. Unethical behavior occurs when decisions enable an individual or organization to gain expense of society. 3.16.5 SOCIAL AWARENESS AND EDUCATION The role among corporate stakeholders to work collectively to pressure corporations is changing. Shareholders and investors themselves, through socially responsible investing are exerting pressure on corporations to behave responsibly. Non-governmental organizations are also taking an increasing role, leveraging the power of the media and the Internet to increase their scrutiny and collective activism around corporate behavior. Through education and dialogue, the development of community in holding businesses responsible for their actions is growing. 3.16.6 STAKEHOLDER PRIORITIES Increasingly, corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Understanding what causes are important to employees is usually the first priority because of the many interrelated business benefits that can be derived from increased employee engagement. Key external stakeholders include customers, consumers, investors (particularly institutional investors), regulators, academics, and the media). WHEEL OF SUCCESS “Upholding the belief that "giving back to the society from which one is benefited", 31
  • 32. Arabian Industries LLC is committed to contributing to the sustainable development of the communities in which its businesses are operated. They recognize that achieving corporate social responsibility while meeting their business objectives requires balance among all stakeholders, including shareholders, customers, staff, business partners, community and environment. Therefore, the organization has been participating in various initiatives, including charity, education, culture & sports, environmental protection and promoting staff's well-being and volunteerism, to enhance their positive impact on people and communities” CHAPTER 4 32
  • 33. FUNCTIONAL DEPARTMENTS 1-FINANCE DEPARTMENT 1. Objectives 8.1 To Manage & account for the financial resource of the Organization, to forecast its requirement in the future and plan accordingly and to check for deviation. 8.2 Report the financial performance of the company to Management, stakeholders & and to comply with the Govt. rules and regulations 33
  • 34. 2. ORGANISATION CHART OF FINANCE DEPARTMENT. MANAGER-FINANCE MANAGER FINANCE (ASSISTANT CHIEF ACCOUNTANT ACCOUNTS-PAYABLE ACCOUNTS-RECEIVABLE ACCOUNTS-PAYABLE ACCOUNTS RECEIVABLE ACCOUNTS-PAYABLE BANK MANAGEMENT INVENTOR MANAGEMENT CASH MANAGEMENT ASSET CONTROL DEPARTMENT SALARY AND WAGES FUNCTIONS OF FINANCE DEPARTMENT Some of the major functions in finance departments are, Management of Accounts Receivable, Accounts Payable, Accounting of Materials, Banking, Managing of Financial Resources and Budget preparation, Cost accounting, Auditing, Preparation of financial statements & Reports, Corporate Planning etc. According to the nature of the functions, Finance department in AI LLC is divided into four main sections for carrying out its process. They are: 34
  • 35. 3.1 Stewardship of Finance Functions 3.2 Servicing and Monitoring of Project Management Activities 3.3 Management of Company Accounts 3.4 Implementation of Corporate and Contract Budgets. 3.1 Stewardship of Finance Functions 3.1.1 Development of finance facilities 3.1.2 Liaison with bankers and other funding agencies. 3.1.3 Managing funding flow and cash balances. 3.1.4 Providing for requirement of Corporate Budgets. 3.1.5 Reporting on financial status to Management. 3.1.6 Liaising with Customers & Suppliers regarding cash flow. 3.1.7 Publishing monthly, quarterly, and Annual Financial Statement. 3.1.8 Development of Management Information system. 3.2 Servicing and Monitoring of Project Management Activities. 3.2.1 Supporting Estimation and Tendering Effort 3.2.2 Approving entries for Finance and Accounts in Estimate summary. 3.2.3 Supporting with Finance and Accounts Services during execution. 3.2.4 Monitoring and Reporting Progress during execution. 3.2.5 Reporting Project Performance on Completion. 3.2.6 Insurance Management. 3.3 Management of Company Accounts. 3.3.1 Banking Management and Controls (Cash Book ledger) 3.3.2 Accounts Receivables and Accounts Payables Management 3.3.3 Inventory/Purchase Administration-(AP Ledger) 3.3.4 Salary and wages, Administration, End of Service 3.3.5 Preparation of Year end Accounts/Management of External Auditing. 3.3.6 Preparation of quarterly and Annual Performance Report 35
  • 36. 3.4 IMPLEMENTATION OF CORPORATE AND CONTRACT BUDGET 3.4.1 Review of Project control budgets 3.4.2 Management of corporate budget Exercise. 3.5 PROCESS OF FINANCE DEPARTMENT. 3.5.1 Accounts Payables. 3.5.1.1 Receiving Invoices from suppliers 3.5.1.2 Verification of invoice with PO and supporting documents. 3.5.1.3 Sorting the invoice according to the divisions and logged in ERP accordingly. 3.5.1.4 Getting the approval in the invoice from the respective buyer 3.5.1.5 Prepare GRN and ARN and approval for the service category invoices 3.5.1.6 Booking the invoices in ERP on the basis of Purchase Order. 3.5.1.7 Print and attach Purchase Journal Voucher along with invoices. 3.5.1.8 On due basis releasing the payment to the suppliers. 3.5.2 Account Receivable. 3.5.2.1 Receive Customer order from Marketing or operation department. 3.5.2.2 Receive copy of DO or JCR from the operation department 3.5.2.3 Generate Print and compile Invoice from ERP 3.5.2.4 Scrutinize the invoice with relevant documents. 3.5.2.5 Distribute the invoice to the customers 3.5.2.6 Follow up for the payment and prepare receipt for the payment. 3.5.3 Cash Payouts. 3.5.3.1 Cash payment vouchers for sundry office expenses 3.5.3.2 Employee settlement as per the advice from salary department. 3.5.3.3 Verification of document with supporting 3.5.3.4 Take approval from Account head. 3.5.3.5 Closing cash book every day 3.5.3.6 Physical cash verification of cash balance on a daily basis. 36
  • 37. 3.5.3.7 Surprise check of cash balance weekly basis. 3.5.3.8Taking approval, Pay and book the voucher in ERP. 3.5.4 Salary Processing and Accounting. 3.5.4.1 Collect, Re-concile and compile attendance data. 3.5.4.2 Attendance is recorded at each location on daily basis. 3.5.4.3 Inform res. division for missing attendance. 3.5.4.4 Collect overtime data and verify with OT rules of the company. 3.5.4.5 Alter employee’s earnings and deduction for arrears. 3.5.4.6 Final processing of salary. 3.5.4.7 Print Bank transfer letter and detailed statement. 3.5.4.8 Getting authorization. 3.5.4.9 Forward transfer advice letter to bank. 3.5.4.10 Print and distribute salary slip. 3.5.5 Annual Budgeting 5.5.1 Update the Budget Assumptions. 3.5.5.3. Operating Expenses 3.5.5.4 Man Power Cost 3.5.5.5 Revenue and Over Heads 3.5.5.6 Capital Expenditures 3.5.5.7 Cash Flow. 3.5.5.8 Collect data for Next year annual budget in prescribed format. 3.5.5.9 Review the assumptions listed by Operation’s Department . 3.5.5.10 Define capacity level of each divisions and bottleneck operations. 3.5.5.11 Update Budget Model. 3.5.5.12 Compiled data received from Operations Department. 3.5.5.13 Verify cost element wise data’s with last years actual. 3.5.5.14 Compare operating cash flow with capital out flow. 3.5.5.15 Presenting budget to senior management 3.5.5.16 Release the budget to operating divisions. 3.5.5.17 Monitoring budget utilization on regular basis 3.5.5.18 Conducting quarterly budget review 37
  • 38. 3.5.5.19 Compiling actual financials for the period 3.5.5.20 Preparing detailed variance report 3.5.5.21 Revise budget accordingly and gets final approval from senior management. 3.5.6 Internal Auditing 3.5.6.1 Identify the scope of Audit 3.5.6.1.1 Checking with various departments about their need of Auditing. 3.5.6.1.2 Review the recommendations of the external auditors 3.5.6.1.3 Review the result of previous auditors. 3.5.6.1.4 Highlight the area which have not audited for a long time. 3.5.6.1.5 Then summarize this information in list of possible audit. 3.5.6.1.6 Review this list with Audit committee and seek their advice. 3.5.6.1.7 Finalize the list of audits, noting approximation of resources and time requirement. 3.5.6.1.8 Short the report by priority level 3.5.6.2 Obtain Audit Committee Approval 3.5.6.2.1 Presenting the Audit list to Audit Committee 3.5.6.2.2. Make the final adjustment recommended by audit committee. 3.5.6.2.3 Communicate the audit program and audit methodology to department heads. 3.5.6.2.4 Conduct audit as per schedule. 3.5.6.2.5 Create preliminary audit report 3.5.6.2.6 Assembling all the findings from the internal audit department. 3.5.6.2.7 Add recommendations to the reports. 3.5.6.2.8 Sending reports to the department heads. 3.5.6.2.9 Adjust the report based on any review comments. 3.5.7 Fixed Asset control system. 3.5.7.1 Receive Asset Purchase Requisition 3.5.7.2 Check the availability of the asset; if available; follow asset transfer procedure. 38
  • 39. 3.5.7.3 If asset is not available, evaluate the proposal and record the fact in evaluation form. 3.5.7.4 Send the asset purchase evaluation for approval and get the approval. 3.5.7.5 Prepare purchase requisition. 3.5.7.7 On receipt of asset ; ARN is prepared thru asset module. 3.5.7.8 Update the asset master in ERP.. 3.5.7.9 Asset invoice and ARN to be sent to accounts for making the payment. 3.5.7.10 Up date fixed asset register. 3.5.8 Depreciation Process 3.5.8.1 Monthly process depreciation in ERP 3.5.8.2 Fixed asset can be update with monthly depreciation process 3.5.9 Fixed asset accounting 3.5.9.1 Fixed asset disposal 3.5.9.2 Fixed asset physical verification 3.5.9.3 Evaluation of fixed asset proposals. 3.5.10 Monthly Management Information Report 3.5.10.1Freeze attendance for the month after confirming with pay roll executive 3.5.10.2Provision for retirement benefit-(Auto thru ERP) 3.5.10.3Provision for leave 3.5.10.4Provision for end of service benefit 3.5.10.5 Provision for Bonus 3.5.10.6Provision for Air Passage 3.5.10.7Provision for Long Term service benefit 3.5.10.8Provision for social security insurance 3.5.10.9Verify GL balance before and after posting the above positions 3.5.10.10 Process Depreciation 3.5.10.11 Process depreciation on Temp node in ERP 39
  • 40. 3.5.10.12 Process depreciation in update mode and pass JV. 3.5.10.13 Transfer GL data for the month to management thru Transfer Management account section in ERP. 3.6 SOME KEY INFORMATION 3.6.1 Insurance schemes “In personal and business affairs; the correct Insurance is vital. Wrong or inadequate cover, can lead to disastrous consequences for individuals, as well as business enterprise. The right advice makes all the difference and prevents costly mistakes. As far as a business a firm concerned, the most obvious things need, is to insure it’s valued human power, and other properties like; buildings, plant and machinery, stock and goods in transit (export and import)etc To ensure all this AI LLC is having a Health Insurance Policy for it’s valued man power, for all exports imports an Open Marine Policy, and also other various policies are under various schemes with a reputed insurance company in Oman. The various insurance schemes are: 1 Fire Insurance. 2. Machine break down insurance. 3. Electronic equipment insurance. 4. Insurance for vehicles and heavy equipment. 5. Personal health insurance. 6. Storage insurance. 7. Open cover policy for all inland and foreign purchases, and for exports and imports. 3.6.2 Corporate Plan 40
  • 41. Corporate plan is prepared by taking estimates and future projections for the coming year. The corporate plan is revised every year by changing current year data’s and adding New Year data’s. This plan projects the company’s position for the next years. 3.6.3 Working Capital Management The Working capital is essential for any Organization to meet its day to day requirements. Working capital may be specified as the firm’s current assets over current liabilities. As a large scale company, AI LLC is also requires sufficient working capital to meet its daily requirements. AI LLC uses letter of credit and bank guarantee mainly for the purpose of financing the import of raw material and for executing the project works. If the Co. needs to avail more than the approved limit, the finance department will have to take permission of Board of Directors. Arabian Industries LLC approaches different banks to raise funds to meet its working capital requirement and it maintains a consortium of banks for the same. They are: BANKERS SUPPORTING AI LLC. 1. National Bank of Oman 2. Bank Dhofar 3. Bank Sohar. 4. HSBC At present Arabian Industry maintains financial arrangements with all these four banks for it’s working capital requirements. In the case of Over Draft, a limit up to an amount of OMR#10,000,000/- (Riyal Omani: Ten Million), Guarantee’s up to an amount of OMR#15,000,000/- (Riyal Omani: Fifteen Million) and Letter of Credit up to an amount of OMR#15,000,000/- (Riyal Omani : Fifteen Thousand). 41
  • 42. 2 PURCHASE DEPARTMENT The purchase procedure covers the following areas of procurement of goods and services for the company. 1. Joint Venture related materials purchases 2 Capital items (For project and other purposes). 2. Equipment and Spares. 3. AI-LLC Project related Material purchases 4. Service items 5 Office stationery and other items 2.1 OBJECTIVES 2.1.1 To maintain uninterrupted flow of materials to support the development schedules. 2.1.2 To procure materials economically at a cost consistent with the quality and service required. 2.1.3 To provide the necessary expertise, advice, information to the Curators and Education Officers with regard to the best quality of material available in the market, supplier’s capability and performance etc. 2.1.4. To develop and maintain good buyer-seller relationship. 2.1.5. To promote source development. 2.1.6. To maintain PDO standard, reputation, and credibility in the market by fair dealings and prompt payments. 2.2. MAIN FUNCTIONS The main functions of the Purchase Department are defined as follows: 2.2.1. To maintain uninterrupted flow of materials to support the sources.. 2.2.2. Checking of requisitions/purchase indents. 2.2.3. Selection of suppliers for issue of enquiries. 2.2.4. Issuing enquiries/tenders and obtaining quotations. 2.2.5. Analyzing quotations and bids etc., and preparation of comparative statement 42
  • 43. 2.2.6. Negotiating contracts. 2.2.7. Checking legal conditions of contracts. 2.2.8. Issue of Purchase Orders. 2.2.9. Verification and passing of suppliers’ bills 2.2.10. Maintenance of purchase records. 2.2.11. Maintenance of vendor performance records/data. 2.2.12. Clearance of foreign consignments. 2.2.13. Development of reliable and alternate sources of supply. 2.3. CENTRALIZED PURCHASES 2.3.1. As every divisions has a Purchase Department, all purchases of stores shall be centralized in the interest of economy, uniformity and as a matter of policy since custodian and consumer should not be the same. Accordingly the purchase of office stationery, forms, liveries, furniture etc., shall be made by the Purchase Department and not by the administration sections. Transfer/adjustment of staff shall be made where necessary. 2.3.2. Local/cash purchase of stores shall continue to be made in exceptional cases by the Heads of Divisions/projects under their power but as far as possible Purchase Officer should be associated even while making such purchases. 2.4. VENDOR DEVELOPMENT AND VENDOR PRE-QUALIFICATION Pre qualified vendor list shall be maintained by purchase department. The vendor list comprise of all pre-qualified vendors under each category stating clearly the respective capability in terms of volume of work, specification, level of technology, etc with rating of the vendors. Addition/deletion to vendor's lists is made on a continuous basis on the above criteria. There are three types of Purchase Requisition (PR) as follows: 1. For projects and major capital equipment 2. For stores, including stationary and office supplies, spares 3 For Services. 43
  • 44. PURCHASING DEPARTMENT ORGANIZATIONAL CHART MD COO FM BUH BUH BUH PURCHASE PURCHASE PURCHASE MANAGER MANAGER MANAGER PURCHASE PURCHASE PURCHASE CLERK CLERK CLERK MD – Managing Director COO – Chief Operating Officer FM – Finance Manager BUH – Business Unit Head 44
  • 45. 3. MARKETING DEPARTMENT 3.1. Marketing Structure MD BUH BUH Marketing Executive Marketing Executive 3.2. MARKETING STRATEGY Strategic thinking is key to the evolution of successful marketing strategies of Arabian Industries LLC. This involves the following analyses: 3.2.1. STRATEGIC PLANNING Evaluate current operations Examine competitor capabilities Forecast market trends Identify related markets and growth opportunities 3.2.1.1. UNDERSTANDING MARKETS : Strategic perspective of the market requires skilful analysis of the trend and how they affect the market size and demand for the firm’s product. 3.2.1.2. FINDING MARKET NICHES : Price, service, convenience and technology are some of the niches in Oman market. 45
  • 46. 3.2.1.3. Product and service planning Analysis of the customer’s demand and the supply, both of the firm and competitors, besides an analysis of the situation in which the customer prefer the product and services. 3.2.1.4. Distribution : Structural changes in inventory management, distribution patterns are some of the key factors which are affecting the distribution process in the Oman market. 3.2.1.5. Managing for result : With pressure on costs, prices, and margins, marketers will have to make effective utilization of every baizas spent in marketing. 3.3. AI LLC’S TRATEGIC PLANNING WITH THE PORTER'S FIVE FORCES FRAMEWORK Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organization’s external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change. Porter's Five Forces is a technique that enables better strategic planning in business. The original competitive forces model, as proposed by Porter, identified five forces which would impact on an organization’s behavior in a competitive market. A Porter's Five Forces is a technique that enables better strategic planning in business. B The Five Forces have become the defector standard in analyzing a company's strategic position and its ability to generate-profits. 1. The rivalry between existing sellers in the market. 2. The power exerted by the customers in the market. 3. The impact of the suppliers on the sellers. 4. The potential threat of new competitors entering the market. 5. The threat of substitute available in the market. 6. 46
  • 47. Application Market opportunity assessment, competitive analysis, and industry blueprint Benefits: A comprehensive framework that leads to deep understanding of an industry and qualitative trends. COMPETITIVE STRATEGY + SMART PLANNING + FLAWLESS EXECUTION = SUCCESS 4. HUMAN RESOURCES DEPARTMENT 4.1. GENERAL INFORMATION Human resource management is one of the most complex and challenging fields of endeavor. It is considered to be the most expensive and important resource of every organization. In AI LLC the scope of Human Resource Department is very vast. 4.2. OBJECTIVE OF HR DEPARTMENT 4.2.1. To maintain the optimum manpower required to sustain the growth of Organization. 4.2.2. To motivate & manage human resource and train them to ensure their personal and organizational development. 47
  • 48. ORGANIZATION CHART OF HR DEPARTMENT 48
  • 49. Administration Manager HR Manager HR Executive Payroll Executive HR Assistant Payroll Assistant HR Assistant Payroll Assistant 49
  • 50. 4.3. Functions of HR department. 4.3.1. Organizational human resource planning & development 4.3.2. Retirement & selection 4.3.3. Wage & Salary administration 4.3.4. Employee records maintaining 4.3.5. Performance appraisal 4.3.6. Welfare programmer 4.3.7. Job evaluation 4.3.8. Handling employee grievances 4.3.9. Handling the legal issues within & outside the Organization 4.4. PROCESS OF HR DEPARTMENT The human resource department has 3 blocks which are: 1. Establishment 2. Industrial relation 3. Welfare 4.4.1. Establishment Section The main functions are: 4.4.1.1. Recruitment & selection 50
  • 51. 4.4.1.2. Transfer, rotation and placement of employees. 4.4.1.3. Wage and salary administration 4.4.1.4. Performance Appraisal 4.4.1.5. Retrenchment 4.5. Well-being of the employee The main objective of welfare measures is to maintain healthy working environment and raise the standards of living of employees which create loyalty to the organization among the employees.. Arabian Industry has always maintained very healthy welfare measures. Statutory scheme Agreement scheme 4.6. Following are the various facilities provided by Arabian Industries LLC to their Employees. 4.6.1 Statutory and Agreement scheme 1. Payment of gratuity 2. Health, safety, welfare 3. Transport facilities 4. Uniform & footwear to the workers 5. Leave & holidays 6. Retirement benefit fund 7. Local travel expenditure 8. Conveyance Allowances 9 Special vehicle loan & Leave travel concession 4.6.2 Voluntary Scheme and Incentives scheme 1. Free food and accommodation for the worker 2. Production incentives & Business incentives 3. Group personnel accident insurance scheme 4. Vehicle loan & Sports & Recreation 5. Incentives for employees & Suggestion scheme 4.7. Industrial Engineering 51
  • 52. The main objective of this section is to make effective utilization of the manpower resources and restructure it for the benefit of the organization. The main functions are: 1. Manpower planning that composes of Manpower audit 2. Custodian of manpower inventory 3. Removing system bottlenecks 4. Maintenance scheduling 5. Work environment study and Employee problem analysis 4.8. Administration wing The wing is headed by Ad. Manager and maintains orderliness in internal affairs of the department. The main functions are: 1. Checking the performance of each employee. 2. Consolidating the reports of different HR sections 3. Act as a linking chain between different sections 4. Office and admin work of HR department 4.9. Recruitment Policy The Recruitment policy is done as per prescribed recruitment specification with proper authority appointed by Board of Directors.. The following are the sources of recruitment. 1. Confirmed employees within the division or company 2. Recruit qualifies candidates from out side 4 FUNCTIONAL INTERDEPENDENCE OF DEPARTMENTS 52
  • 53. 5.1 Finance & Materials Finance department procures fund for production and accounts for it. With these funds materials are brought. During purchase the company has to enter into contract, give letter of credit and other necessary documents, which is done by the finance department for procuring materials Manufacturing, Marketing, Materials and finance Manufacturing department will product the items to be produced and Marketing department helps to canvas business and such way finance dept. can raise the fund required by the Company as a whole. Materials department supply the materials to the manufacturing unit. Finance and Production Production targets are made on the basis of finance budget which checks the economical feasibility of the plan and finance budget cannot prepared without knowing the production plan. Quality & Marketing Quality preserves the customers delight by ensuring the quality of the product produced and services rendered to the customers. QA and QC department will counter checks all the quality. They further goes to the workshop and check the products whether it reaches the market safely with quality. H.R Department H.R department ensures the development of human resource and its productive utilization by directing it in the right channel. IT Department 53
  • 54. The department enhances inter-departmental and intra-departmental flow of information and speedy data processing. Data access is controlled within and between departments. Constant updating is done to catch up with the modern developments. “All departments are interdependent and interrelated to each other for their functioning. One department cannot operate without the absence of the other. The performance of the company depends on the interdepartmental functioning rather than the department wise functioning” FINANCE DEPARTME NT SALES AND PURCHA MARKETIN SE G IT Departmen t Maintenan PROJECTS ce Manufactur ing CHART OF FUNCTIONAL INTERDEPENDENCE OF DEPARTMENTS 54
  • 55. Chapter 5 SWOT ANALYSIS 4.1 SWOT ANALYSIS SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, 55
  • 56. opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. AIM OF A SWOT ANALYSIS • Reveal the competitive advantages of the firm. • Analyze the prospects for sales, profitability and product development • Prepare the company to overcome problems • Allow for the development of contingency plans A. STRENGTH • A leading EPC Contracting, Manufacturing and Maintenance Company specialized in design, engineering, project construction, fabrication, and maintenance activities in Oil & Gas, Refineries, Petrochemicals and Power sectors. • 20 Years prolonged execution and experience with Petroleum Development Oman, Oman Gas Company, Oman Refinery, Petrochemical and Power sectors in Sultanate of Oman. • Well facilitated Workshops at Rusayl & Sohar Industrial Estates. • Advanced and modified Equipments to meet the progressive requirements in the field. • Experienced and long term serviced management and employees • Stable and Concrete Fund Flow. & High profiled and empowered shareholders. • Heavy investment on Manpower and machinery B. WEAKNESS • Lack of self motivated technical-know-how that leads to depend on other establishment for consultancy. 56
  • 57. • Un-availability of local manufacturers for specific materials and equipment requirements. • Unstable technical staff movements due to the exorbitant manpower requirements in the market. • Insufficient deployment on marketing. • Lack of accountability of managers and employees to achieve clear and measurable performance levels. C. OPPORTUNITY • Stable growing and requirements in Oil and Gas field • Progressive development of Petroleum Development Oman • Enhancement of Refinery activities all over the Sultanate of Oman. • Government funding on future developments • Availability of information about best practices in human resources. D. THREATS • Booming investment by the foreign establishments creating stringent competitive market. • Unanticipated intervene on investment by the Government • Deficit utilization of huge invested fixed assets due the variation of awarding and duration of contracts • Insufficient room for allotment of establishment costs in case of idle periods. • Financial recession on world economy. • Other Organizations may attract employees and business away from this industry. 57
  • 58. CHAPTER 6 FINDINGS, SUGGESTIONS & CONCLUSION 12.2 ABOUT THE STUDY This study was conducted for the Operational, Financial, Marketing and Sales at it’s Head office at Al- Khuwair , Maintanance and Fabrication at it’s Rusayl and Sohar work shop. Arabian Industry has 12 58
  • 59. main departments and are interdependent and inter dependence on each other as shown in Organizational chart and inter dependence of departments chart.. To conduct the study, Arabian Industries LLC has divided into 6 major divisions:- 1- Operational division 2- Finance divisions 3- Maintenance division 4- Fabrication Division 5- Sales and Marketing division. 6- Administration and HR Division. 12.3 FINDINGS After spending two weeks at Arabian Industries LLC, my major finding in that organization is as follows: 12.3.1 Being a large business unit, all the departments are well organized and managed by different managers, and all the departments are functioning very well and active. 12.3.2 The organisation structure is divided in to several units like Finance, Marketing, Operation & Quality, Human and Resources etc… These all departments are headed by different head units but at the same time they work for same objective with full co-ordination which shows the unity level about the organisation. 12.3.3 During the study, it was found that it is indeed a healthy organization with a lot of well unique functions. This organization basically being an engineering industry, it has a large investment and a large number of people working in it and there is a well established 59
  • 60. organizational structure with the top level management, the middle level management and the bottom level management. 12.3.4 All departments in the Company are certified to ISO 9001 and regular internal and external audits are conducted to check the compliance and renewal of certificate. There is a full swing total quality management system and it works efficiently and ensuring the total quality of the organization and it’s product and services. 12.3.5 In the company’s system of materials management, there are very less chances of damaged goods and scrap items being raised. The company takes necessary steps to see that no items become scrap in the store and damaged goods doesn’t come in and go out of the company. 12.3.6 The fabrication and mfg. departments are well equipped with all the necessary requirements and there is well functioning tool rooms which care to the needs manufacturing and fabrication. There is also effective scrap management functions carried out to the utmost profit of the company. 12.3.7 All the employees and labourers work very hard towards achieving the goal. Even the higher authorities work very hard without wasting time towards the organization goal 12.3.8 An organisation study also makes me learn that any objective cannot achieve with a short span of time it has to be done through systematic ways. Finally, in any organisation time management play important role because each activity should be done at a right time at right place. 12.4 SUGGESTIONS 12.4.1 One important suggestion is that more care and concern should be given to the clients to retain the trust of existing valued customers. 60
  • 61. 12.4.2 Advertisement like exhibitions do not helps Arabian Industry to generate so much of business, but they also should be participated in all exhibitions to generate customer awareness regarding their entire operations. 12.4.3 Company should try to improve technical service after the installation of all it’s manufactured items. No doubt the company products have technically edge over competitors but in long run they have to build stronger strategies in marking their products.. 12.4.4 Company is hiring lot of heavy equipments for the completion of the jobs in time. It is advisable that, If they would purchase more heavy equipments like heavy duty cranes and excavators, they would be in a position to make more profit.. 12.4.5 During the study, it is noticed that, open purchase orders are issuing for the purchasing of materials. Open purchase orders are the order with no value. This may leads to malpractice and it should be discontinued immediately. 12.4.6 Another important matter which was noticed, in rare cases purchase orders are issuing after the supply of materials. This practice also should be discontinued So that the chances of mis- appropriation can be controlled to a grate extent. 12.4.7 An important area which is to be taken more care is the awarding of sub contract works. It is advisable that, the company is in a position to execute the same job which is sub contracting, profit earning can be increased to a grate extent. 12.5 CONCLUSION. 61
  • 62. The study in Arabian Industries has enabled me to understand the various needs of an organization, how an organization of a corporate nature functions and how important it is to have a right relationship between the employee and employer or the management. Training in Arabian Industries LLC, will help the trainee to understand the various needs of an organization, how an organization of a corporate nature functions and how important it is to have a right relationship between the employee and employer or the management. The study was conducted with a view to understand the functions of an organization, and its various department. During the course of study I was successful in achieving these objectives and could familiarize with an organization and its environment. “This study has improved my confidence by its successful completion to undertake such studies in the future.” 62