Sasol is an international, integrated energy and chemical company that leverages the talent and expertise of more than 35 000 people working in 37 countries, to develop and commercialise technologies, and build and operate world-class facilities to produce a range of product streams, including liquid fuels, chemicals and electricity.
Sasol Oil (one of various business units in the Sasol Group) markets fuels blended at Secunda in Mpumalanga and refined at the Natref oil refinery at Sasolburg in the Free State. The unit operates around 416 Sasol and Exel retail convenience centres in South Africa, exports fuels to southern Africa and supplies various large commercial customers with a combination of fuels including diesel, jet fuel and petrol.
As part of the broader Functional Excellence review of processes in the Sasol group, it became apparent that the business as a whole was not maximising efficiencies in and across business unitswith respect to outbound logistics. The historic decentralised approach to logistics planning, execution and analysis at various levels had a number of deficiencies including lack of visibility, control and optimisation. In a high value, customer focused value chain, this is simply not good enough, leaving various opportunities to increase value untapped on the table.
The broader Functional Excellence initiative had as its objective to implement simple, standard and shared practices that would assist Sasol to achieve its objective of being a world class supply chain organisation and achieve greater efficiency in execution, while also improving service delivery. As part of this initiative, the outbound logistics activities in Sasol would be executed in conjunction with the business units, according to agreed service levels, by a world class, technologically enabled Logistics Command Centre (LCC) that would continuously exploit logistical synergies toward increasing related efficiencies, while achieving benchmark levels of effectiveness.
To start this journey, it was decided to establish the LCC platform inside the Sasol Oil business unit (primary and secondary distribution) and expand it from there to incorporate road logistics in other business units, and then to develop it further to include rail and other modes of transport.
This intervention fundamentally changed the nature of the outbound logistics process in the business from a decentralised, Excel-based operation to a centralised, integrated and technology enabled service. The journey consisted of various transformation initiatives over a period of time, designed to ensure acceptable risk levels, maximising value extraction and ensuring sustainable change. The journey impacted on all three dimensions of process, people and technology change.
Process transformation– this included the design and implementation of processes that supported the operational objectives of efficiency, customer service, standardisation and simplification. Key challenges in this regard included the alignment of stakeholders up and down stream, ensuring that changes in localised processes supported the objectives of external stakeholders. A common set of supply chain objectives across the various stakeholders simplified this challenge. Key processes that were redesigned and implemented include logistics planning and execution, event management as well as reporting, analysis and performance management.
People transformation– the objective was the establishment of a uniquely structured, centralised, skilled and dynamic team responsible for achieving clearly defined business objective. A unique element in this regard is a joint structure staffed 50 percent by Sasol employees and 50 percent by Resolve Solution Partners, with a transfer clause to facilitate full ownership by Sasol. The objective was to tap into the skilled resource pool of Resolve (Resolve provides similar resources to similar platforms in other industries), but also to ensure a balance between experience and innovation by retaining some of the Sasol Oil employees who historically fulfilled a similar role. Throughout the people transformation process, no employee was retrenched.
Technology– a fully integrated technology platform supporting the LCC processes and responsibilities was implemented to form the backbone of optimisation, operational efficiency and visibility of the outbound logistics process. The platform consists of the OPSI PLATO optimisation platform, custom web modules to facilitate the driver briefing process, a reporting and analysis platform, tight integration to SAP through web services and real-time feeds from the vehicle tracking devices. Some of the technically unique elements includes multi-drop, multi-compartment scheduling and multi-product scheduling
The project was conceived in January 2011, following a comprehensive partner selection process. First phases included the definition of a clear project charter, risk assessment and stakeholder analysis. Design work and planning where completed by end April 2011, incorporating input from wide spectrum of stakeholders. A phased approach was suggested to manage risk, extract value from early interventions and to build momentum in the project.
The “interim planning solution” initial phase was proposed as intervention where a skeleton staff of the logistics command centre would prepare daily schedules, while the required integration and further development continued. The schedules were generated daily, utilising manual data loads and no development. Detail feedback and discussion sessions where held between the actual drivers, the distribution team and the scheduling team. The objective was to incorporate real-life input already from a very early stage in project, which might have been overlooked during the design phase.
In parallel to the interim planning solution phase, the development of the required peripheral platforms as well as the integration work to the SASOL ERP continued. The workforce transition process also started. This phase included substantial effort with regards to training, testing and change management.
The LCC took on its full role for one of the major Sasol Oil depots in Gauteng in April 2012. One of the biggest petrol price increases in history occurred at the end of April 2012, in conjunction with an extended long weekend. The combination created havoc in the distribution chain, and highlighted some issues with regards to how the platform, integration and staff reacts in abnormal circumstances. It was decided to postpone the roll-out to subsequent depots to ensure these deficiencies were corrected through process review, technology adjustment and additional training.
The roll-out to subsequent depots was completed by December 2012.
The LCC is responsible for all of Sasol Oil’s road logistics, ensuring that fuel stations receive their deliveries in an optimised, cost effective and low-risk manner. Some of the outcomes from business changes included (measured as part of the three-month post-go-live business case review) a substantial increase in payload utilisation and trips per vehicle.
Other benefits include better control through centralisation, improved vehicle movement control, visibility, standardisation and reduction of manual system intervention. The central control room has brought decision-makers together, including the right information, to facilitate better decision making, especially during times of crisis. Vehicle movements are now better controlled. Decisions historically left to drivers or dispatchers now reside on the level where it needs to be, resulting in better collective decisions, including the reduction to deviations from route and improved driver performance. Both of these benefits are only possible with the right visibility of information. Through the platform, a wealth of real-time information (both operational execution as well as analysis) is available to drive customer service and improvement agendas. Process standardisation across depots makes it possible to collectively improve. One example is that the creation of shipments, historically done manually at each depot, now takes only a few minutes to complete.
The concept of a centralised logistics control centre has over the past few years showed substantial benefit in the South African market, with more and more companies investing in this area. This project however included some unique elements that distinguished it from the rest.
The design and planning was, from the start, based on a build-operate-transfer model between Sasol Oil and Resolve Solution Partners. The objective was always a partnership, not a technology implementation or an outsource model. It ensured close involvement from both parties during all phases (Sasol Oil because they would inherit the platform in near future and Resolve because they will be involved in the everyday operations of the platform). It also provides both parties time to adjust the design during the operational phase to ensure maximum value before it is transferred to full control of the client.
The team structure was designed as a 50-50 partnership, with some resources from Sasol Oil and some from Resolve Solution Partners. This provided for the right mix of environment experience as well as technology skills. It also gave access to a “joint resource pool” to ensure continuity as well as the availability of skills needed for the roll-out to other business units.
The unique business environment required significant learning curve and adaptability from the technology capability. Industry specific nuances included compartment loading, hosted and shared depot structures.
The future holds exciting potential for the operations including the continued improvement and stabilisation of the LCC environment to provide a supporting platform for bolder tactical improvements. Leveraging the vast amount of information generated will enable the use of the LCC base to pursue more sophisticated business opportunities. There is already a recognised potential to roll out to other Sasol business units.
Serious consideration can be given to the incorporation of rail and other modes of transport, and it has become easier to instil a new, continued drive to improve the outbound logistics performance.