Shell

Activity-Based Management in Shell Gabon

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1. Calculate the UOC per barrel for SG. Is a barrel of oil the cost driver for all the activities that go on within RDS? Comment on why RDS chooses to monitor costs per barrel. Office of the President Business Management Community Relations Human Resource Management Production Management Heath/Safety/Environment 5,886,720.00 15,197,000.00 4,204,800.00 1,191,360.00 112,828,800.00 1,051,200.00 140,359,880.00 3.20 140,359,880/(120,000 * 365)=3.2 Cost per barrel should be a relatively easy number to use as a benchmark against other industry players. Even if the information is not published, it should be able to be derived. The items contained within the cost per barrel did exclude some activities. It’s likely that activities such as exploration aren’t included since it is somewhat uncorrelated to production and would exist in any case.

2. Compute the cost of the activities in the Provided IT and Telecommunication Services process. What items did you include or exclude from your calculations? Why?

Select, Install, Operate, Support, Provide Hardware and Provide SAP Telecommunications Software Support Services 724.00 632.00 2,242.00 253.40 221.20 784.70 217.20 189.60 672.60 21.00 1,103.00 235.00 43.00

Staff Salaries Staff Benefits Staff Services Service Contracts Licenses Materials and Supplies Logistics Training

45.00 4.00 1,499.60

26.00 6.00 1,074.80

130.00 446.00 5,421.30

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Both direct and indirect costs were included. Staff benefits and salaries were calculated at 35% and 30% of staff salaries. The column for other processes in business management was not included because it’s not a part of the process in question.

3. Suggest some performance measures to evaluate if these activities are being performed well. Metrics for provide telecommunications services might include customer satisfaction surveys, analysis of any downtime, and possibly security. Provide SAP support could be measured...