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Island Petroleum Limited(IPL)

Island Petroleum Limited(IPL). Application of Lean Six Sigma to Improve the Fuel Supply Process. Island Petroleum Ltd Profile. IPL is a small petroleum Company operating in Jamaica . Sells Regular , Premium Gasoline and Diesel. At its 80 retail stations.

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Island Petroleum Limited(IPL)

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  1. Island Petroleum Limited(IPL) Application of Lean Six Sigma to Improve the Fuel Supply Process

  2. Island Petroleum Ltd Profile • IPL is a small petroleum Company operating in Jamaica . • Sells Regular , Premium Gasoline and Diesel. • At its 80 retail stations. • Has 110 employees and contractors . • Has it’s own import terminal in Montego Bay. • Imports fuels from a refinery in Trinidad. • Buys fuel occasionally from local refinery in Kingston.

  3. Introduction: Project Outline

  4. Lean Sigma Charter

  5. Lean Sigma Charter

  6. Lean Sigma Charter

  7. Problem Statement • Island Petroleum Limited is concerned about the large variance in its planned Operating Income and its actual Operating Income. The actual Operating Income in 2010 is 7% below plan or $949,000. If IPL continues to operate with these variances it will not be able to meet its shareholders obligations. IPL must evaluate what is causing these variances and address the issues.

  8. Project Selection – Pareto Analysis

  9. Planned Replenishment Cycle Time Activities (Order Pick Up & Delivery)

  10. Analysis of Current State

  11. Scatter Graph of Arrival Times

  12. Analysis of cost of delay

  13. Order Replenishment Delay Causes

  14. Cause & Effect Analysis – Delay of Shipments Loading At Refinery Placing Order To Refinery Contamination of fuel Resource availability Refinery breakdown Lack of training Uncertainty of sales Congestion at port Strikes Supervision Unfavorable handling operation time Lack of inventory data Ship doesn’t arrive in allocated time Lack of synchronization Delay of Shipments Port clearance wait time Bad weather Pilot wait time Ship has to divert Weather delays Preference given to shipper owners other customers Congestion at port Tug boats wait time Ship breakdown Selecting the shortest and reliable route Strikes Longer fuel pumping & distribution time Discharging In Jamaica Sailing To Jamaica

  15. Root Cause Analysis: 5-Why“Why do ships arrive late to load?”

  16. Alternative Supply Evaluation

  17. Recommendations

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