Question: There is perhaps no other sector which is currently facing such difficult market conditions as oil sector. This is an industry which has been thrown

There is perhaps no other sector which is currently facing such difficult market conditions as oil sector. This is an industry which has been thrown into turmoil by plunging oil prices, which are still below a once-unthinkable $52 a barrel benchmark. Ghanas petroleum industry, though relatively young has been touted as having the potential to moving the country from a developing country to a developed one. The growth of the industry is highly dependent on ensuring that petroleum products produced at the downstream sector of the industry are distributed consistently and timely to consumers through an effective and efficient supply chain system. Petroleum product consumption continues to increase in Ghana with increase in population yet the supply does not correspond to demand, this gives cause for more analysis of the supply and value chain processes into the downstream sector. Smarj Oil and Gas Distribution Company has been operating in the distribution market since 2011. At the 10th year, management came up with a five-year quality initiative plan based on the Kaizen philosophy of Continuous improvement that involves all employees. This initiative was driven by senior management in response to the outcome of a study conducted by Ann-Folley R&D institute. The study revealed an increasing customer demand and operating considerations revolving around the value chain, highly volatile prices, increasingly stringent environmental regulations and people issues. The company is now focusing the principles of continuous improvement on forecasting customer demands, reduce costs, optimizing the performance through systems focus and participation. A range of quality management tools and techniques are used. A Total Quality Management (TQM) steering committee is responsible for overall direction, but there is also a further steering committee to oversee implementation of the Quality Improvement Teams forecasting and scheduling demands, employee empowerment, and the issues of diversity and inclusion. There are teams of shop floor operators based on natural workgroups and workforce demographics, and these tend to focus on product problems and environmental issues (such as working conditions), however they operate with their associated diversity issues. On the issues of diversity, a section of the groups focus on process improvements (for example, die change) and problem-solving in response to specific customer concerns related to delays, substandard and poor services; while the other section operates under the culture of uncertainty avoidance. A birds eye view of the former piecemeal initiatives indicated that the previous management flagged the issues of getting the distribution processes right, providing a central focus through total quality management for change, and employee empowerment. Under the new leadership, cultural change is the aim to get it right, but it is recognized that only incremental progress in the distribution activities can be achieved and that a supportive attitude is required from management. Questions As an astute operations management professional, you are being tasked to address the following questions: 1. What are the perceived challenges facing the SOG distribution company in their operations? 2. What steps can SOG limited take to ensure an appropriate response to the increased demands of the Petroleum product consumption? 3. Delineate the people challenges facing SOG limited? Discuss how management can make it right. 4. Discuss how SOG limited can optimize operational performance through systems focus and improved participation in the value chain? 5. Using the continuous improvement philosophy, explain how SOG limited can implement any two concepts of the total quality management for operations improvement?

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