There has been much talk about planning for the supply chain of the future. Innovation is all around us. It is happening so fast that supply chain stewards are having a hard time keeping up. However, without a doubt, to succeed in business and operate on a global scale, you need to stay ahead of, or at least keep up with the pack.
For supply chain industries, the future holds much promise as it evolves into a completely digitalised, connected and autonomous industry. Many companies, including Shell’s Lubricants Supply Chain (LSC) business, are preparing for this inevitable future. It is by no means an easy task, but we must start somewhere.
Shell is active across the full value chain in lubricants. We manufacture, blend, market, sell and distribute lubricants in over 100 countries. Globally, we have 40 lubricant blending plants, five base oil plants, and 10 grease plants. Fundamental changes across this vast network cannot happen overnight, which is why we have set out to identify key opportunities and challenges that LSC needs to start planning today. A whole host of innovative ideas, different ways of working, capability building programmes and collaborative partnerships approaches are now being studied and in various pilot and incubation phases.
Looking ahead, while many companies continue to test and integrate new technology and innovation into their supply chain ecosystem, it is anticipated that the companies that would do well in the long term are those that look beyond just technology, and place their talent, community, and environment at the heart of their efforts. This results in sustainable business performance, improved corporate reputation, and a license to grow.
Supply chain as an industry is undergoing a revolution, but its professionals are often “behind the times”. Be it sitting at a corporate office or at a plant site, many are ill prepared to fully embrace the disruption ahead. If this trajectory continues, the career runway of our talents is in jeopardy.
Similar to planning for potential risks that may impact business performance, forward-thinking companies need to start taking proactive steps to mitigate the impact of technology on their supply chain talents. Leaders need to start by asking:
• Which type of technology will play a role in changing my industry?
• What are the opportunities and risks?
• What type of talent do we need today and what will we need in the future?
Take, for example, data management. Traditional data is garnered from purchasing, production orders, and sales. On the other hand, advanced data analytics, cloud computing, apps, and sensors can now produce different forms of data that enable employees to extract the most out of the data collected, accurately forecast demand and optimise the end-to-end supply chain.
The shift from traditional to new ways of managing data cannot happen overnight. It requires a change in skillset, behavior, and mindset. Through robust workforce upskilling programmes, our talents will be able to better understand and embrace the advances in technology while improving business performance.
This way of thinking was central to Shell’s approach when the company moved its lubricant plant from Woodlands to Tuas in Singapore. The plant is Shell’s third largest lubricants plant in the world and second largest in the Asia Pacific. The highly automated facility required Shell to upskill its employees who were used to a more manual way of working to handle the new automated equipment. In order to improve the plant’s efficiency, employees underwent skill development programmes to learn how to leverage on the real-time data from the machinery and find ways to optimise the entire network and not just focus on a specific area.
With that being said, supply chain professionals must also want to influence their own development. The onus is not entirely on companies to develop their workforce. All professionals need to ask themselves:
• How can I stay ahead of this disruption?
• What does my future role look like?
• What do I need to do to get there?
Responsible supply chain leaders must also address community impact as an integral part of their operations. Companies who embark on the technology journey need to critically review the entire supply chain footprint with a sharp focus on community impact.
In Indonesia, Shell Marunda Lubricant Oil Blending Plant works together with a local non-government organisation to run a clean, healthy and self-sufficient programme in nearby villages. The programme aims to increase community awareness and initiative in building a clean, healthy, environmentally friendly and productive neighbourhood. The programme trains people in the two villages in initiating and developing projects such as community compost, a “waste bank” where residents can sell their waste, small-scale urban farms for medicinal plants and common vegetables and small handicraft businesses using non-recyclable waste.
Beyond programmes, LSC attempts to integrate local businesses to be a part of our supply chain and create new local jobs to support community and economic development.
It is important to recognise the direct and indirect impacts of supply chain on neighbouring communities. We need to take a step back and engage with residents in a respectful manner. Be it working with a subject matter expert to understand our impact on land, livelihoods, heritage, and culture.
For decades, we have used digital technologies in one shape or form to create competitive advantages for our businesses and industries.
What is different now is the pace in which digitalisation is evolving, transforming the way we live, work and interact. Never before has there been more room to drive cost efficiency, seek out new revenue opportunities and change the models in which we run our supply chain network.
Recognising the need to ramp up LSC’s current use of digital tools, we are exploring the feasibility of Internet of Things, sensors and advance data analytics to improve the ability to collect and report real-time data across our supply chain to optimise manufacturing performance and enable better decision making.
In the lubricants business, filling and packaging are complex components, which often create bottlenecks at our plants. Robotics, automation and 3D printing may hold the key to unlocking these complexities and part of the funnel of ideas that we hope to successfully utilise in the not too distant future.
Our entire strategy here is to have a coherent digitalisation approach across LSC. This includes empowering local markets and plant operators to try bold innovative ideas, making smart decisions, facilitating quick implementations and enabling fast learning through mistakes.
Whilst a lot of these initiatives are designed with our business performance and customer or end-user in mind, our approach to how we manage our talent, community and environment are critical pillars of consideration as we position ourselves for the future ahead.
About the Author
Cheong Kin-Seng, General Manager, Lubricants Supply Chain Asia Pacific and Middle East, Shell
Over the course of 25 years in Shell, Cheong Kin-Seng has held diverse leadership roles spanning the globe and specialisations. He has taken on strategic and operational management responsibilities in end-to-end supply chain planning, operational excellence, Health Safety Security and Environment (HSSE), quality assurance and logistics. Kin-Seng is passionate about building winning teams that are driven by purpose and a strong commercial mindset.