MGT 314.

(11)
Report on: Filling Station
Submitted To:
Shaila Jahan Mona (JMS)
Lecturer, Department of Management
School of Business and Economics
North South University

Submitted by:
Name ID NO
Md Nagib Mahfuj 142-1336-030
Gazi Rokibul Hasan 152-1763-630
Simanta Saha 153-1000-030
Golam Mukkit 161-1683-630
Ismail Hossain Shohan 163-1481-030

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 Executive Summary

Operations Management is the collective process of producing and delivering not only

product, but also ensure best service of an organization by managing its all available resources

effectively. All product or service whatever good or bad is the collective result of operating

(input-transformation-output) processes. These overall activities often include product creation,

development, production and distribution. Related activities include managing purchases,

inventory control, quality control, storage, logistics, evaluations of processes, supply and process

crude oil.

Padma Filling Station is a market leader in petroleum business in Bangladesh. Padma

Filling Station is also the sister concern of Padma Oil company Limited, which was established

back in 1985 after transferring its major shares from Burmah Eastern Limited.

There are about 50 dealers who bought refined oil from POCL in Dhaka city alone and

also, they own about 7 filling station in Dhaka City. Dealership of POCL is also distributed

across the country, and like Dhaka city they also own several filling stations throughout the

country. Their operation is expanded all over the country and have offices in Noakhali,

Chittagong, Bogura, Dinajpur and Naranayangonj.

This report is based on Operations Management of Padma Filling Station. The main goal

of this report is to know their production and operation processes, activities, waiting line

management and production strategies of the petroleum business.

Related information has been collected from Hosneara Begum (Assistant-Accountant,

POCL), Kaffat UL Mahbub Bin Hossain who was acting manager of a filing station. In addition,

various references from internet was used as the secondary information source.

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 Table of Content

Table of Contents

Brief description of the business...........................................................................4

Analysis of the existing production and operations strategies.............................5-6
Analysis of the waiting line management.............................................................7-8
Analysis of facility layout ................................................................................. 9-10
Application of production and operation management concepts.......................11-14
Process map…………………………………………………………………….15
Analysis of quality control issues...................................................................... 16
Analysis of demand forecasting ……................................................................ 17
Operational problems ........................................................................................ 18
Recommendation for improvements.................................................................. 19
Appendix………………………….................................................................... 20

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 Introduction

PADMA Filling Station a sister concern of Padma Oil Company was founded in 1985,

and it is one of the largest business Petroleum Industry in Bangladesh. Its child company Padma

Filling Station is an Govt. approved leading filling station in Bangladesh and have been into this

business since 1988 after three years of the establishment of it’s parent company, with a goal to

fulfill the increasing demand of oil, seed and gas in this populous city of Dhaka, as well as

throughout the country. Petroleum items are included Diesel, Petrol, Octane and Compressed

Natural Gas (CNG), Kerosene and various brands of lubricants. Their whole operation is spread

across the country is named “Padma Filling Station” which had 159 filling stations operating

24/7 in 365 a year. Since the birth of the company, it continued its advancement in development

works and expanded the projects in all prime locations like Gazipur, Tongi, Norsindi,

Narayanganj, Gabtoli, Sayedabad, Tejgoan, Ashulia, Mohakhali etc. Padma Filling Station

Limited has undertaken Both Residential and Commercial Projects and completed successfully.

Recently the company has undertaken a step in completing major projects including supplying

required fuel and lubricants in Dhaka Metro Rail construction project directed by the company

Dhaka Mass Rapid Transit. Moreover, they are also the supplier of required fuel and lubricants

for Bangladesh Road and Transport Corporation.

Their opening hour starts from 6.00 AM to Mid night usually, unless exception occurs.

Each filling station having about 12-15 stuff in a single shift. Each day Padma Filling station

serves around more than 200 hundred vehicles including private car, CNG, bike. However, bus

and trucks are generally come at night shift. The station we have visited having well equipped

fire rescue system and three automated filling machines as well as equipped with generator n

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case of load-shedding. In pricing criteria, they have strictly followed the government-imposed

price.

Analysis of the existing production and operations strategies

Production Analysis: Production is an activity where resources are changed and there is an

increase in the ability of these resources to satisfy wants. That means transformation of input into

output is basically production. It changes the physical characteristics of the input. To analyze the

production of the company, we have looked everything which is involved with the production.

They are given below:

Location: As it is a filling station company, location is one of the major factors for the company

and they are trying to give the highest priority for this. They have set up their factory in such

location from where it is easy to reach the whole Dhaka easily. They have also filling station all

over the country such as in Dhaka, Chittagong, etc.; even in Dhaka they have tried to set up their

station in the area where filling station is more needed.

Raw materials: petroleum products, lubricants & greases, Bitumen, LPG, Agro-chemicals are

the main raw materials of the company. They try to make sure the highest quality of their raw

materials and for that they have also quality control department.

Quality: The company has built their own factory to manufacture and process their product. As

their product is highly sensitive, so it is mandatory to check the quality of the product in the

manufacturing process and they also do that. Their quality assurance team monitors the whole

process and after certain step they measure the quality of the product.

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Volume of the product: The company has different types of clients such as dealers, agent,

chemical distributor etc. They segment their processing according to the clients and deliver them.

They are flexible in terms of that, so in case of high demand from any customer group, they try

their best to deliver the desired volume.

Facilities: The company gives different types of facilities to the clients. They give the

transportation facilities, bulk discount facilities etc.

Operation strategies: An operation strategy is driven by the overall business strategy which

helps to reduce the cost, increase the efficiency by using core competences. Some strategies are

given below that are followed by the Padma Oil Company:

Developing core competences: Core competences are the strength of the company. It can be

anything of the company which makes them different from the others. The Padma Oil company

has well-trained staffs and vast financial investors. They use their finance and efficient workers

to make the world class product.

Cost effective strategies: To reduce the operation cost, they purchase their raw materials in bulk

and in such a way it gives the minimum total cost to produce the product.

Quality based strategies: They are continuously trying to increase the quality of the product to

be the best in the market.

Time based strategies: They are also focusing on the time-based strategies to reduce the

operational time of the product which will bring the opportunity to produce the product within

short period of time.

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Quick responsiveness: They have also made the culture of quick response of any kind of

problems. They are very flexible in terms of any problem or complain.

Waiting line management

The waiting line or queue management is a critical part of service industry. It deals with issue of

treatment of customers in sense reduce wait time and improvement of service. Queue

management deals with cases where the customer arrival is random; therefore, service rendered

to them is also random. A service organization can reduce cost and thus improve profitability by

efficient queue management. A cost is associated with customer waiting in line and there is cost

associated with adding new counters to reduce service time. Queue management looks to address

this trade off and offer solutions to management.

Waiting line problems: Waiting line is one of the biggest problems of the company. It can

happen within the factory or outside the factory. In filling station company, it is very common to

face a waiting line. In our daily life, we have to face this waiting line whenever we go to the

filing station. The company is trying to reduce the waiting line but it is hard to avoid in the peak

hours when there are lots of demand of fuels. They face problems to handle those demands at a

time. For the long waiting line, they have to arrange the space and as it is for the automobiles so

it takes lots of spaces. They have to incur cost for the space which is very high.

Finite and infinite population: In a waiting line scenario, there are cases of finite and infinite

population of customers and workers. A finite population scenario considers a fixed or limited

size of workers and customers visiting the service counter. It also assumes that customer and

workers once served will leave the line thus reducing overall population of customers and

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workers. However finite population model also considers a scenario where the customer after

getting served will re-visit the service counter for re-service, leading to increase in finite

population.

An infinite population theory looks at a scenario where subtractions and addition of customer do

not impact overall workability of the model.

It is difficult for them to predict the population all over the day but mostly it is very high in the

beginning of the day, as at that time people go outside from home for works and at the midnight

it is very less.

Queuing techniques: Queuing techniques are systems put in place to serve customers in an

orderly manner. Queuing techniques prevent chaos in customer service by ensuring the company

can serve one at a time, on an equitable basis. Queuing is more of a constant issue in product-

based businesses than in the service industry. The company has established two/three servers at

one filling station to reduce the waiting line. They have also arranged the LPG, petroleum in

different que so that it can be more organized.

Strategies to manage customer waiting time: No customer likes to wait. It harms the company

reputation, causes customer dissatisfaction and finally causes profit loss of the company. Here

are four strategies to help you keep your customers' perceived wait time to a minimum:

 Appoint a service leader to coordinate customer-employee interactions. Perceived wait

time is reduced when an employee greets customers directly, learns the purpose of their

visit and then directs them accordingly.

 Keep it moving. Customers want to see that all employees are actively working to move

customers through queues. Every employee should operate with a sense of urgency and

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 avoid what might easily be perceived as idle conversations or tasks. This reassures

customers that employees are striving to help them as quickly as possible.

 Give customers something to do while waiting. When customers in line engage in an

activity while waiting, their perceived wait time can be reduced. Televisions near lines or

waiting areas or magazines lining checkout aisles are classic examples.

 Employees need to be very fast. Even after customers are out of line and at the point of

employee interaction, perceived wait time can be diminished. It all depends on the

employee-customer interaction: Customers are happier and have lower perceived wait

times when employees are fast, friendly to customers, Accurate during transactions,

Sympathetic to customer emotions about waiting and thankful for customer time and

patronage.

Padma Oil Company Ltd Facility Layout

Implementation of an efficient facility layout is a crucial matter for every filling station business.

Padma Oil Company Ltd (POCL) also requires the utilization of a facility layout to achieve

efficiency in the business. Designing a facility layout involves a large amount of research and

investment.

Padma Oil Company Ltd (POCL) deliver their products/service in a product layout structure. In

product layout, workstations are allocated based on a sequence of processing. Every workstation

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is associated with one another with different tasks in order to deliver a full product or service.

Each workstation processes a different set of actions. POCL deliver their oil to customers

through a chorological order of steps. A customer has to follow steps in order to proceed. Since

frequency of acquiring products/services from filling stations in Bangladesh are high, POCL falls

under the pressure of serving several customers at a similar time frame. POCL has developed a

simple facility layout system which is responsible for serving customers in masses. A massive

amount of investment was done to develop the system and all the outlets of POCL throughout

Bangladesh have the same facility layout. The facility layout structure is deemed to have the

highest amount of efficiency when operations are concerned. The structure has been practiced for

a prolonged period of time and has made the business successful in operation.

The facility layout adopted by POCL is subjected to several benefits. They are listed below:

1) More customers can be served at the same time due to an efficient planned system.

2) Time required to process each customer is low. Since the facility layout is fairly simple,

serving each customer is time-efficient.

3) All the workstations are closely placed in terms of proximity and therefore services can

be processed faster.

4) Customer convenience is high.

5) Payment supervision is strong due to the involvement of security.

However, the facility layout of POCL can be subjected to inefficiency due to many factors

involved. They are listed below:

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 1) Lack of skilled labors - If the employees lack the skills to serve every customer with

highest efficiency, the overall process gets lengthier.

2) The deterioration of the pumps - Most of the pumps were in use for several years and

served thousands of customers. The pumps lose their functionality with time.

3) Miscommunication between the workstations – If communication is not effective

between the workstations, it might result in the occurrence of mishaps, therefore the

serving process might be delayed.

4) Incompetency of a particular workstation – If one workstation is incompetent in

productivity, all the workstations will be negatively impacted.

APPLICATION OF PRODUCTION

Unquestionably estimating the strategy, itself assumes a huge job in production inventory

management executives for our Padma Filling Station. Two issues of production inventory

management, how the amount to arrange and when to order request may be tended to here. It is

critical to follow the demand interest and accessibility of inventory to keep away from deficiency

cost. Despite the fact that they barely face shortage cost, it ought to be prescribed to expand

learning of lead time and lead inconstancy to secure against stock-out and smooth.

Raw Materials

They usually order their raw materials inventory which is GAS, PETROL etc when need.

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Inventory Cost

There have some inventory costs. Among those, two important costs are:

•Ordering cost and

•Holding cost.

Ordering cost per order = 2 crore taka. Holding cost per million = 20 crore taka. So, EOQ = root

over (2 x 3 million x 2)/20 = 0.6 million taka.

Total inventory cost = (0.6/2) x 15 + (3/0.6) x 2 = 4.5 + 10= 14.5 crore.

Finished Goods

Padma Filling Station coordinates their checking system for their stock as irregular structure.

They prevalently use this structure by physical stock. The chairman discontinuously checks the

racks and extra room to choose the sum close by. By then, in view of these he can, evaluate how

much stock is required for age. Regardless, this system has a few lacks like they scarcely get

reviews about the condition of the inventories and don't follow the continuous enthusiasm of the

inventories. They also have satisfactory space to store product stock for 36 hours before passing

on them.

Inventory Counting System

By periodic system, Padma Filling Station counted their reserved inventory. They nearly check

their inventory each day. They counted just twice toward the end of every day. After

investigation, we recommend them that they have to pursue perpetual counting system in light of

good outcome.

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Tracking Inventory

They utilized RFID system for following their inventory. They can think about inventories in

time. They have to utilize uncommon system however they don't utilize.

OPERATION MANAGEMENT CONCEPT

PADMA FILLING STATION coordinates their business function throughout the operation

management for the purpose of integrating supply and demand management. The sequence starts

with reserve products and end with final customer.

Storage Facility
Raw Material from
Main Gas Station

Reserve facility

Self-Owned filling
Authorized station all over the
Distributors country

Final Consumers
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 Figure: PADMA FILLING STATION’s Operational
management

Padma Filling Station pursues a decentralized buying strategy, as depicted in the graph above.

They have an interest driven arranging and business working model dependent on ongoing

interest bits of knowledge and request molding. Padma Filling Station is using its rough

materials from his particular suppliers. A segment of the suppliers are neighborhood. Nearby

their very own age, they are moreover redistributing for a part of their things. They are keeping a

mind the idea of the things from redistributing and using their very own picture name. Padma

Filling Station pursues the old model to hold up until the month's end or quarter to move

production and supply dependent on shipments and deals. We prescribe the new model which

calls for progressively constant, unique activity the board acclimations to quickly react to market

changes. This can limit or even dispose of stuns over the supply arrange. The outcomes

incorporate better deceivability; upgraded coordinated effort over the worth chain, including

dependable and unsurprising sourcing and supply, producing, transportation, warehousing, and

appropriation; and quickened basic leadership with better investigation and backing.

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Diagram: Facility layout structure of POCL.

In the product layout system of POCL, 8 customers can be delivered petrol simultaneously. The

main office is responsible for supervision of all the departments in operations. A customer does

not have any direct involvement with the head office while making a purchase. Firstly, they have

to enter the facility from the entrance. Upon entering, they might have to encounter a quene of

customers who are prepared to fill petrol into their automobiles. The quene size depends on the

amount of petrol each customer requires. Higher the amount of the petrol filling, higher the time

it takes for a customer to be served. Then the customer has to reach a pump in order to be served.

One employee is assigned to every pump in order to manually inject oil into vehicles of the

customers. After filling up their petrol tanks, the customers have to reach the payment collection

section to issue their payment depending on the amount of petrol they have purchased. After the

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payment gets processed, the customers receive a receipt for the payment. The receipt is later

shown to the security person before making the exit. This simple process always repeats in this

layout system.

Quality control Issue

Padma Oil Company is always care about customers so that they can survive and rule over the

monopoly to take back the leadership in this industry so they have some unique technique to

handle it

 Customer service at the point

 Never settlement with the service like gas oil fuel for car

 Necessary changes they create and round in a week they clean their surroundings for

green eco system

 They extract oil where from ground and refinery they check this double in a week

 Service they provide in this field also have some impact

 Continuous improvement for their entire work

 Lastly for their profit margin they can ensure better environment and security for

customer.

Analysis for Demand Forecasting

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For this Filling station there is actually scope of demand and forecasting so that they can know

the variables because market is now changing day by day so customer have switch fuel from old

days oil to gas called LPG gas in their car.

For the techniques the use for forecasting we assume that is judgmental forecasting as well as

they run business, they must have idea in these field particularly for demand

 Upcoming Demand

 Profit

 Net realizable Income

 Invest

 Stock in the market

 Salary implication

 Labor and skill worker

 Pump and machinery process

 Fluctuation of loss and income

 Serving and Waiting line Issue

 Moral Values

 Economic Growth

 Filling station Modernized equipment and render service

Operational Problem

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During our observation many of the cases and problem occur during the operational movement

and functional basic work. So, they have some lacking which will if not reconcile than it would

be burden and also not ecofriendly most of all they have some obsolete mind set to do their

regular work. We have now shown our personal observation opinion and also have to show how

they overcome this sort of obstacles.

 Waiting line approach when in the filling station too many vehicles move around to fill

up their car gas or petrol huge queue and also congestion arise, they do not have much

space to arrange those cars to handle also these car line cross their border to main road

this

 Not enough petroleum pump to serve We also observed that not enough gas pump or oil

or petrol box to serve more car to generate profit, only two or three in the station.

 Manual cash collection billing system This is the time of modernization so if they

manually keep their record it will be more time consuming, and serve lesser vehicle

which impact on revenue

 Customer service quality is even lower Washroom facility is demoralizing specially for

women,

 Rescue from danger in severe situation element is low This is the biggest safety security

issue zero tolerance should be approach but they have lower safety tool for survival, this

is so much alarming.

Recommendation for Improvements

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Padma Filling Station is a popular filling station among the competitor group, they have some

lacking in business but despite being some drawbacks they generate very handsome amount of

revenue in business. Our recommendation is that this industry has going concern organization so

it must have some good implication in business and with this modernized world they have some

plan and projection so that they can keep revenue up and cut down cost. Here has some possible

solution which can help Padma Filling Station to recover loss and improve quality also increase

revenue at time.

 Digital billing software: Rather than manually done the functional work for work

optimization and faster the operation they can use computer

 Electronic cash or plastic card usage: Manual in cash bill receive as well as they can

start plastic card swipe system so that swiftly money transfer to the bank and lesser risk,

because for upcoming future it must be happen.

 Handle the long queue: In case of pick hour like office hour in Bangladesh it will be after

8 am and in the evening after 7 pm, they can serve the car by dividing in a lot system,

increase their petrol, gas or oil pump machine so that driven fasten up work.

 For entertainment and revenue open new shop beside station: When fill the car it will be

dangerous for sitting in car so customer willing to buy some food item if there is some

fast food shop.

 Trained up their employee how to be patience in some serious cases or how to be humble

to approach customers

Appendix

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 Bangladesh Petroleum Corporation (BPC)

 Jamuna Oil Company Limited (JOCL)

 Meghna Petroleum Limited (MPL)

 Eastern Refinery Limited (ERL)

 LP Gas Limited

 Dhaka Stock Exchange Ltd

 Chittagong Stock Exchange

CONTACT US
Padma Oil Company Limited, Padma Bhaban, Strand Road, Chattogram, Bangladesh
Phone: +88 031 614235-7
Fax: +88 031 618312
Email: info@pocl.gov.bd
Web: http://pocl.gov.bd
DHAKA OFFICE
7-9 Karwan Bazar, BTMC Bhaban (10th Floor), Dhaka-1215
Phone: +8802 55012261 - 55012264, +8802 55012265 - 55012277
Fax: +8802 55012278 - 55012280
[ CITATION Pad19 \l 1033 ]

Filling Station Management Software in Bangladesh

Gas Filling Station & Petrol Pump management software in Bangladesh with flexibility to run
filling station with business complexities.

 Fully scalable end-to-end software automation solution for filling service stations. The software
is designed for petrol pump and fuel retailers in Bangladesh for flexible and simple filling station
management solution.
[ CITATION Oil \l 1033 ]

Analysis and Scheduling of Maintenance Operations for a Chain of Gas Stations

Mehmet Savsar

Kuwait University, College of Engineering and Petroleum, P.O. Box 5969, 13060 Safat, Kuwait

Received 6 November 2012; Revised 2 February 2013; Accepted 3 February 2013

Academic Editor: Anis Chelbi

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[ CITATION Hin \l 1033 ]

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