Delft University of Technology
Faculty Mechanical, Maritime and Materials Engineering Transport Technology
S. Moerman Improving the tactical and operational planning of fuel distribution for Shell in The Netherlands Masters thesis, Report 2006.TL.7062, Transport Engineering and Logistics.
This report focuses on transport of fuel products from the refinery to the customer. In this report, the word 'customer' refers to a retail station and not to an individual car owner. Transport of fuels from refinery to customer is done in two steps. Primary transport takes the fuels from a refinery to a depot and secondary transport takes the fuels from that depot to the customer.
During the year 2004, two special fuel products were launched by Shell in The Netherlands: V-Power and V-Power Diesel. Distributing these 'differentiated fuels' represents a challenge because these products are not available at all depots. The limited geographic availability of the V-Power fuels have caused contradicting advices of the tactical and operational planning tools on how to distribute the fuels. Because of these contradicting advices, the company was unsure of the most economical approach in fuel transport.
The goal of this thesis is to determine how to improve the planning at tactical and operational level, taking into account the limited geographic availability of the differentiated fuels. In order to do so, first the theory and the application of transport planning tools was studied. Then, the most economical flow of materials for Shell in The Netherlands was determined. Finally, adjustments to the planning tools at tactical and operational level are recommended, to plan as much as possible according to this most economical flow of materials.
To determine the most economical flow of materials, a scenario analysis was executed on a sample area in The Netherlands. Different distribution scenarios were defined and analyzed on total transport cost. The results of the sample area were then also applied to other areas in The Netherlands.
The scenario analysis showed that the most economical flow of materials for Shell in The Netherlands can be achieved by reducing the number of visits to the customers. This can be done by scheduling orders from depots where all necessary products are available.
Based on this study towards the planning tools and the most economical approach in distribution, the recommended adjustments to the way the planning tools are used include:
Schedule delivery of multiple products to a customer as much as possible from the same depot with one truck.
The allocation of customers to a depot with a volume constraint should be done with the above distribution approach in mind. Allocate all customers in a geographic region to the same depot.
Reports on Transport Engineering and Logistics (in Dutch)
