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Concept of Re-branding in Oil Business

Re-branding is a common practice in the oil business. It can happen that two products are mixed to produce a new product during loading onto the vehicle. This is common in the case where additives are added at the loading racks of depots to a base product to produce an enhanced sales product to be delivered to the customer. In the SAP R/3 System, a Sales Bill of Material (BoM) is used to support this activity. The bills of materials that is, sales products are used during scheduling without being exploded. However, during loading the sales product is exploded into its constituent components, and the quantities for these components can be entered. Although the bill of material proposes the quantities of the components to be loaded to make the sales product, it is possible to enter the actual loaded quantities of all components such as, the base product and the additive.

The quantity of the sales product is calculated by adding the loaded quantities of the components and using a weighted average calculation for the temperature and density. The same process also applies to “Planned Rebrands“. In the oil business this is used when different product names are used for stock keeping and sales purposes. The sales product number is entered in the order, delivery and the schedule. For accurate stock keeping it is possible to enter the loaded quantities of the actual stock keeping product.

An example of unplanned rebranding is a case where the ordered product is “Unleaded Regular“and at loading, the driver finds that the product is not available. It is then decided to provide the customer with “Unleaded Super“for the price of “Unleaded Regular“. It is possible to indicate that this type of unplanned rebranding has taken place. The pricing and all the printed documents for the customer refer to the originally ordered product. The goods movements which are generated in the background are based on the actual shipped product.

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