Shell Shell LNG and GAS Integrated Logistics and Operations Management
Added on 2020-06-04
11 Pages3662 Words71 Views
UniversityLOGISTICS AND OPERATIONS FOR OIL AND GASStudent NameLecturer NamePage 1 of 11
Table of ContentIntroduction......................................................................................................................................31.To identify and critically assess the theoretical and practical aspects of Shell’s logistics and operations management decisions with regard to the new initiatives..............................................32.To comparing and contrast Shell’s new downstream service and manufacturing retail initiatives in terms of their differences and similarities...................................................................53.Shell’s methods of planning and coordinating its downstream manufacturing and service retail network...................................................................................................................................64.Human behavioural issues and challenges Shell could face on the road to its transformation’s journey and recommendations for mitigating those.............................................7Conclusion and recommendations...................................................................................................8Reference list.................................................................................................................................10Page 2 of 11
IntroductionThe business of oil and gas is one of the profitable business in the world in current scenario forincreasing amount of demand in different field. The power developed from oil and gas helps tofulfil, the power needs of different vehicles, factories, batteries and much more. Royal DutchShell is one of biggest retailer of oil and gas power in the world. It has almost 43000 servicestation worldwide in which 25 million customers are served by half a million staffs. Royal DutchShell is not only the oil and gas power supplier, but also it has different other kind of businessesworldwide along with this. However, the upstream businesses of this organization has faced lossbut the downstream business has experienced profitability and for this reason, this organisationinitiated different changes to its business. In this assignment, different aspects of Shell’s businessmanagement will be discussed. 1.To identify and critically assess the theoretical and practical aspects ofShell’s logistics and operations management decisions with regard tothe new initiativesRoyal Dutch Shell has taken different new initiatives to cope up with changes of power needs ofthe world and to gain profitability and for this reason, it needs to take logistic and operationmanagement decision accordingly. In 2015, the upstream operations of this organisation faced37 percent loss compared to previous year but the downstream operations include retailexperienced triple profitability. The new initiatives are taken in order to gain the profitabilityfrom different aspects of this business that also contributes to the customer demand. Lowinflation and interest rate enhance the fuel consumption on the road of Britain. Along withdifferent other competitors and demand of the customers, Shell initiated to focused on producingalternative of fuel such as ethanol which is prepared from Brazilian sugar cane. It contributes tothe demand of power with environment friendly approach, which is producing 70 percent lessCO2 than regular petrol. Along with this, the Shell is working on hydrogen innovation to powerthe hydrogen fuel care and batteries. A joint venture of Shell has planned to structure hydrogen-fuelling pumps throughout Germany at 400 locations by 2023. Apart from this, the demand ofbattery electric cars are growing in Holland and California and for this reason, Shell is alsoPage 3 of 11
working on supercharging technology. According to Larsen et al. (2013) the demand ofalternative fuel powered vehicles are renewable energy are growing and in future those can becapture a biggest part of power consumption. It is the reason, Shell is focusing on renewableenergy generation and in China one of its site is running by solar energy. Along with this, Shell focused on changing the structure of its retail business by adding differentvalue added serves to it. According to Sari et al. (2017) in current economic scenario, retailersneed to work hard to attract customers, especially in petrol stations where location and price ismore essential than brand loyalty. Therefore, Shell takes decision to attract customers even ifthey have no need of fuel for their cars. The customers often visits petrol station due to washtheir cars or only use the parking zone or only to purchase foods from attached stores. Shellattached Costa coffee concession or Waitrose stores with many of its petrol stations to attractcustomers who does not have to refuel their cars to gain more revenue. Shell has beenrestructured 400 petrol stations throughout the UK and attached DHL pick points, add moreparking space and also make those stations more larger. It has planned to upgrade 50 more petrolstation in coming years. The sales enhanced from those restructured stores by 15 percent andfood sales enhanced by 49 percent for this upgradation. It started to make more money fromselling products rather than fuel for this reason. In Bangkok, Shell sell its highest quality fuelnamed V-power with a luxury cafe. Customers get two attendants it that site for serving themand servicing their cars. According to Galankashi et al. (2016) Due to enhancement of driverless cars, the service stationsare gaining its importance than fuel stations. Those autonomous cars take people from one placefrom another and a good service station is required for those cars and people sitting in it.Therefore, Shell has focused on developing this kind of service stations in the country in whichthe autonomous cars are increasing. Those service station needs to relevant for the people sittingin it and also service the car as soon as possible. Therefore, with the changing of powerrequirement, the importance of petrol station is reducing eventually and Royal Dutch Shell needsto change its logistics and operation management decisions accordingly. Shell needs to take care of its different activities related to planning and controlling the logisticsmore accurately. It needs to plan its operations perfectly so that every small thing can comeunder it. It needs to sequence the operations correctly and schedule based on the requirements.The activities can be before or after which depends on the operational needs. If Shell completesPage 4 of 11
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