BHP Billiton Case Study: Operational Performance and Management

This report analyzes BHP Billiton's operational performance, strategic objectives, and mission statement. It examines the company's focus on resource extraction and processing, as well as its global sales and marketing strategies. The report outlines BHP Billiton's key objectives, including creatin...Read More

Running Head: MANAGEMENT 0
BHP Billiton
Systems Thinking
Student Details

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Activity 1
BHP Billiton
BHP Billiton is one of the world’s leading resource companies. This company’s
global headquarter is situated in Melbourne, Australia. The company extracts and process the
gas, oil and minerals. Additionally, BHP sold its product worldwide with the help of the sales
and marketing team let through Houston and US (BHP Billtion , 2019).
Mission Statement
The mission statement of the organization specifies the company’s objective, and the
objective of this company is to create sustainable value for its shareholders, suppliers,
business partners, contractors, employees, communities and customers. In addition, the
mission of this organization is to create the long-term relationship with their stakeholders
with the help of various discoveries, innovative developments, different acquisitions and
natural resources’ marketing (BHP Billiton , 2018).
Strategic Objective
The strategic objective of BHP is to operate the large & long-term life, low-cost,
expansions, and acquisition of an upstream asset, which has been diversified by the market,
commodity and geographical conditions. In addition, BHP wants to acquire the position with
the appropriate advantage value, enhances the capabilities and needs to deliver the
competitive resources to fulfil the needs of the international market and this can be done with
the help effective and efficient corporate planning process (BHP Billiton , 2019).

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Outline of Operational Performance and Management
This company’s outline of the operational performance and management within 12
months specified that full-year production remains unchanged for Metallurgical Coal, Energy
Coal, and Petroleum. The total production of the Copper was between 1,700 - 1,785 kt. In
addition, the production of Iron Ore had been reduced and remains between 272 and 274 Mt.
Moreover, the Production of group copper is expected to be increased by 6% in the next
financial years (BHP Billtion, 2018).
Sources: “BHP Billiton Growing Asset Portfolio” (Skeeing Alpha , 2018)
The operational performance and management include planning, supervising and
organising, which helps in boosting the profitability in the business. Hence, it is important for
the organization to consider the operational performance and management on a priority basis.
In the above analysis, it has been observed that the BHP has an average increment in
operational performance and management (Digital Initiative , 2016).

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Activity 2
After the Industrial Revolution: Changes in Operation Management in the Mining
Industry
The development of the Industrial Revolution could not take place without the coal
and iron, hence the mining industry plays an important role in the industrial revolution. The
coal had been used for the steam engines that time and the iron ore is used for coke, which is
purer as compared to coal. As a result, in the early 1800s the mass production of the iron had
been increased, which helps in making the goods like water pipes, rails, and machine frames
by the people at that time. In addition, the mass productions of the various good after the 18th
century had also been used for transportation method (Simpson, 2018).
The industrial revolution had also been considered as the quality revolution that time
as the production of the various ores had been increased over 10 million tonnes, which leads
to the increment in the global share of the various ores of mining industry output from 20% to
80% in the years between 1970 to 2000. In addition, due to the increase in productivity the
scope of services had also been increased for the people (Wilkes, 2019).
It has been observed that after the industrial revolution, there was a drastic change in
the operational management in the mining industry and this industry has grown its
productivity tremendously and enjoying the remarkable success. However, after 2000, this
industry shows the sign of slowdown as shown in the chart given below (IG Group Limited ,
2019).

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Sour
ce: Australian and American Mining Industry Productivity (Humphreys, 2019)
Products and Services Range in BHP Billiton provides focus to operations
The operational management of BHP Billiton is designed in such a manner that it
controls the process of production of products and services. The responsibility of the
operations manager is to ensure that the operations must be effective and efficient in terms of
using the resources needed for the production of products and services (BHP Billiton , 2019).
In Operational management, the operational manager role is to establish the proper planning,
supervising and organising the provision of offer services, manufacturing of products and
productions. Therefore, the Product and services range offered by the BHP Billiton has a
greater focus on Business Operations.
The Operations and Marketing Policies in BHP Billiton
The operational policies help in defining the BHP Billiton goals for the long term and
help in providing oversights, which is necessary for the company. It includes the activities of

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the company takes place, which ensures the following of the marketing strategies, led down
by the company, which leads to the strong return on investment (BHP Billiton , 2019). The
BHP Billiton marketing strategies helps in increasing the business operations as the focus of
this company is on improving the pricing, distribution strategies and adverting, which
ultimately shows the appropriate cooperation in between the operations and the marketing
policies (BHP Billiton , 2019).
Activity 3
Reflection on the role of Operational manager in the following decisions
Operations strategy
This strategy is defined method by the company, which has been used to achieve the
objective. The operational manager plays an important role in this strategy as he is the person
who responsible for developing this strategy (Reference for Business , 2019). As the
operational manager, the individual has to perform various activities, which includes the
operating efficiency, inventory turnover, improved production and fixed asset proper
utilisation.
Customer relations
The operation manager ensures that the needs of the consumer must be satisfied by
implementing service policies in the company. In addition, as an operation manager, the
individual has to find the measures to satisfy the needs of the clients and makes the regular
upgradations in the services (Chrons , 2019). Moreover, the operational manager has to
manage the service staff.

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People management
In this, operational management has to perform many tasks such as compensate, hire,
provide benefits, and administration. In addition, the operational management needs to
develop the people management skill, which includes the appropriate communication skills,
leadership quality, motivation, training, performance feedback and delegation of the
responsibilities and the authorities.
Process management
The operations manager is responsible for managing various activities related to
process management, which includes the production of goods and services. Additionally, he
has to perform both the responsibility of managing and the operational process. The
designing, controlling, planning, improvement in performance and the operations strategies
are the part of the process management has to be performed by the individual as operations
managers.
Cost control
The operations manager is responsible for managing the activities, which are related
to the production cost of goods and services. Hence, the operations manager plays an
important role in cost management, which includes cost control. The operations manager
does cost control to identify and reduce the expenses and increase the profits for the business.
Risk control
The role of the operations manager to guide the risk manager who is responsible for
generating the policies and process related to risk management. All the operational risk needs
to be managed with the help of proper risk model, appropriate research and required
analytical support, which has been provided by the operations manager to the risk manager.

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The operations manager played an important part in the organisation as he has to
oversee the production of products and services in the organisation and the above points help
in understanding the job role of the operations managers in running the business smoothly.
Therefore, it is advisable that the organisation should hire the most efficient and effective
operations manager for further benefits in the business, which leads to the increment in the
profitability of the business.
Activity 4
System
A system is defined as the network of elements, which are interdependent. These
elements work together to establish and accomplish the aim of the system. The system in the
organisation is made up of various divisions, which includes different functions. The system
function includes marketing, financing, productivity, operations and HR.
The organisation, which operates through an open system, will interact with the
environment by giving the information and receiving the information. In a closed system, the
interaction will happen within the system, which means no interaction with the outer
environment.
Characteristics of Open System
The open system includes various characters such as input, transformation process,
boundary, feedback and change in environment. The major characteristics of the open system
are as follows:-

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a. Negative Entropy: It is counted as the ability of this system, which brings the
new energy in terms of input and environmental feedback in order to reduce the
delaying process.
b. Synergy: The open system has the ability to cooperate the whole to identify
which should be more than the summation of its parts.
c. View: The system viewpoint states that the manager can be successful if they
operate the open system units rather than the system which are closed
Characteristics of Closed System
The Closed system characteristics include the isolated system that shows no
interactions with the environment externally. The major characteristics are as follows:-
a. Efficient Procedure: The benefit of the closed system is its efficiency as it
includes the procedure, which is clear and will not be affected by outer influences.
b. Physical System: The closed system is considered as the physical system as it
does not includes certain types of transfers.
Activity 5
Role of Mayor
The mayor from the council of government usually works for the executive branch.
The voters have elected the mayor and the mayor prepares the city budget. In addition, the
councils have to approve this budget. In this activity, the mayor is the head of the five
councils in Adelaide. Form these council one of the council is facing the problem of fire
fighting. Almost 80% of the council is involved in fire fighting activities.

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How to solve the Fire fighting problem?
Therefore, it is important for the mayor to take some necessary step to solve this
problem. These steps are as Appointment of the expertise, have to shut down the operations,
change the designs of the strategies and proper training to the council to face this type of
problem. In addition, to eliminate the fire fighting, there are several ways, which can be
considered by the mayor such as strategic, tactical and cultural. If the mayor adopts the
Tactical method, it includes quick decision making which having major changes in the policy
to face this problem. On the other hand, if the mayor adopts the strategic approach it will take
a longer duration as it involves various procedures. Besides this approach, if the mayor
adopts the cultural method, the mayor has to change the mindset of the whole organisation
and the senior manager’s behaviour. These above mention ways can help the mayor in
solving the problem in the organisation. In addition, the mayor can also transfer the
underutilised resources form the one council to another one. Moreover, the mayor needs to
consider the systematic approach to solve these kinds of problems.
Activity 6
The wrong decision by Mayor
The major decision was taken spontaneously and hence, the early decision of the
mayor went wrong. There should be proper analyses of the council before the implementation
of the measures to solve the fire-fighting problem in the organisation. However, the approach
adopted by the mayor is not appropriate enough to solve this problem.
The Systematic approach
In this kind of situation, the mayor can adopt a systematic approach. This approach helps
in determining the reliability of the projects in the council and the applied procedures, which

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is based on the application of the proper experiments. These experiments clearly help in
having the effective outcomes and will definitely help the mayor in solving the fire fighting
form the council. The main goal of the systematic approach is the identification of the most
efficient measure to generate the consistency with the optimized outcomes. This approach
allows the mayor to takes the full advantage of it for solving the problem. The benefits of a
systematic approach are as follows:
a. It helps in understating the different kinds of dynamic in the organisation, which leads
to the optimum utilisation of the resources. The systematic approach helps in giving
positive outcomes as it involves proper analysis
b. The systematic approach helps in solving the problem with the help of suggesting the
innovative measures to solve the difficulties, and the complex problem easily.
c. It is considered as the creative process which includes a lot of planning and
supervising which leads to effective and efficient results
It has been observed that the mayor must adopt the systematic approach to solve the
fire fighting problem faced by the council as this council needs the proper planning and
supervision so that the fire fighting activities must be resolved and the council will
improve its operations.

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Bibliography
BHP Billiton. (2018, June 30). BHP Billiton Annual Report 2018. Retrieved from BHP
Billiton: https://www.bhp.com/investor-centre/annual-report-2018
BHP Billiton. (2019, July 8). Locations And Operations. Retrieved from BHP Billiton:
https://www.bhp.com/media-and-insights/image-gallery/locations-and-operations
BHP Billiton. (2019, July 8). Our business. Retrieved from BHP Billiton:
https://www.bhp.com/our-businesses
BHP Billiton. (2019, July 8). Production And Market Strategies In A Changing Iron Ore
World. Retrieved from BHP Billiton:
https://www.bhp.com/media-and-insights/reports-and-presentations/2005/02/
production-and-market-strategies-in-a-changing-iron-ore-world
BHP Billiton. (2019, July 8). Structure and strategy. Retrieved from BHP Billiton:
https://www.bhp.com/our-approach/our-company/strategy
BHP Billiton. (2019, Jully 8). About us. Retrieved from BHPBilliton:
https://www.bhp.com/our-approach/our-company/about-us
BHP Billiton. (2018, April 9). Press Release. Retrieved from BHP Billiton:
https://www.bhp.com/-/media/documents/media/reports-and-presentations/
2018/180419_operationalreviewfortheninemonthsended31march2018.pdf?la=en
Chrons. (2019, July 8). The Role of an Operations Manager. Retrieved from Chrons:
https://smallbusiness.chron.com/role-operations-manager-14234.html

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Digital Initiative. (2016, November 18). BHP Billiton: Mining data to mine more efficiently.
Retrieved from Digital Initiative:
https://digital.hbs.edu/platform-rctom/submission/bhp-billiton-mining-data-to-mine-
more-efficiently/
Humphreys, D. (2019). Mining productivity and the fourth industrial revolution. Mineral
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Reference for Business. (2019, July 8). OPERATIONS STRATEGY. Retrieved from
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https://www.referenceforbusiness.com/management/Ob-Or/Operations-Strategy.html
Simpson, M. (2018, August 29). Industrial Revolution in Australia – impact on
manufacturing in the 1800s. Retrieved from Museum of Applied Arts and Science:
https://maas.museum/inside-the-collection/2018/08/29/industrial-revolution-in-
australia-impact-on-manufacturing-in-the-1800s/
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