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Cirrus Appointed by Preem to Green its Supply Chain

July 31, 2012

Cirrus Appointed by Preem to Green its Supply Chain

Sweden’s largest fuel company, Preem AB, has selected Cirrus Logistics’ COST2SERV Network Strategy tool to help achieve its key objective of creating an environmentally sustainable business across all its activities. Initial use of the tool will focus on reducing the level of CO2 emissions in its supply chain while also optimising the supply chain and driving costs out of the operation. The approach is so novel that Preem was unable to find sufficiently powerful supply chain optimisation technology already on the market. Cirrus, with its track record of pioneering product development to meet the needs of individual customers in numerous distribution scenarios, will be adding new capabilities to COST2SERV in order to achieve Preem’s objectives.

Preem’s supply chain in Sweden is complex with a large number of different inputs from its two refineries and six depots, as well as from three partnering oil companies. In total, the company has a refining capacity of more than 18 million m3 of crude oil every year, supplies some 400 Swedish gasoline stations, 190 truck stops and is the country’s market leader in heating oil and diesel.

“We believe that we have a dual responsibility,” explains Jonas Flodwall, Business Developer at Preem. “On the one hand, society needs our products, but society also needs us to produce and distribute them in an environmentally sustainable way. We already have two of the most eco-friendly refineries in the world; now we intend to ensure that our distribution processes are equally eco-driven. Of all the tools we looked at to help us in this mission, we found COST2SERV one of the most intuitive to use and Cirrus was open to the idea of building CO2 minimisation into its existing technology.”

In addition to running COST2SERV on its Swedish network at least once a year to ensure that regular adjustments can be made to the supply chain, Preem will be using COST2SERV as a tool for strategic decision making. Plans for changes to the supply chain, growth in business and the introduction of new products will be tested in multiple data scenarios to assess their implications for CO2 emissions and their impact on costs. In particular, Preem is developing its own branded environmental diesel product, with the likely result of increased complications in the distribution process. Using “What if?” simulations, Preem will be testing the likely impacts and options to manage them. Cirrus Logistics is creating the first computer model of the existing network that will provide the baseline CO2 emissions level for future exercises, and will then be training the logistics team at Preem in the use of the software.

“This is a very exciting opportunity,” says Bob Blightman of Cirrus Logistics. “We are always seeking to develop our products on the basis of a specific requirement or customer feedback and there can be no doubt that the issue of CO2 emissions will become ever more key in optimising supply chains.”