Established in 1970, Royal Dutch Shell has achieved accolades and glory by being one of the major oil and natural gas companies in United Kingdom. In 2013, Shell was enlisted as one of the largest companies in Fortune Global 500. One of the major highlights of this year was 84% sales revenue, which is $556 billion of Netherland’s GDP (Shell.com 2017).
As a matter of specification, in the year 2016, there were 93,000 whose dedication, commitment and perseverance mounted up the sales revenue to 233.6 US$. This added the value of 4.57 billion US$ to the profit margin.
The company attains an important position in London Stock Exchange. According to the Financial Times Stock Exchange, the company has bagged 100 points. Uptil the closing of trades and transactions, Shell’s market capitalization is pound185 billions. This is one of the highest records done by any company (Shell.com 2017).
Envisioning sustainable development, through the means of honesty, integrity has enabled the professionals to dream of making a noticeable contribution towards the achievement of economic growth. Respect for the stakeholders and shareholders have enhanced the fame and glory of Royal Dutch Shell across the globe (Shell.com 2017).
The prime mission of Royal Dutch Shell Company is to satisfy the needs, demands and requirements of the stakeholders and shareholders through the delivery of quality products and services. Focusing on the manufacture and production of quality oil products has enabled the personnel to achieve efficiency in the business operations. Consciousness towards the preservation of the ecological biodiversity is one of an important missions adopted by the personnel towards ensuring the benefit of the general public. Standardized performance by the employees makes this mission a realistic one (Shell.com 2017).
Royal Dutch Shell has come a long way in terms of satisfying the needs, demands and requirements of the stakeholders and shareholders. This has been done through the means of manufacturing and supplying refined quality oil, petrol, diesel and natural gas. However, it aims to emerge as one of the topmost refinery industry within the threshold of Asia (Shell.com 2017).
In the upstream business, Shell personnel are entrusted with the responsibility to extract necessary oil and natural gas for delivery from the wastes. This is done by utilizing efficient and effective infrastructure. On the other hand, the downstream business includes management of the business activities. Here, a wider supply chain network is crucial for shipment of the products and services. The congenial workplace environment provides the opportunity to the employees to reveal their talents and enhance their professionalism (Shell.com 2017). The goal is to expand the business up to the extent of foreign market penetration. Adoptive innovative measures through the preservation of ethics and values make the objective a realistic one.
Management is necessary for the systematic execution of the business activities. This is applicable for each and every professional field including the oil and natural gas company, Royal Dutch Shell.
This assignment attempts to shed light on the management of petrol, diesel, crude oil, training and development and shell graduation courses.
The oil and gas companies that operate within the petroleum sector can be divided into three major industries. The process of bringing the gasoline and other petroleum to the fuel pumps is a very difficult and complex process (Waples 2013). This needs a lot of effort by the workers. These three major industries are upstream services, midstream services and the downstream services. In the upstream section, the exploration, development and production of the petroleum products is done properly. In the second stage or the midstream section, the petroleum products are gathered, stored, transported and then marketed to the customer target group on entire wholesale basis. In the third portion or the downstream stage, the products are purified, refined and sent for retail marketing in the concerned markets (Dadong 2013).
The midstream energy companies are mostly involved in the process of gathering, processing, storing, transporting and wholesale marketing of the various products like the crude oil, natural gas and natural gas liquids (Shakhsi-Niaei et al. 2013). There have been many issues and challenges in the company regarding the logistics and operations. The unconventional resource like shale gas was produced but the business demand for these unconventional resources has always been volatile and intensive. This result in the significantly non-productive time spent behind transportation of assets and high health and safety exposure where a number of large vehicles used to be transported in the semi-urban areas (Devoid 2013). The clients have been facing the challenges of managing a fragmented and immature local transport carrier base. The local market for the resources was severely resource constrained. The problem arose that the need for resources was very high in the market. Another challenge was added to it that the large volumes of materials and equipments had to be imported from China. This action could delay in the entire program. Two of its main products can be considered as petrol and diesel. These are very important resources and are needed at every step of life. If the delivery of these resources was delayed, there could be a huge demand for these resources in the industry.
The supply chain management in the petroleum sector is very complex (Christopher 2016). The supply chain management of Royal Dutch Shell plc has been very effective and efficient in many sections as provides the customers of Shell with quality services. As the business is becoming globalized day by day, the supply chain management issues are growing everyday as well. The problems like cost control, planning and risk management, inventory management, suppliers and owners’ relationship management have to be redesigned. They have decided to use some strategies that will help to decrease the supply chain issues. These strategies are to use the best mode of freight, appointment and competent staff, clear policies for the evaluation of the oil and gas products. It is, therefore, very important to take up strong strategies to do well in the highly competitive business market (Tsai and Yang 2013).
The chosen organization is facing a lot of issues and challenges at the present time. These issues like the introduction of extra costs in delivering the goods at different times in different areas. The prices of fuel are going up every single time in different countries. This is a great threat as the buyers will feel a challenge to buy those things. The prime risk that is faced in this case is that the price of the materials depends on the past results of the market. Here, errors can take place very easily. So, the risks are increasing and the stakes are higher. The stakeholders have to inspect this situation properly because the negative reflection on the products and services of the company can bring in poor performances by the company (Oosterhuis, Molleman and van der Vaart 2013).
It is to be noted that Royal Dutch Shell Plc operates in several countries like USA, China, India, Australia, UK, Brazil, New Zealand and Pakistan. It is obvious that the measure or access point of Oil and Gas is different in these different countries. This thing can result in conflicts between the buyers and suppliers.
According to the Downstream Director of Royal Dutch Shell Plc John Abbott, announced that the company has gained more cash profit in its downstream business than its upstream one. They have a huge amount of debt and they would use this cash to pay off their debts. They can maintain the dividends by using this cash as well (Fabiano and Currò 2012). The proper focus of the downstream sector of Royal Dutch Shell plc is to develop the crude oil into a range of refined products. They move the oil and market it all over the world as they aim to market it all over the world for the domestic, industrial and transport use. Their strategy in the downstream business is to reinforce their global position as the leaders in the oil and gas industry. One of their key strengths is to develop and apply the modern technology. The great financial and project management skills permit them to take part in the large field development projects (Fabiano and Currò 2012)
There are several Human resources issues within the organization. Besides that, the organization will be looking to put proper emphasis on the service quality management as they are quite aware that this can lead to devastating performance of the organization (Daley 2012). Effective planning and control is needed to curb the issues that are very much in prominence recently. The challenges that the HR department faces is to manage the resources. There are high risks in the future to manage the resources so the Hr department should make sure that this is looked at with the highest priority. Many people do not get interest in working in this industry as there are constant threats of job losses. They should develop some policies to attract more workers into this sector with a premium salary package (Daley 2012).
Meetings and conferences between Shell and the stakeholders and shareholders enhance the clarity of the company personnel regarding the marketing of products and services. The interactive nature of the meetings and conferences clarifies the doubts in terms of executing the allocated tasks in an efficient and effective manner. Decisions regarding selecting the volunteers seem appropriate in terms of adopting collaborative production (Francis et al. 2014). Allotment of the volunteers in different departments proves beneficial for the managers in terms of monitoring the operations. Keen observation in this direction is assistance in terms of making estimations and calculations regarding the next courses of action.
As a sequential step, making plans for adopting effective communication channels act as a wise step for the personnel. Within this, the company indulges in joint ventures with transport agencies. Here, one of the major concerns is the disproportionate ratio between the supply and the hired transport (Shell.com 2017). This issue weakens the supply chain management for Shell. In view of this issue, the constructed plans fail due to the basic understanding regarding the entrance problems of large goods carrier trucks in the remote areas.
Inability to enter into the destination spots delays the delivery of the orders, which aggravates the complexity of Shell in terms of achieving successful completion of the downstream businesses. Along with this, delay in the delivery degrades the quality of the products and services, which deprives the stakeholders and shareholders of their needs, demands and requirements (Schönsleben 2016). This is one of the other examples, which reflects an absence of oriental approach, which contradicts the systematized approach needed for making plans.
Viewing it from other perspective, these issues attach a negative connotation to the aspect of management. Maintenance of consistency compels Shell to encounter crisis, which adds vulnerability to the market position. Effective utilization of these crisis phases for altering the plight of the company possesses flexibility to restore the hard earned glory and respect. Adopting the means of survey and feedback brings to the forefront the potential drawbacks, which needs modification (Christopher 2016). Revealing spontaneous approach for modification enhances the corporate nature of the personnel in terms of gaining back the loyalty, trust and dependence from the customers.
Apart from this, frequent evaluation helps the managers to assess the effectiveness and feasibility of the undertaken steps in terms of the identified and the specified requirements. This assessment, in turn, helps in the sustaining the market position amidst the competitive ambience. Within this, coordination and unity among the functional units of Shell is a cornerstone in terms of regulating the business activities in an effective manner (Shell.com 2017).
In the process of doing the business, the major concerns are controlling the price and mitigation of the risk factors. These issues necessitate due to the lack of oriental approach towards the effective management of the human resources. The intensity of the issue contradicts the limitation of downstream activity (Shell.com 2017). However, in order to maintain the pace with the requirements of the question, focus needs to be maintained on the downstream activities. Here, the management of human resources in crucial in terms of transmitting the appropriate orders to the correct place. Lack of strategic approach towards the execution of the business activities is the main reason for which the risks arise (Mangan and Lalwani 2016).
Human behavioral challenges within the downstream operations include difference of opinion between the managers in terms of proper placement of the manufactured oil products to the finishing line. This delays the supply process. Herein lays the lack of basic understanding regarding the delivery within the stipulated deadline. Viewing it from other perspective, conflicts between the managers destroys the integrity and decorum of the workplace, which negates the selection and recruitment of the managers. In view of this connotation, the role of the HR is put to interrogation in terms of fulfillment of the identified and specified mission, vision, goals and objectives (Heaslip 2013).
Open forums and discussions can be organized in order to achieve negotiation for the conflicts, which give rise to conflicts. The discussions would provide a platform to the personnel to voice out their opinions about the issues, which they are encountering in the process of doing the downstream business (Swink et al. 2014).
Along with this, the members of Shell can indulge in joint ventures with the trade union members for tackling with the financial issues, such as inflation, fluctuation in the prices of the raw materials and others. Within this, adopting the means of social media would enhance the parameter of public relation with the customers (Walker et al. 2014).
Strategies need to be developed for achieving positive outcomes in the business operations. As an example, hiring tempos for shipping petrol, diesel or crude oils in the remote areas would project on time delivery. This would mitigate the conflicts regarding poor or inferior quality products. Along with this, adopting premium pricing method would cater to the requirements of the stakeholders belonging to the middle class (Heaslip, 2013).
Conclusion
This assignment emerges successful in providing an insight into the basics of logistics and operations management. Taking the example of Royal Dutch Shell alarms the businessmen regarding the best possible ways of marketing the manufactured products. In-depth insight into the products and services relates with the value chain analysis, which proves helpful in terms of carrying out the primary and secondary activities. Maintenance of equilibrium between these activities results in the infrastructural development of the company. Within this, the negative issues are the other side of the coin, to which conscious approach needs to be applied for the achievement of positive outcomes. Herein lays the appropriateness of policies and strategies, which possesses flexibility to systematize the business operations of Shell. For this, matured behavior of the personnel is crucial in terms of achieving large scale customer satisfaction, loyalty, trust and dependence. This behavior is possible only if the human resources are properly managed.
Some recommendations can be made that-
References and Bibliography
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Dadong, L.I., 2013. Crucial technologies supporting future development of petroleum refining industry. Chinese Journal of Catalysis, 34(1), pp.48-60.
Daley, D.M., 2012. Strategic human resources management. Public Personnel Management, pp.120-125.
Devold, H., 2013. Oil and gas production handbook: an introduction to oil and gas production. Lulu. com.
Fabiano, B. and Currò, F., 2012. From a survey on accidents in the downstream oil industry to the development of a detailed near-miss reporting system. Process Safety and Environmental Protection, 90(5), pp.357-367.
Francis, M., Fisher, R., Thomas, A. and Rowlands, H., 2014. The meaning of ‘value’in purchasing, logistics and operations management. International Journal of Production Research, 52(22), pp.6576-6589.
Heaslip, G., 2013. Services operations management and humanitarian logistics. Journal of Humanitarian Logistics and Supply Chain Management, 3(1), pp.37-51.
Mangan, J. and Lalwani, C., 2016. Global logistics and supply chain management. John Wiley & Sons.
Oosterhuis, M., Molleman, E. and van der Vaart, T., 2013. Differences in buyers’ and suppliers’ perceptions of supply chain attributes. International Journal of Production Economics, 142(1), pp.158-171.
Rushton, A., Croucher, P. and Baker, P., 2014. The handbook of logistics and distribution management: Understanding the supply chain. Kogan Page Publishers.
Schönsleben, P., 2016. Integral logistics management: operations and supply chain management within and across companies. CRC Press.
SHAKHSI-NIAEI, M.A.J.I.D., IRANMANESH, S.H. and TORABI, S.A., 2013. A review of mathematical optimization applications in oil-and-gas upstream & midstream management. International Journal of Energy and Statistics, 1(02), pp.143-154.
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Swink, M., Melnyk, S.A., Cooper, M.B. and Hartley, J.L., 2014. Managing operations across the supply chain (pp. 248-249). New York, NY: McGraw-Hill/Irwin.
Tsai, K.H. and Yang, S.Y., 2013. Firm innovativeness and business performance: The joint moderating effects of market turbulence and competition. Industrial Marketing Management, 42(8), pp.1279-1294.
Walker, P.H., Seuring, P.S., Sarkis, P.J. and Klassen, P.R., 2014. Sustainable operations management: recent trends and future directions. International Journal of Operations & Production Management, 34(5).
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.
Waples, D.W., 2013. Geochemistry in petroleum exploration. Springer Science & Business Media.
Waters, D. and Rinsler, S., 2014. Global logistics: New directions in supply chain management. Kogan Page Publishers.
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