Managing Strategic Resources & Operations

This report provides an overview of AGL Energy Ltd, a solar company engaged in the generation and retailing of gas and electricity. It discusses the day-to-day operations of the company, the linkages between operations and theory, and the sustainability initiatives within the company. The report also explores strategic resources and operations management.

Managing Strategic
Resources & Operations

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Overview of solar company.....................................................................................................1
2. Highlighting day-to-day operations of solar company............................................................1
3. Linking between solar company operations and theory..........................................................3
4. Sustainability within solar company precinct..........................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Operations management is one of the vital parts of enhancing company’s strategic success.
Present report deals with AGL Energy Ltd headquartered in Australia and is engaged in
generation and retailing of electricity and gas for customers. Overview of company is provided
along with daily operations of it. Moreover, linkages with theory have been discussed and
sustainability of company has been explained.
1. Overview of solar company
AGL Energy Ltd is an Australian listed public organization which is involved in
generation and retailing of gas and electricity for both commercial and residential use. The term
AGL denotes Australian Gas Light Company which was renamed in 2006 as AGL Energy Ltd.
Its headquarters are in North Sydney, New South Wales, Australia. The products offered by
company are energy, generating natural gas, wind power, hydroelectricity and coal seam gas. It
is also involved in offering services of electricity and gas generation, distribution and retailing
etc. Principle operations of AGL Energy Ltd are to generate energy from power stations using
thermal power, natural gas, solar energy and other sources.
In the month of April 2019, AGL Energy Ltd has made an announcement that it had
acquired rights for developing pumped hydroelectric energy storage project in main pit of
Kanmantoo mine of Adelaide Hills in South Australia. It is estimated that project can store and
generating 250MW of electricity from 2024. On the other hand, customer base of company has
reached to 3.7 m in which 2.3 m are electricity customers and remaining 1.4 m is from gas
(Annual Report of AGL Energy Ltd. 2019). It employs 3750 number of workers as per the
published annual report 2019. The profit after tax for the year ended 30 June 2019 stands out at
$1040 million.
2. Highlighting day-to-day operations of solar company
The day-to-day operations of AGL Energy Ltd includes electricity generation, gas storage
and then sale of electricity and gas to commercial, residential and wholesale customers on a
broader scale. It can be analysed that there are several functions which are to be performed on
daily basis so that interrupted services and products may be provided to customers without any
difficulty. Primary purpose of AGL Energy Ltd is to generate enough income from its activities
for paying its expenses, profit sharing to owners and increase intrinsic value of enterprise.
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Employees deployed in various departments perform specific business functions for attainment
of common goal (Gibson & Parkman, 2018).
Line functions or line groups are entrusted to perform tasks which are directly related to
accomplish objectives. In AGL Energy Ltd, line workers are responsible to sale electricity and
gas produced to its customers through possible channels according to its business processes. Line
employees make money for company by selling products and generate profit, thereby, leading to
increase market share. After that, staff functions are performed for creating and maintaining
infrastructure of company (Merigó & Yang, 2017). Advisory services are provided by them and
controls line functions. These include HR department, legal department and accounting
department. HR unit retains or hire best of the talent out of pool of candidates. While, legal
department handles all matters pertaining to investigations, compliance, mergers or acquiring
rights to ensure business is adequately centred to legal affairs. Accounting department, on the
other side, of AGL Energy Ltd is entrusted to handle business transactions in the books of
accounts and manage receivables and payables.
Moreover, while running business, interacting with customers and staff is needed.
Talking to employees on how to increase their productivity and issues faced by them. Training
employees to ensure that business gets desired output. Moreover, resolving issues which are
hindering their work at the workplace (Ivanov, Tsipoulanidis & Schönberger, 2017). Next day-
to-day business operation is to manage bank. Regular checks are required to be performed by
employees to know exact amount of cash through perfect monitoring. With the help of
monitoring, certain benefits can be accomplished highlighted below-
 Picking up fraudulent transactions and activities of suspicious nature
 Identifying opportunities for saving money
 Regulating cash spending to most productive sources
 Making supplier payments and receiving customer’s payments on time
Accounting department is then required to make invoices for sale of electricity and gas
products to customers (Ferguson & et.al, 2017). This helps to maintain healthy cash flows and
payment terms and discount offers for early payments to avoid outstanding dues from debtors.
This 24-hour operating cycle is initiated in normal business operations. Initial outlay of cash for
producing goods and selling to commercial, residential and wholesale customers takes place
(Choi, Wallace & Wang, 2018). AGL Energy Ltd, then receive cash from customers in exchange
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for the commodities. Moreover, well-structured business operations of company also ensure that
an estimation of requirement of working capital that it will need for maintaining and growing its
business to achieve greater heights.
3. Linking between solar company operations and theory
The products and services offered by AGL Energy Ltd are in direct linkage with the
theories of operations management. These are discussed below with reference to solar
company’s operations-
Six Sigma-
Figure 1: Lean Six Sigma
(Source: Alsyouf, Kumar, Al-Ashi, & Al-Hammadi. 2018)
It is useful measure of how much a process deviates from perfection. The six sigma
techniques involve defining, measuring, analysing, improving and controlling problem. AGL
Energy Ltd incorporates the six-sigma theory in attaining of the gas and electricity products for
getting trials. After successful trials virtually, improvement in items are made and then sold to
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customers. Six sigma is quite useful as making process through various stages help in offering
quality products and services of solar energy to customers of company.
TQM (Total Quality Management)-
Figure 2: Total Quality Management
(Source: Slack, 2018)
As the name suggests, TQM is continuous process of detecting and eliminating errors in
supply chain management and operations for improving experience of customers. Plus, it ensures
that employees are trained to accomplish overall quality of final product (Lee, 2018). AGL
Energy Ltd indulges in usage of TQM for providing top-notch quality services and commodities
to customers for gaining good customer experience. TQM eliminates errors and thus, with the
help of better understanding of quality of commodity, people are served in a better manner.
Capacity Planning-
It is the process of ascertaining production capacity needed by company for meeting
ever-changing demand for its commodities. AGL Energy Ltd employs capacity planning for its
solar energy products. It produces according to demand so that wastage of resources is not made.
Design capacity is integral part of capacity planning, in which maximum amount of work that
company can complete in due course.
Statistical Process Control (SPC)-
SPC is scientific methodology for incorporating quality analysis and improvement. With
the help of it, quality is analysed in form of product or process measurements which are obtained
in real-time during manufacturing process (Wiemken & et.al 2018). Control limits and
specification limits are ascertained thereof. It can be analysed that AGL Energy Ltd has focused
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on SPC through preparation of control charts. This helps to assess whether quality of products is
matched with that of pre-defined quality. Thus, improvement is done statistically to ensure good-
quality products are offered to customers.
Process innovation-
It refers to implementation of significantly improved production or say delivery method
for offering better items to customers (Waldman & Terzic, 2018). Newness to existing
production process which enhances level of AGL Energy Ltd and as a result, money and time is
saved. Thus, firm engages in process innovation quite effectually.
4. Sustainability within solar company precinct
The sustainability is one of the major things in organization to survive in the future for
long run to serve its customers. AGL Energy Ltd is dedicated to engaging in those activities
which do not hamper its sustainability in any manner. In relation to this, focus area of Board of
company has been on various matters. Site visits are made to power stations of enterprise at Loy
Yang and Macquarie for overseeing health, safety and environmental issues that may affect sites.
Crib point is made being AGL Energy Ltd’ proposed LNG import jetty to meet with
varied stakeholders and to allow directors for understanding key concerns. Moreover, safety
incidents were including suspension of coal ash sales from Bayswater and Liddell Power
Stations following reporting of increased metals in the ash. Furthermore, reports confirmed that
use of ash did not have risk to health of people. Moreover, AGL Energy Ltd is focusing on
lower-emissions technology in order to maintain commitment to deadlines and investing in
renewable energy.
On the other hand, company is growing into new markets through which firm can present
its potential in energy sector in the market (Ketokivi & McIntosh, 2017). Thus, it can be said that
AGL Energy Ltd has been initiating various ways to ensure that its sustainability lasts for long.
Moreover, carbon emissions and fuel consumption are controlled in a better way. Hence,
business has focused on sustainability for achieving greater avenues.
CONCLUSION
Hereby it can be concluded that strategic resources and operations of AGL Energy Ltd
has been well-crafted to enhance business operations. The safety and environmental incidents are
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looked by company in order to deliver best products and services to customers. Furthermore,
modern operational techniques are adopted by company to deliver better solar energy products.
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REFERENCES
Alsyouf, I., Kumar, U., Al-Ashi, L., & Al-Hammadi, M. (2018). Improving baggage flow in the
baggage handling system at a UAE-based airline using lean Six Sigma tools. Quality
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Annual Report of AGL Energy Ltd. 2019 [Online] Available Through: <
https://www.agl.com.au/about-agl/investors/annual-reports >
Choi, T. M., Wallace, S. W., & Wang, Y. (2018). Big data analytics in operations
management. Production and Operations Management, 27(10), 1868-1883.
Ferguson, N. T., Samsonov, Y. A., Kinshumann, K., Chandrashekar, S., Messec, J. A., Novak,
M. F., ... & Ben-Zvi, N. (2017). U.S. Patent No. 9,578,017. Washington, DC: U.S. Patent
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Gibson, P., & Parkman, R. (2018). Cruise operations management: Hospitality perspectives.
Routledge.
Heizer, J., Render, B., & Munson, C. (2017). Operations management. Pearson Education
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Ivanov, D., Tsipoulanidis, A., & Schönberger, J. (2017). Global supply chain and operations
management. A Decision-Oriented Introduction to the Creation of Value.
Ketokivi, M., & McIntosh, C. N. (2017). Addressing the endogeneity dilemma in operations
management research: Theoretical, empirical, and pragmatic considerations. Journal of
Operations Management, 52, 1-14.
Lee, C. K. H. (2018). A review of applications of genetic algorithms in operations
management. Engineering Applications of Artificial Intelligence, 76, 1-12.
Merigó, J. M., & Yang, J. B. (2017). A bibliometric analysis of operations research and
management science. Omega, 73, 37-48.
Slack, N. (2018). Essentials of operations management. Pearson UK.
Waldman, S. A., & Terzic, A. (2018). Process Improvement for maximized therapeutic
innovation outcome. Clinical Pharmacology & Therapeutics, 103(1), 8-12.
Wiemken, T. L., Furmanek, S. P., Mattingly, W. A., Wright, M. O., Persaud, A. K., Guinn, B. E.,
... & Ramirez, J. A. (2018). Methods for computational disease surveillance in infection
prevention and control: Statistical process control versus Twitter's anomaly and breakout
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