Analysis of BHP's Day-to-Day Operations and Sustainability

This report provides an in-depth analysis of BHP, a multinational mining company. It begins with an overview of BHP, its history, and its operational structure, including its key business segments like copper, coal, petroleum, and iron ore. The report then delves into BHP's day-to-day operations, detailing activities such as profitability prediction, social license maintenance, infrastructure implementation, resource management, regulatory compliance, and risk mitigation. The core of the analysis links BHP's operational practices to the theory of Managing Resources and Operations, highlighting concepts like internationalization, sustainability, and corporate responsibility. The report specifically examines BHP's sustainability initiatives, emphasizing its commitment to environmental responsibility, employee safety, and community engagement. It concludes by summarizing BHP's operational processes and its approach to sustainable practices within its value chain, including specific targets and achievements in areas like workplace safety and environmental impact reduction. The report showcases BHP's commitment to creating long-term shareholder value through efficient resource management and sustainable operational practices.

Running head: OPERATIONS MANAGEMENT
OPERATIONS MANAGEMENT
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Overview of the company:.....................................................................................................2
Day-to-day operation of BHP................................................................................................3
Linkage between company’s operation and the theory of Managing Resources and
Operations:.............................................................................................................................5
Sustainability:.........................................................................................................................6
Conclusion..................................................................................................................................9

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Introduction
The administration and management of the business practices for constructing highest
standard regarding the efficiency of businesses is known as operations management. The
concept of operations management includes the aspects of transformational process of labour
as well as materials in product offerings in efficient and effective state. The purpose of
incorporating the application of operations management is to maximize profit for
organizations. The implication of operations management helps in the position of ensuring
the efficiency of business operations by utilizing the required information effectively and
efficiently by optimum utilization of resources (Mahadevan, 2015). The efficiency of
optimum utilization of the required resources should be aligned with the aim of addressing
customer demand or identified concerns (Slack, 2018). The concept of operations
management includes the phases of preparing, establishing as well as the practice supervising
the functions of manufacturing and production for the desired product offerings. Operations
management includes the function of managing the complete process of production system by
converting the inputs in the form of desired output with the help of resources. The main
purpose of the paper is to understand the day-to-day operations of the company. The
company selected for this paper is BHP Billiton, an Australian mining company. In this
paper, the operational process will be linked with the theory of strategic resources and
operations. The paper will also identify the sustainable practices in the value chain of BHP
Billiton. The paper will be concluded by a summary of whole operational process.
Discussion
Overview of the company:
BHP Billiton is the former name for BHP, which is a multinational mining company
specializes in petroleum and metals. The Headquarter of BHP is in Australia in the city
Melbourne, Victoria. The Australian mining company was established in the year 1885 in

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Broken Hill of New South Wales, which was an isolated mining region. The organization was
founded by Philip Charly. The company, BHP was ranked one of the largest mining
organizations that is centred on the concept of market capitalization in the year 2017. It was
also ranked as the third-largest organization in Melbourne in terms of revenue. In the year
2015, BHP found tangled in a disastrous situation, where the Bento Rodrigues dam collapsed.
BHP is considered as the foremost resource company. The organization is involved in the
process of extraction and processing oil, gas and minerals (Bhp.com, 2019). The company
had more than 62,000 members in workforce (including contractors) primarily in the regions
of Australia and America. Along with the international operational activities, the offerings are
also sold in international markets, where the sales and marketing practices are led by Houston
in United States and Singapore. BHP operates through the concept of Dual Listed Company
in association of parent companies, BHP Group PLC and BHP Group Limited. However, the
company reflects the characteristics of an individual economic entity, thereby referring the
name as BHP (Bhp.com, 2019). The corporate purpose of the company is creating long-term
values for shareholders by the practices like identifying, acquisition, growth and marketing
and sales of the natural resources. The purpose is accomplished by the strategy of owning and
operating long-life, large, expandable, low-cost and the presence of upstream assets that are
diversified through geography, market and commodity (Ansoff et al., 2018). BHP is known
for its capability of producing commodities like copper, metallurgical coal and iron ore. The
environmental approach is concentrated on robust discovery, analysis and control for the risk
associated with material in all phases of business. The decision making process of BHP
involves the perspective and understanding of stakeholders along with the involvement of
technical and management team.
Day-to-day operation of BHP
The mining organization of Australia, BHP is concentrated on the areas like North
America, South America and Australia. The operations of petroleum is linked with the

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countries like U.S, Trinidad, Tobago, UK, Algeria and Australia. The operational units of the
organization are categorized into, Copper, Coal, Petroleum and Iron ore.
The operational activities of BHP includes:
 Prediction of potential profitability factors as well as the risk associated with the day-
to-day functions.
 Maintaining the social license for operating the activities of extracting minerals and
coal in alignment with external community (Fredendall and Hill, 2016)
 Ensuring permits for projects in terms of assigned budget and schedule.
 Implementing the planned, well-designed and developed infrastructure efficiently by
including water treatment activities, power and water supply (Price, 2015).
 The facilitation of estimation, management and maximizing the reserves and
resources that are mineable accurately and efficiently (Kato et al., 2015).
 Ensuring the alignment of the planned operational activities with regulations and
policies with the aim of minimizing cost of operation (Fredendall and Hill, 2016)
 Day-to-day activities includes the process of assessment, mitigation and minimization
of health, environmental risks and risks related to safety and insurance (Fredendall
and Hill, 2016)
The operational process of BHP includes the practice of examining potential success in
regards to the complex market involving governmental policies and economics while
undergoing required changes (Meindl, 2016). Another activity includes the process of
quantifying the natural resources and involves definition of reserves, which has the potential
of extracting from reserve evaluation reports. The assessment of profitability for different
quality standard of natural resources through high-grade natural resources by evolving the
cash flow of the project. For a specific offerings like coal, the organization regulate the level
of coal-bed methane for the purpose of offering pre-mining degasification with the

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association of effective mine ventilation structure and with mine safety (Fredendall and Hill,
2016). The organization involves the step of accurately determining the condition of mine
horizons for safety mines with hydrogeological and geological obstacles. This step is aimed
at ensuring the environmental impact of the processes of organization (Haksever & Render,
2017). The environmental issues are addressed on a day-to-day basis by designing an
efficient, innovative and inclusion of effective engineering technologies.
Linkage between company’s operation and the theory of Managing Resources
and Operations:
The theory of Managing Resources and Operations deals with the concept of
structuring the operational processes in alignment of sustainable strategies by directing focus
on accomplishing effective and efficient management for operations and resources. The
theory deals with the concept of operational management in the form of transformational
systems. The major themes included in this theory are technology disruption, sustainability,
customer needs and employee satisfaction (Bellis, 2016). The theory reflects the process of
analysing operational activities and constructing strategies for the purpose of improving the
operational processes and the steps for addressing problematic issues. The concepts included
in the theory of Managing Resources and Operations includes:
Internationalisation: The concept of Internationalization includes global nature for the
businesses and complexities in supply chain process with the identification of concerns in
inventory management, disruptive innovative practices and management of supplier network
(Gálvez & Cisternas, 2017).
Sustainability: The efficiency and effectiveness of operational activities is extracted from the
process layout and choice, managing quality and inventory management. The incorporation
of the characteristics of innovation contributes in the stimulation of sustainability (Gálvez &
Cisternas, 2017).

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Corporate responsibilities and ethics: In terms of business models, corporate social
responsibilities are considered (Jack & Powers, 2015).
The linkage between the operational decisions of BHP and the theory of Managing Resources
and Operations can be explained as the core functionalities and values of the organization.
BHP is majorly involved in the transformation process of extracted natural resources into the
offerings like, coal, copper, petroleum, aluminium, manganese, iron ore, nickel, uranium,
titanium minerals and silver (Fredendall and Hill 2016). The organization is well-aware of the
customer needs, which can be deduced from its position in the market. Employee satisfaction
in the mining organization, BHP is incorporated through strict policies and regulations
regarding mining and production safety (Hitt, Xu & Carnes, 2016). The organization is
currently working towards the vision of integrating a fully automated business from the
extraction of natural resources to the market (Fredendall and Hill, 2016). The company aims
at collaborating efforts and innovative practices for discovering and executing newer ways
for improving standards, environmental impact, safety measures and productivity (Heizer,
Render & Munson, 2017). The company attempts at putting safety and security first by being
environmentally responsible and responsible for employee safety, human rights and
community health (Hitt, Xu & Carnes, 2016). The governance of sustainability reflects the
standards and long-term impact and maintenance of social license for operation. The
decisions and strategies on sustainable approach is taken by the BHP Forum on Corporate
Responsibility, which is a medium of stakeholder engagement program (Spuerk, Drobe &
Lottermoser, 2017). The day-to-day activities and decisions of BHP are performed based on
the requirements communicated in the document, ‘Our Requirements Standards’. These
policies and standards are base for the development and implementation management system
regarding operational activities (Hitt, Xu & Carnes, 2016).

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Sustainability:
Sustainability refers to the process or the ability to exist at the same level constantly.
It is basically the coordination and management of all the financial, environmental and social
attributes in order towards a responsible, ethical and a huge success. In simple terms
sustainability is an approach of the business organizations to create a long term value by
considering how the various organizations operate within a structured social, ecological and
economic environment. The BHP charter sustainability value is core to its strategy. They put
health and safety first and are environmentally responsible. They respect the human rights
and support the host communities (Giannakis & Papadopoulos, 2016). High governing
standards are maintained. There is a Board’s Sustainability Committee that assists with the
monitoring and governance and the Board’s Risk and Audit Committee looks after the risk
management system of the group (Giannakis & Papadopoulos, 2016). The BHP Forum in
Corporate Responsibility is the key to the engagement of the stakeholders. BHP believes in
working with integrity and focuses on environmental management and climate changes. It
also focuses on the human rights and UK Modern Slavery Act Statement (Giannakis &
Papadopoulos, 2016). There is an anti-corruption compliance team and the organization
maintains a proper tax transparency, closure planning and several sustainable tools (Ivanov,
Tsipoulanidis & Schönberger, 2017). The mining organization, BHP is considered among the
ninety marketing companies and fossil fuel extraction entity for the two-third of the global
greenhouse gas emissions. The sustainability within the company’s value chain has grown
strong over the years (Giannakis & Papadopoulos, 2016). The wellbeing of people,
community and environment depends on everything that the company does. The organization
tries to create a culture of a trustworthy and careful relationship between the people with the
help of a proper communication system and a strong leadership. They aim at minimizing the
environmental impacts by doing partnership with many companies for supporting the
environmental resilience. They aim at improved quality of life that is beyond just the life of

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operations (Giannakis & Papadopoulos, 2016). The latest report shows that the organization
has performed better in terms of people management, society, climate changes and protection
of the environment.
In terms of people, the targets were –
i. Zero work related fatalities: Workplace fatalities reduced a lot. There were
only 2 workplace fatalities in the year 2018.
ii. Year on year improvement of TRIF (Total Recordable Injury Frequency) per
million hours worked: TRIF recorded was 4.4 in the financial year 2018.
iii. A reduction of around 50% in occupational exposures: Exposures refer to
exposure of DPM, coal mine dust and silica. There was around 31% of
reduction in occupational exposures (Giannakis & Papadopoulos, 2016).
In terms of society, the targets were –
i. Zero significant community events – The target was met (Giannakis &
Papadopoulos, 2016).
ii. Not less than a percent of the profits before tax invested in the community
programs that will help in improvement in the quality of life and achievement of
Sustainable Development Goals. The company spent 77.1 US$ million (Giannakis
& Papadopoulos, 2016).
iii. Implementation of indigenous people strategy across all the assets through
development of Regional Indigenous Peoples Plans – This have been developed in
most of the relevant geographical assets (Giannakis & Papadopoulos, 2016).
In terms of climate change they tried to maintain the emission of the greenhouse gas or to
reduce its level while continuing the business growth within the year 2022. There has been an
increase in 1% emission of the greenhouse gases as recorder in 2018.

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In terms of environmental protection, the targets were –
i. Zero significant environmental events – This target has been met.
ii. Reduction in the withdrawal of fresh water by 15% by the year 2022 – There has
been 2% reduction in the fresh water withdrawal as per the current report (Magon
et al., 2018).
iii. Improvement of the terrestrial biodiversity and marine ecosystem within the year
2022 – The development program has been commenced in collaboration with
other organizations (Mayes, 2015).
The organization sets clear accountability in relation to the sustainability. They have a
proper charter that articulates their common purpose, the code of conduct supports the charter
and reflects the procedures and standards throughout the organization, the requirement
standards are the foundation of development and effective management solutions,, the
metrics and targets help in measuring the performances and drive improvement and through
reporting the organization is accountable to the stakeholders for results.
Conclusion
Therefore, it can be concluded from the paper that the operational activities of BHP is
based on the aspect of extracting and producing the offerings with the association of safety
and ethical guidelines. The preparation of the operational activities includes the measures that
addresses the potentiality of negative impact on community and employees. The day-to-day
activities of BHP involves procedure of mitigation, assessment and minimization of
environmental, health and risks in association to insurance and safety. The organization’s
sustainability practices are focussed on the objective of understanding reducing the negative
impact of extraction and modification practices of Copper, Coal, Petroleum and Iron ore.

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