Analyzing Altrad's Business Processes for Improvement in Oil & Gas

This report provides a comprehensive analysis of Altrad, a maintenance contractor in the oil and gas industry, focusing on its business processes, particularly in protective coatings, scaffolding, insulation, and fireproofing. The analysis highlights the unique challenges Altrad faces due to its operations on Barrow Island, including supply chain complexities, stringent quality control measures, and specific training requirements. The report identifies disconnects and inefficiencies within the organization, specifically between the protective coatings department and purchasing/stores, as well as human resources. Key issues such as lack of communication, poor employee retention, and insufficient trade-specific education are discussed. The report recommends implementing a trade-specific education program, removing unnecessary work practices, and establishing a reward system to improve employee morale, work quality, and overall efficiency, ultimately enhancing Altrad's brand and client relationships. Desklib provides a platform for students to access this and other solved assignments to aid in their studies.

1. ORGANISATION
1. ORGANISATION
The organization that is taken for analysis is a maintenance
contractor in the Oil and Gas industry called Altrad. They have a
specialization in protective coatings (paint), scaffolding, insulation
and fireproofing. They have been chosen due to their distinctiveness
of operating on Barrow Island which causes unique processes
regarding supply chains, quality control, and training (Altrad, 2018).
Altrad has also been chosen due to its lack of training and lack of
cohesiveness between departments (relationships).
MISSION
Altrad aims to be a leader in the maintenance sector of the oil
and gas industry. The goal is to achieve a high quality of work,
efficiently and safety at a reasonable cost.
1.2 TARGET MARKET
The altrads target market is the 11 gas plants in Australia as
well as the offshore rigs that compliment these plants. They aim to
the employee over 1500 people from 4 different chore trades. If
successful then they could potentially branch out into the mining
industry throughout the Pilbara in the North West, Western
Australia.
Strategy
To become an industry leader Altrad has identified 5 key elements
to achieve its mission

a.)To educate and train its workforce
b.)Improve its communication and adhesiveness between
branches
c.) Cost-effective purchasing and delivery methods
d.)Retain its workforce
e.)To provide new products to the industry that will significantly
increase their quality and give them a competitive advantage.
The 3 areas of focus for the next 12 months for Altrad are;
a.)To give education to workers in the industry and to improve
quality and reduce re-work and costs.
b.) Improve supply processes to ensure there are sufficient
products and equipment on site always.
c.) Gain knowledge and experience in new products that have a
potential to create new work opportunities throughout the oil
and gas industry.
Business process identification
Business processes involve several different departments and
rolls that create one overall product or service. The overall process
fixates on each specified roll in the process and what inputs and
outputs are required, as well as supplies and values, to recognize
strengths and weaknesses in the organization. Business processes
provide a clear understanding of the workflow and structures
involved in the operations of a business.
2.1 Education
The education process for Altrad occurs before the employee
gets to site. As Barrow Island is a class a nature reserve, the
organization educates its employees on what is and isn't accepted in
the accommodation camp as well as the gas plant. This is to protect

the class A nature reserve and to adhere to the clients (Chevron)
demands of protecting the flora and fauna of the island. These
inductions are compulsory for all employees as the client won't allow
employees on site without the strict education.
The process has cross-functional and crosses relationship
processes. As well as educating the employees on site requirements
they are also educated on safety issues. The Gorgon project has strict
safety rules and regulations which must be adhered to. Altrad
education process involves courses in working at heights and
confined space entry, however, there is a serious lack of education
into the requirements of the actual job. These inductions are generic,
and the education process needs to involve specific trades also. The
trade education will be the focus of this report.
2.2 Application of protective coating
The application of protective coatings process is a core function
of this organization process. It is the primary function for protecting
structural steel, pipes and water tanks. The protective coatings
department has cross relationships with the scaffolding and
insulation department. They work with the support of human
resources, purchasing/stores, and trades assistants.
Applying protective coating has strict quality control standards
that must be adhered to. The applicator must apply the protective
coating to the steel within site (Barrow island, Gorgon project)
standards and within strict time frames (Yang, 2008). This allows the
other processes such as scaffolding and insulation to work around
the protective coating applications and flow with coherency.

2.3 Purchasing/ Stores
The store's department which purchases protective coatings,
personal protective equipment and supplies have a combination of
standard purchasing and individual purchasing. The protective
coating has been negotiated with a contractor to supply paint at a
discounted price. The challenge for stores is to find time and space
on the supply ships that deliver to Barrow Island can be challenging
and expensive (Bahadori, 2015). The process involves having all
deliveries being checked by quarantine for flora, fauna, and defects
before being loaded into the supply ships that only travel to the
island bi-weekly. Stores purchase products for all departments,
however, this report will focus on the protective coatings
department.
ANALYSIS
After analysing the relationship maps it is clear to disconnect
and interfaces in the protective coating process. The inputs and
outputs have recognized the inefficiencies, communication
breakdowns, and departmental rivalries.
The protective coating department does not have a
disconnection with the purchasing/stores department due to the lack
of education and understanding nor do they operate with standard
work procedures. The store's department runs out of protective
coatings and due to the uniqueness of being on an island, it takes
time to receive the paint. This causes a backlog of unfinished work
fronts and deadlines being missed. Ordering the minimum amount of
product increases transportation bills and affects the painter's ability
to complete jobs on time and to standard.

The other disconnect is between the protective coatings
department and human resources. This is the typical white collar,
blue collar differences with human resources, unique work practices
and rules regarding annual leave, public holidays and
communication. This has caused an ‘us vs them' attitude which
denigrates the coatings department and causes poor morale, work
quality and retention issues. It also affects the Altrad brand amongst
the workforce in the industry. Being forced to take five days annual
leave at a time as opposed to one or two, or not being paid for a
day's work because the employee hasn't signed off at the end of the
day add an unnecessary stress to an already stressed workforce.
The communication breakdown comes from human resources
only communicating with blue collar, protective coating applicators,
via email. Tradesman doesn't check their emails regularly and
employees have missed travel arrangements (flights) due to human
resources stubbornness to only email employees to notify them of
roster or flight changes (Newman & Ober, 2012). This suggests that
human resources personnel have personal agendas and relationships
with owners.
4.1 Tightness and Dependence
The reliance on related departments within the process and
how they depend on each other is critical in the protective coatings
process. The store's department is dependent on its suppliers and
without the protective coatings being supplied then the job won't go
ahead. Every part of the process is vital including manufacturing the
product, transporting it to the island, paying the accounts and storing
the correct amount of paint (Chopra, Meindi & Kalra, 2016).
4.2 Bottlenecks

A bottleneck occurs when the capacity is equal or less than the
demand requested. It slows production and output. Altrad has the
potential to bottleneck at the store's stage of the process if they do
not order enough paint required for the job. If it happens then island
runs out of paint and it create the entire protective coatings process
bottlenecks.
4.3 Service blueprinting
Service blueprinting has a connection with the line of visibility.
The line of visibility is what the customer witnesses and what they
don't. When a customer is present then the focus should be on
providing a good service.
The client (Chevron), rarely witness Altrad applying the
protective coatings. However, they do inspect and scrutinize the
quality of the work. No job gets completed without chevron
inspecting the job and approving the standard of application
(Frauendorf, 2007). Although blueprinting suggests that efficiency
should be an Altrads priority as most of its work is done without the
customer watching, in this case, providing a good service is more
important.
4.4 Process measurement
Without a form of measurement then a process is impossible to
analyze. (A) Measure performance through its
5.0 Discussion
After analysing the protective coatings process several issues
have arisen that could impact both the overall process as well as the

financial viability of the business. These include quality control,
education, retention, communication, and efficiency.
The key areas that need to be addressed are retention and
education. Due to the disconnect between human resources and the
protective coating struggle to retain quality employees. The ‘us vs
them' competition between these two departments leads to a high
turnover and poor morale. Quality employees feel they are
mistreated and unappreciated and constantly leave to work
elsewhere. Poor moral leads to poor work quality, which flows on to
deadlines not being met and budgets not being followed
(Frauendorf, 2007). This could lead to unhappy clients and the
potential for the client (chevron) looking for other contractors to fill
the void.
Due to the high turnover, the ( A ) brand is poor within the
industry and therefore they have to settle for unqualified or
inexperienced workers. The connection is not between education
and protective coatings are clear through its output of the final
product. With HR being unaccountable to anyone, the process,
personnel, and quality should be discussed and reviewed (Yin, 2016).
If HR cannot hire the most experienced and knowledgeable
employees, (A ) should consider adding an interface with education
to their process.
Conclusion
To run a successful operation and business then all
departments and sub-departments need to be aware of the overall
process. All areas of the business need to work coherently and
effectively to provide a quality and efficient service. Competing with
other departments and working selfishly can be toxic and
detrimental to an organization. This can ultimately lead to failure
through poor branding and loss of contracts.

Hiring the right employees and retaining them to successfully
run a job on time and on the budget is key to maintaining a good
relationship with your clients. Human resources are responsible for
the hiring of employees and implementing rules and conditions. For
this reason, then a review of the human resource department is
essential to identify why unnecessary rules and conditions are being
forced upon the workforce leading to a high turnover. This
department has a serious problem of the workforce.
The other disconnect happens between protective coating and
stores. There is a communication breakdown between these two
departments. Due to long waits between ordering and receiving the
product a review of the communication process is necessary to
rectify this issue.
RECOMMENDATION
Develop a trade specific education program- Due to (A) poor
brand within the industry then there is a need to train and educate
from within. An increase in knowledge from the workforce will
improve standards and outputs. By increasing quality outputs, the
workforce's morale increases as a bi-product of doing a good job.
Good moral flows on to better retention.
Remove unnecessary work practices- An improved relationship
between human resources and the workforce is essential. There is no
apparent reason to force employees to take 5 days annual leave at a
time, not pay them for public holidays, not paying them for not
signing off at the end of a day's work or to threaten them with their
jobs for having a sick day. This is just an authoritarian way of
operating and is completely outlined in this day and age (Chopra,
Meindi & Kalra, 2016). Removing these rules would eliminate
arguments and resentment between departments.

Implement a reward system for work quality- a reward system
should be for work crews and not individuals. By doing this it would
help promote teamwork, increase morale and create a bond
between the workforces that would help with retention. Team
awards should be handed out so there is no spitefulness and
bitterness towards individuals that could create a rift amongst
workers (Bahadori, 2015). Awards such as dinner at a restaurant for
the crew, a fishing charter or gift cards will be effective and show the
employee that the business cares about them.

References
Altrad. (2018). About Us. Retrieved 3 February 2018 from
http://www.altrad.com/
Bahadori, A. (2015). Essentials of Coating, Painting, and Lining for the
Oil, Gas and Petrochemical Industries. Gulf Professional
Publishing.
Chopra, S., Meindi, P., & Kalra, D.V. (2016). Supply Chain
Management. Pearson Education.
Frauendorf, J. (2007). Customer Processes in Business-to-Business
Service Transactions. Springer Science & Business Media.
Friedmann, S. (2009). The Complete Idiot's Guide to Target
Marketing. Penguin.
Newman, & Ober, S. (2012). Business Communication: In Person, In
Print, Online. Cengage Learning.
Warner, A.G. (2010). Strategic Analysis and Choice: A Structured
Approach. Business Expert Press.
Yang, L. (2008). Techniques for Corrosion Monitoring. Elsevier.
Yin, R. (2016). Theory and Methods of Metallurgical Process
Integration. Elsevier.