Business Process Improvement

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Introduction

The paper identifies numerous critical segment of the employment arena in the Kuwait Petroleum Corporation (KPC). It attempts to examine the recruitment process at Kuwait Petroleum Corporation (KPC), create an overview of KPC including oil sector history in Kuwait; and explain Business Process Improvement (BPI) concept along with the steps for a successful business process improvement plan. Subsequently, model to redesign the process will follow a detailed analysis of the recruitment process in Kuwait Petroleum Corporation. Then, the paper will discuss the advantages of adopting the redesign process as well as the difficulties it will face during planning and implementation of the redesign. Finally, the paper will present some recommendations after the conclusion (Tétreault, 1995, pp34)

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History of KPC

According to the Kuwait petroleum corporation and the economics of the new world order, in around 1920s oil had been discovered in significant sections of the countries surrounding and neighboring Kuwait. Kuwait at the time was witnessing several strange black patches in the desert hoping it meant that the black gold was in waiting for discovery. Expectations were very high and so in 1938 attention turned to Burgan  as oil was discovered in massive quantities in Kuwait.

In the early years of oil discovery, Kuwait’s hydrocarbon resources were controlled by Kuwait Oil Company (KOC), which was a foreign company at the time. But after 1972, Kuwait acquired 25 percent of KOC and in 1983 this percentage grew to be 51 percent, which also was rejected by the Kuwaiti parliament as they thought that Kuwait’s oil resources were extracted too rapidly (Tétreault, 1995, pp34). As a result, KOC was instructed to limit its production. That only drove the British Petroleum (BP) and Gulf Oil to extract as much as they can before full nationalization take place.

In 1974 Kuwait had already acquired 60 percent of KOC, and therefore the nationalization process was set to take place gradually so it won’t affect the price of oil. Moreover, in Dec. 1975 Kuwait government announced full nationalization of Kuwait Oil Company (KOC) by acquiring the remaining 40 percent. By 1979, the government had already taken over the oil business in Kuwait by acquiring several other oil companies: KNPC, PIC, Aminoil, Mina Abdullah Refinery, Kuwait Wafra Oil Company and KOTC.

Due to these major acquisitions, it was only reasonable to join their forces in order to be more coordinated and efficient. So, in 1980 Kuwait Petroleum Corporation (KPC) was initiated to serve as an umbrella to integrate oil industry in Kuwait. Currently, Kuwait Petroleum Corporation (KPC) is Kuwait’s national oil company that is responsible for Kuwait’s hydrocarbon interests throughout the world. The company’s products are sold internationally through its subsidiary’s name (Q8). And as part of the global energy industry, Kuwait Petroleum Corporation provides oil and gas needs by exploring, producing, refining, transporting and marketing these natural resources locally and globally. KPC also serves as a mother company for multiple oil companies in Kuwait which include: KOC, KNPC, KOTC and PIC to keep them under government control and other subsidiaries such as: KAFCO, KUFPEC, KPI-Q8, SFIC, KGOC. Although it has so many subsidiaries under its wings, KPC managed to keep each company focused on their own activities emphasizing on their areas of strength and took the responsibility of marketing Kuwait’s oil internationally (Tétreault, 1995, pp54).

However, throughout the years Kuwait Petroleum Corporation continue to grow and acquire other companies following its mission and vision of being the leading corporation in managing hydrocarbon related activities and maximizing shareholder’s value. KPC’s vision involves also improving and developing national manpower, by encouraging continuous learning in all areas related to KPC’s business. This requires the company to have a highly intelligent and developed recruitment process in order to have the best staff to train and improve to be the best in their areas of expertise.

Business Process Improvement (BPI)

Business Process Improvement (BPI) is known to be a set of tools that identify, analyze, and improve business processes in order to optimize performance and improve company’s effectiveness and efficiency. BPI is a process designed to reduce cost and cycle time as well as to improve quality at the same time. This process is usually paired with enhancement of information technology (Harvard Business Press, 2010, pp 16). Why improve business process? In a developed organisation where innovation and constant improvements are key success factors, it’s important to always revise and monitor major processes. If it was noticed that a certain process was insufficient or lack efficiency, then the organisation must consider redesigning this process in a way that saves time and at the same time improve quality.

Organizations can benefit from business process improvement model in many ways, however it requires total commitment, as it can be time consuming and complex process but highly rewarding at the end. If the process was done correctly it will definitely save time and money by simplifying complex processes and eliminating unnecessary procedures within the process. It also helps to anticipate, manage, and respond to changes in the market more effectively, which will improve efficiency. BPI helps to better serve customers by revising strategies in order to improve skills and expertise, which will lead to exploiting new business opportunities. And to have the best results with BPI experts suggest organizations follow these six steps (Harvard Business Press, 2010, pp 34):

1. Identify the process and plan the change
2. Analyze the process
3. Redesign
4. Acquire resources
5. Implement
6. Continually improve

In this paper we will only explain the first three stages of business process improvement.

1-      Identify the process and plan the change:

In this stage, managers are responsible to identify the process in need of change. This is done by first detecting key business processes (Harvard Business Press, 2010, pp 25-34). Then manager must spot signs of trouble and inefficiency according to customers complains, time, and how complicated the process is. In the case of KPC it was noticed that there are three main processes to consider and these are internal recruitment process, applying online process, and the process of choosing the individuals. So in order to choose the process that the organisation will benefit more from redesigning, we decided to use the process selection matrix. This is done by rating each process according to certain criteria such as cost saving potential, complaints, ease to change, or the opportunity to change is high or low. The rating should be on a scale from 1-5 five being the highest.

Figure 1

This was done by the managers in different departments and was found that most of them think that it’s critical to change the internal recruitment process. Managers think that this particular process if improved will have great impact in terms of time management and cost.

2-      Analyze the Existing Business Process:

After planning the project and choosing the team responsible for redesigning the process, several steps must take place as part of phase 2. The first thing that has to be done is mapping the process and translate it into a set of  logical, interdependent activities that leads to the desired outcome. The process map is the key to determine the problem (Harvard Business Press, 2010, pp12-20). The next step is to examine the process map. The team observes the process map and evaluates every step to spot the part where it needs to be modified to get best results. The purpose of analyzing the process map is to categorize the activities and rearrange them to the most efficient way. After that a team should interview stakeholders in order to take their comments on the project they are trying to do. And at the end of phase 2 we need to have a close estimate of where the company is in terms of other organizations.

Now in step one after we chose the process we’re going to redesign, we did a flowchart of the process as follow:

The goal of the process map is to find the weak points within the process that need to be changed.

• Redesign

Out of the redesign process some of these critical issues must emerge out distinctively by the managerial team of the KPC so as to pave way for the stringent steps associated with the redesign activities. These steps include (Harvard Business Press, 2010, pp25);

1. Envisaging a good process
2. Testing and assessment of the KPC teams ideas
3. Con.............