Royal Dutch Shell also known as Shell is a multinational oil company that is incorporated n UK with its headquarters in Netherlands. The industry is highly active in the area of oil industry and includes refining, transportation, marketing and distribution of petrochemicals, trading and power generation. Shell operational activities are carried in more than 90 countries that generates 3.7 million barrel of oil per day. Shell also had a primary listing on London Stock Exchange and is one of the leading countries in the world (Beske and Seuring 2014). Shell has the highest financial growth with latest technology and is one of the biggest names known in the field of energy.
Vision: they make difference through their employees, who are a combined team of highly skilled and dedicated workforce. They deliver its services and value their customers and further contribute towards sustainable development.
Mission: the company’s mission is to safely distribute and market petrochemical and energy products by offering value added services.
The ‘energy ‘market is evolving and ever booming throughout the world. The report will outline the challenges faced by the Shell Company while expanding its business to the Gas refining, storage, transportation and its marketing and retailing business (Govindan et al. 2014). The company’s major competitors are Total, Chevron Corporation, Exxon Mobil, BP and Conoco Philips. The oil and gas industry in the recent times are focusing on the latest digital technology as well as data analytics to transform their industry.
Planning and control: Global forces in the recent times like geopolitical pressure are troubling the oil and petroleum industry. Therefore proper knowledge skills and planning is required so that it can effectively adapt itself towards the geopolitical industry. It is very important to make appropriate efforts through proper planning and controlling. Some of the major challenges in the gas industry can be resolved if major emphasis is given on interdependencies between the operational effectiveness, senior management information and decision making approach. Gas is not renewable natural resources, so the alternative methods should be planned and devised beforehand for oil exploration. Information technology is needed to achieve the aim of the organization. Data should be effectively organized and collected in a useful form to create a basis for decision making.
Quality and safety management: oil and Gas suppliers form a crucial part of the industry and also face heavy scrutiny. Failure in proper delivering of the quality results in creating a negative impact on the environment. Though the downstream and midstream areas of the gas chain can be controlled by the conventional quality management system, still a deficit in enterprise quality management software (EQMS) can affect the entire process. Supply and price are very important besides quality and compliance as they play a crucial role in global value chain. Shell recently has launched number of programs to deal with the safety and quality management issues within the organization (Fahimnia Sarkis and Davarzani 2015).
Project management: the project t mangers of shell faces huge risks as the operational cost fluctuates according to the environment, regulations and other factors. The drilling procedure requires additional costs so that the equipment can be catered besides the regulatory conditions that make the project highly expensive. Due to the uneven nature of the product, the prices in the gas industry are highly volatized in nature. In addition to these geological barriers also increases the risks for the prices. The unconventional method for extraction of natural gas is also very costly. In addition to this the retaining and funding of skilled workers within the organization is also a great challenge for the management. Budgeting risks increases due to various uncertaininties present in the extraction processes like drilling in difficult or unfamiliar terrains. Though Shell company invests a huge amount but the fluctuations in the gas prices and demand negatively affects the revenue of the firm. unstable and inadequate oil productions are other risks that put constraint in the operational budget especially when it comes from prices to product.
Layout design- the gas industry in the recent times is to a great extent influenced by the supply and demand economics. The upstream chain includes exploration activities, like data processing, surveying and mapping. The mid-stream activities include storage, processing and transportation of gas under process or compliance control and logistics (Christopher 2016). The downstream activities include delivery of gas to the business and consumers. the best alternative route for the gas pipeline should be established and geo technical design is used for the pipeline layout. This makes it highly compatible with the sociocultural, environmental and physical conditions according to the region. The region has high social and environmental complexity; therefore designing the layout is a huge challenge for the organization.
It is identified that the major and most effective target market for Shell will be the Indian subcontinent. This is due to the reason that countries in the Indian Subcontinent especially India are witnessing huge growth in terms of economy and population. Moreover, India is the second largest county in the world in terms of population. Thus, the demand for the gas products is also increasing with the rise in demand for energies (Lin and Wesseh 2013). This is also to be considered that oil products are facing difficulties due to the emission related issues and production limitations. Thus, it is suggested the Indian market will be the most effective target market for Shell in offering their gas products (Zenker and Beckmann 2013).
Identification of the gas products
However, it is to be noted that gas products are diverse in nature and not all products will be suitable for the Indian market and condition. Thus, it is identified that cooking gas should be offered in cylinder forms in the Indian market. This is due to the reason that demand for cooking gas (LPG) is rapidly increasing with the conversion of the people from the traditional way of cooking (Aguilera, Inchauspe and Ripple 2014). Moreover, currently, Indian market is dominated by the public companies and it will be a huge opportunity for Shell to market their cooking gas in the Indian market. Another gas product that will be offered in the Indian market is CNG (Compressed Natural Gas). CNG is increasingly being used for the vehicular fuel as cleaner alternative for the fossil fuels. The demand for CNG is also increasing and it will be also an opportunity for Shell to market their CNG products in the Indian market (Growitsch, Hecking and Panke 2014).
The current supply chain of Shell will not be applicable for the gas exploration and marketing. This is due to the reason that currently they are only operating in the oil sector and oil products and gas products will be different and thus the supply chain will also be different. It is suggested that backward integration will be covered by the company itself and the forward integration will be outsourced (Benjaafar, Li and Daskin 2013). This is due to the reason that backward integration in the oil and gas sector should be with the company in order to have the strategic advantages. Outsourcing of crude gas sourcing activities and the processing and refining activities may take away the competitive advantage from Shell.
On the other hand, the forward integration activities such as distribution and retailing should be outsourced in order to more market reach. This is important for the Shell due to the reason that they do not have the market presence and reach extensively in India. Thus, outsourcing these activities to the Indian firms will ensure that the market reach will be more.
The first tier suppliers for Shell will be the crude oil explorers. Though, Shell will have its own oil exploration activities but third party vendor will also be selected in order to maintain the seamless supply of the crude materials. Another first tier stakeholder in the supply chain will be the transporters (Wilhelm et al. 2016). This is due to the reason that transporters and sipping lines will be responsible to provide the crude materials for Shell. They will have their own storage facilities in order to store the crude materials.
Shell will have multiple modes of transportation including roadways, railways and waterways. This will help them to not get dependent on a particular mode of transportation. However, waterways will be the primary mode for transporting the crude materials from the offshore facilities and railways and roadways will be used for transportation from the destination port to the storage facility. Roadways will also be used to distribute the refined products in the market.
Tow management process that will be used in coordinating the supply chain activities is ERP system and supplier relationship management. Initiation of the ERP system will help in preventing the issue of shortage of crude materials and it will also help in promoting seamless supply of the raw materials (Nwanka and Roumani 2014). Moreover, initiation of the ERP system will also help in regulating the production process according to the market demand. Supplier relationship management will also help in managing the suppliers and communicating with them in the business process.
One of the major differences between the product and service supply chain is the offering types. This is due to the reason that in the case of product supply chain management, the core offerings will only be the products, while in case of service supply chain management; the offerings will be different based on the customer demand. Another difference is the flow of distribution. In case of product supply chain, resources will move towards the end customers only. On the other hand, service supply chain witnesses reverse logistics and movement in opposite direction.
The major similarity between the two supply chains is the importance of the end customers. This is due to the fact that core objective of both the supply chain is to maximize the value for the end customers.
One of the major issues will be the exposure of the employees towards hazardous gases and chemicals. This is due to reason that exploration and refining crude gas will lead to emergence of hazardous gases. Another mental issue that may be faced by the employees is the monotony in the offshore facilities. In this case, job rotation should be initiated in order to put them in different responsibilities. Job design should also be initiated in order to have more variances in job profile for the employees.
Technologies such as drones will be used in order to identify the potential issues in the offshore facilities. Moreover, all the employees will be covered with an online live portal where they will be able to communicate with each other regarding their issues.
Conclusion and Recommendation:
Shell industry while expanding its business should also consider facing various risks and challenges that includes fluctuations in the demand and supply to the technical falls and deficiencies. T is recommended that the company should comply with the environmental and safety regulations that confine the company’s operational activities to a certain limit. it is important for the firm to regulate the gas in order to ensure that cost of services should be kept minimal.
Though the gas companies mostly focuses on preserving margins to whether the decreased price storms, the company should look ahead about the updated digital technologies. Shell is depended mostly on the pools of data to discover and understand clearly about the potentials related to the reservoir and several other production activities.
References:
Aguilera, R.F., Inchauspe, J. and Ripple, R.D., 2014. The Asia Pacific natural gas market: Large enough for all?. Energy Policy, 65, pp.1-6.
Benjaafar, S., Li, Y. and Daskin, M., 2013. Carbon footprint and the management of supply chains: Insights from simple models. IEEE transactions on automation science and engineering, 10(1), pp.99-116.
Beske, P. and Seuring, S., 2014. Putting sustainability into supply chain management. Supply Chain Management: an international journal, 19(3), pp.322-331.
Beske, P., Land, A. and Seuring, S., 2014. Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature. International Journal of Production Economics, 152, pp.131-143.
Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), pp.299-312.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Fahimnia, B., Sarkis, J. and Davarzani, H., 2015. Green supply chain management: A review and bibliometric analysis. International Journal of Production Economics, 162, pp.101-114.
Govindan, K., Kaliyan, M., Kannan, D. and Haq, A.N., 2014. Barriers analysis for green supply chain management implementation in Indian industries using analytic hierarchy process. International Journal of Production Economics, 147, pp.555-568.
Growitsch, C., Hecking, H. and Panke, T., 2014. Supply disruptions and regional price effects in a spatial oligopoly—an application to the Global Gas Market. Review of International Economics, 22(5), pp.944-975.
Lin, B. and Wesseh Jr, P.K., 2013. What causes price volatility and regime shifts in the natural gas market. Energy, 55, pp.553-563.
Nwankpa, J. and Roumani, Y., 2014. Understanding the link between organizational learning capability and ERP system usage: An empirical examination. Computers in Human Behavior, 33, pp.224-234.
Wang, G., Gunasekaran, A., Ngai, E.W. and Papadopoulos, T., 2016. Big data analytics in logistics and supply chain management: Certain investigations for research and applications. International Journal of Production Economics, 176, pp.98-110.
Wilhelm, M.M., Blome, C., Bhakoo, V. and Paulraj, A., 2016. Sustainability in multi-tier supply chains: Understanding the double agency role of the first-tier supplier. Journal of Operations Management, 41, pp.42-60.
Zenker, S. and Beckmann, S.C., 2013. My place is not your place–different place brand knowledge by different target groups. Journal of Place Management and Development, 6(1), pp.6-17.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download