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Implication on Financial Statement

After the action had been taken, I approximate the following items in financial statement will be affected :
Compensation cost will be reduce by 30%.
Insurance expenses will be reduce by 15%.
Petrol expenses will be reduce by RM 45,000.00.
Salary & Allowances will be reduce by 10%.
Spare parts, tyres and tube expenses will be reduce by 5% respectively.
Upkeep and maintenance expenses will be reduce by 20%.
FS
WHAT IS THE PROBLEM?
Problem 2 : High Oil Pilferage
Cause of the Problem :
Lack of tracking system
company do not know what happen when CPO on the way transit
Effect of the Problem :
Thousands of metric tones CPO end up missing
Tankers found abandoned by the roadside and empty
Drivers missing
Increase in insurance premiums
Problem 3 : Driver Shortage
Cause of the Problem :
Remuneration package is unattractive
High absenteeism of drivers
driver frequently absent without reason
Effect of the Problem :
could not delivered CPO to the refineries on time
Problem 4 : Quality of CPO Affected
Cause of the Problem :
The delivered CPO is contaminating with liquid such as water, used oil or sludge
Effect of the Problem :
Although the CPO is delivered, quality of CPO compromised.
Reputation of company impaired.
Possible glitch in renewing contract
Problem 5 : High Cost of Upkeep & Maintenance
Cause of the Problem :
Lack of allocation and scheduling system
delivery route and vehicle maintenance done by manually and non-scheduling
Effect of the Problem :
High maintenance cost offset the company profit
Recommendation
Vehicle Tracking

The most basic function in all fleet management systems, is the vehicle tracking component.
This component is usually GPS-based, but sometimes it can be based on GLONASS or a Cellular
triangulation platform.
Once vehicle location, direction and speed are determined from the GPS components, additional tracking
capabilities transmit this information to a fleet management software application.
Methods for data transmission include both terrestrial and satellite.
Satellite tracking communications, while more expensive, are critical if vehicle tracking is to work in
remote environments without interruption.
Company can see actual, real-time locations of their fleet on a map. This is often used to quickly respond
on events in the field.
Recommendation
Action:
Restructuring Compensation & Benefit Policies
Fulltime Driver (encourage full time drivers)



Other Benefits :
Employee are entitled to annual medical allowance for RM 250.00
Employee are entitled to company group personnel accident insurance.
Employee are entitled to annual bonus for double pay at the year end.
Part-time Driver
Every driver pay RM60 per day
Implication:
Improve attraction, retention and motivation.
Effectively reduce absenteeism issue.
Improve employee and resource efficiency by decreasing employee unproductive behaviors.
Total salaries & allowance expenses will be lower than previous.
Recommendation
B. Low Gross Profit Margin
High Compensation Cost
High Upkeep & Maintenance Expenses
B. Low Gross Profit Margin
Problem 1 : Compensation Cost Arising
Causes of the Problem :
Shortfall of crude palm oil (CPO) , the amount of delivered are short
Quick cash by the drivers
drivers siphon some CPO and sell to the syndicate
Effect of the Problem :
Impact to the amount of CPO delivered not tally with delivery order
RECOMMENDATION
Recommendation
Action:
Fleet Management System Should Be Used
Management of a companys vehicle fleet. Fleet management includes companys motor vehicles such as
car, vans and truck.
It includes a range of function, such as vehicle telematics (tracking + diagnostics), vehicle financing,
vehicle maintenance, driver management, speed management and etc.
Implication:
To help lower the risk of CPO pilferage, increase security and safety, while improving efficiency and
productivity.
Therefore, compensation cost will reduce.
Companies that have implemented fleet management system are reducing fuel consumption via optimized
routing and monitoring of both vehicles and drivers.
Better feedback for drivers also help lowering insurance premiums.
Recommendation
Recommendation
Action:
Appoint specific service centre
Contract with service centre for 80 tankers.
Scheduling mileage for service periodically
Mileage odometer recorded computerize on weekly basis
The following table is a reference for tanker checking.
Implication:
Effectively decrease upkeep and maintenance expenses
Longer useful life of tankers
The lower of upkeep and maintenance cost can increase the operating margin.\
Recommendation

A. Customer Complaints
Quality of CPO
The quality of CPO delivered .inability to fulfil customer orders
Short Delivered
Quantities delivered not tally with the amount of delivery order
Conclusion
To ensure the company competitive advantage in future, PHSB must make sure that the company has
strong operating process. Besides that, PHSB should remains the quality of CPO while transit from mills
to refineries. Thus, the reputation of PHSB will increase and it will help to increase the operating margin
and lower the customer complaint
The Pirates of the Silverland
BMW
Lee Kwong Wei A122722
Low Sin Yee A125799
Chan Shu Sin A123042
Tay Siew Leng A122313
Issues

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