P E T RO N A S LU B R I C A N T S I N T E R N AT I O N A L :
Shaping the future supply chain
PETRONAS LUBRICANTS
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Redefining the supply chain, shaping the future Through an aggressive supply chain transformation, Petronas Lubricants International gears up for continued growth of its lubricants business.
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I
n any business, when
a range of high-quality automotive and
stripped down to its
industrial lubricants products in over 100
core, the concept is
markets worldwide.
simple – it’s a case of making a product and being able to deliver
pliers of lubricants, the company has
that product to the customer.
ambitions to continue to grow.
This makes the supply chain
To do so, PLI looked internally at how it can
function of a business a key com-
achieve this vision by generating greater effi-
ponent, and over recent years it
ciencies and looked specifically at redefining
has become a function that is
its supply chain.
spearheading the future growth in many organisations. This is most certainly the case 04
Currently within the top 10 leading sup-
“We’re spending close to 82% of our total outlay as a business on the supply chain,” says Phil
for Petronas Lubricants Interna-
James, Head of Global
tional (PLI), manufacturers of
Supply Chain.
“ WE WANT TO BE SEEN EVEN MORE AS A TECHNOLOGY DRIVEN COMPANY BECAUSE THAT’S THE DIFFERENTIATOR” — Phil James, Head of Global Supply Chain
“It’s a great responsibility to have so we have to be careful how we spend and more importantly, how efficiently we spend.” With a background in chemical engineering, James has worked extensively in refineries and chemicals plants as well as in the corporate centre. James first entered the lubricants supply chain world with BP Lubricants and got a real taste for it. “It’s a business that can really get under your skin” he says. After 7 years with BP Castrol James left to return to refining with BP. “It just wasn’t the same,” he shared. “I found myself
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missing the lubricants business terribly. So, when after a few years I was asked to head up PLI’s supply chain function I had to check myself not to bite their hand off!” Now he can call upon his extensive experience of working within a large multinational company and, crucially, how the supply chain can support and guide and impact the success of PLI’s vision. “Having worked for BP, it really opened my eyes to how a multinational company operates. It gave me first-hand experience in seeing the procurement of raw materials right through the entire supply chain to cus08
tomer delivery,” he says. “What I believe is an important learning is the need for a company of the size and scale of PLI to be just as fast and nimble as other bigger players. That’s what drives us here at PLI.” As the company looks to generate efficiencies across its supply chain to operate more effectively, James believes that there needs to be the basics of efficient and effective supply chain, and awareness of other opportunities to add value to the relationships that are being built. This, James feels, is key to the supply chain transformation so that, “customers get what they want, when they want it, when they ask for it,” he says.
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As among the 10 top lubricants providers in the world, James believes that the future of PLI will
collaborations that need not necessarily be centred around raw material or service. As with any journey or any transforma-
consist of supplier relationships
tion, there is a goal. For PLI, it is to grow
that are no longer defined by sale
and become among the Tier Two lubricants
and purchase, but relationships
player globally. James admits that trans-
that are much more collaborative.
forming the supply chain is only one of
“We’re looking beyond the
many pathways towards achieving this and
bases of traditional relation-
that the company must also do more to get
ships,” he says and are looking
to where it wants to be.
at areas for mutually beneficial
This is where the idea of thinking differently comes into play – not only is the company approaching the very nature of supply chain dif13
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“ TECHNOLOGY FORCES US TO TAKE SOME RISKS AND WORK WITH SOME SMALLER COMPANIES WHERE TECHNOLOGY MIGHT NOT YET BE PROVEN. IT’S AN IMPORTANT RISK FOR US TO TAKE BECAUSE WE’RE NOT GOING TO FIND THE SOLUTIONS ON OUR OWN.” — Phil James, Head of Global Supply Chain
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ferently, it is asking its suppliers and even its internal staff to look at supply chain in a newer and different dimension. This, James feels, is the only way in which the company can truly grow and prosper. “Changing the supply chain wasn’t enough,” he says. “It’s about challenging the status quo and drive innovation. And in so doing, changing how others, such as suppliers, customers and the like, see us.” This change starts internally. James is striving to create a much more collaborative ecosystem, connecting the buyers and the sellers and the technology people with the business to drive that innovation.
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This collaboration is almost a no brainer as the technology teams within PLI are often in contact with suppliers in the same way that the procurement and supply chain teams are. Couple that with the fact that the sales team are in constant contact with the technology and procurement teams, it makes sense to create a unified collaborative dialogue. “It’s been one of the major changes so far in this journey,” says James. “What it has done is enable a far greater mix of conversation. It has helped us create better ideas and greater possibilities as a company.” PLI embarked on this journey of change some years ago and the company can already point to areas in which this vision is starting to bear fruit. w w w. p l i - p e t r o n a s . c o m
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“ WHAT I BELIEVE IS AN IMPORTANT LEARNING IS THE NEED FOR A COMPANY OF THE SIZE AND SCALE OF PLI TO BE JUST AS FAST AND NIMBLE AS OTHER BIGGER PLAYERS. THAT’S WHAT DRIVES US HERE AT PLI.” — Phil James, Head of Global Supply Chain
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Through the changing of that buyerseller relationship, PLI has been able
lubricants space demanded by the
to restructure the way that contracts
OEMs.
are formulated with some suppliers,
Another area in which the supply
thus highlighting
chain transformation has shown proven
PLI’s commitment to its growth ambi-
success is in the collaborative relation-
tion, which in turn encourages a
ship with technology. Technology
change mindset in its suppliers.
continues to redefine industry sectors
Another example is the
all over the world and James share,
close collaboration with a PETRONAS
2018 is the Year of Technology for PLI.
refinery in Melaka, which resulted in
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port the evolution of the high quality
“We want to be seen even more as
the “decommoditising” of its high-
a technology driven company because
quality base oil production Etro, into a
that’s the differentiator,” he says.
higher specification Etro Plus. This
“Technology forces us to take some
has encouraged a mindset of continu-
risks and work with some smaller com-
ally redefining the capability of
panies where technology might not yet
Petronas’s base oil production to sup-
be proven. It's an important risk for us
to take because we're not going to find
to efficiency and effectiveness,” he
the solutions on our own.”
says. “But there will always be more to
This sentiment is highlighted in the
do as the bar continues to get higher.”
construction of a new Research and
“The future is going to be defined by
Technology centre in Turin, which adds
digital space and data. It’s going to be
to the company’s existing satellite R&D
less about looking back on what data
centre portfolio across Brazil, China
has told us but more about what
and Malaysia, for example.
insights and foresights we can gain
These centres represent Petronas’ commitment to technology and attract
about our business. “For us, it’s about being agile and
technology companies to work with
leveraging technology to connect our
PLI to innovate or create new products.
supply chains. We have to be ready
As PLI continues its transformational
today, for what tomorrow will bring.”
journey, James admits that it is a journey that will never truly end. As the
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industry evolves, so will PLI. “As at now, we are 85% on the route
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PETRONAS Lubricants international Business Division Level 26, Integra Tower 356, Jalan Tun Razak Kuala Lumpur | 50500 www.pli-petronas.com