Pirates Of The Silverland (Oil Piracy)

569 words - 3 pages

Problem statement
Quality and quantity of CPO delivered
The root problem encountered in this case is the quality and quantity of the CPO delivered. Palm Haul Sdn Bhd’s (PHSB) major client Oilene Refineries Sdn Bhd is unhappy with their service mainly because the CPO delivered is either contaminated or short delivered.
The CPO delivered to Oilene is contaminated with either sludge or water. This is due to unethical behavior of tanker drivers who involve in oil piracy by siphoning the CPO and selling them to syndicates. The CPO that is being siphoned is replaced with either water or sludge so the end user will not realize the theft. Further, this situation prevailed as the oil piracy during the time period of 2009 was robust with a record of approximately RM 325 million of CPO production lost annually. This hence ...view middle of the document...

This has incurred a high cost in the operation of PHSB as they have to compensate for the amount that is being short delivered.
On a bigger picture, Malaysia being one of the largest oil palm exporter will be affected if this situation persist thus give the competitive advantage over their rival Indonesia and further put Malaysia’s reputation at stake.
It is recommended that PHSB install Fleet Management System (FMS). FMS is a device that tracks the movement of vehicle through GPS satellite. This device track the route at which the vehicle travel at anytime and anywhere with in-depth traffic reporting, satellite view and etc. The system also marks the date and time the tanker enter a hot spot where CPO siphoning was rampant. This enable the company to easily monitor their driver’s movement and thus reduce the risk of CPO siphoning. Besides, the company will also be able to benefit from reducing their transportation cost through less fuel consumption and vehicle operating expenses because drivers’ will be aware that they are being monitored and thus will not dare or risk involving in illegal activities. This on the other hand will also increase efficiency and productivity of the company as well as drivers.
This system is also an added advantage as the company will be able to meet the consignor’s demand by temperature management of the CPO. Siphoning activity could compromise to the quality of CPO delivered as it requires a particular temperature condition to preserve its freshness. Since siphoning activity could be overcome through this system, the quality of CPO is therefore maintained.
Besides, FMS also monitor excess speed. This allows drivers to enforce a safe driving techniques as well as reduce the operation cost by not having to pay to the summons for speeding. This also indirectly improve the life of vehicle.

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