Indian Oil Corporation Limited

OIL DEPOT SUPPLY CHAIN

Group 1
Abhinav Daharwal
Meera Lakshmi Suresh

Sherry Sethi
Shiva Nanditha

Vignesh Ramanathan
Aishi Mahapatra

Industry Overview

One of countrys 6 core industries 15% GDP; CAGR of 4.1 % over the last 5 yrs.
India 6th largest consumer of oil and 9th largest importer of crude oil
Energy consumption break down:

Players:
Upstream ONGC, OIL, Reliance, Cairn Energy, HOEC
Downstream IOCL, HPCL, BPCL, RIL, Essar, Shell
Transport and Distribution IOCL, GAIL, RIL, GSPC

Company Overview

Market leader in
petroleum products - 46%
market share

Largest Refiner 31 %
refining share

Largest Pipeline

The turnover growth is insulated from the cyclical demand fluctuations due to
diversified customer base - railways, aviation, power , coal, fertilizer plants, transport
and defence

Refineries & Pipeline network

Indian oil- Structure & Functions

Crude Imports

International Trade
Crude
Products

Prod. Imports / Exports

Domestic
Demand

Domestic
Crude

Imp. LS
Crude

Prod. Transfer
Marketing.

Refining

Imp. HS
Crude

OMCs
exchange
Support

Up-Stream

Imports /
Exports

Pipe Lines /
R&D

Support
Down-Stream

Supply chain of Indian oil

Exploration &
Development

Shipping

Market

Distribution
to Depots

Refining &
Blending

Transportation

Storage

SCM: An integrated business process

Integrated supply chain planning from crude procurement to demand at

depots, which looks at total corporate profit
Demand planning based on
historical sales data &
market intelligence

Crude availability

Procurement
(Material)

International trade
purchases crudes
that give best
margin for the
whole corporate
based on periods
demand
Crude selection
using Integrated Planning tool

Manufacturing
(Capacity)

Refineries make
optimized
operational plans
based on targets
set by Integrated
planning

Sales &
Distribution
(Demand)

Marketing
generates
optimized
operational
distribution plan
based on
direction set by
Integrated plan

Optimized operational
plan based on integrated targets

C
U
S
T
O
M
E
R

Depot
operations

Transportation

Outlet
operations

Depot Operations

Storage

DEPOT

Filling
Receipts

Indent
processing

Inventory
Management

Supply Planning

Quality &
Safety Issues

Filling Operation

Bay
points

Oil filled at
assigned
bay point

S&D
Plan

Trucks

Each truck
assigned a
filling bay

Trucks
queue at
gate

Statistics
No. of trucks = 320/day
No. of Bays = 20
Filling Rate = 800L/min
Tanker size = 24kl

CARD READER

TRUCK SCHEDULING
TRUCK STANDARDIZATION

7-10
min

Truck Identification

Card issued at gate

Truck capacity

Authorization at gate

Bay Area Allocation

Bay point allocation

Oil Quantity

Flow terminal swipe

Recommendations

Issue fixed card for each truck

Except capacity all other information is static
Time taken to fill a truck = 40 min
Therefore 1/4th of filling time can be saved by
issuing fixed cards

CARD READER

TRUCK SCHEDULING
TRUCK STANDARDIZATION

Truck Contract

Truck leased by
Depot

Truck leased by
pump

Challenges due to non-standard truck

Trucks sent by pumps can be of various
makes
Hence each truck has to be examined to
verify the compartments
Significant man-hours is wasted in this
activity

Standardization approach
The depot, transporter and truck
manufacturer come together
standardize the truck dimensions
Transporters are only allowed to use the
pre-decided truck make
Reduces the time required for Oil
checking, truck checking and logistics

CARD READER

TRUCK SCHEDULING
TRUCK STANDARDIZATION

Depot contracts trucks. These are kept at the depot and used to transport oil to
pumps
Truck dealers are paid based on distance travelled.
Due to inefficient scheduling of truck to pumps, some dealers earn more than the
others. This leads to discontent among dealers.
xijk = if truck k will deliver to location i on day j, binary variable, binary variable
yi = distance from depot to location i
5
5
5
Maximize
=1 ( =1
=1 )
On a particular day a truck can travel a single location
5
5
=1 11 1
=1 11 1
5
5
=1 11 1
=1 11 1
5
5
=1 11 1
=1 11 1

Only one truck goes from the depot to a particular location

5
5
=1 11 1
=1 11 1
5
5
=1 11 1
=1 11 1
5
5
=1 11 1
=1 11 1

Transportation
The products from the refinery (port, pipeline storage centre etc.) are transported to
Terminal/ Port/ depot from where it is further supplied to retail outlets

The terminal acts as a warehouse from which goods are supplied to retailers.

Bangalore City
276 Indian Oil Retail
Outlets
1 depot capacity 78000kl
Daily sales volume 1170 kl
Inventory=Four day sales
quantity

Petroleum Products:
Motor Spirit(MS)
High Speed Diesel(HSD)

Superior Kerosene Oil(SKO) Naptha (SRN)

Auto LPG, Automotive
Furnace Oil (FO)
Lubricants
Light Diesel Oil(LDO)
Bitumen

Current Scenario

Pilferages en-route

Traffic restrictions
in certain routes

Issues

Human error
wrong routes

Control over
transportation

Every truck is provided with a real time Vehicle Monitoring Unit for
monitoring 3 things

Route
Speed
Stoppages en-route

Routes for trucks are established by IOCL sales department and depot

Transport contractors are paid monthly based on the cumulative distance

covered

Retail outlet operations

IOCL customer for
Petroleum Products

Institutional customers

Petrol pumps

Eg. Railways, state

transport corporations
Company Owned
Company operated

Private dealership

Issues

Recommendations

Which location to choose for new pump ?

Based on market potential, competitions and local

strategy
Potential high revenue location or there is low viability

Whether to go for Coco or Pvt. Dealership ?

Current Bidding process is highly skewed,
what to do?

Competitive bidding route, bring in transparency. Focus

should be on bringing efficiency and best practices

Sales officer to ensure quality, quantity delivered at outlets

1. Maintain stock at depot

2. Cater to order on due date
3. Ensure quality &quantity

1. Inventory checks
2. Customer order through
SMS
3. Make RTGS payment
before due date

Issues

Recommendations

Losses due to temperature

variation

Temperature is an environmental factor but can be

avoided to an extent through appropriate fittings that
ensure air-tightness

Pilferage

Potentially high revenue location or there is low viability

Current Bidding process is highly

skewed, what to do?

Competitive bidding route, bring in transparency. Focus

should be on bringing efficiency and best practices

THANK YOU