This document provides an overview of Shell Pakistan Ltd's supply chain operations. It discusses Shell's history in Pakistan dating back to 1903. It then outlines Shell's strategic intentions, vision, goals and strategies. It provides details on Shell's local and foreign suppliers, products, types of oil streams, modes of oil supply to terminals, major consumers, and the complexities of the oil supply chain process. It also maps out Shell's upstream and downstream operations including exploration, production, procurement, refining, distribution and marketing. Finally, it discusses topics like terminal locations, demand planning, transportation, ports, inventory management and channel offer management.

1. Introduction to management
PRESENTATION

2. Shell Petroleum
Pakistan Ltd

3. PRESENTED BY
Naseeb ullah qamar malik arslan khan sohail kamran
mohammad abbas khan

4. Contents
HISTORY.............................................................................................................................................2
STRATEGIC INTENTION........................................................................................................................2
NUMBER OF DEPOTS IN PAKISTAN.......................................................................................................3
SUPPLY CHAIN PROCESS OF OIL INDUSTRY:..........................................................................................4
SHELL SUPPLY CHAIN PROCESS OF SHELL PAKISTAN:.............................................................................4
Local Suppliers................................................................................................................................5
Foreign Suppliers............................................................................................................................5
SHELL PRODUCTS................................................................................................................................5
TYPES OF STREAMs in an OIL INDUSTRY...............................................................................................5
Mode of Oil Supply to the shell terminals.............................................................................................7
Major Consumers...............................................................................................................................8
Shell Complex Supply Chain.................................................................................................................8
Upstream Operations......................................................................................................................9
Shell Downstream Operations .......................................................................................................10
Terminal locations:...........................................................................................................................12
Demand planning:............................................................................................................................12
Inside the company.......................................................................................................................13
Transportation .................................................................................................................................13
Ports................................................................................................................................................13
HIERARCHY OF SHELL’s SUPPLY CHAIN...............................................................................................14
Inventory management:....................................................................................................................15
Channel offer management:..............................................................................................................15

5. HISTORY
Shell isa multinational companyandinPakistanitisoperatingasa publiclimitedcompanybythe name
“Shell PakistanLtd.Shell isa superiorbrandname witha100 yearhistoryinthisregion,infectthe
companyisstill inpossessionof afuel storage tankfrom1899. However,the documentedhistoryof the
Royal Dutch/shell groupthe Indo-Paksubcontinentdatesbackto1903 whena partnershipwasstruck
betweenthe shell transportandtradingcompanyandthe Royal Dutch petroleumcompanytosupply
petroleumproductsinAsia.
STRATEGIC INTENTION
COMPANY’S SLOGAN/MISSION
“You can be sure of Shell.”
COMPANY’S OBJECTIVE
Shell isfocusingonretailing,providingbetterfacilitiestocustomers,cleanpetrolpumpsconstructing
international standardpetrolfillingstations,goodadvertisingcampaignsandmini markets(select).
VISION OF SHELL
To Be The Top PerformerOf FirstChoice.
AIM OF SHELL
Creatinga secure businessenvironment,minimizingeconomiclosses,andbusinessdisruptions
safeguardingthe group’sintegrityandreputations.
GOAL OF SHELL
The goal of the companyisto positionitself asthe preferredoil companyinPakistan,leadingthe fieldin
itscommitmenttosafety,customerservice,qualityandenvironmental protection.

6. STRATEGIES OF SHELL
A strategyof corporationformsa comprehensivemasterplanstatinghow the corporationwill achieve
itsmissionandobjectives.Itmaximizescompetitiveadvantage andminimizescompetitive disadvantage.
The strategyof Shell istogrow internallybyexpandingitsoperationsthroughacquisitionandstrategic
alliances.
Shell focusestodifferentiateitsproductsfromcompetitorsinthe areaof qualityandservices.
ORGANIZATIONALRESOURCES
Shell hasestablished1404 petrol filingstationindifferentareasof Pakistan.Butnow the companyis
tryingto reduce the numberof petrol fillingstationbecausetheydonotneedthat fillingstation,whose
monthlysalesare lessthan500000 liters.Up till now about50 pumpsare renovatedindeferentcitiesof
Pakistan.
MARKET LEADERSHIP DUE TO INNOVATION
Shell isconsideredtobe the marketleaderininnovation.Itwasthe firstcompanytoget legal approval
to operate Mini-Market.Itprovidessuggestive literaturestoitscustomerswhilelaunchinganew
productsuch as Helix superandHelix Lubricantetc.
It was alsothe firstcompanyto introduce the conceptof Mobile TrainingUnit (MTU) for the purpose of
trainingthe workersandintroducingqualityandquantitycontrol units,whichcheckthe qualityand
quantityof motorgasoline atvariousfillingstations.
NUMBER OF DEPOTS IN PAKISTAN
Shell hasgot14 depotsindifferentareas of Pakistan.
Oil and petroleumindustrysupplychainistotallydifferentthanthe supplychainof FMCG insteadof
lubricant.Shell Pakistanoroil marketingcompaniesfollowsdownstreamsupplychain.

7. Shell purchasesproductsfromthe followingrefineries:
Local Suppliers:
 National Refineryltd
 Pakistan refineryltd
 Byco Refinery
 Attock Refinery
 PARCO Refinery
Foreign Suppliers:
Shell importsrefine oil fromall overthe worldbutmostlyfromGulf andFar East.
 Oman Refinery
 Qatar Refinery
 Singapore Petroleum
 Malaysia Petroleum
 Kuwait Petroleum
 ADNOC
SHELL PRODUCTS
 Motor Gasoline (MOGAS)
 HighSpeedDiesel (HSD)
 JetFuel
 Furnace Oil
 AviationGasoline(AVGAS)
Shell purchases these products fromthe refineriesone mostprofitable productof shell isAviation oil.
Thisoil isnot available inPakistansoShell isimporting thesegases tosupplytothe Militaryfortheir
aircrafts. Refineriesgive producttothe companyby the pipe lines.
TYPES OF STREAMs inan OILINDUSTRY
The oil &gasindustry is usually divided into three major
sectors: upstream, midstream and downstream
The upstream oil sector isalsocommonlyknownasthe exploration and production (E&P) sector.The
upstreamsectorincludesthe searchingforpotential undergroundorunderwater crude oil andnatural
gas fields,drillingof exploratorywells,andsubsequentlydrillingandoperatingthe wellsthatrecover
and bringthe crude oil and/or raw natural gas to the surface.
The downstream sector commonlyreferstothe refiningof petroleumcrude oil andtheprocessingand
purifyingof rawnatural gas, as well asthe marketinganddistributionof productsderivedfromcrude

8. oil and natural gas.The downstreamsectortouchesconsumersthroughproductssuchas gasoline or
petrol,kerosene,jetfuel,diesel oil,heatingoil,fueloils,lubricants,waxes,asphalt,natural gas,
and liquefied petroleumgas(LPG) aswell ashundredsofpetrochemicals.
The midstream sector involvesthe transportation(by pipeline,rail,barge, ortruck),storage,and
wholesalemarketingof crude orrefinedpetroleumproducts.Pipelinesandothertransportsystemscan
be usedto move crude oil fromproductionsitesto refineries anddeliverthe variousrefinedproductsto
downstreamdistributors.
Upstream
Exploration & Production
Midstream Downstream
Refining & Marketing
Pakistan Oilfields
Limited
Orient Petroleum Inc.
OMV Pakistan Inc.
Pakistan Petroleum
Limited (PPL)
Shell Pakistan Ltd.
Caltex Oil (Pakistan)
Limited
Pakistan State Oil
Company Limited
Pak Arab Refinery Complex
National Refinery Limited
Pakistan Refinery Limited

9. Mode ofOil Supply to the shell terminals
 Tank Trucks
 Tank Wagons (Pakistan Railway)
 Pipelines.
SPL has a 26% share inthe in the White Oil pipeline operatedbyPak-ArabPipeline Company
(PAPCO),whichrunsfromKarachi toMehmoodKot.Shell hasa30% stake inPakistan Refinery
Limited(PRL) inKarachi.

10. Major Consumers
- Retail Customer: petrol pumps (also called dealers)
- Commercial customer: big industries (textiles etc)
- Big power plants
- Aviation customers
Shell Pakistan Limited (SPL) in numbers:
 Shell has got 14 depots in different areas of Pakistan.SPL serves approximately 1,000,000
customers at its Retail stations in Pakistan
 We have over 750 Retail stations across the country
 Offering over 15 lubricants for different vehicles and industrial uses
 A Shell fleet of over 300 oil tankers distributes our products nationwide
 60 aircrafts served daily
 Shell has a 39% brand share preference
 SPL distributes from 8 oil depots (including JVs)
Shell is present at 5 major airfields across Pakistan
Shell Complex Supply Chain
The whole supplychaininthisindustryasverycomplex comparedtootherindustries.The crude oil has
to make a longjourneyfromthe pointof productionto the refineries.Longdistance resultsinalong
leadtime of several weeksandinnumerousplayersinthe supplychain.The productionisconcentrated
incertainareas but the productitself isdemandedall overthe world.The refineryprocessisacomplex
and capital-intensivepartof the chain.The refinedproductsare distributedeitherbyroad,water,rail or
pipeline.
The oil supplychainisfundamentallybasedonatraditional model andthe differentstagesinthe chain
alsoillustrate it.The oil companieshave theirclassicwaytoserve the customerswithproductsbeing
'manufactured',marketed,soldanddistributed.The maingoalsare the same like inotherindustries,
deliverthe rightproducttothe usersin the righttime and at the rightprice.The oil supplychain
essentiallycanbe dividedintotwocloselylinkedmajorsegments:upstreamanddownstreamsupply
chain.The supplychainasa whole consistsof 6 mainstageswhere the middle refiningstage separates
the up- and downstreampartsof the chain,althoughprocurementasavital functionhasto happen
before refinerystage inordertoprovide the inputsforit.Figure illustratesthe beforementionedand
givesa schematicviewaboutthe typical oil supplychain.

11. Upstream Operations:
Upstreamof Shell Petroleumbasicallystartswiththe acquisition of crude oil andwiththe related
operationsuchas explorationandproduction.Afterwardlogisticsmanagementhastobe involvedin
orderto deliverthe crude oil fromthe exploitationpointtothe refinery.
1. Exploration:
Thisstage involvesseismicand geological operations.
2. Production:
These concernsaboutexploitationof the crude oil fromthereservoirbydrilling.Production
needshighlyqualifiedengineeringworkanditalsolinkstoother activitiessuchasprocurement,
transportation.The crude oil producedistransportedbypipelinesoroil tankerstothe terminals
for storage.Fromhere itis eithertotransportdirectlytothe refineryorexportedtoother
companies’refineries.

12. Shell Downstream Operations:
The firststage of the downstreamsupplychainisthe refiningprocesswhichisbasedondemand
forecastingandtriggersthe procurementandthe logisticsactivitiesinordertosupplycrude oil tothe
refineryanddeliveritsderivativestothe customers.
3. Procurement:
Thisis sourcingof and managingthe supply of the rawmaterial to the refinery in the right time
and in the right quantity.

13. 4. Refining:
Thisis a complex,well planned process which involves thetransformation of the crude oil into
differenttypesof derivativesbasedondemandforecasting.Therefore,thishasatightlinkto the
next stage, to the marketing activities and also involves inventory management.
5. Distribution:
Logisticsmanagementassuresthatthe rightproductsgetdeliveredtothe right customersinthe
righttime preferablyinacost efficientway

14. .
6. Marketing:
Thisdealswithmarketingthe differentcrude oil derivativestothe rightcustomers.Marketing
has to have an accurate knowledgeaboutthe currentinventorylevel andrefineryactivitiesin
orderto manage its sale function.
Terminal locations
Kemarri in Karachi , Shikarpur,MehmoodKothin Balochistan,inLahore atMachike,InIslamabadat
chaklala,inPeshawaratTaruChamba. Kemarri terminal isthe onlyplace inPakistanwhere Shell cantake
deliveryof Oil/productsdirectlythroughShiptankertransports.
Demand planning
Outside the company(overall for the whole of Pakistan):
Oil industryisa regulatedindustry,Companiescannotdecidethemselveshow muchOil toimportor
produce,thatis setby Ministryof Petroleum.The ministrywill advisethe Oil marketingcompaniesto
maintainstockso thatthere is noshortage inthe market.Oil marketingcompanieswill trytosource the
Oil throughrefineriesorif thatis notpossible thenthroughimports.Ministryof commerce holdsa
meetingeverymonthknown as“productreview meeting”.Here all marketingcompaniesand
representativesfromthe refineriescome andreview the productioncapacitiesof differentrefineriesfor
differentproducts;Combineddemandof all the oil marketingcompaniesisputforwardandthe shortfall
has to be imported.

15. Inside the company:
Whenthe monthends,the retail teamand the marketingteamtell the demandforthe nextmonth.
if for example we knowaboutnextmonth’sdemandinIslamabad,thenthe demandplannerwillcheck
and see howmuchof thisdemandcan be metby Attockrefinery.If there isashort fall,thenthe
demandplannerwill checkandsee howmuchof the product isavailable inFaisalabad,isPARCO
Refineryable tomeetthe demand? If sothenproductwill be purchasedfromPARCOloadedontoTank
Lorriesand sentto Islamabad.If thatisnot the case thenthe plannerwill looktowardsKemarri,where
the product isalwaysingreaterquantity.Productswill be shippedfromKemarri overlandviatanker
transportor pipelinesincase Diesel product.
Transportation
4 modesof transportation:
 Land
 Air
 Sea
 Pipeline
Amongall, Pipeline is consideredtobe the cheapestmode of transportation.
Ports
There are 2 ports inPakistan that are utilizedbyShell PakistanLtd.:
 KPT
 Port Qasim
“Wide oil pipeline”goesall the waytoLahore.It isusedto transportDiesel fromthe southernpartof
PakistantoNorthernandmid countryparts of Pakistan.Due to thispipeline the carrying/transportcost
for the customerbecomesvery low.The pipeline canbe usedbyall the oil marketingcompanies.Ship
tankertransportscarrying Diesel usuallycome toPortQasim. Terminalsof Shell atMehmoodkothand
machike are connectedtothispipelineandfortransportationof Diesel Shell doesnothave touse over
landTankertransport as itis usingthispipeline.Astransportcostis low,automaticallythe costtoend
consumerisalsolow.

16. Q:Whyis price of fuel constantthroughoutPakistaneven thoughcost oftransportingto consumers
and customersin northern areas ofPakistanis expensivethen southernareas?
Governmenthassubsidizedthe costof transportationtonorthernareas.Costof transportingproducts
to Lahore is expensive byRs5/litercomparedtotransportingtosouthernareas.Technicallyspeaking
cost of fuel shouldbe more expensiveinLahore comparedtosouthernareas.The governmenthas
askedall the oil marketingcompaniesnottopasson thisprice to the customer,inreturnthat cost is
compensatedbythe government.
HIERARCHY OF SHELL’s SUPPLY CHAIN
GM Supply&
Distribution (4
countries)
Facilities
Terminal
Manager
Logistics
Manager (ME& SA)
South North
Supply Contracts
& Negotiations
Supply Contracts &
Negotiations Lead
Supply Chain
Analyst
Supply
Operations (ME &
SA)
Supply
Operations
Lead (PK)
Supply
Operations
Analyst

17. Inventory management
G-SAP(Global SAP)isusedtomanage inventory.Asperthe instructionof the government,Oilmarketing
companieshave tomanage an inventoryof 20 to 21 days incase of Diesel andMotor Gasoline.Supply
teamleadisresponsible forall the demandplanningandsupplyplanning.Since Oil marketing
companies’role istodistribute Oil productstocustomers,nointernal demandplanningcantake place
insteadChannel offermanagementisdone.
Channel offer management
Salesandoperationplanning:Channel offermanager,supplieroperationsleader,logisticsmanagerare
the primaryparticipants.If foran example there isademandfor80 millionlitersfornextmonth,it isthe
jobof supplyoperationsleaderto ensure that80 millionlitersisavailable.Logisticsmanagerhasto
ensure thathe has enoughtanklorries/tankertransporttoshipthe Oil productsto customers.Channel
offermanagerprovidesthe demandfigures(fromthe ordersreceived).Itisthe supplythathas to be
planned,notthe demand.