ExxonMobil Inc. Company

Assignment # 2
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ExxonMobil Inc Company Case Study
ExxonMobil Company demand for gas and oil products is high hence need to manage capacity, demand, inventory and supply chain to meet customer satisfaction. This section discusses how the organization handles the capacity, demand, supply chain and inventory. The oil and gas industry purposes to create a safe work supply for the industry now and in future.ExxonMobil primary aim is to ensure that people go to work and get home safely.
Capacity
Capacity is the maximum output level that an organization can sustain to provide service or make a product. Capacity planning demands the management to accept the product process limitations. In essence the production system factors conversion process, input requirements and output process. After considering long-term planning and forecast organizations should undertake capacity planning.ExxonMobil capacity would be the ability of a certain system to produce output at a given time. In operations, management capacity is deemed as an amount of the input resources available to generate relative output over a certain period of time. Eccles & Krzus (2018) claims that In ExxonMobil, capacity planning is essential in determining optimal resource utilization and plays a crucial role in the decision-making process, for instance, modification to product lines, an extension of existing operations and extension of starting new products.
Optimization of transfer batch size
The selected batch size determines the flow time and flow capacity. Hence to maximize capacity and reduce the flow time optimization of transfer batch size is fundamental. However to establish the transfer batch size, the organization undergoes processes such as determining the bottlenecks of the process, figures out the capacity trip per hour, factors the material release policy, determines the maximum batch sizes that the transportation can accommodate and sets the batch size to meet the objectives of the operation .Notably, the batches in a process have different sizes.
Resource utilization: Small batch sizes smoothen the workload operations while big batch sizes produce longer progressive active periods accompanied by longer progressive inactive periods.
Flow time: Small batch sizes minimize the parts batch time to run through the system. Conversely, large batch sizes increase the batch time consumed in the process.
Facility traffic: Small batch sizes generate traffic in the facility due to rapid transfers that occur. In certain scenarios, the situation may be undesirable and dangerous.
Inventory storage: Small batch sizes amount to minimal time for each part, impacting on minimal Work in progress inventory.
Optimization of batch size with operation setups
ExxonMobil uses its resources to produce more than one type of product. For instance, the organization recycles its petroleum waste products. ExxonMobil has product versatility that ensures it maximizes on its resources. However, changing from one product to another consumes a lot of time and labor. The organization minimizes the setups and the costs linked with them, diverse processes produce a multiple diversity of flow units in batches. Worth noting reducing the setup time prompts an operational thruput.
Managing processes disruptions
Poor quality disrupts the entire process metrics. Poor quality wastes resources through production of the bad portion in the first place, subjected to fix the bad part often and by going through the process of establishing the bad part before progressing in the processor before they are sold to the clients. The organization has a tendency to fixing the defects or scrapping the products due to defects based on the estimated losses that might occur.
Designing a process to match products and services
ExxonMobil ensures there is a good relationship between products and processes when designing processes to create their products or deliver their services. In essence, every aspect of the process of manufacturing aligns with the products that the organization creates and process design is a material aspect of product development. The organization's product and services drive process design and the processes ultimately determine the organizations' profit margins and costs. The organization has processes classified into projects, batch shops, job shops, flow lines, continuous flow process, and assembly lines.
Projects: They basically result in a single output.
Job shops: Generates small batches of diverse products and each batch is customized as per the customer’s order. Each product may demand different processing times and steps
Batch shops: These generate periodic batches of similar products. Additionally, batch shops can produce unlike products following the same process
Flow lines: The process incorporates independent stations that produce similar parts. Each part follows a similar cycle throughout the process. The flow line output is determined by the bottleneck
Assembly line: Generates discrete parts flowing at a regulated rate through an established process. The lines move the parts to the resources and before the line moves on each line must complete its task.
Continuous flow process: The processes are subjected to the continuous production of items in a highly automated process. Generally, the flow runs 24/7 nonstop.
Balancing operating costs
Each process has its own operating cost structure that determines the cost of units produced at diverse production volumes and a minimum volume of production at which the process is profitable (Rossetti & Bright, 2018) The operating costs are classified into variable and fixed costs. The fixed costs such as mortgage payments, rent, insurance, property taxes, certain overhead, and administrative expenses and capital 100 equipment are independent of unit volume produced. Conversely, variable costs change proportionately to volume. Labor, material and power to run equipment are examples of variable costs.
Face to face and back office operations
ExxonMobil contains both elements of manufacturing and services and this makes the business to thrive. The organization strengthens the customer interface through establishing an easy service flow, minimizing customer's handoffs, maximizing the customer's comfort, minimizing customers movement throughout the process, capitalizing on space, keeping the customer in view and separating the back office processes from office processes.
Improving efficiencies behind the scenes
The organization does not directly involve the customer in the optimization of business efficiency. The back office operation has a smooth flow of materials through the process that is easy to control and monitor. The processes were designed using guidelines such as th...