Traditionally, logistics is perceived as a system that just involves physical movement of goods. In reality, it is much more and plays a pivotal role in case of gigantic companies like PSO, holding around 68% POL market share.
In the fast-paced, highly dynamic and cut-throat competitive environment among Oil Marketing Companies (OMCs), to achieve the objective of ensuring timely, proper and uninterrupted supplies to customers from Karachi to Khyber and Turbat to the Northern Areas, PSO realigned its functions in 2002 and dedicated the Logistics Department to manage this gigantic task.
Logistics Department, in line with the company's vision, actively pursued a policy of upgrading supply chain network, systems and procedures. One of the foremost initiatives was introduction of fleet management tank lorries, equipped with satellite tracking and pilfer-proof system, in all major cities. Through this system, it has become possible to stop pilferage or adulteration en route.
This has enhanced customers' confidence and has improved the company's image. To inspire confidence at all levels of supply chain - in-transit products dispatched for PSO storage locations/customers - PSO started fleet upgradation program. Currently, around 1,000 upgraded tank lorries, equipped with tracking and pilfer-proof system, are engaged in delivering quality fuels across the country.
To closely monitor the en route movement of these tank lorries, Base Stations of three tracker companies have been installed at PSO House. To ensure complete customer satisfaction, PSO has engaged a strong distribution network of 35 storage locations spread all over the country where a team of highly dedicated professionals manages the operations.
The supply chain mechanism of POL products is such that the product(s) are procured through three sources of supplies - Northern (ARL), Central (PARCO and Dhodhak) and the Southern which is the largest source of supplies (NRL, PRL, Bosicor, ENAR and Imports). These products are mostly stored in PSO tanks and then supplied through most suited and cost effective modes of transportation, either directly to customers or transported to PSO depots for onward supplies to customers.
The transportation mechanism falls under two categories: primary transportation ie movement of products between PSO locations and secondary transportation ie movement of products from PSO storage locations to customers.
The logistics activities are managed through three modes of transportation. 1). Road, encompasses around 5,500 tank lorries, listed by 500 carriage contractors. 2). Rail, includes 3,000 tank wagons operated by Pakistan Railways 3). Pipelines: Cross-country pipelines connecting Keamari/ Bin Qasim to Mahmood Kot, furthering to Faisalabad Gatti and terminating at Machike (Lahore). Also, PSO has dedicated pipelines, connecting PSO terminals to customers.
Logistics witnessed two revolutionary changes in 2005. One was commencement of White Oil Pipeline Project (WOPP) in March 2005, connecting Bin Qasim (Karachi) to Mahmood Kot, which replaced almost entire road and rail movement of HSD from Karachi to upcountry locations. This, being the cheapest, the fastest, the safest and environmentally friendly mode of transportation, is expected to save Rs 700 million per annum in transportation cost. The other change was implementation of SAP in PSO in July 2005. This has eliminated all bottlenecks in flow of information among all locations, resulting in significant improvement in supply chain efficiency.
The unshakable resolve, dedication and commitment of Logistics team including PSO's business partners (carriage contractors, drivers and owners of tank lorries) is depicted from the unfortunate earthquake of 8th October 2005 when despite several challenges - difficult terrain and severe weather conditions - uninterrupted delivery of POL products was made possible to these remotest-earthquake-hit parts of the country.
PSO has always placed great importance on health, safety and environment of the society it does business in. The company provides comprehensive development programs such as the Defensive Driving and HSE training program that train the drivers and field staff about necessary safety preventions and, at the same time, also provide support on much personal levels such as life and health insurance. In view of the changing business dynamics and abreast with international standards, Logistics will be soon ISO 9001:2000 certified.