Many individuals have contributed in completion of
this report .We are especially thankful to Sales Executive Pakistan State Oil Mr. Abdul Rahman for his precious time
and help. He provided us with the knowledge of existing sales system of PSO.
We are also thankful to our reviewers: Mansoor Ur Rehman, and Farooq Ahmad for their review &
guideline regarding sales systems of different organizations. We also recognize
the constructive feedback from Kamran
javaid. Naval university
This report would not have been possible
without our parents encouragement. Very Special thanks to our parents for
their love, affection, encouragement, and help.
Authors
Study of System Analysis and Design course has two
aspects: Theoretical and practical. All that we have studied in class room is
theoretical; as we have read text on different phases and techniques used for
system analysis and design.
For
the practical implementation of our knowledge we have analyzed the sales system
of Pakistan State Oil Multan division-for sales of petrol, diesel, Kerosene,
furnace oil and other lubricants. We have visited DM office PSO Multan. DM
office is covering the sales of a large area i.e. southern
We have implemented
techniques that we have read during course study. Sales system in PSO is
conventional, however they are not facing problems but in near feature they
might need a computerized system, as computerization of any organization comes
with several advantages like cost saving etc.
Authors
Contents
Introduction
1. Introduction to
oil
marketing companies in
2.
Introduction to
PSO company LTD
3.
Company overview
...
4.
Objectives
5.
Financial performance
...
6.
Market share of Company
7.
Infrastructure
..
8.
Products of PSO
.
9.
Information about
Sales office
Existing System
1.
Product requisition and
Sales invoice slip
..
2.
Context level diagram
.
3.
Sales categories of PSO
4.
Problem Definition
...
5.
Detailed analysis of
existing system
.
6.
Alternatives
...
7.
feasibility study
....
8.
Cost/Benefit Analysis
.
Proposed System
1.
Conventional file system .vs.
Computerized
database system
2.
Data flow diagram of
Proposed
system
..
3.
Definition of DFD
4.
Master files
5.
Customer Master file
...
6.
Product Master file
..
7.
Cartage contractor Master file
.
8.
Advantages of our proposed
System
...
9.
Users work with computer
...
10. Menus
11. Conclusion
References
are at the end.
There
are four major petroleum and lubricants marketing companies operating in
These companies are:
1. Pakistan Sate Oil
Company Limited.
2. Shell Pakistan Limited.
3. Caltex Pakistan Limited.
4. Total Atlas Lubricants.
(Total Parco
A brief introduction of
these four companies in account of
Pakistan State oil Company Limited
The Company has the largest retail network in the country and the
most extensive terminal and depot network. The Company is focused on
efficiently meeting the energy requirements of
PSO is committed to being the pre-eminent marketer of petroleum products and
services to its customers, and achieving this goal while maintaining high
levels of efficiency and profitability. As such, it has contributed greatly
over the years towards the development of the petroleum products infrastructure
in
Company divisions are as follows:
v
Retail
v Industrial Consumer
v Aviation & Marine
v Lubricants & Agency
trade
SHELL
Pakistan Limited
It all began in 1899 when the company initiated its operations with the
import of kerosene from
Primarily involved in upstream- oil and gas exploration and production;
and downstream activities - refining, transportation and marketing of petroleum
products; the Shell Group of Companies has interests that include
petrochemicals, coals and metals as well.
The Royal Dutch Company and Shell Transport & Trading Company merged
their interests in 1907 and together they formed one of the worlds largest
enterprises. Operating in over a 100 countries and employing more than 100,000
people, Shell is also the largest retailer of automotive fuels and lubricants
in the world.
The businesses of shell in
1. Commercial road transport.
2.
Industries.
3.
Lubricants.
CALTEX Pakistan
Limited
Caltex Petroleum Corporation, of
which Caltex Oil (Pakistan) Limited
is a part, is a major International Oil Company, created in 1936 as a joint
venture between two major US oil companies, Chevron Corporation and Texaco Inc.
It has been called the most successful joint venture in corporate history.
Caltex has
operated in the sub-continent since 1938 and established its subsidiary Caltex Oil (
Caltex is a
diverse organization operating Refineries, Refined Oil Terminals, Lube Blending
Plants, LPG / storage / marketing facilities and retail outlets. Caltex companies refine, manufacture
and market a wide range of petroleum products in
Refining and Manufacturing in
·
Pakistan
Refinery Ltd.,
·
Lube
oil blending plant,
Caltex Oil (
PSO
company Limited
Company overview: Established in 1976, PSO was formed through the
amalgamation of three state controlled oil marketing and storage companies,
Pakistan National Oil ("PNO"), Premier Oil Company Limited
("POCL") and State Oil Company Limited ("SOCL"), formerly
ESSO Undertakings. PSO is currently the largest OMC in
Objectives:
The Company is focused on
efficiently meeting the energy requirements of
PSO is committed to being the pre-eminent marketer of petroleum products and
services to its customers, and achieving this goal while maintaining high
levels of efficiency and profitability. As such, it has contributed greatly
over the years towards the development of the petroleum products infrastructure
in
The Company recently embarked upon an extensive program of restructuring,
rationalizing its network of retail outlets, improving its marketing image
through a nation-wide initiative to refurbish and re-brand key retail stations,
and further improving efficiencies by streamlining its organizational
structure.
Strong
financial performance:
PSO
has an impressive record of profitable financial performance. Revenues have
grown at a CAGR of 13.8% since 1996 and earnings before interest, depreciation
and amortization ("EBITDA") has grown at a CAGR of 10.6% over the
same period. For the fiscal year ended June 2001, PSO generated sales volume of
12.6 million tons with sales revenue in excess of Rs. 169 billion (US$ 2.8
billion) and after tax profits of Rs. 2.25 billion (US$ 37.5 million). PSO is
the third largest publicly listed company in
Market share: A brief description of each of the Company's Divisions follows:
Retail: PSO is the market leader in the Retail sector in Pakistan with
approximately 40% market share in motor gasoline and over 60% in diesel oil.
PSO owes this competitive position in part to its extensive dealer financed
retail network of more than 3,750 outlets, which is by far the largest in the
country. In the last two years the Company has embarked on a scheme of
rationalization, closing down unprofitable stations, and upgrading and
re-branding others.
Industrial Consumer:
The
industrial consumer division enjoys high volumes and generates steady
profitability and cash flows. The division has long-term contracts in place with
independent power producers ("IPPs") in
Aviation & Marine:
PSO is the market
leader in aviation fuels in
Lubricants & Agency trade:
There are approximately 600 agents around the country with whom PSO has
agreements for the sale of petroleum products including furnace oil,
light-diesel oil, kerosene and lubricants. PSO sells its own brand of
lubricants and is also the exclusive distributor for Castrol lubricants in
Structural reforms underway:
In recent years, the GOP has appointed senior management personnel from
the private sector to run PSO. The new management team initiated a structural
reform program for the Company, upgrading its retail outlets and concentrating
increasingly on high margin products. In FY2000 PSO incurred Rs 967 million
(US$18.6 million) of capital expenditure, primarily on the Company's New Vision
retail development program. PSO is now moving towards a marketing strategy
which is similar to that employed by the multinational OMCs present in
The new management team also completed a staff rationalization program through
the implementation of a voluntary redundancy scheme to reduce staff numbers,
improve competitiveness and bring it more in line with the other OMCs in
Infrastructure:
PSO owns key import terminals and has an
overwhelming advantage in terms of the storage capacity and geographical
coverage of its depot network.
Terminals & depots:
PSO has
significantly greater terminal capacity than its competitors, particularly at
the strategic import points. The Company's nationwide storage capacity is about
758 thousand metric tons. Of this, about 501 thousand metric tons is located at
the major import points which include Keamari, Zulfiqarabad oil terminal and
Pipri Marshalling Yard.
Financial Highlights
|
|
FY 96 |
FY 97 |
FY 98 |
FY 99 |
FY 00 |
FY 01 |
|
|
80,563 |
109,508 |
121,345 |
115,636 |
135,040 |
169,726 |
|
Marketing
& Administrative Expenses |
1,000 |
1,143 |
1,155 |
1,153 |
1,452 |
1,671 |
|
Profit
before Tax |
2,563 |
3,746 |
2,826 |
3,356 |
3,581 |
3,451 |
|
Profit
after Tax |
1,498 |
2,046 |
1,846 |
2,671 |
2,231 |
2,251 |
|
Capital
Expenditure |
921 |
821 |
408 |
397 |
967 |
1,245 |
|
Shareholder's
Equity |
4,149 |
5,533 |
6,586 |
8,184 |
8,986 |
9,808 |
|
No. of
Shares outstanding |
64 |
83 |
99 |
119 |
143 |
143 |
|
Break-up
Value (Rest / share) |
65 |
67 |
66 |
69 |
63 |
69 |
|
Cash
Dividend |
382 |
662 |
794 |
1,072 |
1,429 |
1,429 |
|
Dividend Per
Share (Rest.) |
6 |
8 |
8 |
9 |
10 |
10 |
|
Bonus
Share (%) |
30 |
20 |
20 |
20 |
-- |
-- |
|
|
11.6 |
11.9 |
12.7 |
12.1 |
12.7 |
12.60 |
Products of PSO
|
PSO AUTOMOTIVE OILS |
|
Engine
Oils |
|
Gear
/ Transmission Fluids |
|
Brake
Fluids |
|
Automotive
Greases |
|
|
|
|
|
PSO Industrial OILS |
|
Circulating
Oils |
|
Spindle
Oils |
|
Hydraulic
Oils |
|
Turbine
Oils |
|
Gear
Oils |
|
Refrigeration
Oils |
|
Cylinder
Oils |
|
Asphaltic
Oils |
|
Heat
Transfer Oils |
|
Metal
Working Fluids |
|
Slide
Way Oils
|
|
Process
Oils |
|
Transformer
Oils |
|
Industrial
Greases |
|
|
|
|
|
Castrol Automotive OILS |
|
Engine
Oils |
|
Gear/Transmition
Fluids |
|
Brake
Fluids |
|
Automotive
Greases |
|
|
|
|
|
Castrol Industrial Oils |
|
Circulating
Oils |
|
Hydraulic
Oils |
|
Turbine
Oils |
|
Gears
Oils |
|
Refrigeration
Oils |
|
Compressor
Oils |
|
Cylinder
Oils |
|
Asphaltic
Oils |
|
Heat
Transfer Oils |
|
Metal
Working Fluids |
|
Slide
Way Oils
|
|
Industrial
Greases |
|
|
|
|
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){kind=link}
){kind=link}
|
Industrial Chemicals |
|
Industrial
Chemicals
|
|
|
|
|
|
Fuel Oils |
|
Fuel
Oils |
|
|
General information about DM office PSO
Being the largest oil marketing
company of Pakistan PSO has a large no. of products that they are selling
throughout the country. But we will discuss the sales of Diesel, motor
-gasoline (petrol), LSFO (low sulphur furnace oil), HSFO (high sulphur furnace
oil), and Lubricants.
Talking
about sales procedures PSO has categorized the above mentioned products into
three major categories:
o
Consumer
o
Retail
o
Lubricants
We will consider the sales through DM office
DM
office covers a large area that includes Khanewal, Vehari, D.G.Khan, Layyah,
EXISTING SALES SYSTEM
As
system is defined as a set of interrelated components that work together to perform
a particular task or to fulfill a specific purpose within the time frame an
allotted budget. Existing sales system in PSO is conventional, means no
computer involved all work is done manually by clerical staff. Any organization
or individual want to purchase any of the products first come to DM office and
fill a requisition form, after filling the requisition form customers have to
pay the price of product through bank draft. The bank draft is then attached
with product requisition form and supplied to storage depot and from there
product is collected along with sales invoice.
There
are four copies of each of the:
o
Product requisition form
o
Sales invoice slip.
A sample Consumer Product
Requisition Form
Sales invoice/Customer Order
Slip
Context level diagram of
existing system
Five
entities are involved in this system:
o
Head office
o
DM office
o
Customer
o
Storage Depot
o
Bank
CONTEXT Level Diagram of Existing sales
Processes numbered in
context level diagrams are:
1. Customer
request for product.
2. Customer
gets a requisition form DM office.
3. Customer
status is checked.
4. Approval
of sale and discount allowances etc.
5. Request
after approval from head office.
6. Requisition form is given to customer.
7. Customer
pays money in the bank.
8. Bank
generates a draft and gives it to customer.
9. requisition
form along with bank draft is checked at depot
10.
Product
is delivered to customer.
These
numbered arrows are only for demonstration purposes some other steps also
involves in this process, however these arrows do not represent the sequence of
steps.
As we have to
discuss the sales system with respect of consumer, retail, and lubricants. Existing
system is almost similar for these three, except of the requisition forms and
sales slips these are little different from each other. Let us briefly discuss
these three from sales point of view.
Consumers
Consumers mostly buy HSFO,
LSFO and other industrial lubricants. Major consumers in this region are IPPs
(international power projects)like AES(American electric Supplies),ROUSH Power
plant, KAPCO etc and all other industries like sugar mills and textiles etc are
also purchasing from PSO. Consumers buy in bulk quantity.
Retail
Outlets with the name of Vision and
other petrol pumps selling PSO petrochemicals deals through retail department.
Some other customers who buy a little quantity also deal through the retail
department.
Lubricants
PSO is Marketing British
manufactured CASTROL along with PSOs own lubricants, there is a separate
department for lubricants, the divisional sales department of lubricants is
situated in
Problem Definition
As
we already have discussed that the sales system of PSO is conventional and in
most of cases manual work is costly as there is a series of duplicate tasks and
many other problems like data security, integrity may also occur. There is no
information system available and PSO is a centralized organization and local
offices have to consult with the head office for every transaction if transaction
is slightly different from company policy. Sales offices are located at a
reasonable distance from storage locations communication is also required as
sales office should have the current knowledge about volume and quantity of
product available at storage location. In existing system sales officer has to
go to storage location and physically measure the product. Another problem is
direct communication with the customer; customers have to come to office for
the product requisition.
Scope of Problem
Major
problem is of communication among different entities and due to this
communication problem many other problems can also occur. For example if sales
office fills a requisition form and quantity specified over this form is not
available at storage depot, this means that customer order will not be fulfill
and that will be affect the company reputation. Another problem is that
customer asks for discount and the decision is to be taken in head office by
top management, manual communication i.e. dispatching of documents through
courier services might waste time and can also lose the customer as well.
Occurrence of one transaction effects almost all departments of organization,
and records of all departments are needed to be update, in case of conventional
file processing this is a time consuming
processing whereas in computerized database processing all related documents
can be updated at once with a single click.
Detailed Analysis of
Existing System With
Problem point of view
We
already have briefly discussed the existing system let us now check the system
from problem point of view mentioned above.
In current sales
system the documents of vital importance are product requisition forms and
sales invoices. From sales office product requisition form is issued to
customer there are four copies of this form with different colors;
White
copy is issued to customer, he will hand it over to depot in-charge. Duplicate
pink color for CPM. Triplicate blue color is for credit control section and
quadruplicate yellow is for sales office. Same in case of sales invoices
although their copies are not colored but a number of copies generated is
greater than that of product requisition form as other parties are also
involved.
Different
records are maintained for existing system like customer, product, storage
depot, cartage contractor, payment particulars etc. Due to conventional file
processing system that required a lot of labor and time as all these records
are maintained at different places and ultimately these records are stored in
head office. Performance reports cannot generate quickly to measure the
product, sales force performance, daily sales or customer status therefore
management can not review the performances. Due to conventional system the
sales office cannot have the current information about the storage depot and
also cannot communicate with management affectively. This might result in huge
loss as this is age of competition,
many
multinational companies like shell, caltex are now in market.
What are the Alternatives?
One
short and precise answer of this question is that the system should be
computerized and different offices at different locations and storage depots
are connected with each other as well as with the head office by mean of some
wide area network (WAN). That is only possible when all offices and systems are
computerized. This computerization is solution of many problems like integrity
and security. As database maintained by computers is centralized and all other
offices access the data according to their privilege authority assigned by the
database administrator means no one access the data more then he or she is
authorized of. Whole database can be updated with a simple database application
due to the integrity. With a change in any particular of any of entities whole
database will be updated automatically. Although existing sales system of PSO
Multan region is not creating problems but it is inefficient. We have said that
system should be computerized but before computerizing we should measure the
feasibility if it is worth enough to computerize the system. You have to spend
a handsome amount of money while converting a conventional system to a
computerized system that includes the cost of hardware and software and also
the cost of expertise of system analysts, designer, builder, developer and
consultant therefore a careful feasibility study is required.
Why Feasibility study?
Why
you are needed to measure the feasibility of proposal because you have to work
within a limited budget, if the best solution is not affordable than the next
best solution may be affordable. For example if analyst purpose that give a
laptop computer to each member of sales force we are talking about
Cost/benefit analysis as name shows is the analysis of productivity of
cost that is incurred on purchase of some services or products means the
product or service is worth the money that has spent on its purchase. As we
have studied that giving each sales force member a laptop is not feasible with
respect to benefits that can be obtained from it. As we have a series of
alternatives and next best alternative is that each sales force member is
provided with a cellular phone that is more economical and best serve
the organization purpose.
Advantages of Cost/Benefit
Analysis
o
Cost/benefit analysis enables us to work
effectively within our budget more effectively.
o
With the help of cost/benefit analysis we are
able to select those alternatives which also meet the future needs of
organization.
o
Cost/benefit analysis enables us to select the
best alternative of maximum efficiency at minimum possible cost.
o
Cost/benefit analysis left organization with
reasonable savings that can be used for some other productive purposes.
Conventional file system .Vs. Computerized Database System
Many advantages of
computerized system over conventional file system are already discussed in the previous
part of report. Let us now discuss the database system. As in conventional file
system data is scattered at various places and needed information cannot
accessed quickly when needed this problem is overcome by database of system.
A
database is a collection of interrelated files (tables) and a file is a
collection of homogeneous records.
New System Will Work Like
That
From these diagrams we can
easily understand the built of database different files are connected to an
information system locally and these information systems are then connected to
a consolidated, integrated, and centralized database.
Above drawn model is best for sales
system of PSO locally as well as nationally. Regional offices are computerized
perform their specified tasks and where needed can also connect to the
centralized database of Head office PSO. All regional offices can connected to
database by means of WAN when these offices are connected to centralized
database they can keep in contact with each other.
DATA FLOW DIAGRAM of Proposed System:
A Little Definition of Diagram drawn above
Customer
enters in office first contact to front desk officer ,front desk officer then
refers customer to respective sales executive, sales executive send information to computer section, computer
section checks the order and check customer and product status and also update the company main office acc.
Computer section then provides sales executive with approval or rejection of
order. sales executive then fill a requisition form and give it to customer.
The payment mode is through bank draft customer made payment and gets draft
from bank main office database can automatically updated through any simple
database application. Customer then goes to storage locations and provides
depot in charge with purchase requisition and bank draft, depot in charge send
this information to computer section; computer section checks the information
from main office. And in the end product is delivered through cartage contractor.
Different
files are needed to produce and maintain. Many temporary files are needed for
storage of temporary data in above discussed sales system but permanent and
main files are given below:
o
Customer master file
o
Product master file
o
Cartage contractor master file
Brief Discussion of Master
Files
Let
us discuss the structure and organization of these files one by one
Customer Master file
customer
master file should be designed and constructed such that it provides best
results with minimum storage space. Related fields should be defined as well
but master files are constructed in such manner that you dont need to modify
the structure of file frequently means key information should stored in master
file and information of temporary usage should be stored in some temporary
files.
Product Master File
As
we already have discussed the sales system and distribution channel for all
products in the
Cartage Contractor Master
File
Information about cartage contractor
is needed to stored because these contractors are company appointed and are
bounded in a contract for the transportation of products. Once order is given
the cartage contractor of nearest storage location will be informed or the
shipment of product.
Advantages of proposed system
There
are many advantages of our purposed system over existing system major
advantages are:
o
Data Security.
o
Data accuracy.
o
Data integrity and consistency.
o
Communication.
o
Increased speed of processing.
o
More efficient performance.
o
Current financial position of company can
easily assessed.
o
Quick report generation.
o
Economical in future
o
Due to interactive menu the database
application is user friendly hence easy to use.
Users work with Computers
Normally
it has seen that people resist change of system and usually dont like
computerized systems as they considered it as much difficult, therefore steps
should be taken to make system more user friendly. For this purpose different
sort of programs are generated but the thing of vital importance is menu. Two
types of menus are created.
1. Interactive menus
interactive menus
enables user to interact with database programs these menu programs are use
full for entering and display various types of information regarding customer,
product cartage contractor and financial records of the company
A Sample interactive menu
|
PSO Sales Office
|
|
|
A sample Batch Menu
|
PSO
Sales Office
|
As you have seen that there are different
buttons in this menu a particular form will appear when you click on first button
of interactive menu and by clicking on other button of interactive menu you
will have an output screen whereas the batch menu print the different
information.
Conclusion
of Report:
we have
investigated the system, information is gathered by interviewing sales
executive, surveying the retail outlets and through internet found the problem,
analyze the problem, perform a cost and benefit analysis and proposed that the
sales system should be computerized as computerized approach is best in current
situation and also very use full for future
We have interviewed: Mr. Abdul Rahman
Sales Executive
Pakistan State Oil Co. LTD.
DM Office
News letter: Vision
Websites: www.psocl.com