The oil and gas industry is a company providing the necessary items and services that are required by the international oil and gas sector to explore extract and transport oil and natural gas at the refinery and then finally to the consumer. Schlumberger is the largest oil manufacturer company in the world and the most recognized service companies on the market since 1920 and in South America since 1929.
It is a process to take or make important decisions for a company. The decision making process help the organization to detect the problem and gave possible solutions of a problem. The step by step decision making process can help organization to take internationally and thoughtful decision by collecting relevant information and defines alternatives solutions for a problem.
Basic model for decision making
The decision-making process begins with the examination of the nature of the problem then followed by the generation and assessment of possible options and ends with the choice of an option. It consists of 5 steps:
- Stage one: examination of the nature of problem
- Stage two: generation of possible solutions
- Stage three: selection among the possible solutions
- Stage four: performance of the decision
- Stage five: follow-up and control
People who are involved in decision making
The decision making groups are formed with the mixed employees of different departments. Their numbers vary from 5 to 8. These include different employees of different departments of the organization for example finance department management department legal department safety department maintainer department etc. These groups are made like 2 members from Maintance 1 from finance 2 from legal department 1 from safety officer or safety advisor and 2 within managerial position.
Effective decision making
Effective decision-making can be achieved by finding options as well as interpreting information about key events that may affect the performance of a company. Therefore the overall performance of the organization must be taken into account or results. By trying to evaluate only products processes and results tend to underestimate the role of how decisions are made which can affect the quality of the decision-making process without taking into account all the affects of the stakeholders.
Problems and challenges
The way oil services companies manage their decisions with large things such as facilities have been identified as a big challenge. For industrial person decisions are made on the basis of maintenance inputs data and management frameworks but where decisions involve significant things such as facilities decisions are generally related to costs mainly due to the lack of supporting data and historical documents. In this case managers look for the most practical solution without taking into account all internal and external constraints.
Three main operational facilities:
- Asset Management: These are activities that are a systematic and coordinated organization that favorably and sustainably manages asset systems performance risks and expenses in order to achieve its strategic plan.
- Facility management: It is defined as a multi-discipline practice to provide the functionality of the building environment by delivery of support services to organization.
- Facility manager. It is defined as the person in charge in an organization to which senior management desire to communicate and control all required activities and services of an organization both inside and outside.
Example according to Schlumberger:
The facilities were in operation until 2015 when low oil prices led to a low in activity and low in financial gain was affected by high maintenance price. Based on recent market conditions Schlumberger achieve in very clear and detailed manner to justify the assets of large facilities and reduce its impression in order to control costs and expenses in order to return to financial gain.
1. Examination of nature of problem:
The purpose of this step is to provide guidance and a basis to low the risk of generating not a suitable solution or excessive use of organizational resources. It is achieved by other steps. These are:
- Detecting the problem: Schlumberger has to examine the possibility of integrating resources and optimizing the use of common facilities or existing facilities. This creates a systematic approach to choosing from existing facilities assessing different phases to provide a view beyond a cost analysis or financial analysis.
- Fix objectives: In order to set an objective to provide the success of the decision model a checklist has been suggested. The checklist calculates whether the proposed overall objective falls within the SMART objectives category or not.
- Recognize the problem: This step indicates whether the detected problem is strategic or non-operational. If the problem is strategic the normal sequence of the decision model must be followed. However if the decision is operational it is possible to proceed to the third step.
- Set up Decision making group: This step helps to indicate the optimal decision-making group respecting the nature of the problem and the organizational situation. The decision group was formed with a mixed group of employees from multiple departments. The group has eight participants.
The idea behind this mixed group of different sectors or departments of society is an attempt to create a more objective vision while achieving to find the best solution to apply.
2. Creation of possible solution:
This step has further two steps. The first one is to collect and examine information about each option and the second one is to apply methods to create favorable scenarios.
- Collect and examine of data: Due to the lack of available historical data a SWOT analysis was carry out for each institution to identify the strengths, weaknesses, opportunities and threats or danger of each.
- Apply creative solution generating techniques: After several meetings and group discussion in which the decision-making group was actively engaged in creative solutions some scenarios were presented in which each scenario will be assessed according to its convenience and acceptability.
3. Selection among possible solutions:
The objective of this step is to evaluate the possible solutions according to criteria in order to reach a favorable solution. This requires identifying the evaluation criteria and then comparing the multiple alternatives using the chosen criteria. These steps are presented as follows:
- Identify evaluation criteria: It evaluates the criteria in which possible solutions are compared. It is based on the decision making group where the decision is will be considered as acceptable.
- Convenience test per each facility: Of the three convenience tests the facility has to need the skills and resources to apply the required changes which allow it to function as an integrated facility.
- Desirability test for facility: The criterion for this is acceptability or desirability. Some problems may be experience because of historical data frictions. Some installations will lead to a positive solution and others to a negative solution. The negative is discarded quickly.
- Applying decision rule: The purpose of this step is to examine the decision rule to reach at a solution. To do these two alternative tools will be used to calculate the favorable solution. The first tool will be a decision tree. From the execution of this tool an optimal alternative will be drawn.
- Choosing a solution: Once all the information was collected it was then possible to calculate the favorable solution for optimizing Schlumberger’s installations
4. Implement decision:
The execution phase involves planning and carries out the required activities so that the chosen solution actually solves the problem. As the plan of this solution requires time so this will only present the decision group stage.
It should be noted that the solution is not only to transform the facility into a coordinated hub covering all wire line services in Schlumberger, but that will also be enlarged to other solutions to be put into effect for the others facilities based on brainstorming and discussion session carried out through the decision model.
5. Follow up and control:
This step indicates that facility manager’s make sure that the plan is actually followed. It is essential that facilities management can support the properly implemented structure with the shared application to control and collect all information from multiple tasks and services.
Decision making is difficult factor for all the business. Some decisions are obvious and can be taken easily and some decisions are complex and take much more time. Some of the decisions are taken by the groups. In Schlumberger, decision group are made from different employees of different departments. This help in the effective decision making. The group follows the different steps of decision making (harc analysis and risk control) to achieve their desire task. It helps to minimize the loss and maximize the profit.