• Flexible planning at Shell Retail

As the world’s number one mobility retailer, Shell Retail is processing 11 billion transactions a year. Operating across the world, the ability to replan is crucial if market conditions put pressure on the original plans. Oracle PBCS enables the flexibility Shell Retail needs for its modeling and planning processes.

By Danielle Gruijs, October 2020

Flexible planning at Shell Retail

“Understanding our costs globally is important to us,” says Mark Williams, Global Enablement Manager Retail at Shell. “It helps us to form our strategic decisions, such as where do we want to operate and in which growth market we want to invest.”

Shell Retail is serving 30 million customers a day across 44,000 sites in more than 75 countries. The global company operates four retail models – each one selected to optimise delivery within a specific geographical area. These retail models range from retailers and dealers to wholesalers and licensees.

“Our goal was to kill the spreadsheets and get everything into one tool. Also, we wanted to be able to benchmark internally.”

Improving the modeling and planning process with Oracle PBCS

To facilitate the understanding of costs, the company decided to improve its modeling and planning process. “We were using a lot of manual Excel models with formulas and macros, without a real understanding of how these macros were running. Often, the spreadsheets would be filled, and the outcome taken without validation. This led to errors and incorrect allocations to our dealers. We noticed that we were wasting money and were unable to recover it,” continues Mark. “Our goal was to kill the spreadsheets and get everything into one tool. Also, we wanted to be able to benchmark internally. Our modeling and planning tool will be used in over 20 markets, giving us a good sample size to identify a good cost structure model.”

After considering various options, Shell Retail selected Oracle PBCS (Planning and Budgeting Cloud Service) for its modeling and planning processes. “During a round of RFI’s (Request for Information), Oracle ticked the most boxes for us. We were looking for something that could manage our retailers’ detailed allocation and would give us possibilities for analysis,” says Mark. “Cost was a key consideration for us as well, Oracle fitted our budget requirements.”

The ability to replan

Another key requirement was the ability to replan. With so many sites around the world, being able to replan if market conditions change is crucial for Shell Retail. “We wanted the solution to facilitate realtime replans any time in any given week or month,” says Mark.

“The flexibility and robustness of Oracle PBCS enable quick replans if market conditions put pressure on the original plans,” says Stephan de Wit. As Performance Management consultant at Finext, Stephan was closely involved in the modeling of the new planning processes.

From the start, it was clear that the model would require major adjustments to support Shell Retail’s demands. “Part of our problem is our complexity. There’s not a planning solution in the market that manages our hybrid business model, which is not completely franchised, but not completely managed either. We use 4 core operating models, with a variation within each of these 4. After all, operating in Pakistan and China demands a different approach than operating in the United Kingdom or the Netherlands,” states Mark. “Working through this variation required additional flexibility in our models.” “Modeling a global integrated planning solution – with 24/7 replan functionalities for different time zones, cultures, and legal output -required serious capabilities. We succeeded by using our experience and being flexibel,” says Stephan.

Reducing costs while broadening portfolio

As for many companies, the energy transition plays a role for Shell Retail as well. “Our main challenge is keeping ourselves relevant during the energy transition. We want to broaden our portfolio and introduce new fuelling options, in a way that constantly delights our customers,” says Mark.

The new modeling and planning processes support this goal. “We aim to be thought leaders in new energy and to change our fuel mix to include biofuels, electricity, and hydrogen. Taking that into consideration, we want to reduce costs and look at our operational processes. Really understanding our business models is essential for continued growth.”

Global roll-out of Oracle PBCS

Implementing Oracle PBCS in so many countries across the world demands careful project planning and the ability to adapt quickly to changes. As Mark puts it: “We’ve had to make many design choices: how to create the data, how to keep the information locked down from market to market, how to design the models. Together with Finext, we’ve worked through these choices as a team.”

Mark is enthusiastic about Finext as modeling and implementation partner for the global roll out: “As a niche player, Finext is quick and agile. I liked the fact that Finext is not tied to any vendor, which means they can give independent advice. They’ve helped guide and steer us.”

“Having tools and processes is important, but it’s all about the right team of people to support you in that.”

The first results are very positive. “We’ve implemented 17 markets now and have seen a reduction in the business plan replan cycle time. The solution is nice and straightforward, giving our retailers control of their own businesses. For instance, due to changing market conditions, 1 market had to do 14 replans in 3 weeks. It’s great that the tool can support this, as being able to quickly replan helps our retailers to correct costs, identify possibilities for cost reductions and overall stay on plan.”

Key for growth

Asked for advice for peer companies starting a global roll-out, Mark says: “Think about where you want to go with the project over time. The project on its own is good but integrating it with all the other systems is key for growth. And finally, having tools and processes is important, but it’s all about the right team of people to support you in that.”

Planning, Budgeting & Forecasting Industry Oracle Planning & Budgeting Cloud Service – PBCS