Supply Chain Management in RILs Oil Export to Bahamas

Presented by: Rajesh Shukla Aparna Pendse Sangeeta Kotian

Points to be discussed
Case Study in brief How RIL export strategy resembles SCM? Benefits to RIL Oil and Gas industry demand in 2011-12 Prospect of SCM application in my company

Case:
RILs increase in Gasoline exports to Bahamas. From 2009-10 gasoline shipped value $631 b reached to $2.2 b in 2010-11. Expected to rise by 50% to $3.2 b in 2011-12. North & South America located near Oil Storage tanks of Freeport in Grand Bahamas island. The company receives payments for the exports from customers in the US or South America. Hired fuel tanks in Bahamas, attracted by the prospect of huge savings in shipping costs by using large tankers to ship fuel to the strategically located country. Bahamas storage tanks are used for "bulk breaking" of large cargoes and exporting smaller parcels to the North American and Latin American markets.

How RIL export strategy resembles SCM?

What is Supply Chain Management?, and how it resembles in RILs case.

 SCM is configuration, coordination and continuous improvement of a sequentially organized set of operations. The goal is to provide maximum customer service at the lowest cost possible. The links below represent the major supply-chain links in the oil and gas industry. Exploration Production Refining Marketing Consumer Case study shows Reliance is using traditional push strategy wherein, production and distribution are being carried on forecasts. Below represents stage after refining. Where Oil is imported in Free Trade Zone areas from reliance and stored and from thereon, supplied to Gasoline stations as per demand.

FREEPORT, GRAND BAHAMAS ISLAND JAMNAGAR PORT, GUJARAT 7544 nautical miles

Benefits to RIL
Easy accessibility to North & South American regions and Caribbean countries due to Stock availability from Freeport storage tanks. Full truckload (FTL) rates are more economical on a cost per pallet basis than less than truckload (LTL) shipments Exemption from other government licenses and permits for the operation. No taxes or levies on business transactions carried on with persons outside the Bahamas. No taxes to be paid on property, machinery and goods used within the free trade zone. No direct taxes on or against earnings of any employee in the free trade zone or on the distribution of earning to persons living outside The Bahamas. No export taxes to be paid on exports. No customs duties to be paid on the importation of goods and articles (except consumable items) for use in the free trade zone.

Oil demand
As per recent oil market report from international energy agency, American regions will consume 30.1 mb/d (millions barrel per day) in 2012 which was 29.8 mb/d in 2011 After America only Asia pacific regions are near to it whereas other continents are below 15 mb/d, lowest is African countries 3 mb/d. Reliance have leased tanks to tap higher profitability regions by reducing there shipping voyages and reducing oil wastages.

Prospect of SCM in my company

Bibliography
Borcointernational.com International Energy Agency Economic Times.com Journal of Business & Economics research Bahamas Free Trade Zone Act Wikipedia.com