ExxonMobil Corporation is one of the largest multinational gas and oil handlers in the USA. Exxon Mobil started operations in 1999 and is an ultimate descendant of Standard Oil owned by John D. Rockefeller. It came is a merger between Exxon and Mobil, both of which were subsidiaries of Standard Oil. The company's brands are Esso, Mobil, Exxon, and ExxonMobil chemicals. According to Forbes Global, ExxonMobil is one of the top six companies in terms of market capitalization. It has constantly featured in the Fortune 500 as a top 10 in terms of profitability. It is a publicly traded company, and institutional owners hold about 55% of its shareholding. These institutional owners include the Vanguard Group, State Street Corporation, and BlackRock. It controls about 3% of the global oil market and about 1% of the global oil and gas reserves. In terms of the global ranking of the major refiners globally, ExxonMobil is the seventh-largest (handling a capacity of 6.3 million barrels each day). The company has an expansive and elaborate supply chain and logistics system. Oil and gas transportation heavily relies on shipping, and the processed products from the refineries require road transport.
ExxonMobil's retail supply chain relies on a network of 12,000 outlets across the US, 1400 of which are dealer-operated. The outlets act as the major retail outlets and handle gasoline, lubricants, engine oils, tackifiers, polymer modifiers, butyl, and other products. The products are made from crude oil sourced from the Middle East, Africa, the Gulf of Mexico, Australia offshore, and Papua New Guinea. The crude oil is refined in the 37 oil refineries located in 21 different countries. ExxonMobil's largest market in the USA and it has seven refineries scattered strategically to serve the East Coast, the Mid-USA, and the West Coast. The well-organized structure allows the company to orchestrate a very efficient supply chain. Table 1.1 shows the supply chain of ExxonMobil. It includes both the upstream and the downstream supply chain.
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Table 1.1: ExxonMobil's Supply Chain
The process starts with crude petroleum supply after exploration and purchase from other crude oil miners. Afterward, the crude oil is transported and stored in 37 refineries located in 21 different nations across the world. Ships, pipelines, haulers, and trains do transportation from mining sites to the refineries. Refining and blending are done at the refineries. Here, crude petroleum is processed into different products, and they are shipped to various supply depots—the supply depots supply to the retailer outlets. The outlets are responsible for retailing the products to the customers.
The most critical section of the business is the shipping and receiving operations of the company. Shipping and receiving determine the effectiveness of its supply chain. ExxonMobil has two ways in which the retailer gets their deliveries made: trucks and through shipping. The trucks deliver the products for outlets that are within the USA, and the shipping is for the outlets outside the US. In handling these deliveries, the company has invested in numerous and strategically positioned warehouses that are poised to take every order as required. The problem here is that these warehouses are improperly interfaced with the central system that is run by the sales department. Table 1.2 shows the process flow and the linkages between the different network services in shipping and the company's receiving operations.
Table 1.2 Process flow and Linkages
The company's refineries receive crude oil from the various transportation forms or from the reserve warehouses and processes the crude oil into different products. The company's loading department divides the load into separate parts. The products are shipped to the intermediate warehouses awaiting the preparation of orders from the retail outlets. After order preparation, the shipment is sent to the quality and packaging department for checking. Afterward, the orders are packaged, consolidated, and dispatched to the outlets on a ship, road, train, or air.
ExxonMobil may face three possible problems in its operations. First, the delivery truck drivers may not always adhere to a schedule and therefore end up being on the road longer than necessary. Here, the company failed in collecting data on the distances between each point along every transit line. Such data would be vital in coming up with transit times. Transit times are unknown, and it is left up to the driver to try to make the delivery on time. The transit lines also lack storage points, and in case the driver drives along a line that demands taking a rest, the goods are left at the risk of damage and theft. Secondly, the truck's movement is supposed to follow a schedule because it is an easier way to manage the deliveries. In some cases, ExxonMobil may result in a haphazard delivery, and the management of orders makes scheduling very complicated. The inconsistency leads to mishaps, which delays orders, which means that the inbound deliveries are never reliant on pre-planned scheduling. Lastly, the sales team mishandles and delays the clients' order requests, and they end up creating a backlog in the company's warehouses. The sorting is also a mess because some items arrive at the warehouse late. All these timing errors end affecting the entire supply chain and waste too much time for the employees and the drivers waiting to make the deliveries.
ExxonMobil can solve these problems in three different ways. First, the company's problems can easily be solved through the installation of a management information system (MIS). Such an approach is vital because, unlike the other possible solution, these systems will make a genuine attempt to hold people accountable and encourage them to do a better job ( Lysons & Farrington, 2016 ). In a management system, the data about what everyone does every day will be visible, and the backlogs in the deliveries and the order taking will be managed in a much better format ( Cousins et al., 2019) . Next, the handling of deliveries ought to be streamlined. For instance, the company must invest in numerous and strategically positioned warehouses that are poised to handle every order as required. The problem here is that these warehouses are improperly interfaced with the central system that is run by the sales department. As a solution, the company can outsource the role of supply and delivery to a global leading shipping and delivery company such as Maersk Sealand. At a fee, ExxonMobil's goods can be shipped and delivered. For every order, Maersk can take some part of the price from the buyer and the other from the outlet as a cost-sharing solution. Finally, the company can opt for a 21st-century solution and opt for a robotics solution. With robotics, almost everything that demands human-intensive labor can be taken over by robots. Instead of relying on human effort and their culpability towards making mistakes and the inability to work 24 hours, robots can be used in packaging and loading trucks ( Chandak, 2018) . In this way, the number of human beings needed will drastically reduce, and packaging and deliveries will be timely and go on 24 hours each day.
Conclusively, ExxonMobil's supply and the retail chain works as it would in a typical organization. The process starts with crude petroleum supply after exploration and purchase from other crude oil miners. Afterward, the crude oil is transported and stored in 37 refineries located in 21 different nations across the world. The company's shipping and receiving rely on order preparation, and the load is sent to the quality and packaging department for checking. The retail process has some inherent problems in scheduling and non-automation. The solutions offered encourage proper scheduling and pave the way for automation.
References
Chandak, A. (2018). How "Goods and Service Tax" will Impact Logistics and supply chain industry in India. Journal of Production Research & Management , 8 (2), 20-22.
Cousins, P. D., Lawson, B., Petersen, K. J., & Fugate, B. (2019). Investigating green supply chain management practices and performance. International Journal of Operations & Production Management .
Lysons, K., & Farrington, B. (2016). Procurement and supply chain management . Pearson.
