Making It happen at BPCL Kochi Refinery

Making IT Happen at BPCL Kochi RefineryPresented By:Urvashi KalsonShristi KhusiramPranav KoundinyaVishakh bharadwajSujith subramaniamBhuvanesh PrakashSulekh jainParikshit jhajhariam.k.ravi teja

OIL REFINERY An oil refinery is an industrial process plant where crude oil is processed and refined into more useful products such as petroleum, gasoline, diesel fuel, heating oil, kerosene, LPG , etc.

The core activity of an oil refinery lies at its Operations.INDIAN SCENARIO

The oil and gas sector is one of the six core industries in India. It impacts the decision making across the important spheres of economy.India is the fourth-largest energy consumer of oil & gas in the world, accounting for 37 per cent of total energy consumption. Oil consumption is estimated to reach four million barrels per day by 2016.The petroleum and natural gas sector attracted FDI worth Rs 31,620 crore according to Department of Industrial Policy and Promotion (DIPP)

BPCLA leading player in the Petroleum sector in India Marks its presence as the totally integrated company being at upstream producer, midstream supplier, refiner, distribution networks and at the retail front across the petroleum productsCore Activity being refining it has four refineries strategically located to cover Indias geographic beltHas a pan India presence to serve a wide array of consumers in metros as well as rural India

BPCL: KOCHI REFINERYConnecting Corporates Through Integrations: BPCL KRL IT Transformation

De-regulations of Indian refinery industry: technological innovations, profit maximization, IT enabled transformation

IT Journey: Different Components rolled out to create a robust foundation A TimelineStrategic MilestoneMES related MilestoneERP MilestoneERP related Milestone199719982003200920002003200720072001200420092006Online system implementationEmail & IntranetY2K upgradeMaster Plan StudyEmployee Self ServiceProject Mantra & SAP ImplementationNew Data CenterBPA Study for MESProject SynergyProject AryabhattaAIMS ProjectMES Project6Do you think the IT implementation at BPCL KR as a successful implementation? If so Why?Provided all users and applications with accurate data The implementation was such that the data source was singular and common to allThe technologies used like SAP and state-of-the-art implementation GUI was provided at all work stations for ease of operabilitySAP decomposed the whole system into modules like Finance, Controlling, HR etc, and then implemented the sameEffectiveness of Change managementThe end-user training was handled effectively and efficiently along with Just-in-Time training Various initiatives to make the implementation successful across the organization includedSpecial in-house bulletin called Mantradhwani to report progress, changes and benefits of the systemBanners and posters were displayedNext in line were MES and AIMS projects All the above technological transformations provided BPCL KR with a competitive edgeVarious ISO certifications and national awards and rating

Success FactorsSupport of Top ManagementIT StrategyImplementation MethodologyExternal Sponsorship and SupportStrength of SecurityQuality Assurance and TestingMinimal Customization and Package SelectionRisk Mitigation

BPCLs View PointBPCL was divided into 6-Strategic Business Units : RetailAviationLubricantsLiquefied Petroleum Gas (LPG)Industrial and CommercialRefinery3-pronged IT Strategy: Create Communication NetworkBasic Information Network setupProcess Transactions with customersMajor IT strategic projects implemented and their success factorsSAP ERP: known as Project Mantra, a business initiative rather than IT initiativeSignificant role of the Steering committee: issue resolutionImplemented in two phases, CDP and DDI, covered all the functions/ verticals like Finance, controlling, Materials, HR etc.A streamlined process was followed: as-is and to-be process methodContinuous and systematic monitoring throughout the progressThe end result was a Structured Issue Methodology, made the issue resolution promptA three level training model was followed for better learning process: Level 1- Overview, Level 2: Functional detailed, Level 3: Module configurationJust in Time concept was used to retain the gained knowledge fresh, training was conducted just before Go-live of the projectFAQs about SAP R/3 were helpful in self learning of the tool

Cont.MES: Manufacturing Execution System, focus on the operation management and achieving operational excellence (TCS as consultant)Business process analysis (BPA) study was carried out to identify the KPIs and thwie contribution to enhance the operationsA proper solution architecture and integrated framework was to be suggested along with the quantitative business benefitsAlignment of IT system SAP R/3 with other business requirements: Project SynergyLead to automated and optimized refinery work processes and SAP R/3, LIMS and MES were integrated to form a MIS to provide end to end business solutionsTechnology support in providing holistic decision support and execution systemCont..Asset Integrated management system: focused on asset reliability and integrityIntegrated with SAP PM moduleThe critical factor was the benefit realization methodology, followed in MESAll the projects were implemented in phased mannerA baseline study and post go-live audit were conducted to assess the success of the projectsStudies revealed that improvement in the business benefits of the refinery exceeded the bench marksAutomation and optimization of refinery operational processesEnd to end integrated systems provided a structured approach to the problems: Seamless networkingIncreased visibility across downstream supply chainImplementation of pilot projects, accessing the feasibility of the project, thus saving overall efforts and future risk mitigationAnd most important, full-fledged support from top management, most of the times, were part of the steering committees

Do we have any risks in product implementations like ERP? If so what were the major risks during the implementation of SAP and how it was mitigated?

Timelines and project scheduling - High risk areas that affect core strategic objectives - Due to interdependencies associated with ERP

Managing process and technological change associated with ERP Implementation - ERP is not an IT project alone. - Almost all business units are affected by the implementation

Functional area involvement - Lack of involvement of cross functional areas

After Implementation risks - Technical risk - Security risk - Data Management Risk

SAP R/3 Implementation in BPCL refineryAccelerated SAP Implementation methodology Different Module implementationRisks of Implementation : SAP-ERPScaling up of the implementation due to merger between KRL and BPCL, data compatibility issues and time taken to align the functioning of ERP. Reason is BPCL has a larger user base and scaling up could take more time and it is an expensive process. ERP has generally 3 kinds of inputs: material bills, inventory records, master production schedule. If anyone of the input is faulty, the generated output net requirement plan (NRP) will be problematic.Crucial technical support for Internet connectivity, maintenance and upgrade activity of ERP system could be risky if the vendors are not paid on time or do not do their tasks.In-house SAP experts knowledge may not be completely shared with the core members, which could lead to ineffective exploitation of ERP systemRisk Mitigation: SAP-ERPProper planning phase by phase which involves IT experts and core members during implementation as well as post implementation.Operating members should involve in development and UAT to ensure authenticity of the output which is expected to be similar to output in traditional/pre-implementation methods.Once UAT is done, the core members could push ahead for Go-Live.Security and authorization of way of access to data to be designed based on the business structure. Governance, Risk and Compliance is the effective method used nowadays to secure data.Regular auditing of the process also ensures the process followed by end users is in line with what is required by the company standards.Risk Mitigation through trainingBig Bang Strategy

In the Big Bang strategy companies layout a grand plan for their ERP implementation. The installation of ERP systems of all modules happens across the entire organization at once. In this strategy the company moves from the existing business systems to new systems on a particular date.http://www.accenture.com/microsites/bigbangdisruption/Pages/home.aspxCont.AdvantagesThe overall cost of implementation is less because no interface programs are required to communicate between the legacy system and the new ERP system Big Bang eliminates all of the sequencing and decision making of implementing of one module at a timeIt is well designed for rapid implementationsIt creates a strong central focus for all the ERP team members It can avoid complex integration issues

Disadvantages The amount of time of careful planning and preparation for the go liveBottleneck of critical resources, like lack of funds, non availability of professionals, etc. during the implementation can result in failed implementationsThe recovery process is very difficult in the approach The consequences of a failed implementation can range from a huge financial loss to going out of businessBig Bang Approach in BPCL Kochi RefineryThe implementation instead of selecting few functions at a time took all of them at once and successfully completed the integration one month ahead of schedule because of proper internal communication and good change management practicesThe transition to the SAP ERP was very smooth as ascertained by positive level of acceptance. This implementation became one of the best ERP implementations in the industry In your opinion what was the approach adopted by BPCL KR for Information Technology planning? Can we adopt the same approach to other manufacturing industries?

BPCL KR adopted a very systematic and phased Information Technology planning. Computerization in KRL started in 1980 with the IBM Batch Processing Systems. 1995 saw the adoption of online computerization with HP9000 servers with UNIX system.Year 2000 brought the rigorous Y2K upgrade which embarked KRL into a major IT transformation process including ERP and MESIt aggressively pursued its IT planning in accordance with an IT Master Plan, to enable KRL in enhancing the competitive advantage through operational excellence.ContKEY GUIDING PRINCIPLES OF THE MASTER PLANIntegrate best in class packagesUse proven technology that has a sustainable futureProvide all users and applications with a common set of accurate data support complex decisions and to monitor effectiveness of these decisions.Provide graphical user interface to access all aplications from all work stationsUse the knowledge built into existing systems.Capture data only once at the source

ContKEY DELIVERABLES OF THE MASTER PLANIT road map suggesting the implementation of a Business Management System(BMS) and Manufacturing Execution Systems(MES)Road map for IT infrastructure and IT enabled engineering applications.Project organization and project execution methodology to be followed for all major projects.Change management methodologiesRoad map for business supporting applications and workflows ContBenefit methodology for analyzing benefits was adopted.Benefits were classified into three main categories:1)Benefits that could be measured and audited2)Benefits that could be measured but not audited.3)Benefits which are difficult to measure

Future Technological ChallengesSustainability of existing IT applicationsBuilding a IT competency center for refineriesOptimize the existing IT systems for more business valueIdentifying and implementing new IT systems aligning with the business strategiesAdoption of refinery specific IT applications based on emerging technologies like Mobility, Analytics and cloud computingIntegration with source and destination nodes to balance supply and demandContinuous and automated quality monitoring from the crude stage till delivery using IT servicesMonitoring competitors products from India and abroad and integrating changes in our production to counter themhttp://www.atkearney.com/paper/-/asset_publisher/dVxv4Hz2h8bS/content/refining-2021-who-will-be-in-the-game-/10192