Supply Chain Management Practices of Indian Oil Corporation Limited Liquid Petroleum Gas (lpg) Division

SUPPLY CHAIN MANAGEMENT PRACTICES OF INDIAN OIL CORPORATION LIMITED LIQUID PETROLEUM GAS (LPG) DIVISION

Term Paper for the Partial Fulfillment of the requirements of the course

SML 843

SUPPLY CHAIN LOGISTICS MANAGEMENT

Course Coordinator: Prof. D.K.BANWET

SAMIR JAIN

2005SMF6553

SAURABH BANSAL

2005SMF6573

ASHISH Kr. SINGH

2005SMF6648

CONTENTS

1. INTRODUCTION 3

Global Oil and Gas Industry 3

Indian Oil and Gas Industry 3

Indian Oil Corporation Limited 4

Challenges and opportunities

2. DESCRIPTION OF SUPPLY CHAIN OF IOCL (LPG) 7

Details of Working of LPG Supply Chain (in Delhi Region) 8

Types of Products 8

Costs involved in the supply chain 9

Production at the Bottling Plant 10

Distribution at the Bottling Plant 10

Reverse Logistics 10

Scrap Process 11

3. ILP: Answer To Supply and Demand Fluctuation 12

Demand Forecast 13

Aggregation 14

Observation 17

Indane Linkage Planner 17

Charges associated with sourcing 18

Rough Cut Schedule 22

APPENDIX 24

REFERENCE 25

1. INTRODUCTION

GLOBAL OIL AND GAS INDUSTRY IN 2005

The global oil and gas industry has been experiencing high prices for crude oil and petroleum. Strong growth in global demand, economic resilience to higher energy costs, hurricane related supply disruptions in the United States and a three decade low global oil spare capacity pushed up the oil prices. Besides, concerns over the stability of supplies from the Middle East due to geo-political uncertainties as well as speculative purchase by hedge funds further caused ripples in the global oil market, impacting a great deal of volatility to oil prices. World natural gas consumption grew by 2.3% during 2005. The enhanced production in Russia and Norway contributed