PHS Case Study

Rosily, the Chief Executive Officer which is also the son-in-law of PHs’s founder, Dates S. Naked.

Like the other transport companies involved in the business, PHS also faced problems with its drivers embroiling in oil piracy. Transport companies are naturally will held the responsibility for such thefts as they usually take place under their watch and these companies are bound to compensate the refineries for such losses. The culprits involved frequently tanker drivers, depot operators and transporters.

One of the major customer of PHS, Linen Refineries Pipeline) complaint about the quality of the COP delivered by PHS and its later impact on Oiliness failure to fulfill their customer orders. This is because of the practice of siphoning COP and adulterating the consignment with water, used oil or sludge was so uncontrolled that a number of PHs’s customers have threatened to change their custom to other more reliable transport companies.

Besides that, profits for the first quarter of 2009 had drastically decrease compared to the same period on the previous year due to the high compensation expenses and maintenance cost.

These matters worried Dates Naked whom then insisted En. Rosily inspect the matters and report to him within one week with possible solutions. En. Rosily then asked his university friend, Mikhail Mood, a management consultant to assist him Ninth Dates Aniseed’s task. SOLUTIONS OF THE CASE If you were in the position of En Rosily, what would recommend to Dates S. Naked?

If were in the position of En Rosily, there are several possible solutions that I would like to be recommended to Dates Naked regarding the crucial matters in Palm Haul Sad Bad (PHS) which are; to implement Fleet Management System, have a good compensation package for the drivers, conduct a training program for staffs regarding the knowledge on tankers’ maintenance and a preventive maintenance to educe the maintenance upkeep.

The first possible solution is to implement the Fleet Management System (FM) in order to overcome the issue of high oil pilferage.

The Issue arose when a fair percentage of COP that is loaded into the tankers never arrived at the destinations but thousands of metric tones were missing, tankers Nerve not arrived at the refineries which were found abandoned plus with the missing drivers. Hence, due to the cases of the abandoned tankers, Lillian Insurance, PHs’s insurer, threatens PHS to increase the insurance premiums as PHS is insured against Goods-in-Transit. FM is a modified system from British company, Importance Pl and is supplied locally by CASE Multimedia Technologies Sad Bad. He system provides innovative technology solutions that enable companies to gain real-time control of their distribution processes which includes customer deliveries, deciles and drivers. Besides, customers can take back control of the traditional ‘black hole” in distribution.

A FM device will be installed in the cab of a Crude Palm Oil (COP) tanker which will allow PHS to track scoundrel drivers as the system will mark the date and time the tankers enter a hot spot and how long they stop at rest areas and eating shops.

Furthermore, FM will allow PHS to locate more than 70 hot spots in the peninsula where COP siphoning was rampant. Furthermore, FM device have a “panic button” which will be installed near the driver’s seat in every oil tanker Inch enables the driver to alert headquarters if the tankers are hijacked or experiencing any difficulty. This means that, if the oil tankers go off the original route and head to one of the hot spots, then the system will detect them.

Therefore, by using FM, the drivers will be aware of the risks they will be taking if they work with he syndicates to steal the COP which automatically will reduce the oil thefts as well as the compensation cost faced by the company. The second possible solution is to have a good compensation package to the drivers to earn their loyalty and to lower the driver shortage and the issue of high absenteeism.

A good compensation package can includes year-end bonuses as the bonuses will be much lower than the compensation cost that PHS is currently bearing.

Besides, PHS can also increase in driver’s salary based on Malaysian Industrial Development Authority salary rate for Orr and truck drivers to minimize the pilferage. Moreover, PHS could as well include medical, social security, accident protection, pension scheme, Employer Contribution Fund and annual leave of 10 to 14 days which is normally provided together with an annual salary increment that is calculated based on a certain percentage of the basic salary and performance.

The third possible solution that can be recommended to Dates Naked is to conduct a training program to heighten the knowledge of the staffs in order to prevent any break down of the tankers in which Nil raise the maintenance cost. Increasing that awareness will prompt immediate actions from these key players and not from the administration manager only. This is to lessen the pressure of the administration manager’s Jobs and to avoid any Irregular services of the tankers.

The training should be geared toward the basic fundamentals of the tankers maintenance.

A professional training program will increase up-time in addition to reducing any unforeseeable downtime. Last but not least, besides conducting a training program for the staffs to learn about the tankers maintenance, a preventive maintenance could also be one of the possible solutions as prevention is better than cure. Maintenance plays an important role in any Otto to reduce maintenance costs. Preventive maintenance programs are pre-assigned actions which are scheduled to occur.

Studies by international companies and engineering institutes have shown that industrial facilities and municipalities can save up to 10 percent on maintenance by focusing on their preventive maintenance efforts. A good preventive maintenance program focuses mainly on energy savings. En conduction inspections, lost revenue is consistently traced to the following: leaks, lubrication, misalignment, and belt slippage. Leaks are easy to find. Normally, {oh will find pools of liquid on the floor or dripping from the overhead.

Energy is Nested since the system has to run more frequently to make up for what is lost. En bearings have excessive lubrication, energy is lost through fluid friction in the lubricant causing the bearings to overheat or run at higher than normal temperatures. Heat is generated in the flex portion of the coupling and the bearing purporting the shaft. Proper alignment is important to prevent such energy loss through coupling. From the case, Appendix E indicates the approximate temperature ranges required during the transportation chain.

The rate of heating should be no greater than ICC per day.

The travel temperature must be complied with as far as possible during transport, to minimize oxidation processes. Towards the end of the Joyce, the temperature of the oil must be slowly raised to the appropriate pumping temperature. Unless otherwise recommended by the consignor, heating plan shown n Table 2 of Appendix E can be used to prevent singeing which will cause the color to darken and value to be lost due to rancidity as too great or rapid an increase in temperature entails considerable losses in quality.

In a nutshell, by overcome the high maintenance upkeep, high absenteeism and shortage of drivers and also high compensation cost with the possible solutions given above, the issue on low operating margins will automatically be solve together with the matters regarding the insurers as well as the major customer’s complaint on the quality of COP delivered by PHS.