The Coronavirus outbreak has exposed the vulnerabilities of current global supply chains. Many have unraveled, unable to withstand intense demand-supply shocks. Against this background, Shell, one of the world’s leading oil and energy companies, has stayed resilient. By leveraging data and digitalization to drive new ways of working and collaborating, focusing on a more holistic approach to safety, nurturing future-focused talent, and pushing forward on sustainability and business continuity agendas, it has ensured that its global supply lines have remained robust, reliable, and most importantly, competitive.
How has Shell continued to successfully produce and deliver the lubricants and greases required by its customers amidst the ongoing upheaval? How has it kept its sprawling supply chain network spanning assets, suppliers, and partners – the engine room of both Shell and other industries – running strongly and seamlessly? To learn more, Frost & Sullivan’s Dr. Julia Saini, Associate Partner & Vice President – Mobility, and Sven Thiede, Vice President – Energy, Sustainability, and Mobility Practices spoke with the man tasked with ensuring the supply chain for Shell’s lubricants business stayed operational even during the worst of the crisis – Singapore-based Richard Jory, Vice President, Lubricants Supply Chain, Royal Dutch Shell.
Here are some key insights from the recent interview:
Extracting Value from ‘Digital’ and ‘Data’ Solutions
Across our supply chain, we are building a strong digital backbone. And we are simplifying complex data to improve productivity and better know and serve our customers. But it’s not just about hardware. I’m also encouraging the 3,000 people who work in and with the lubricants supply chain organization to embrace more digital ways of thinking.
‘Data’ is fundamental to ‘digital’; it’s about moving towards a digital business using data to make better decisions. Shell has been the lubricants market leader globally consecutively for the last 14 years. We have access to huge amounts of data that cover every aspect of the business. Today, with computing power being what it is, we can leverage the scale and data to make better decisions in everything that we do. That is the core of digitalization for me.
One good example is BlendRight. It’s an award-winning data analytics tool developed in-house to improve decision-making. We have been able to combine our huge legacy dataset with advanced analytics tools to make better blending decisions. And in doing so, reduced costs by millions of dollars.
Another example is Smart Plant+, a manufacturing execution system at our Singapore plant that helps us predict where there is going to be a failure, a bottleneck, or maybe even a quality incident on the shop floor, even before it happens. This is something that motivates our frontline operators because there is nothing more frustrating than having to spend a lot of time correcting an error. There is a lot of waste involved. Using data-driven insights helps us get it right the first time, saves time, removes frustration, and just makes for more satisfying work.
Digital Transformation in Action
The COVID-19 pandemic is accelerating the digital transformation of our operations. Virtual tours have allowed us to go out, talk to the operators at the frontlines, move around, and that is possible because we have put the enabling technology into our plants, even as we move ahead with enhanced 4G and 5G Wi-Fi capabilities. The operators themselves are excited by the use of these digital technologies and learning all sorts of new skills.
Linking Digital Tools to Safety Practices
Travel restrictions are still in place in many countries to halt the spread of COVID-19. Today, the only way I can be out in the frontlines of our plants and logistics centers across the world is in a virtual, digital way from my home office in Singapore. For example, on Safety Day in June – a day when all of Shell steps back and reflects on our commitment to safety – I was able to be present virtually at several different plants around the world and do a safety tour. Some of this was through the use of smart glasses to see what was happening, literally through the eyes of our employees in the plants.
Augmented Reality (AR) is also helping us work more efficiently and stay safe. Sometimes our frontline operators need help from technical experts in other parts of the world. Using digital tools with augmented reality, we can get the expertise where it is required. AR is not new to the supply chain but is fast playing an important role. A good example is our Marunda lube oil blending plant in Indonesia where we are doubling capacity. We have been able to finish the final acceptance testing of bottling lines and blending equipment with the manufacturers in Italy and China. AR technology has helped us have ‘eyes’ on the ground without needing to travel.
Responding Effectively to Crisis
We are a global network of 29 lubricant plants and nine grease plants. Back in January, we had to think on our feet in China where the coronavirus struck initially and where we have big operations. In Wuhan, our team quickly coordinated a complex, multi-party effort to deliver vital lubricants required for equipment to build temporary hospitals and provide the much-needed oxygen supply, all the while ensuring the safety of our staff and customers.
In February, for people in the West, the pandemic was still something largely confined to the TV screens. With the learnings from our colleagues in China and Hong Kong, we were able to quickly review all our business continuity plans and cascade learnings across the globe. So we were ready to continue to provide reliable, resilient operations for our customers while keeping our staff safe.
That was essential because the supply chain is the engine room of Shell Lubricants; it’s a network of assets, suppliers, and partners that simply has to work. We are an industry that provides products that are often crucial to keep things running. Emergency vehicles, delivery trucks, ships, and even air compressors in frontline medical equipment in hospitals all require lubricants and lubricant products. So our supply chains must remain operational.
Shell Tuas Lubricants Plant
At the end of the day, it is really about protecting the health of our colleagues working at plants and offices (and now homes), providing them with the tools and the equipment they need to do the job safely, and making sure we keep our customers supplied. We also support response efforts in the communities where we live and work. In Kenya, our joint venture converted a lubricants blending plant to produce hand sanitizers for the government.
Nurturing Talent with a Purpose
Talent acquisition is a priority for Shell. We look for talented people with knowledge and skills in Science, Technology, Engineering, and Math (STEM), both at the graduate level and also with experienced hires.
We also invest in education programs to develop young engineers into future innovators. This is the 35th year that we have organized the Shell Eco-marathon, an energy-efficiency competition that encourages young people to build a small, energy-efficient, one-person car. The record is driving over 3,000 kilometers on a liter of fuel. This shows what talent can do if given the right opportunity.
For the supply chain, the days of thinking of plants in terms of oily overalls are long behind us. Technology and digital, in particular, are changing that mindset. For instance, we were integrating a new section into our existing Grasbrook plant in Hamburg. It was great to see young data engineers working closely with experienced frontline operators to integrate all the assets – both old and new – into a computer screen to make the plant flow and operate much better. And that I think is the future; blending the two to make everyone’s lives a little better so we can give the customer the product they need, whenever they want.
Young people don’t just want to sit behind a keyboard; they want to see the physical outcome of their work. They want to have a purpose in what they do. Working for a company like Shell where we are trying to tackle some of the biggest challenges the planet faces – the energy transition, for example – gives real meaning to people’s work.
Focusing on a People-first Approach
Without a doubt, this has been a challenging year for many people. What has been important for me is motivating people during this time of crisis, trying to create small islands of certainty on which people can build and get the maximum out of themselves. If we can all do that, we can thrive.
It’s important to recognize that companies, ultimately, are just people. Hopefully, the decision-makers are making decisions from a strong sense of purpose. The key is to make people sustainably happy. Happy, engaged, motivated employees and content customers are likely to translate into satisfied shareholders. All this can be measured through employee surveys or customer satisfaction scores and, of course, the financial results will show what shareholders are thinking.
On the personal front, I am guided by a clear direction and purpose. Many years ago, my family and I chose to be carbon-neutral. My wife, who is Mexican, and I invested in an 18,000 tree-replanting forest initiative in Mexico. We must take personal and professional decisions that leave behind a better planet for our children.