Operational and Supply Chain Management in Petronas Chemical

Operational and Supply Chain Management in Petronas Chemical Group, Malaysia 1
OPERATIONAL AND SUPPLY CHAIN MANAGEMENT IN PETRONAS CHEMICAL
GROUP, MALAYSIA
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Operational and Supply Chain Management in Petronas Chemical Group, Malaysia 2
Introduction
Business organizations adopt various mechanisms and processes of improvement in order
to enhance performance and growth. Operations and supply chain management are key aspects
mandatory for any success and profit-oriented company. Across the globe, every business is
striving hard to establish, sustain a reliable approach to operations. In this paper, an analytical,
critical, and reflective approach is used to demonstrate a case study on the two key business
attributes. The case is targeting one of the vibrant economies in the Middle East, Malaysia. And
the company of interest is Petronas Chemicals Group. The different business environments with
relevance in shaping the future of the target company are well highlighted and tentatively
discussed. An argument based on John Gattorna’s article is also a key component of this essay.
Conception and Scope
For any consumer, successful access to product and service is a complex process.
Multiple external and internal intrigues and processes are involved along the way. A robust and
well-provided system is involved in the oversight and management of the process and movement
of products. Operations management and supply chain management are aspects that hold the key
to any process of product supply and customer satisfaction. The world of business is
progressively turning competitive. To enjoy the lion's share of the available market,
organizations like Petronas Chemicals have invested tremendously in management.
According to Regattieri et al. (2019), operations management refers to the systems of
running a business organization efficiently and with absolute diligence and effectiveness. The
various sub-systems which are entailed include production system analysis, material handling,

Operational and Supply Chain Management in Petronas Chemical Group, Malaysia 3
and movement as well as maintenance. Operations head are tasked with the coordination of
internal operations, driving the production and movement of the product and service as well.
Supply chain management, on the other hand, involves all processes of materials
collection, production of the product, and delivery to the market or consumer (Monczka and
Trent, 2005). Key players in the supply chain include the logistics team and experts, suppliers,
and consumers. Companies with a global network usually come to life with a strategic and
formidable supply chain system ranging from purchasing orders to market forecasting. A broader
and deeply integrated emphasis on supply chain management has been created and evolved over
the years (Jraisat, L.E. and Sawalha, 2013). Value creation and competitive advantage are
key aspects in shaping the future of any organization.
Introduction to the case organization
Petronas Chemicals Group (PCG) is one of the biggest global organization of integrated
chemicals in the whole of southeast Asia. The company is known for its world-class sites of
production fully incorporated and integrated with feedstock and final downstream products. The
company’s production capacity is above 12 million metric tons annually (Jalan et.al, 2017).
Some of the products processed marketed and sold by the company include a range of chemical
products; polymers, olefins, fertilizers, ethanol, methanol, and other derivative products. For the
last three or so decades, PCG has been a regular in the Bursa Malaysia listing (Jalan et.al,
2017). The ability of the company to maximize the value of the vast oil and natural gas
resources in Malaysia is uncompromised and unrivaled. The journey to success is not an easy
venture for PCG. The turbulent global market has been a breathtaking challenge and equally an
opportunity for the company to hit new targets and special economic goals.

Operational and Supply Chain Management in Petronas Chemical Group, Malaysia 4
Organizational Challenges of Implementing Process Control, Process Performance
Management, and Plant Availability
In order to facilitate and guarantee success in the three aspects of supply chain
management discussed above, the performance management system and process control should
balance flexibility and consistency. However, several organizational challenges derail the
implementations of the key elements of the performance.
The first challenge is inadequate or total lack of alignment frameworks. The availability
of sperate and isolated organizational processes is responsible for the lack of proper alignment.
Sometimes organizations suffer from disjoints between strategic development, operational
planning, and budgeting frameworks with antithetical frameworks (Baldea et.al, 2014). The
whole system hence lacks concrete alignment between individual, departmental, and plant
performance and the overall organizational delivery. The supply chain becomes disoriented and
full of gaps that downplay the surge to excellence and improved product brands as well as
service delivery. The development of poor measures is another challenge that PCG and similar
organizations face (Dubey et.al, 2017). No relevant and substantial measures are established
to meet the demands of set targets and goals. Occasionally, critical figures and data collection are
missing. Hence, the path to a well tacked and responsible performance framework is null and
almost lost.
According to Seuring and Gold (2013), organizations with huge financial and resource
foundations are often affected by leadership turmoil. The management challenge is life to the
operations of most oil and chemical companies in Malaysia. The process of integrating and
aligning a sustainable management framework for process control and process performance
management becomes a burdening challenge. The framework should be well-disciplined, and its