eStore at Shell Canada Case Study
Q1. (35%) Briefly characterize Shell’s industry supply chain and contrast it with the supply chain of similar companies in the US. Then, explain the main business challenge(s) that Shell was trying to address using eStore, and discuss the ways in which Shell strategically leveraged the eStore’s capability for that purpose.
Shell’s corporate strategy is “More Upstream, Profitable Downstream,” utilizing technology and innovation for sustainable development that delivers growth for shareholders. The company focuses on three key management objectives: operational excellence, flexibility to respond to market opportunities, and margin optimization across the supply chain. Shell’s review of its business processes discovered that many refineries had developed their own supply chain planning and operational processes. By standardizing the business practices, Shell could improve efficiency. Shell organized its refineries into regions called “supply envelops” where planning, scheduling, and operations are coordinated to optimize profitability across the regional supply chain. Shell takes a very different take on supply chain management. They view it as a cost center that operates in a consulting mode across the organization. The group is supported by a percentage of the savings it generates across the organization, with the remainder of the savings being shared by the various functions or business units that buy into the plan. These cost savings may go toward the SBU or functional cost-reduction goals set by the corporate executive team. The success of such programs has led senior management to establish an ongoing set of goals for cost savings in the supply chain on an annual basis.
2. (35%) eStore is essentially a new e-sales channel that Shell Canada has launched. Why do you think Shell Canada is experiencing low use of its eStore?
Due to financial pressure to reduce costs, Shell Canada deployed an eCommerce solution...