Given the high price of diesel and lubricants nowadays, if you mention the name of any oil company it will more than likely solicit a grimace instead of a smile. It is thus FleetWatch decided to venture beyond the price barrier and look behind the scenes at a complex logistical pipeline which cannot fail to put BP-Castrol in a favourable light. Dave Scott reports.

South Africa consumed 366.5 million litres of oil and grease in 2007. This is according to reliable estimates supplied by Phillipa Dodds, Marketing Controller for Lubes-Africa at BP Castrol. A litre of oil has a specific gravity of around 0,850 so around 312 million tons – excluding the mass of the containers such as drums and cans – has to be transported annually within the SA Customs Union. 

The inbound, storage, outbound and distribution of mega-litres of oil is a logistical feat in which oilblending and packaging plant, Blendcor and Castrol’s national distribution hub play distinctive roles. BP and Shell account for nearly 50% of the SA lubricant market between themselves while Blendcor accounts for approximately 80% of all BP and Castrol lubricants distributed within South Africa, as well as the sub- Saharan Africa region. Blendcor is credited with manufacturing roughly half of sub-Saharan Africa's lubricants overall, which alone makes it bigger than all three combined of the competitor blending plants located at Island View in Durban harbour. 

Shell established the Blendcor plant in 1957, with BP assuming a 50% share in 1975. At the time, Blendcor served as a blending plant operated by, and supporting nearby SAPREF refinery. In 1992 Blendcor was set up as a separate company, with the directors and board members derived from oil giants, BP and Shell. A significant upgrade of the facility was conducted in 1996/7, and the facility gained further impetus when BP purchased Castrol in 2000 and consolidated its lubricants production at Blendcor. 

Craig Williams, BP's Area Supply Chain manager – Lubricants Africa, comments that “The Blendcor operation is among the top 20 biggest blending plants in the world, and certainly one of the largest in the southern hemisphere.” The company employs 150 staff, along with 35 core contractors and 90 key service providers, with the core blending/filling, grease and despatch units running on a two-shift basis around-the-clock on weekdays. 
 

Located at Island View near the Durban harbour, the Blendcor facility is co-owned by BP and Shell, and occupies some 52 000 m2 in its present form. Additionally, the Island View operation serves as a storage facility of immense proportions, with the refined base oils stored in 21 tanks that range in capacity from 500 000 to 4,6-million litres.  Custom-designed to suit BP's specific needs, the Hub was opened in 2006. Featuring 25 000 pallet positions, it was built on a 35 000 m2 site, with the warehouse itself covering some 12 730 m2.

The Hub is an automated warehouse employing the latest state-of-the art technology, allowing for the random storage of product in an optimised fashion, with barcode scanning and radio frequency links to all forklifts operating within the facility. This ensures that each and every product is scanned and tracked within the warehouse, and it's therefore possible to monitor the position and status of all of the products within the facility on a realtime basis. Even the traffic flow within the site is co-ordinated in a clockwise direction to optimise operational efficiency also further enhanced with an automated routing scheduling system.

Complex, massive in-bound logistics

Most of the base oils used in the blending process are received from the nearby SAPREF refinery via a 13 km pipeline. As with Blendcor, the SAPREF facility is a joint venture between BP and Shell, and is renowned as the largest crude oil refinery in southern Africa. Selected raw materials are also imported directly by ship to Blendcor, most notably the specialised additives used in the blending process, as well as part-synthetic and fully-synthetic oils. 

A benchmark feature of the Blendcor plant is its leading-edge technology, which incorporates a fully automated in-line blending process. This provides very accurate mixing of base oils and additives. According to Williams, "The core blending is driven by a sophisticated computercontrolled process, ensuring an extremely high level of metering precision that, in turn, leads to far greater final product consistency and quality compared to a manual procedure." In all, 18 grades of base oils and 700 different additives are required for the complex blending process used in the various BP and Castrol products manufactured locally, which includes automotive, industrial and marine lubricants. 

Note that lubricant additive formulations remain jealously guarded secrets that are not shared between Shell and BP – Blendcor is a blending plant that acts according to the requirements of each company. This means a can of oil is not a badge-engineered, generic product for marketing purposes – lubricants do actually differ! 

Blendcor is also a large manufacturer of grease, which is fairly unique among blending plants around the world. The grease products are designed for various applications, including the specialised rock drill products for the mining industry. 

Thereafter, the blended grades are stored in 75 finished-product tanks that range in capacity from 10 to 150-tons, before being packed for bulk delivery, in 210-litre drums and small packs that include 20-litre, 5-litre and 0,5-litre sizes. The packaging for the numerous product lines is sourced locally from 21 suppliers. 

Furthermore, an on-site laboratory conducts a variety of tests during production to ensure that the strict standards are maintained throughout. This includes in-process testing before filling, as well as batch tests before the final products are released. 

Quality remains a core focus, and Blendcor achieved the stringent automotive sector-related ISO/TS 16949 accreditation in 2002 for BP and Castrol. 

This testifies to its top-notch status by implementing quality management systems (QMS) for all business aspects, from planning through to measurement and process control in each facet of the procurement, production and supply chain. Additionally, Blendcor received an ISO 14001 qualification in March 2000, entrenching the company's world-class environmental management system by reducing waste, monitoring and controlling resources, and reducing site effluent and emissions. 

Outbound logistics – to the ‘Hub’ and then nationally

The outbound logistics involves the packaged product being dispatched by road transport to BP’s centralised national distribution centre in Riverhorse Valley, known as the Hub with 25 to 30 trucks leaving Blendcor for the Hub each day. 1 080 pallets are delivered to the Hub from the Blendcor plant with a typical stockholding comprising around 8-million litres of oil. Bulk finished product, as well as base oils are dispatched by road tankers or rail tank-cars to storage centres, or direct to high-capacity clients. 

The Hub serves as a fully integrated warehouse that co-ordinates and despatches all of BP and Castrol's packed products to its South African clients, as well as those further north in the sub-Saharan Africa region. One of SA's leading logistics service providers, Unitrans, operates the Hub as partner on BP's behalf. The warehouse runs on a 24/5 basis, with two shifts on rotation five days per week, and a staff complement of around 90 employees. 

When customer orders are received, the products are packed overnight, and the following day Unitrans  line-hauls the order by 32-ton superlink truck to the relevant cross-dock. Thereafter it is placed on a smaller vehicle, which then delivers the products directly to the client. The major advantage of this centralised process is that BP has one consolidated facility where all of the stock is held, and is able to service national customers in two to five days. This allows for greater coordination and improved efficiency. 

“With the Hub in place, we developed an entirely new route-tomarket strategy,” Williams says. “Instead of servicing each of our customers directly, we now cater for our smaller customers through appointed distributors across the country, and our major clients are serviced by cross-docks in all the  major centres, includingJohannesburg, Witbank, Polokwane, Bloemfontein, Port Elizabeth and Cape Town.” 
 

Overall, Blendcor has a product portfolio that spans 600 grades of lubricants and, at any one time, 1 750 stock-keeping units of various capacities. In 2007,  ts production volume reached 240-million litres, with a record target of 300-million litres set for 2008.

Safety Rules – OK! 

The Hub incorporates an integrated fire prevention system with tanks and pumps, linked to the local metro council emergency services. The facility is fully bunded, with the various areas of the warehouse built on different levels in order to contain any potential spillage or waste, and this is channelled via a large-volume separator pit that prevents any damage to the environment in the case of such an incident. 

An integral element of BP's uncompromising HSSE policy is the focus on the transport side of the business, in partnership with Unitrans. This comprises selecting properly trained and accredited drivers who must be familiar with the handling of hazchem products. In line with BP's global policy framework, onsite driver sleeping quarters are provided at the warehouse, and there is a night-time driving ban between 22h00 and 04h00, as this has been scientifically proven to be the most dangerous period in terms of driver fatigue. 
 

Emphasis was placed on BP's stringent global health, safety, security and environmental (HSSE) policies in the design phase of the Hub. This resulted in the implementation of the Entropy Health and Safety Management System (HSMS). This programme is designed to improve health and safety standards, internal control, external communication and overall corporate performance. Icons are used to demonstrate and communicate safety to the workers – it’s the best FleetWatch has seen at any plant.

Williams concludes – “This policy has worked extremely well for us, both locally and internationally. Since the Hub started operating in the third quarter of 2006, we haven't experienced a single major vehicle accident on any local or line-haul delivery, which is a great success story.” 

Between Blendcor and the Hub it’s a fascinating viewpoint-slice of a very complex logistical pipeline in dangerous goods. In a world where maintaining standards are an everyday challenge, BP-Castrol must be saluted for the efforts they are making in terms of product and safety. All businesses can learn from the Hub’s HSSE methods – they’re outstanding.