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INTRODUCTION
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1 INTRODUCTION
Arabian Industries LLC, is a leading 100% Omani owned Contracting Company with active
participation in Oman’s Hydrocarbon, Petrochemical and Energy Sector industries since 1990. The
Company posted a growth of approximately 330% during the period from 1990 to 2006 and is
currently rated one of the leading EPC Contractors in the Region.
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I underwent an organizational study at Arabian Industries LLC to acquaint myself with the business
environment for a period of two weeks during the period of Nov. and Dec. 2009, as a part of the
MBA curriculum at the Mahatma Gandhi University, Kottayam, Kerala. This study was conducted
to understand the structure, function and processes of various departments and their inter-
dependence. During the course of study I was able to successfully interact with the employees of
the organization and they were happy to give me all possible information regarding the company.
They also took me to the plants and worksites where I got the first hand information about the
organizational processes and its functions.
The methodology consists of data collection through interview, observation and company
periodicals review. The data collected from different sources are classified, analyzed and
interpreted. Based on which an organizational structure, its functions and various departments are
identified. The various departmental functions are clearly identified and their processes & activities
carried out are recorded. An in-depth analysis is made me to understand the departmental process
based on which a process chart is prepared. The analysis further formed the basis for identifying the
departmental interdependence.
3 METHODOLOGY
This study is descriptive in nature. This is also a grouping, which includes many particular research
methodologies and procedures, such as observations, surveys, self-reports, and tests.
5 AREA OF STUDY:
The study was undertaken at Arabian Industries LLC and the respondents were the Finance
Manager, Department heads and employees from different departments like finance, maintenance,
fabrication, manufacturing, and marketing etc.
6 DATABASE
The research efforts employ both primary and secondary research techniques to ensure that the
foundation of business intelligence and insight is accurate, current, and reliable. To conduct this
study, both Primary and secondary data have been used.
8 CHAPTERISATION
Chapter : 1 - Introduction
Introduction chapter gives an idea about the, organization where the study has conducted, the
nature of the study, the method of the study, scope of the study and it’s objectives and the
limitations of the study.
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This the last chapter of this report and it discuss about the findings of some major
problems identified during the study and certain remedial measures to be taken to
overcome the identified problems and conclusion of this report.
CHAPTER 2
PETROLEUM SCENARIO
5
OMAN ECONOMY & PETROLEUM SCENARIO
The twenty third of July 1970, the date of accession to the rule of the country by His Majesty Sultan
Qaboos bin Said, Sultan of Oman, is of prime significance in Oman's history. It forms a watershed
between traditional and modern Oman. Since then the Sultanate, under the leadership of His Majesty
Sultan Qaboos bin Said, Sultan of Oman, started establishing the pillars for its modern
The Vision for Oman's Economy: Oman 2020 aims at carrying out a substantial transformation in the
structure of the national economy by developing a multiplicity of income sources, instead of depending
mainly on a depletable source like oil in order to achieve economic balance and sustainable growth.
Accordingly, it is expected that there will be a gradual decrease in the contribution of the oil sector to
the GDP while the contribution of the non-oil sectors to GDP will increase gradually. It is expected that
by 2020 the oil sector contribution to GDP will be 9% while the contribution of the gas sector will
increase to 10 %. This significant transformation of the structural composition of the production base of
Oman's economy is what we mean by economic diversification
Now Oman is a middle income economy that is heavily dependant on dwindling oil resources. Because
of declining reserves, Muscat has actively pursued a development plan that focuses on diversification,
industrialization, and privatization, with the objective of reducing the oil sectors contribution to GDP to
9% by 2020. The drop in oil prices in 2008 and the global financial crisis reduced Oman’s budget
surplus in 2008 and slowed the pace of investment and development projects, but GDP growth still was
positive, in part because Muscat implemented an expansion fiscal policy.
The global financial and economic crisis of 2009 was a major test for all the Gulf countries, but
Oman’s steady and careful development policy and it’s long term vision kept it immune from the worst
implications of the crisis. Now the world economy is on the path of recovery and oil prices are on the
rise again, the Sultanate is geared for further economic growth and development.
Despite a sharp fall in average oil prices in 2009, the Omani govt. has managed to keep it’s fiscal
amount close to balance. Oman’s economy has navigated through the global economic crisis in
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relatively good shape. Although country’s real non oil growth fell sharply in 2009, it remained in
positive territory. Oman’s financial sector was less affected by the global economic
crisis and the countries modest level of indebtedness has limited it’s external
vulnerability.
Petroleum Development Oman is the foremost exploration and production company in the Sultanate. It
accounts for more than 90% of the country's crude-oil production and nearly all of its natural-gas
supply. The Company is owned by the Government of Oman (which has a 60% interest), Royal Dutch
Shell (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a 2% interest).
The first economic find of oil was made in 1962, and the first consignment of oil was exported in 1967.
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CHAPTER 3
Mr.Amer Al Suleimani
(Managing Director)
8
ARABIAN INDUSTRIES LLC – A PROFILE
Managing
Director
HR
Joint
Venture
(JV) Finance
WPAI Manager
Internal
Chief Auditor
Operating
Officer
Logistic &
CMGR. Head Head Head Procureme Asset
HSEM QAQC AIMLLC AIPLLC AITSLLC nt Control
Manager
Manager
Corporate
Planning Marketing Proposal
Engineer
Arabian Industries LLC is a leading engineering company catering to the needs of the energy sector
for the MENA region. It has facilities and expertise to meet the varied client needs of the Oil/Gas and
other energy sectors in the production, Processing and delivery phases. Started in 1991 in The Sultanate
of Oman, they have grown steadily and won many accolades and appreciations. The most prestigious
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achievement is the Year 2008 “His Majesty Cup award for best five factories”. Their commitment to
the job, quality of work, earnestness to provide Total Solutions and desire to surpass client
expectations has consistently earned repeat business from their esteemed clients. These
qualities enable them to compete in international markets and succeed.
3.2 THEIR CAPABILITIES INCLUDE:
1. Engineering – EPC projects, Design and Engineering of Vessels, Skids and Tanks.
2. Manufacturing – Fabrication of Pressure vessels, Skids, Tanks, Heat Exchangers, Columns,
Process piping and Structural works
3. Construction – For the Oil and Gas industry, Refineries, Petrochemical projects,
4. Power plants as well as Power transmission & distribution networks and associated works
• ASME ‘U’, 'U2' ‘S’ & ‘R’ Stamps: For the manufacture and repair of Pressure Vessels at their
state-of-art facilities at Rusayl & Sohar work centre.
• Society is their cradle so they need to preserve and enrich it; Customers are their Patrons so
they need to honor their commitments with them;
• The employees are their biggest assets, so they need to nourish and help them grow.
“Arabian Industries LLC and its subsidiaries are committed to become one of the leading
companies providing complete solutions to the energy sector by enhancing customer satisfaction,
strengthening employee & supplier relations and continually improving its product & services
through the Quality Continuous Improvement, Enhancing Employees Safety, Providing proper
resources & suitable working environment, achieving national development and improving
profitability and budget”.
Chart No.2
30,000,000
12
11
20,000,000 10
9
Sales 8
7
10,000,000 6
4 5 Series1
3
1 2
0
1 2 3 4 5 6 7 8 9 1 1 1
Series1 1, 2, 4, 6, 6, 9, 11 13 17 19 21 25
Month
10
Monthly Sales for 2010
Arabian Industries Projects LLC (AIP), a subsidiary of Arabian Industries LLC, is the
Projects Division providing Engineering, Procurement, Construction and commissioning
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services, to cater to clients in the Oil & Gas, Petrochemicals, Power, Fertilizer, Chemicals
and Refinery Industries. The nature of activities involves Management and Execution of
Engineering, Procurement, and Construction projects including associated Health, Safety
and Environmental systems. AIP has a sound Management policy with emphasis on
teamwork, efficiency and personal relations at all levels.
Arabian Industries LLC has entered into a JV with two foreign companies. They are listed below.
The WPAI - J.V. was formed between Arabian Industries LLC. and Worley Parsons (Oman)
during the middle of 2005 as a framework to cater to the Engineering, Maintenance and
Construction contract for Petroleum Development of South Oman, awarded by PDO. This is a
five year contract which can be extended to 7 years.
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Design, Detailed Engineering, Procurement, Construction, Pre-commissioning and
commissioning of Oil and Gas facilities covering the complete Civil, Mechanical,
Electrical & Instrumentation works involved in new and developmental projects
NORM STANDS FOR : “Naturally Occurring Radioactive Materials” which are found in the
PDO sites during production of Oil from oil-wells. This project involves a patented process of
decontamination of such NORM contaminated equipments used in Oil processing, to the
Environmental criteria required for releasing them for reuse or scrap. This entails suitable
investments in setting up decontaminating facilities and developing the required infrastructure in
PDO sites for the said purpose.
EPC Projects
• Maintenance...
Process Equipment
• Pressure Vessels
3.8.2 FACILITIES
ARABIAN INDUSTRIE’S MANUFACTURING AND FABRICATION facilities are located at the capital city of Muscat
and the port city of Sohar, in The Sultanate of Oman.
SOHAR WORKSHOP
Situated in an area of 12000 m2. High roof bays can handle a single section weighing up to 100 Ton
under the shed and 250 Ton in the yard, with thickness up to 150 mm in mono block construction.
RUSAYL WORKSHOP
The Rusayl workshop houses a fabrication facility with a well equipped covered bay and an open yard
which can handle a single section weighing up to 200 Ton in the yard with thickness up to 80 mm in
mono block construction.
PROJECT FACILITIES are located at their sites and these include temporary facilities like camps with
associated utilities. Other resource mobilizations include Plant, Equipment and Manpower suited to the
typical requirements of each project and client. Support services like procurement, contract
administration, cost control, manpower recruitment, etc. are rendered from Head Office in Muscat. All
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the operations are backed by a logistic management system overseeing the deployment of a well
maintained fleet of vehicles and equipments.
ARABIAN INDUSTRIES TECHNICAL SUPPORT LLC has its own maintenance facilities at two locations – one
at Rusayl (In Muscat) and another on the coastal city at Sohar.
RUSAYL WORKSHOP
Rusayl Workshop, has its own Maintenance facilities in Rusayl Industrial Estate. ITS-LLC is under
certification process for API Monogram License (6A & 6D). ITS Rusayl workshop has an overall area
of 6550 square meters out of which 900 square meters are covered.
SOHAR WORKSHOP
Sohar Workshop, at Plot No: 257-259,261 &262, P. O. Box 93, Postal Code 327, and Sohar Industrial
Estate has its own Maintenance facilities in Sohar Area. ITSLLC is under certification process for API
Monogram License (6A & 6D). ITS Sohar workshop has covered area of 2310 square meters and
material storage facilities.
3.8.3 CAPABILITIES
• Mechanical design of process equipments like pressure vessels, heat exchangers, separators,
manifolds and pre engineered skid packages and columns as per International standards ASME
Sec VIII Div1 & 2, PD 5500 Shell standards.
• Design of Shop and site Storage tanks as per international standards API 650, 653, EN 14015
and Shell standards & Design of direct and indirect heaters, fuel gas treatment plants
• Regular association with reputed international process owners and licensors in the Oil & Gas,
Refinery and Petrochemical industry for the design of equipment internals.
• In-house mobile cranes of 25,50 & 80 MT capacities , and Over head cranes of single piece
handling capacity up to 50 MT .
• Hydraulic lifting and jacking arrangement for heavy loads up to 250 MT and CNC operated
multi torch profile cutting machine.
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• Hydraulic rolling machines capable of rolling up to thickness range of 110 mm in cold
condition
• Heavy thick plate shearing and bending machineries and Fast cutting and pipe beveling
machines up to diameter 64” etc.
WELDING AND JOINING TECHNOLOGY
• Core competency and expertise in welding and joining technology of all construction metals,
especially in DSS,CRA and special alloy steels
Machining
Arabian Industries workshops are fully supported by in house machining facility with modern lathes,
milling, grinding, drilling, boring and press machines.
Testing
• Hydro/pneumatic testing bays and facilities and RT/MT/UT/PT/PWHT/PMI and other NDT
facilities.
• Tie ups with authorized testing laboratories for the mechanical and chemical testing etc.
Heat Treatment
• Oil & Gas, Refineries, Fertilizers, Petrochemicals, Steel Industries, Ports etc.
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• Maintenance of Static Equipments and Heat Exchangers including Tube Cleaning,
Re-tubing and Plugging
• Choke Manifolds , Mud Pumps , Blow out preventers , and Well Head Equipment & X-Mas
Trees.
• Other Equipment pertaining to API 6A & 16A , and Valve Testing, Repair & Maintenance
Services etc.
Other Services
• Workshop Based, Metallic and Ceramic Spray Coating , Hard Facing , Dynamic and Balancing
• Crossover & Spare Parts Manufacture , Stellite Coating , All types of machining jobs.
Site Based
• Bolt Tensioning , Flange Facing (on Site Machining) , Hydro Jetting , Fast Cutting of Pipes etc.
3.8.4 EQUIPMENTS
SOME OF THE MAJOR EQUIPMENT & MACHINERIES UNDER ARABIAN INDUSTRIES LLC
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Tons el.
Hydraulic Pipe Bender Hydraulic pipe bending machines capable to roll 20D and 40D bends
upto 12" Sch 40
Man Power
Category 2009 2008 2007 2006 2005
Managers: 30 25 22 18 15
Engineers: 120 110 95 75 60
General Support Staff: 55 45 38 35 25
Supervisory workforce: 750 700 690 600 550
General workforce: 1800 1725 1600 1475 1400
Total Manpower: 2755 2605 2445 2203 2050
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ManPower
2009
2009
2008
2008 2007
2007 Series1
2006
Strength 2006 Series2
2005
2005
Series3
2004
2003 Series4
1 Series5
Year
“Over the last few years, AI-LLC, own a strong market presence and customer recognition
with endless capabilities, resources and dedicated manpower. “
Petroleum Development Oman is the foremost exploration and production company in the Sultanate. It
accounts for more than 90% of the country's crude-oil production and nearly all of its natural-gas
supply. The Company is owned by the Government of Sultanate of Oman (which has a 60% interest),
Royal Dutch Shell (which has a 34% interest), Total (which has a 4% interest) and Partex (which has a
2% interest).
Project-1
Project-2
Name of Project DCME & I Engineering Service Contract No. C-680046, -PDO
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Project-3
Project-4
Project C31/1097: Hubara -Saih Rawl - 132 kv Overhead line, South Base
Duration of the project 25 months
Type of Contract EPC , Lump sum
Project-5
Name of Project Pressure Reduction Terminal -PDO
Duration of the project 25 Months
Type of Contract Main EPC Contractor
Project-6
Petrofac is an international provider of facilities solutions to the oil & gas production and
processing industries.
1-Name of the Project LP Vessels for Kauther Gas Plant -Kauther Gas Project, PDO
2-Name of the Project Storage tanks ( CS/SS) for Kauther Gas plant (8 No),
3-Name of the Project DSS/SS Heavy wall piping for Kauther Gas plant
3.1
Name of the Project EPC of Gas floatation & Degassing tanks
Design code DEP 34.51.01.31 & EN 14015-2004
3.2
Name of the Project EPC of two no of Settling tanks
Design code DEP 34.51.01.31 & EN 14015-2004
3.3
Name of the Project PDO – Fahud
Production & test Separators
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Steam Injection Project
3.4
Name of the Project DSS/SS Heavy wall piping for Kauther Gas plant-(8,000-
Inch.dia),
Kauther Gas Project, PDO
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3-LP/HP VESSELS FOR SOHAR REFINERY PROJECT FOR JGC CORPORATION JAPAN.
22
6-GAS TREATMENT PLANT-BHEL PROJECT FOR PETROLEUM DEVELOPMENT OMAN.
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ENGINEERING PROCUREMENT AND CONSTRUCTION OF SOHAR REFINERY PRESSURE REDUCTION TERMINAL..
CLIENT: OMAN GAS COMPANY..
1
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3.9 QUALITY POLICY OF ARABIAN INDUSTRIES LLC.
A dedicated team of Quality Assurance and Quality Control Engineers (lead by the Company’s
QA/QC Manager and Quality Systems Engineer) supports the implementation and monitoring of
Quality Management of the Company. All departments in the Company are certified to ISO 9001
and regular internal and external audits are conducted to check the compliance and renewal of
certificate.
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ISO 9001:2000 requires that an organization’s quality policy provide a framework for
reviewing the company’s quality objectives. The policy should give an
overall direction for the organization, and its objectives should flow in that
direction. But because of outside forces such as customer requirements and market environments,
business conditions can change. If this happens, the alignment between quality policy and
objectives can become off-centered. So, the standard requires that management periodically
review changes to both the policy and objectives. An organization’s objectives must be
measurable and its quality management system processes designed to meet those objectives.
1 Mission
To achieve market leadership through excellence in the quality of product and services by adopting
state of the art technologies and innovative management approaches aim towards customer
satisfaction.
2 Vision
Arabian Industries LLC is committed to providing their clients with the best possible service and
results at a competitive price, without compromising on quality, health, safety, environment, business
ethics or welfare of their staff. “As a recommended supplier, and a preferred employer, AI LLC is
meeting the objectives and needs of their clients & employees.”
3 Policy
Arabian Industries LLC and its subsidiaries are committed to become one of the leading company
providing complete solutions to the energy sector by enhancing customer satisfaction, strengthening
employee & supplier relations and continually improving its product & services.
AILLC and its subsidiaries strive to achieve this through the following objectives:
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• Continually improving the effectiveness of quality Management System
• Enhancing safety of employees and protecting the Environment
• Timely delivery of products
• Providing adequate resources and suitable work environment
• Training & Development of work force and meeting statutory Omanaization target
• Improving profitability
4 Strength
Integrity in diversity. Though their business expands to diverse sectors they still abide by their vision
& policy and maintain integration of their Quality management system and consistency of operations
through empowerment, motivated & dedicated peers and strong leadership
5 Approach
6 Credentials
AI LLC’s quality management system established since 1996 has been certified to ISO 9001 – 2000.
Their pressure equipments manufacturing facilities are accredited by ASME for U, U2, S and R
stamps. Oil & Gas field equipments manufacturing facilities are certified by API for conformance to
6A, 6D and 16A requirements.
AI LLC’s Quality Management System is certified to ISO 9001: 2000 by M/S. Velosi Quality
Management International Limited. The scope of accreditation includes:
Design, manufacturing and installation of process equipments like columns & reactors, pressure
vessels & separators, heat exchangers, gas treatment packages, manifolds, piping pre-fabrication and
storage tanks in accordance with ASME/U/U2/S/R symbol requirements / BS & other international
standards.
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3.12 ARABIAN INDUSTRIES PROJECTS LLC
3.14.1 To be of service to the nation and to contribute effectively to its economic well being and
growth through the production, supply and marketing of infrastructure facilities to Petroleum
Production and it’s allied industries in Sultanate of Oman.
3.14.2 To sustain and improve its pioneering role in the development of engineering and technology in
manufacturing industry through continuous research and development.
3.14.3 To improve productivity and maintain high standards of quality and adopt effective measures
for controlling cost in all aspects.
3.14.4. To ensure for its customers the availability of its products and services on reasonable terms, for
its shareholders a fair return on capital invested and, for itself, development of adequate
internal resources for continual growth and expansion.
3.14.5 To develop, train and maintain a team of motivated and disciplined personnel with required
skills and abilities, and to encourage innovation and to create a condition for their functioning
and career development so as to improve their overall quality of life
3.15.1 To achieve a net profit of OMR: One Million per year with a turnover of OMR: 100 Million by
the year of 2010
3.15.2 To focus on cost reduction and technology up gradation in order to become competitive in each
line of business.
3.15.3 To constantly innovate and develop new technology and services to satisfy customer
requirements.
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3.15.4 To invest in new business lines, where profit can be made on sustainable basis over the long te
rm.
3.15.5 To compete through speed, agility and flexibility in recognizing and
capturing opportunities in existing markets.
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• Innovation in processes, products and services
• Managing the risks a company faces.
All modern societies lay down ground rules, laws and regulations that businesses are expected to
follow. Legal responsibility defines what society deems as important with respect to appropriate
corporate behavior. Businesses are expected to fulfill their economic goals within the legal framework.
Legal requirements are imposed by local councils, state and federal governments and their regulating
agencies. Organizations that knowingly break the law are poor performers in this category.
Intentionally manufacturing defective goods or billing a client for work not done is illegal. Legal
organization’s direct economic interests. To be ethical, organization’s decision makers should act with
equity, fairness and impartiality, respect the rights of individuals, and provide different treatments of
individual only when differences between them are relevant to the organization’s goals and tasks.
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Unethical behavior occurs when decisions enable an individual or organization to gain expense of
society.
Shareholders and investors themselves, through socially responsible investing are exerting pressure on
corporations to behave responsibly. Non-governmental organizations are also taking an increasing role,
leveraging the power of the media and the Internet to increase their scrutiny and collective activism
around corporate behavior. Through education and dialogue, the development of community in holding
WHEEL OF SUCCESS
“Upholding the belief that "giving back to the society from which one is benefited",
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Arabian Industries LLC is committed to contributing to the sustainable development of the
communities in which its businesses are operated. They recognize that achieving
corporate social responsibility while meeting their business objectives requires
balance among all stakeholders, including shareholders, customers, staff, business partners, community
and environment. Therefore, the organization has been participating in various initiatives, including
charity, education, culture & sports, environmental protection and promoting staff's well-being and
volunteerism, to enhance their positive impact on people and communities”
CHAPTER 4
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FUNCTIONAL DEPARTMENTS
1-FINANCE DEPARTMENT
1. Objectives
8.1 To Manage & account for the financial resource of the Organization, to forecast its requirement
in the future and plan accordingly and to check for deviation.
8.2 Report the financial performance of the company to Management, stakeholders & and to
comply with the Govt. rules and regulations
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2. ORGANISATION CHART OF FINANCE DEPARTMENT.
MANAGER-FINANCE
MANAGER FINANCE
(ASSISTANT
CHIEF ACCOUNTANT
ACCOUNTS-PAYABLE ACCOUNTS-RECEIVABLE
Some of the major functions in finance departments are, Management of Accounts Receivable,
Accounts Payable, Accounting of Materials, Banking, Managing of Financial Resources and
Budget preparation, Cost accounting, Auditing, Preparation of financial statements & Reports,
Corporate Planning etc.
According to the nature of the functions, Finance department in AI LLC is divided into four main
sections for carrying out its process. They are:
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3.1 Stewardship of Finance Functions
3.2 Servicing and Monitoring of Project Management Activities
3.3 Management of Company Accounts
3.4 Implementation of Corporate and Contract Budgets.
3.5.5.21 Revise budget accordingly and gets final approval from senior management.
3.5.6.1.4 Highlight the area which have not audited for a long time.
3.5.6.1.6 Review this list with Audit committee and seek their advice.
3.5.6.1.7 Finalize the list of audits, noting approximation of resources and time
requirement.
3.5.6.1.8 Short the report by priority level
3.5.6.2.6 Assembling all the findings from the internal audit department.
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3.5.7.3 If asset is not available, evaluate the proposal and record the fact in evaluation form.
3.5.7.4 Send the asset purchase evaluation for approval and get the
approval.
3.5.7.5 Prepare purchase requisition.
3.5.7.9 Asset invoice and ARN to be sent to accounts for making the payment.
3.5.10.1Freeze attendance for the month after confirming with pay roll executive
3.5.10.2Provision for retirement benefit-(Auto thru ERP)
3.5.10.3Provision for leave
3.5.10.4Provision for end of service benefit
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3.5.10.12 Process depreciation in update mode and pass JV.
“In personal and business affairs; the correct Insurance is vital. Wrong or inadequate
cover, can lead to disastrous consequences for individuals, as well as business
enterprise. The right advice makes all the difference and prevents costly mistakes. As
far as a business a firm concerned, the most obvious things need, is to insure it’s valued
human power, and other properties like; buildings, plant and machinery, stock and
goods in transit (export and import)etc
To ensure all this AI LLC is having a Health Insurance Policy for it’s valued man
power, for all exports imports an Open Marine Policy, and also other various policies
are under various schemes with a reputed insurance company in Oman.
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Corporate plan is prepared by taking estimates and future projections for the coming
year. The corporate plan is revised every year by changing current year data’s and
adding New Year data’s. This plan projects the company’s position for the next years.
The Working capital is essential for any Organization to meet its day to day
requirements. Working capital may be specified as the firm’s current assets over
current liabilities. As a large scale company, AI LLC is also requires sufficient
working capital to meet its daily requirements.
AI LLC uses letter of credit and bank guarantee mainly for the purpose of financing the
import of raw material and for executing the project works. If the Co. needs to avail
more than the approved limit, the finance department will have to take permission of
Board of Directors.
Arabian Industries LLC approaches different banks to raise funds to meet its working
capital requirement and it maintains a consortium of banks for the same. They are:
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2 PURCHASE DEPARTMENT
2.1.2 To procure materials economically at a cost consistent with the quality and service
required.
2.1.3 To provide the necessary expertise, advice, information to the Curators and Education
Officers with regard to the best quality of material available in the market, supplier’s
capability and performance etc.
2.1.4. To develop and maintain good buyer-seller relationship.
2.1.5. To promote source development.
2.1.6. To maintain PDO standard, reputation, and credibility in the market by fair dealings
and prompt payments.
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2.2.6. Negotiating contracts.
2.2.7. Checking legal conditions of contracts.
2.2.8. Issue of Purchase Orders.
2.2.9. Verification and passing of suppliers’ bills
2.2.10. Maintenance of purchase records.
2.2.11. Maintenance of vendor performance records/data.
2.2.12. Clearance of foreign consignments.
2.2.13. Development of reliable and alternate sources of supply.
2.3.1. As every divisions has a Purchase Department, all purchases of stores shall be
centralized in the interest of economy, uniformity and as a matter of policy since
custodian and consumer should not be the same. Accordingly the purchase of office
stationery, forms, liveries, furniture etc., shall be made by the Purchase Department
and not by the administration sections. Transfer/adjustment of staff shall be made
where necessary.
2.3.2. Local/cash purchase of stores shall continue to be made in exceptional cases by the
Heads of Divisions/projects under their power but as far as possible Purchase Officer
should be associated even while making such purchases.
Pre qualified vendor list shall be maintained by purchase department. The vendor list
comprise of all pre-qualified vendors under each category stating clearly the respective
capability in terms of volume of work, specification, level of technology, etc with rating of
the vendors. Addition/deletion to vendor's lists is made on a continuous basis on the above
criteria.
There are three types of Purchase Requisition (PR) as follows:
1. For projects and major capital equipment
2. For stores, including stationary and office supplies, spares
3 For Services.
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PURCHASING DEPARTMENT ORGANIZATIONAL CHART
MD
COO FM
BUH
BUH BUH
PURCHASE PURCHASE
PURCHASE
MANAGER MANAGER
MANAGER
PURCHASE PURCHASE
PURCHASE
CLERK CLERK
CLERK
MD – Managing Director
COO – Chief Operating Officer
FM – Finance Manager
BUH – Business Unit Head
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3. MARKETING DEPARTMENT
MD
BUH BUH
Strategic perspective of the market requires skilful analysis of the trend and how they
affect the market size and demand for the firm’s product.
Price, service, convenience and technology are some of the niches in Oman market.
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3.2.1.3. Product and service planning
3.2.1.4. Distribution :
With pressure on costs, prices, and margins, marketers will have to make effective
utilization of every baizas spent in marketing.
3.3. AI LLC’S TRATEGIC PLANNING WITH THE PORTER'S FIVE FORCES FRAMEWORK
Porters model is based on the insight that a corporate strategy should meet the
opportunities and threats in the organization’s external environment. Especially,
competitive strategy should base on and understanding of industry structures and the way
they change.
Porter's Five Forces is a technique that enables better strategic planning in business.
The original competitive forces model, as proposed by Porter, identified five forces which
would impact on an organization’s behavior in a competitive market.
A Porter's Five Forces is a technique that enables better strategic planning in business.
B The Five Forces have become the defector standard in analyzing a company's strategic
position and its ability to generate-profits.
6.
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Application
Market opportunity assessment, competitive analysis, and industry blueprint
Benefits:
A comprehensive framework that leads to deep understanding of an industry and qualitative
trends.
Human resource management is one of the most complex and challenging fields of
endeavor. It is considered to be the most expensive and important resource of every
organization. In AI LLC the scope of Human Resource Department is very vast.
4.2.1. To maintain the optimum manpower required to sustain the growth of Organization.
4.2.2. To motivate & manage human resource and train them to ensure their personal and
organizational development.
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ORGANIZATION CHART OF HR DEPARTMENT
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Administration Manager
HR Manager
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4.3. Functions of HR department.
The main objective of welfare measures is to maintain healthy working environment and
raise the standards of living of employees which create loyalty to the organization among
the employees.. Arabian Industry has always maintained very healthy welfare measures.
Statutory scheme Agreement scheme
1. Payment of gratuity
2. Health, safety, welfare
3. Transport facilities
4. Uniform & footwear to the workers
5. Leave & holidays
6. Retirement benefit fund
7. Local travel expenditure
8. Conveyance Allowances
9 Special vehicle loan & Leave travel concession
The wing is headed by Ad. Manager and maintains orderliness in internal affairs of the
department.
The main functions are:
The Recruitment policy is done as per prescribed recruitment specification with proper
authority appointed by Board of Directors..
The following are the sources of recruitment.
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5.1 Finance & Materials
Finance department procures fund for production and accounts for it. With these funds materials
are brought. During purchase the company has to enter into contract, give letter of credit and
other necessary documents, which is done by the finance department for procuring materials
Manufacturing, Marketing, Materials and finance
Manufacturing department will product the items to be produced and Marketing department helps
to canvas business and such way finance dept. can raise the fund required by the Company as a
whole. Materials department supply the materials to the manufacturing unit.
Finance and Production
Production targets are made on the basis of finance budget which checks the economical
feasibility of the plan and finance budget cannot prepared without knowing the production plan.
Quality & Marketing
Quality preserves the customers delight by ensuring the quality of the product produced and
services rendered to the customers. QA and QC department will counter checks all the quality.
They further goes to the workshop and check the products whether it reaches the market safely
with quality.
H.R Department
H.R department ensures the development of human resource and its productive utilization by
directing it in the right channel.
IT Department
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The department enhances inter-departmental and intra-departmental flow of information and
“All departments are interdependent and interrelated to each other for their functioning. One
department cannot operate without the absence of the other. The performance of the company
depends on the interdepartmental functioning rather than the department wise functioning”
FINANCE
DEPARTME
NT
SALES AND PURCHA
MARKETIN SE
G
IT
Departmen
t
Maintenan PROJECTS
ce
Manufactur
ing
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Chapter 5
SWOT ANALYSIS
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of
planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses,
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opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and
threats are external factors.
A. STRENGTH
• 20 Years prolonged execution and experience with Petroleum Development Oman, Oman Gas
Company, Oman Refinery, Petrochemical and Power sectors in Sultanate of Oman.
• Advanced and modified Equipments to meet the progressive requirements in the field.
• Stable and Concrete Fund Flow. & High profiled and empowered shareholders.
B. WEAKNESS
• Lack of self motivated technical-know-how that leads to depend on other establishment for
consultancy.
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• Un-availability of local manufacturers for specific materials and equipment requirements.
D. THREATS
• Deficit utilization of huge invested fixed assets due the variation of awarding and duration of
contracts
• Other Organizations may attract employees and business away from this industry.
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CHAPTER 6
FINDINGS, SUGGESTIONS
&
CONCLUSION
This study was conducted for the Operational, Financial, Marketing and Sales at it’s Head office at Al-
Khuwair , Maintanance and Fabrication at it’s Rusayl and Sohar work shop. Arabian Industry has 12
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main departments and are interdependent and inter dependence on each other as shown in
Organizational chart and inter dependence of departments chart..
To conduct the study, Arabian Industries LLC has divided into 6 major divisions:-
1- Operational division
2- Finance divisions
3- Maintenance division
4- Fabrication Division
5- Sales and Marketing division.
6- Administration and HR Division.
12.3 FINDINGS
After spending two weeks at Arabian Industries LLC, my major finding in that organization is
as follows:
12.3.1 Being a large business unit, all the departments are well organized and managed by
different managers, and all the departments are functioning very well and active.
12.3.2 The organisation structure is divided in to several units like Finance, Marketing, Operation
& Quality, Human and Resources etc… These all departments are headed by different head
units but at the same time they work for same objective with full co-ordination which
shows the unity level about the organisation.
12.3.3 During the study, it was found that it is indeed a healthy organization with a lot of well
unique functions. This organization basically being an engineering industry, it has a large
investment and a large number of people working in it and there is a well established
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organizational structure with the top level management, the middle level management and
the bottom level management.
12.3.4 All departments in the Company are certified to ISO 9001 and regular internal and external
audits are conducted to check the compliance and renewal of certificate. There is a full
swing total quality management system and it works efficiently and ensuring the total
quality of the organization and it’s product and services.
12.3.5 In the company’s system of materials management, there are very less chances of damaged
goods and scrap items being raised. The company takes necessary steps to see that no items
become scrap in the store and damaged goods doesn’t come in and go out of the company.
12.3.6 The fabrication and mfg. departments are well equipped with all the necessary
requirements and there is well functioning tool rooms which care to the needs
manufacturing and fabrication. There is also effective scrap management functions carried
out to the utmost profit of the company.
12.3.7 All the employees and labourers work very hard towards achieving the goal. Even the
higher authorities work very hard without wasting time towards the organization goal
12.3.8 An organisation study also makes me learn that any objective cannot achieve with a short
span of time it has to be done through systematic ways. Finally, in any organisation time
management play important role because each activity should be done at a right time at
right place.
12.4 SUGGESTIONS
12.4.1 One important suggestion is that more care and concern should be given to the clients to
retain the trust of existing valued customers.
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12.4.2 Advertisement like exhibitions do not helps Arabian Industry to
generate so much of business, but they also should be participated in
all exhibitions to generate customer awareness regarding their entire operations.
12.4.3 Company should try to improve technical service after the installation of all it’s
manufactured items. No doubt the company products have technically edge over
competitors but in long run they have to build stronger strategies in marking their
products..
12.4.4 Company is hiring lot of heavy equipments for the completion of the jobs in time. It is
advisable that, If they would purchase more heavy equipments like heavy duty cranes and
excavators, they would be in a position to make more profit..
12.4.5 During the study, it is noticed that, open purchase orders are issuing for the purchasing of
materials. Open purchase orders are the order with no value. This may leads to malpractice
and it should be discontinued immediately.
12.4.6 Another important matter which was noticed, in rare cases purchase orders are issuing after
the supply of materials. This practice also should be discontinued So that the chances of
mis- appropriation can be controlled to a grate extent.
12.4.7 An important area which is to be taken more care is the awarding of sub contract works. It
is advisable that, the company is in a position to execute the same job which is sub
contracting, profit earning can be increased to a grate extent.
12.5 CONCLUSION.
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The study in Arabian Industries has enabled me to understand the various needs of an organization,
how an organization of a corporate nature functions and how important it is to have a right
relationship between the employee and employer or the management.
Training in Arabian Industries LLC, will help the trainee to understand the various needs of an
organization, how an organization of a corporate nature functions and how important it is to have a
right relationship between the employee and employer or the management.
The study was conducted with a view to understand the functions of an organization, and its various
department. During the course of study I was successful in achieving these objectives and could
familiarize with an organization and its environment.
“This study has improved my confidence by its successful completion to undertake such studies in
the future.”
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