Supply chain management system of Shell Lubricants

Waleed Rai (ME-10-03) Yasir Hamayun (ME-10-16)

Usman Ejaz (ME-10-24) Salman Zaheer (ME-10-33)

Who we are…..?

• We are a global group of energy and petrochemicals companies with around 93,000 employees in more than 90 countries and territories. Our innovative approach ensures we are ready to help tackle the challenges of the new energy future.

Introduction

• The second largest oil company in the country, Shell Pakistan has successfully positioned itself as the preferred oil and gas company in Pakistan, leading the field in its commitment to customer service, quality of products, safety and environmental protection.

• Shell Pakistan Limited (SPL) is a Pakistan-based company engaged in the marketing of petroleum and compressed natural gas.

• The Company introduced Shell Helix Ultra, Shell Helix CNG Super, and restored its Quick Oil Change service as Shell Helix Oil Change Plus.

• Shell Pakistan is divided into functional areas i.e. Retail, Lubricants, Operations, Finance, Corporate, Human Resource and Commercial Fuels.

History

• Marcus Samuel, founder of the Shell Transport and Trading Company. Almost 200 years ago, a London antique dealer began importing sea shells from the Far East to supply a fashion for exotic decor.

• At this time oil was largely used in lighting and lubricants and the industry was based in Baku, Russia, with its large reserves of high quality oil and strategic natural harbor.

• In 1892, Murex was the first ever tanker to transit the Suez Canal.

• The brothers’ company was named the Shell Transport and Trading Company in 1897.

• It used a mussel shell as its logo

Becoming Royal Dutch Shell….

• Shell Transport’s activities in the East, combined with a search for new sources of oil to reduce dependence on Russia, brought it into contact with Royal Dutch Petroleum.

• The two companies joined forces in 1903 to protect themselves against the dominance of Standard Oil. They fully merged into the Royal Dutch Shell Group in 1907.

• By the end of the 1920s Shell was the world’s leading oil company, producing 11% of the world’s crude and owning 10% of its tanker tonnage.

• Shell changed its logo to the scallop shell, or pectin, which is used today.

Shell history in Pakistan….

• The second largest oil company in Pakistan• Shell has an over 100 year’s presence in the

subcontinent. • After the independence of Pakistan in 1947,

the name was changed to the Burma Shell Oil Distribution Company of Pakistan.

• In 1970, when 51% of the shareholding was transferred to Pakistani investors, the name of changed to Pakistan Burma Shell (PBS) Limited.

• In February of 1993, as economic liberalization began to take root and the Burma divested from PBS, Shell Petroleum stepped into raise its stake to 51%.

• The years 2001-2 have seen the Shell Petroleum Company successively increasing its share, with the Group now having a 76% stake in Shell Pakistan Ltd (SPL) - an expression of confidence.

• Since 2007, Zavig Ismail Bin Abdullah is the Chairman and Managing Director of shell Pakistan Ltd.

Our values

• We are judged by how we act: our reputation is upheld by how we put into practice our core values of 'honesty, integrity and respect for people'

Vision• As Shell Pakistan Limited, we strive to deliver

results, perform to the highest standards, develop our people, provide quality customer service and actively pursue consistent safety improvements.

Responsibilities of Shell Pakistan

• Shell Pakistan Ltd. recognizes five areas of responsibility……

1.Shareholders

• To protect shareholders’ investment, and provide a long-term return competitive with those of other leading companies in the industry.

2.Customers

• To win and maintain customers by developing and providing products and services which offer value in terms of price, quality, safety and environmental impact

3.Employees

• To respect the human rights of their employees and to provide them with good and safe working conditions and competitive terms and conditions of employment.

• They recognize that commercial success depends on the full commitment of all employees.

4.Those With Whom They Do Business

• To seek mutually beneficial relationships with contractors, suppliers and in joint ventures and to promote the application of these Shell Pakistan Ltd. General Business Principles or equivalent principles in such relationships.

5.Society

• To conduct business as responsible corporate members of society,

• to comply with applicable laws and regulations,

• to support fundamental human rights in line with the legitimate role of business, and

• to give proper regard to health, safety, security and the environment.

Principles of Shell Pakistan

Economic

• Long-term profitability is essential to achieving our business goals and to our continued growth. Without profits and a strong financial foundation, it would not be possible to fulfill responsibilities.

Competition

• Shell Pakistan Ltd. supports free enterprise. They seek to compete fairly and ethically and within the framework of applicable competition laws; they will not prevent others from competing freely with them.

Integrity

• Shell Pakistan Ltd. insists on honesty, integrity and fairness in all aspects of their business. The direct or indirect offer, payment, soliciting or acceptance of bribes in any form is unacceptable.

• All business transactions on behalf of Shell Pakistan Ltd. must be reflected accurately and fairly.

Political Activities

• Shell Pakistan Ltd. does not make payments to political parties, organizations or their representatives.

• Shell Pakistan Ltd. does not take part in party politics and do their business according to countries legislations.

Health, Safety, Security and the Environment

• Shell Pakistan Ltd. has a systematic approach to health, safety, security and environmental management in order to achieve continuous performance improvement.

• They continually look for ways to reduce the environmental impact of their operations, products and services.

Local Communities

• They manage the social impacts of their business activities carefully and work with others to enhance the benefits to local communities, and to mitigate any negative impacts from their activities.

Compliance

• They comply with all applicable laws and regulations of the countries in which they operate.

Product Range

Product Range For Automobiles

Shell Helix UltraCleans and protects for maximum performance.

Fully synthetic motor oil.

Shell Helix HX3Cleans and protects older engines. Multi-grade

motor oil.

Shell Helix HX7 Cleans and protects for extra responsiveness.Synthetic technology motor oil.

Shell Helix HX5Cleans and protects, reducing engine noise.

Premium multi-grade motor oil.

Spirax A 85W140Heavy Duty Gear Oil for transmissions operating under extreme

pressure

Donax TM High Quality Automotive transmission, Power steering and

Hydraulic oil

Antifreeze Coolant Coolant supplied in concentrate form to provide freeze &

corrosion

Brake & Clutch Fluid Shell premium quality glycol type automotive brake fluid

Shell Rimula R3 X Triple Action – Resists: Wear, Deposits, Heat SAE 15W40, API

CH4

Shell Rimula R2 Extra Turbocharger Performance SAE 15W40, API CF4

Lubricants for industry

Shell CorenaAir compressor oil to meet challenges

Shell DialaElectric oils to meet challenges

Shell GadusGreases designed to meet challenges

Shell MorlinaBering and circulating oils

Shell OmalaIndustrial gear oils

Shell TellusHydraulic fluids designed to meet challenges

Raw Material

• Base oil• Additives

Base oil

• 80% of our lubricants is base oil which is further categorized into 2 subgroups

• Group 1 for high viscosity, usually used for hydraulic and gear oil. This is being purchased from National refinery and brought to blending plant in the form of Bousers

• Group 2 is low viscosity oil, which is being import from Singapore, Thailand, and UAE.

Additives • Acid neutralizers• Antifoam• Antioxidants• Antirust• Antiwear agents• Corrosion inhibitors• Detergents• Emulsifiers• Viscosity index improvers

Sources of additives

The main sources of additives are • Chevron• Mobil Sister concern firms• Blue Water technology Germany

Shell Lubricants Blending Plant

• Shell Lubricants Blending Unit is a State-of-the-art plant situated at Napier mole road East wharf, Kemari Karachi.

• The Plant was commissioned in April 1992 and is fully operational offering highly quality-oriented services.

• The plant is highly flexible and responsive to customers' needs and is reputed for being a reliable service provider of world class lubricants.

Atomizing the Packaging ProcessThe Robotiser was installed and commissioned in the 1st quarter of 2005 to enhance the efficiency of the packaging process and eliminate the manual element to save time and reduce the risk of injuries.

Small Pack filling line

• The advanced quality control lab facilities rank very high among the world-wide labs of Shell blending plants.

• Shell lubricants aims for Global Excellence by implementing sound, structured and innovative strategies across all processes.

• Shell will continue to demonstrate its ability in setting new standards and benchmarks across the industry with focus on attaining the highest levels of customer satisfaction.

Drum filling line

The packaging unit is capable of handling a wide variety of packages from 800 ml up to 210 liters.

Packing List

• 1 liter pack• 3 liter pack• 4 liter pack• 10 liter pack• 20 liter gallon• 209 liter drum

Packing material

• Poly pack bottles• Corogated boxes• Drums

Ware Houses Locations

MultanLahoreKarachi Rawalpindi

Transportation Mode

• Agility Logistics (Pvt) Ltd

Shell Pakistan signed a contract with” Agility Logistics (Pvt) Ltd” who is responsible to deliver products from blending plant site to warehouses and customers all over Pakistan.

• Ziarat Logistics (Pvt) Ltd

In 2007 Company signed an agreement with ZLPL for providing its logistics & transportation services from Karachi to different cities. The Company was providing different oil products to Afghanistan through Shell Pakistan Limited,

• Bashir Siddiq Logistics

One of leading Transport Company in Pakistan ISO 9002 certified working for shell Pakistan .

Sub Contractors for Fuels

•Mehran Enterprises•Fast track Pvt Ltd•Shah Nawaz & Sons •Shabili Petroleum contractor

Shell carriage

• Approximately 5% of deliveries from warehouses are carried out by shell own carriage

From order to delivery….a complete process

SAP System

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Shell services

The shell range of lubricant services aims to help improve business performance by increasing operational efficiency and reducing maintenance costs. There are services offering easy product selection, expert lubricant advice, and equipment and lubricant condition monitoring to help cut maintenance costs.

Shell services

Shell lube advisor:The shell lube advisor specialist lubricant advice

and technical support service is designed to ensure that you use the right shell oil at the right time

Shell services

Shell lube analyst: The shell lube analyst oil and equipment

condition monitoring service can help to improve equipment reliability and cut maintenance cost.

Shell services

Shell lube match:The shell lube match web based product recommendation tool offers expert lubrication suggestions for your vehicle and equipments.

Customer Awareness programs•Shell Pakistan Limited conducts several seminars for product awareness for its customers on the lubricants, services and the best practices in the industry. •This platform will serve as an opportunity for the participants to benefit from sharing the ideas & experiences with the Shell Lubricants team.

Mobile testing lab

• Mobile testing lab is a very unique service provided by Shell Pakistan limited. Which is actually a van carrying all latest lab equipments that enables to test viscosity and viscosity index of a lube on the spot.

Videoscopy technique

• Shell is the only pakistan’s lube company who provides video scopy analysis of machines, turbines, and compressors. By using this technique, we can monitor the wear and tear of their parts

SWOT Analysis

Strength

• Shell confirms its position as a leader in the gas and power business with a deal to design the world's first large scale Gas to Liquids plant.

• Shell is using effective means for the promotion of its products. It is heavily emphasizing on advertisement and other promotional tactics.

• Shell provides in time deliver to their petrol pumps.• The HRM policies of Shell are its strengths; its incentive based

policies are motivating for employees.• The shell gives the proper attention to their customers.• Shell has international standard petrol pump.• Mobile training units’ side keeping staff up to date on a whole

range of topic including most important issues of health safety and environment.

• They have no proper shades and sitting arrangements at the filling stations because people who came for oil changing and car washing face difficulties in this regard.

• There is no proper drainage system at filling station.• There is very little empowerment of employees.• Shell has eight regional retail managers who are watching the

activities of petrol pumps in all over the Pakistan that is insufficient to handle the problems.

• Shell has the heavy budget for the promotion activities.• All tanker is fitted with special tamper-profit seals to ensure that

only the highest quality fuel is delivered to all company operation sites.

OPPORTUNITIES

• Shell has maintained a tradition of introducing new innovation as compare to its competitors. The example being the mobile, training unit, quality and quantity unit, Mini-market (select, Jet was (Rianbow), oil change. Lubricants (Rumila C.D.X,) Helix that is opportunity for Shell to maintain these facilities.

• People perceptions are changing and they prefer digital pumps. So they should renovate their petrol pumps. Shell also has an opportunity to enter in the nice market.

• Shell has strong financial position so it has opportunity to avail a new market share in CNG business.

• Shell is the market leader due to innovation so it can easily win the customer confidence.

THREATS

• The smuggling of petrol in Baluchistan form Iran is one of the greats threats to the company.

• The fake oil makes up a large share in the market, if such practices are not prohibited it will create a disastrous effects on sale

• PSO is also servicing in profitable areas.• Shell is charging few paisas more than their competitor. Shell

is facing very stiff competition to PSO and Caltex.• Entrant of new companies in the refinery sector.

PESTMacro Environment

POLITICAL FORCES

• In Pakistan there are rapid changes of Government. Each government that came in power condemned the planning work done by the precious government. The slow development due to political instability but now the present government is very stable to grow because govt. is providing incentives to different industries.

ECONOMIC FORCES

• In Pakistan GNP is 400 $ and inflation rate is very high which is 12.7. The balance of payment position in Pakistan is -3.5%. The employment rate is very low.

• These all factors affects company business

SOCIO CULTURAL FORCES

• In Pakistan population is increasing and social values are also changing so the demand of fuel consumption is also increasing. People are coming from rural areas to cities and their life style and values are also changing. They are using modern technology like care, motor cycle for traveling.

TECHNOLOGICAL FORCES

• Pakistan environment regarding the technology is not very advance due to the lack of resources.Natural gas, because of its environmental qualities, efficiency, and technological advances are going to play an increasingly important role in meeting demand for clean energy.

Recommendations

• There should be proper shades and proper sitting arrangements at the filling stations because people who come for oil changing and car washing face difficulties in this regard.

• Lubricants should be disposed in a proper way to protect the environment form being polluted.

• Shell should provide small incentive to its customers.• Schemes like “Buy 50 liters of super and get a come free or a

cola drink free”, should be kept introducing time to time by shell.

• Shell should make company operation site in every city for capture the new market.

• There is only one thing that is constant that is change; shell should investment on research development to cope with dynamic environment.

• Company should established new regional office to control the activities of company operations site.• Lubricants should provide the facility 0f free oil change on all its out lets.• Shell should develop modern retail outlet. These outlets should have all possible facilities for customers because one of the reasons behind decrease market share is modernization of competitors.• Shell should develop effective marketing programs that will help the company increase sales that will lead to increase market share. In these market programs emphasis should be given to advertising, which is most effective and efficient tool of promotion for such type of business.

Thank You