CHAPTER FIVE: SUMMARY, CONCLUSION, AND RECOMMENDATIONS
5.1 Introduction
This chapter presents a summary of the findings of the study, recommendations, conclusion, limitations, and the need for further research.
5.2 Summary of the Findings
The study findings disclosed that the manufacturing capacity of Shell Houston is 275,000 bbl/d (43,700 m3/d). This discloses that the refinery produces large quantities of barrels of oil.
The finding of the study is that more than half of the respondents (56.8%) indicated that there should be full deregulation of the downstream petroleum sector. This backing the affirmation that the dominant part of the partners in the business has constantly needed full deregulation of the area as audited in writing. The foundation of new processing plants got the second most noteworthy rating of 15.9% of the all-out reaction, while pivot support of the treatment facilities to build limit use got 13.6% rating. What’s more, 6.8% of the respondents considered redesigning and sufficient support of the downstream offices as a means for development. This reaction recommends that partners in the private segment don’t generally believe that the legislature can keep up these offices, which have heretofore been the circumstance with the downstream segment. Another improvement implies determined by the two of the respondents were: auspicious settlement of endowment cases to advertisers by the administration and improved interest in the part. This thing evaluated 4.5% over the announcement “guaranteeing modern agreement with worker’s organizations in the part” which was appraised most minimal with 2.3% by the respondents.
Also, 81.8% of the respondents were of the opinion that among the various challenges facing the petroleum products supply and distribution, low capacity utilization of domestic refineries was of extreme importance, while 61.4% of the respondents also indicated that frequent pipeline vandalism which has necessitated heavy reliance road haulage for products movement across the country was of extreme importance. Pipelines are generally appropriate for moving oil-based commodities. However, 70.5% of the respondents demonstrated that improper estimating of oil-based commodities and appropriation plans being actualized by the legislature as another test variable of outrageous significance; while the greater part of the respondents (56.8%) discovered value bending in the neighborhood showcase, generally because of value controls, as a significant test variable. What’s more, 75.0% of the respondents were of the conclusion that low stockpiling limit at breakwaters and capacity stops comprise a significant test in the inventory and dissemination of oil-based goods. This reaction was in concurrence with the perspectives communicated on the capacity stop in the investigated writing.
5.3 Conclusion
The supply chain will continue to be complex in the future. They will engage the world and include many wholesalers, suppliers, retailers, logistics providers, and distributors. As the web of players is reliant on each other and too much intertwined, exploring where challenges lie will become increasingly problematic. More cost-effective and efficient supply chain practices in oil marketing firms epitomize the significant aspects for upholding incessant supplies of lubricants and its derivatives, the decrease of lead times, and decrease of distribution expenses. As a result of the inflexibility engaged in the supply chain of the oil lubricants industry, Shell Company encounters many challenges in their supply chain management.
In spite of the significant challenges in Shell corporation supply chain management, rooms for enhancements and cost savings do coexist alongside the supply chain. The implementation of the best practices and systems to back up supply chain management highlights a key area for enhancement of supply chain effectiveness. Oil marketing firms have become increasingly dependent on the services of third-party logistics organizations, strategic planning, and outsourcing to administer their supply chains and therefore decrease the problems that are encountered by the Shell Corporation.
The oil and gas industry is looking more promising than ever today. They are witnessed quick growth of the industry, customer preference to products, and many other fascinating things. However, they are encountering stringent government regulation, rising competition for labor, and uncertainty regarding projects that could raise energy security in the country. This industry is often dynamic. A professional in this industry requires being innovative, always pursuing new ways to carry out business. They have to be able to adapt to the market and dynamics of the business. A professional in this industry requires taking the notions that were derived in the classroom and brainstorm on the appropriate way to apply them in a non-traditional industry. Still, there is so much to be learned regarding the worldwide oil and gas industry. This industry has been the dominant source of energy for nearly seven decades. As the globe starts to shift towards green energy, the oil and gas industry will be the innovators who carry on to bring the public energy to fuel their daily lives.
Upholding disruption-free supply of lubricants is a goal set by the oil marketing companies in the downstream petroleum supply chain. Even though this comes with a significant operational expense, oil corporations always struggle with the issues of rising expenses of service delivery as they attempt to maintain their anticipations from end-users. Thus, the petroleum supply chain requires to be efficient and combined to remain competitive and satisfy social roles. A significant mode of attaining uninterrupted flow of lubricants at a minimum expense and at the appropriate time to last-mile users is the distortion of the supply chain. It is likely to make various significant conclusions. The downstream petroleum supply chain could have enhanced operations based on punctual supply and decreased operating expenses when the operators grasp the causes of disruption of the supply chain system, and strategically choose the suitable approaches for mitigation. The exchange of precise and timely information about the position of the inventory and expenses alongside the supply chain network has the capacity to improve visibility in the whole network. The mitigation of the distortions in the supply chain in the oil and gas industry can be enabled by approaches that aim at flexible supply chain processes and intelligent supply chain relationship management.
5.4 Recommendations
Shell Corporation requires considering the outsourcing idea to liaise with the business rivals to discover the shared solutions to their issues facing supply chain management. Shell requires training its personnel to appreciate the notion of supply chain management and the best practices and systems that will be instrumental in mitigating the issues in their supply chain management.
Shell Corporations requires developing client relation management policies, which might entail the specific guidelines to assist the workers in their relations with clients—an instance in guaranteeing the good with a promised duration of the order. The procedures of customer relationship management ensure that the clients are treated equally, and these policies assist the workers to understand the actions that are appropriate in every circumstance.
Shell Corporation requires participating in close cooperation between corporations and authority. This corporation would ease the understanding of policy issues, enhancement of infrastructure, and bring about equity in the transparent tendering systems on supply. The efficient provision of lubricants depends on the status of physical infrastructures for refining, conveying, and storage. In this pretext, it is essential to upgrade the oil receiving jetties at the ports to elude delays and expense overruns. Most of the refineries use old technology and thus not capable of refining the remains of its processing products. The expense is passed to its consumers. The organization should invest in more storage capacity at the oil storage area.
Investment in information technology systems is a necessity in the contemporary business world and particularly in the facet of supply chain management. Such technologies assist oil marketing companies by managing inventory, carrying out market trend analysis, and enhancing the information present to supply chain management. An advantage that can be attained by enforcing information technology is to enhance and allow external communication with the members of the supply chain management by linking the systems of information technology. By linking these systems, the human element can be removed from the equation, and remarkable financial and operational efficiencies can be gained. Upgrading the information technology systems will help to improve the interexchange of information and supply chain visibility. Nonetheless, the information technology will enhance the oil pumps at the pump stations that would offer efficient, punctual service to the clients.
Green energy has a significant impact on the oil and gas industry. Corporations are assessing how they can harness the green energy sources. The green energy market is targeting the thermal and hydropower plants though the solar and wind are being embraced quickly in the market. There are still reservations regarding nuclear energy, taking into account the risk of nuclear waste or the manufacturing of nuclear weapons. However, the approaches are shaping up to mitigate the risk and maximize the profits. Till then, sources, including wind and solar, are concentrated on new sources such as biofuels that are explored extensively. The shift towards green energy will impact firms that operate in the oil and gas industry in many ways. Firstly, it will increase the rates of employment. Among the green energy sources that have been explored, bioenergy has proven to be the most influential. The fuel is developed and conveyed in a confined space. The work involves a lot of manpower, and thus, the scope of employment will rise. Wind power and hydropower will bring job opportunities during the project development and construction stage. However, when the unit is commissioned, only a few operational staff will be necessitated to carry out the operational task. Secondly, green energy will improve cost efficiency. Renewable energy is less costly compared to traditional energy. When renewable energy can be generated on a large scale, it will get rid of the shortages of gas. The other kinds of renewable energy are more cost-effective compared to traditional oil and gas. The benefits of the expenses will be transferred to the consumers and thus capable of saving a significant amount on utility bills. Thirdly, green energy should be embraced because it will enhance the image of the brand. It makes business sense to shift from traditional energy resources to renewable ones. The environmentalists have been contending regarding the negative effects of using and overusing the non-renewable energy source. The embracement of alternative energy will bolster the image of the Shell brand. Fourthly, green energy will lead to greater access of the market and energy. As a result of the reliance on fossil fuels which are non-renewable sources and costly, a substantial number of persons in the world lack access to power. The majority of individuals in the continents of Asia and Africa are still using biomass for cooking food. However, the replacement of the traditional oil and gas with alternative energy will imply that it has deep penetration into the market, and most persons will have access to it. Fifthly, green energy will allow a moral investment venue. Renewable sector is taken into account as a luring and moral investment avenue for the individuals who wish to invest outside the traditional channels and look upon its future. The increasing investment in green energy is contributing to the creation of jobs and community cohesion, which reflects a positive move. Established Oil Corporations are making a practical, in-depth, and steady approach towards renewable energy. However, there are still many firms that are currently in the research stage and do have a plan. The pathway to clean fuel energy that runs with lucrativeness and efficiency is getting paved. More than a hundred nations are developed and third-world countries have established a clean fuel target and are shifting towards it. The European Union has established an objective to satisfy its 0.2 of the energy requirements through renewable sources by 2020. The world has recognized climate change and is liaising together to move from carbon-intensive to the carbon-moderate setting, which might allow the coming for future generations.
Customers’ preference for the lubricants has been changing with time. As many brands characterize the lubricant market, the notion of establishing a new product is proven. However, if the product is to obtain a significant position in the market and sustain that, therefore, brand positioning has to be stressed cautiously. There are many facts that consumers consider when buying a lubricant. The factors that require to have conversed through activities involving marketing should be discussed based on their order of significance. First, the marketing management of the Shell Company should review the performance and quality of their lubricants. The key aspects of lubricants that the users of the lubricant industry take into account before buying the brand are quality and performance. Thus, the promise of greater performance and high quality need to have conversed through brand positioning. The perceived performance of the consumers requires being satisfied, and greater quality needs to be enforced in the product. Second, the management of the organization should ensure that they sell the products at low prices. As the market has many products for the consumers to select from, a low price will assist in proofing its perceived performance and quality. Thirdly, the company should ensure that whenever they release a product to the market, it needs to have a greater API grade than the coexisting products in the lubricants market. Fourthly, the company should consider the brand value because it will be instrumental in the sale of the products in the market. A branded new product of Shell Company will be significant. Finally, to design an effective branding approach for a new product, the brand positioning should entail the perceived performance and quality, greater API grade, low price, and brand value to give it an upper edge to the branding practice. With the appropriate brand name and a low price, a newly established product by Shell Corporation will ensure that the company establishes its dominance in the market.
5.5 Implications
The supply chains have been established to meet the demands of the client through detailing the manner in which the products and services float on the chain. By including flexibility of the chain and fluctuation within the chain. In the short run, flexibility implies reacting to changes in demands or supply rapidly and deal with the external disruptions effectively. In the long run, it implies satisfying the structural shifts in markets and change the supply network approaches, goods, and services. By including the principles of flexibility, managers can rapidly work with a design and establish a supply chain without altering it structurally. That allows the managers to allocate more time and attention to other significant elements of their responsibilities.
5.6 Limitations of the Study
The representative had a poor understanding of the systems in the supply chain management presently in use in firms. The understanding of these systems would assist the respondents in offering more informed responses to the study. Also, the respondents were lazy in filling the questionnaires.
5.7 Areas of Further Research
This study assessed the proposed strategy of Shell to help deliver the company’s growth plan to meet supply required for lubricant oil by 2025. It would have been better to review the impacts of these challenges in the organizational performance of Shell Corporation.