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A
Project Report on
‘Operation Management’
SUBMITTED BY:
Anushree Kulkarni Ashmita Mahakul
Deepak Doddamani Dinky Chhabria
Pankaj Dashmukhe Rahul Mahadik
Rohini Varadkar Sonal Jog
Submitted in partial
fulfillment of the requirement
of Ist Semester of MMS course,
Mumbai University
Bharti Vidyapeeth’s Institute of Management Studies and Research 2008-2009
OPERATIONS MANAGEMENT
PROJECT REPORTPROJECT REPORT
HINDUSTAN PETROLEUM CORPORATION LIMITED
By
Sonal JogSonal Jog
Rohini VaradkarRohini Varadkar
Dinky ChhabriaDinky Chhabria
Asmita MahakulAsmita Mahakul
Anushree KulkarniAnushree Kulkarni
Pankaj DashmukhePankaj Dashmukhe
Deepak DoddamaniDeepak Doddamani
Rahul MahadikRahul Mahadik
Operations Management Project Report
ACKNOWLEDGEMENT
We wish to express our deep gratitude towards all the persons who
contributed for this project and helped develop ideas and approach in
report writing.
We thank Mr. Shailendra Thasale, Senior Engineer, Honeywell, and all
officials of HPCL Mahul refinery who guided us in this project.
We are grateful to Professor N. K. Agarwal, Faculty of subject
Operations Management, MMS-I, B.V.I.M.S.R. (Belapur, Navi Mumbai),
for his guidance throughout our project work.
We would like to thank Prof. Dr. D.Y Patil, the director of Bharti
Vidyapeeth’s institute of management studies and research, Belapur,
Navi Mumbai for his kind permission to carry on our project work and
his cooperation.
Last but not the least we would like to thanks all our college friends for
their encouragement and morale support.
Sonal Jog
: (19)
Rohini Varadkar :
(07)
Dinky Chhabria :
(08)
Asmita Mahakul :
(30)
Anushree Kulkarni :
(26)
Pankaj Dashmukhe :
(09)
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Operations Management Project Report
Deepak Doddamani :
(11)
Rahul Mahadik :
(29)
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Operations Management Project Report
Table of Contents
1 Introduction......................................................................................4
2 HPCL – COMPANY AND OPERATIONS.........................................52.1 Profile.................................................................................................................................5
2.2 Background of company and operations............................................................................5
2.3 Type of Industry.................................................................................................................5
2.4 Capacity..............................................................................................................................6
2.5 Location selection criteria..................................................................................................6
2.6 Functional Groups..............................................................................................................9
2.7 Production strategy:..........................................................................................................11
2.8 PLANT LAYOUT:...........................................................................................................12
2.9 PROCESS LAYOUT:......................................................................................................14
2.10 Production Planning and Scheduling..............................................................................15
2.11 Materials management....................................................................................................16
3 ENTERPRISE RESOURCE PLANNING AT HPCL...............................183.1 Boosting Service to Customers and Vendors...................................................................19
3.2 Streamlining Distribution Workflows..............................................................................19
3.3 Training Encourages Greater User Acceptance................................................................19
4 QUALITY MANAGEMENT.........................................................214.1 Quality Control & Maintenance.......................................................................................21
4.2 Asset Integrity Management (AIM).................................................................................22
4.3 High tech infrastructure and stringent quality control......................................................22
4.4 Fully AUTOMATION......................................................................................................22
4.5 Import and Storage facilities:...........................................................................................23
4.6 Quality Assurance.............................................................................................................23
5 WORK MEASUREMENT..........................................................255.1 WORK MEASUREMENT:............................................................................................25
5.2 LABOR STANDARDS:...................................................................................................25
5.3 RECRUITMENTS AND PROMOTIONS:......................................................................26
6 ENVIRONMENTAL MANAGEMENT..............................................286.1 Effluents and Solid Waste Analysis in HPCL Petrochemical Refinery:..........................29
6.2 Analysis of Waste Water and Effluent Treatment Methods:............................................30
6.3 Safety and Hazards Management:....................................................................................31
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Operations Management Project Report
7 VALUE ENGINEERING............................................................337.1 Feasibility Phase...............................................................................................................33
7.2 Conceptual Phase..............................................................................................................33
7.3 Basic Engineering.............................................................................................................34
7.4 Detailed Engineering and Construction............................................................................34
7.5 Commissioning and Start-Up...........................................................................................35
8 KEY FINANCIALS.................................................................368.1 Fixed Assets......................................................................................................................36
8.2 Current Assets, Loans and advances................................................................................36
8.3 Income..............................................................................................................................36
8.4 Return on investment........................................................................................................36
9 BIBLOGRAPHY....................................................................38
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Operations Management Project Report
1 INTRODUCTION
Operations management is understood as the process whereby
resources or inputs are converted into more useful products.
A petrochemical industry basically converts petroleum and natural gas
in useful products. Petroleum refinery use crude petroleum as a raw
material and converts it into different products like petrol, kerosene,
diesel, low-density oils, hydrocarbons like propane and propylene,
butane and butylene, pentane, hexane, toluene, benzene, and other
products like tar, lubricants base, etc.
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HPCL REFINERY
Operations Management Project Report
2 HPCL – COMPANY AND OPERATIONS
2.1 PROFILE
Name : Hindustan Petroleum Corporation Limited (HPCL)
Incorporation : 1974
Constitution : Public Limited Company
Sector : Petroleum Refinery
Industry : Petroleum
Activities : Bitumen, LPG, CNG, and downstream petroleum products.
2.2 BACKGROUND OF COMPANY AND OPERATIONS
HPCL is the second largest player in Indian Oil sector and in highly
competitive lubricants market. It was formed in 1974 on nationalization of
ESSO India operations.
HPCL has two refineries producing a wide variety of petroleum products-one
in Mumbai (West Coast) and the other in Visakhapatnam (East Coast). The
HPCL refinery in Mumbai is situated in Mahul, west coast. It is in an M.I.D.C.
area, which also has other big industries like Indian Oil Corporation limited
(IOCL), Bharat Petroleum Corporation limited (BPCL), Tata power plant etc.
The Corporation also holds major equity in Mangalore Refinery and
Petrochemicals Limited, and is proposing to set up a refinery in the state of
Punjab.
2.3 TYPE OF INDUSTRY
HPCL refinery can be classified as an analytical type of industry. It is
petrochemical industry i.e. broadly speaking chemical engineering industry.
Petroleum refinery is a production industry where raw material crude
petroleum is transformed into various useful products using some chemical
processes.
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Operations Management Project Report
2.4 CAPACITY
HPCL Mumbai refinery has a capacity 5.5MMPTA.HPCL Mumbai is operating
one of the largest lube oil refinery in the country which has a capacity of
335TMT. This Lube Refinery accounts for over 40% of the India's total Lube
Base Oil production. The refining capacity steadily increased from 5.5 million
tonnes in 1984/85 to 13.70 million metric tonnes (MMT) presently.
According to Auto Fuel Policy, EURO-IV norms are to be followed in metro
cities by 2010.To supply it in future additional capacity planning is being
done. Diesel hydro treating (DHT) of about 2.2MMTPA will be introduced in
HPCL. Majority of EURO-IV HSD will be produced in HPCL, Mumbai.
2.5 LOCATION SELECTION CRITERIA
Oil Refineries process millions of gallons of oil that have been drilled from the
Earth’s crust. Choosing the location of an oil refinery is not an easy task
because a number of environmental and safety concerns need to be taken
into account.
India does not have high crude oil reserves, and hence it depends totally on
import of petroleum crude oil. Gulf countries are the main suppliers to India.
Transportations and refining costs are very high for any refinery and hence
these factors take priority in considering plant location.
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Refinery (west coast) Mumbai.
Operations Management Project Report
Oil Refineries are often located on the coast and away from busy cities. When
choosing the location for an oil refinery, the following factors need to be
taken into consideration:
Coast: HPCL is located at its Chembur in Mumbai and Vizag in Andhra
Pradesh because of the proximity of sea routes from the plant location. As for
transportation purpose, the raw material used in the production in HPCL i.e.
crude oil can be easily transported via the sea routes. There is a rail route
specially built for transportation of coal, from vadala to refinery area. Almost
all oil refineries like BPCL, IOCL are situated at the Mahul gaon location at
Chembur in Mumbai. HPCL petroleum refinery is on Mumbai west coast
because generally refining is carried on along the coast, where low cost water
transportation can be used.
Transportation: – The oil refinery must be near to rail, road or sea links and
close to the site the oil has been drilled. HPCL has port near to it.
Available workforce: – It may be tempting to build an oil refinery in a
remote location where no people or animals can be affected. However, a
refinery needs workers living relatively nearby. Even though HPCL refinery is
far from residential area transport facilities from workers quarters is
available.
Available customers: – Oil refineries need to be within easy reach of
customers. It is essential to have good transport links. Some refineries are
pipelines as a method of transportation.
Air pollution: – Although industries are regulated by strict controls regarding
the amount of pollution they release into the atmosphere, oil refineries emit
number of polluting gases. To reduce the effects of air pollution on people,
refineries should be built away from the built-up areas. Care should be also
taken to position the refinery so that prevailing winds do not carry pollution in
the direction of towns and cities. One can see boards specifying height from
sea level in entire HPCL refinery area.
Water pollution: – Some refineries use water from local rivers and streams
for cooling purposes. This means that the water is pumped out of the river or
stream, circulated around a cooling tower and returned to the river at a
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Operations Management Project Report
higher temperature. This increase in water temperature is called thermal
pollution. Some species of fish are unable to survive in these conditions.
Waste products from refinery may also be washed into local rivers and
streams.
Noise Pollution: – Machinery that operates 24 hours a day can make a lot of
noise for people living nearby. Lorries and trains that come to pick up refined
products also contribute to the noise.
Special sites of interest: – Like other buildings, oil refineries must avoid
areas of special scientific interests. These can include regions where rare
animals are being protected.
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Top view of HPCL refinery, Mahul Mumbai on Google earth
Operations Management Project Report
2.6 FUNCTIONAL GROUPS
HPCL refinery is spread over a very large area. It has many plants within its
campus area. So management of such a big organization becomes very
challenging. HPCL has managed it very well till now by organizing itself into
appropriate functional departments.
The various departments are as under:
Human resource: HPCL HR department has taken number of HR initiatives
to make the Corporation a great place to work. The ‘Balanced Scorecard’ tool
to set up performance targets and evaluation, Competency Mapping and
Development Centers to enhance employee capabilities. Six Sigma for quality
improvement have yielded rich dividends and are being constantly upgraded
to higher levels of sophistication. A significant HR event of the period was the
conduct of an International Program on ‘Emotional Intelligence’ in association
with TISS wherein a large number of professionals and students participated
and appreciated the program.
The Corporation continues to give utmost importance to training by
nominating employees both for in-house and external programs.
HPCL has bagged DMA Erehwon Innovative HR Award because it has
successfully taken an HR idea from concept to reality and has sustained
results.
They also got Amity HR Excellence Award for achieving enviable position of
one of the best and most admired companies due to innovative strategies for
Human Resource Management and Development
Finance: The finance function involves keeping record of financial data
related to fixed assets, intangible assets, which forms most important part of
a refinery operation. Additionally it also monitors the construction period
expenses on projects occurring on monthly and quarterly basis and keeps
record of other important financial depreciation, impairment of assets, foreign
transactions, investments, inventories, duties on bonded stocks, Grants
provision, exploration and production expenses, employee benefit, sales of
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Operations Management Project Report
products, research and development., Taxes on income, contingent liabilities
and commitment capitals, accounting, classification of expenditure and
income.etc.
Marketing: LPG Marketing in India has traditionally been confined to
domestic & non-domestic consumers in urban/semi urban markets and all
efforts till date have been in meeting the demands of these markets. With the
saturation of urban and semi urban markets and the adequate availability of
LPG in India, there is a need to look for alternative markets. Rural India
presents a big opportunity for growth of LPG in India.
HPCL is a major bunker fuel supplier to the ships (vessels) at major Indian
ports viz Calcutta, Haldia, Visakhapatnam, Kakinada, Chennai, Cochin,
Mangalore, Goa-Vasco, Mumbai, Kandla.
HPCL also supplies other petrochemicals like hydrocarbons, lube base oils,
tar, petrol, and diesel, ATF etc. Hence it has very good chain of distributors.
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Operations Management Project Report
2.7 PRODUCTION STRATEGY:
A very high priority is attached by the Government of India to conservation of
petroleum products in view of the need to reduce gap between demand of
petroleum products and indigenous supply of crude oil.
Sporadic tension in the Middle East region that is the main source of our oil
imports as well as a heavy import bill is a potent reason for continued
emphasis on conservation and sparing use of petroleum products.
Accordingly, strategic storage of crude oil becomes very important. HPCL,
Mumbai plant has high capacity tanks for storage of crude oil as well as
finished products. Every shipment of raw materials is after 15 days. But
continuous production is carried out to make-to-stock the products.
HPCL has trying to do backward integration by taking part in exploration and
production process in country and outside country in joint ventures with some
of the big companies. But more emphasize is given to production of high
products length which are kept in stocks.
HPCL, in partnership with consortium, currently has 20 E & P blocks in India
and two overseas, including a service contract for the western offshore
marginal fields under cluster-7 near Mumbai High.
Its upstream JVC Prize Petroleum Company, which was formed in 1998,
currently operates marginal fields in Gujarat and Mumbai High and onshore
blocks in Gujarat and Madhya Pradesh.
HPCL has been participating in the new exploration licensing policy’s (NELP)
fourth round. During NELP-VI, HPCL participated along with major operators
like ONGC, OIL, GSPC and GAIL.
The Centre has awarded 15 blocks in which HPCL’s participation interest
ranges from 10 to 20%. The 15 blocks include 11 deepwater ones in Krishna
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Operations Management Project Report
Godavari and Cauvery basins, two shallow water blocks in Mumbai High and
two onshore blocks in Rajasthan.
2.8 PLANT LAYOUT:
LAYOUT OF HPCL REFINERY, MUMBAIDHPS : De-hydrocarbonaton de-sulphurisationLR : Lube RefineryCPP : Captive Power PlantGF : Green FuelFR : Fuel RefineryOMS : Oil Management & SupplyQM : Quality managementF&G : Fire and GasTA : Tank AreaLPG : LPG Storage and Supply
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DHDS LR
CPP
FR OMS
F & G LPG TA
B
QM GF
Operations Management Project Report
STORAGE AREA OVERVIEW
STORAGE AREA OVERVIEW
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GHASLET GHASLET
SOLVENT CRUDE OIL
Operations Management Project Report
2.9 PROCESS LAYOUT:
PROCESSES IN HPCL:
There are many different units in petroleum refineries, for carrying out
different processes like distillation, separation, filteration etc. Depending
on the products produced by the refineries process HPCL layout in a such
way that
a) There be very short distance between reactors or units of plant
that has to be followed according to requirement.
b) Less piping and cooling, heating expenses.
c) Pumps, valves and other materials required between successive
processes should be limited and controllable in number.
d) Waiting time for the next process should be minimum.
e) Very little manual labor is required and automation and
instrumentation can be done effectively.
f) Planning and scheduling of specific product can be done accurately
and storage and distribution should be properly maintained.
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Operations Management Project Report
2.10 PRODUCTION PLANNING AND SCHEDULING
The main objective of this work is to discuss planning and scheduling
applications for refinery operations in HPCL, Mumbai.
Major Steps Involved In Planning:
STEP 1: Nonlinear planning model for refinery production is developed. The
model represents a general refinery topology and allows the implementation
of nonlinear process models as well as blending relations.
STEP 2: Optimization model is developed considering the market limitations
for each oil derivative usually supplied by the refinery. The optimization
model defines all operating points, thus increasing the production of more
valuable products, while satisfying all specification constraints.
Major Steps Involved In Scheduling:
STEP 1: To overcome scheduling problems in oil refineries mixed integer
optimization models are formulated that rely on both continuous and discrete
time representations. This model takes care of the problem of crude oil
inventory management that involves the optimal operation of crude oil
unloading from pipelines, transfer to storage tanks and the charging schedule
for each crude oil distillation unit.
STEP 2: Development and solution of optimization models for short-term
scheduling of a set of operations that includes: product receiving from
processing units, storage and inventory management in intermediate tanks,
blending in order to attend oil specifications and demands, and transport
sequencing in oil pipelines.
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2.11 MATERIALS MANAGEMENT
HPCL has emerged a front-runner, in providing excellent services to the
customers, and also delivering state - of - art - products.
Various products of HPCL are as under:
Bitumen: Bitumen is one such product being manufactured and
marketed at HPCL refineries at Mumbai. They produce and
market all the three grades of bitumen viz., 80/100, 60/70 &
30/40. The quality control measures are observed very
stringently, and the bitumen is tested as per the requirement of
the BIS. HPCL has made a foray into newer products such as
rubberized and polymerized bitumen.
Fuels: HPCL produces variety of fuels. Some of them are listed
below.
o Petrol (MS), EURO-II, EURO-III
o High Speed Diesel (HSD)
o Furnace Oil (FO)
o Light Diesel Oil (LDO)
o Low Sulphur Heavy Stock (LSHS)
o Naphtha
o Lube base oils
o ATF
Marine – Bunker Fuels: The bunker fuels offered are:
o Heavy oil 180 cst (fuel oil: FO)
o Marine diesel oil (light diesel oil: LDO)
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Operations Management Project Report
o Marine gas oil (high flash diesel: HFHSD)
Marine Lubes: HPCL is the Marine Lube partner of Total
Lubricants, France and manufactures TOTAL brand primary
marine Lube grades. Secondary grades are of HPCL formulations
and are certified by TOTAL as equivalents. Bunker lubes are
supplied duty free & duty paid for international and coastal - run
vessels respectively. ELF marine lubes offered are:
o Atlanta Marine D3005
o Talusia HR 70
o Disola M 3015 & M 4015
o Aurelia 3030 & 4030
o Aurelia XT 4040 & XT 4055
Special Products: The products include:
o Hexane
o Propylene
o Jute Batch Oil
o Solvent 1425
o Turpentine Oil (MTO 2445)
o Carbon Black Feed Stock (CBFS)
o Molten Sulphur
LPG & ATF: LPG is the very important product produced by
HPCL.HP gas has large customer base and very large distribution
network. LPG is sold at very subsidized rate that is loss for the
company. But it recovers that loss by selling ATF at very high
margin.
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LUBE REFINERY OF HPCL
Operations Management Project Report
HYDROCARBONS : HPCL also produces solvents like propane,
hexane, benzene, toluene, and many other hydrocarbons, which
are separated by distillation.
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3 ENTERPRISE RESOURCE PLANNING AT HPCL
To strengthen business management and improve customer service,
HPCL implemented an advanced enterprise resource planning (ERP)
system based on range of JD Edwards Enterprise One application from
Oracle.
The ERP system was implemented at more than 430 locations across
India from 2003 to 2005, and is used by over 2,000 employees. HPCL is
continuously looking at innovative ways of enhancing customer
satisfaction by leveraging technology.
The real time, on-line availability of information from across all the
geographically spread locations of the corporation on a centralized
system, has enabled HPCL to improve efficiencies in the Ares of
tracking and monitoring customer receivables, credit management,
inventory management and provide enhanced service to customers
and other stake holders.
Upgrading to an integrated business management platform gave HPCL
an enterprise-wide view of its finance, manufacturing human
resources, and sales and distribution processes. Online access to
information ensured managers could keep track of procurement,
inventory, production schedules, and customer orders.
The company also standardized business practices, ensuring process
consistency across multiple locations. A document archival system is
an integral part of the ERP system, allowing HPCL to store invoices,
purchase orders, checks, and other material. This ensures the company
can locate critical documents quickly and efficiently.
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Operations Management Project Report
3.1 BOOSTING SERVICE TO CUSTOMERS AND VENDORS
In keeping with HPCL’s aim of enhancing customer satisfaction, the
company designed portals that draw on information gathered by its
ERP system to provide clients with dispatch details, account
statements, and a history of sales transactions completed over the
past three years. Customers log in to the portal using a secure user ID
and password. Separate portals for aviation, direct sales, LPG, and
retail customers were established.
HPCL also developed an electronic payment system to promote
smoother and faster payments to its vendors, contractors,
transporters, and other service providers. The system is integrated
with the company’s banking institution, enabling payment information
to be seamlessly transmitted between the two organizations and
ensuring timely payment to suppliers.
3.2 STREAMLINING DISTRIBUTION WORKFLOWS
HPCL realized another efficiency improvement when it streamlined its
distribution processes and implemented new notification alerts. For
example, the company’s dealers and distributors now receive e-mails
and text messages via their cell phones informing them of impending
shipments. This information is sent to dealers and distributors
immediately following the generation of an invoice, enabling them to
keep track of their orders.
3.3 TRAINING ENCOURAGES GREATER USER ACCEPTANCE
A change management program was established to facilitate a smooth
transition to the new system for employees. Comprehensive training
was provided to staff during the implementation, followed by refresher
courses post-deployment.
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Operations Management Project Report
Competency development programs for specific user groups such as
regional managers, finance staff, heads of terminal/depot/LPG plants,
sales officers, project engineers, HR officers and clerical staff are also
conducted regularly.
HPCL organizes virtual training sessions from time to time to allow staff
in remote locations to learn about new system features. This reduces
travel time and cost for participants and enables quick dissemination of
new information to users.
A state-of-the-art data center at HPCL’s head office at Mumbai houses
powerful IBM enterprise servers that run the database and applications.
The company uses a virtual private network (VPN), dedicated
telephone lines, very small aperture terminals (VSATs),
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Operations Management Project Report
4 QUALITY MANAGEMENT
Quality refers to the sum of the attributes of properties that describe a
product.
In petrochemical industry quality is generally expressed in terms of
specific product characteristics such as color, specific gravity, viscosity
etc.
HPCL have latest quality control technology that is mandatory for
improvement of refinery throughput, quality and yield.
Its quality control department has been successful in carrying out
improvement in crude oil viscosity, API gravity, and reduction /removal
of sulfur, increase crude distillation yield and overcome other
operational problems from time to time using upgraded technologies in
petroleum refineries.
4.1 QUALITY CONTROL & MAINTENANCE
Quality control is achieved in HPCL by following ways:
1) All material supplies are affected from approved suppliers and
manufactures only.
2) All items procured are inspected /tested.
3) Sampling of the products is done thrice a day and analysis at
each stage is carried out. Strict quality control is ensured.
4) Stage wise inspection and certification of jobs by inspectors.
5) In HPCL highly experienced and higly skilled craftsmen handle
jobs. Prequalified and highly skilled Engineers inspect quality
departments. Even refinery workers, welders etc are tested and
certified for job.
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Operations Management Project Report
Maintenance plays a crucial role in the production process in the
Refineries / Petrochemical plants. A plant may be regarded as
successful when it operates without interruptions, which can however
be achieved only when its facilities are in perfect working order at all
times. The strategic importance of maintenance increases with
increasing sophistication. The overall objective is to maximize
production output at minimum total cost.
4.2 ASSET INTEGRITY MANAGEMENT (AIM)
This type of program involves world-class standards of inspection and
maintenance of refinery facilities and pipelines to ensure the
uninterrupted, reliable and efficient operation. This program, which
utilizes advanced technologies and methodologies, is vital to minimize
the risks and vulnerabilities of large scale petroleum operations,
protect the safety of the workforce and neighboring population, and to
maximize energy security for India. HPCL will be adopting it in near
future.
4.3 HIGH TECH INFRASTRUCTURE AND STRINGENT QUALITY
CONTROL
HP the second largest integrated oil company of India has 40 well
spread out bottling plants and 2 tap off points on Jamnagar Loni LPG
pipeline of GAIL with online automatic quality control equipment
ensures total quality checks of cylinders at bottling plants. These
equipments are upgraded from time to time.
4.4 FULLY AUTOMATION
HPCL has adopted a strategy of complex pipelines so as to decrease
the idle times of plants and machineries. It is highly automated.
Controlling of process is done from control rooms of HPCL.
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Operations Management Project Report
HPCL have 20 electronic carousel of automatic type which fills cylinders
automatically basis. Filling of cylinders are interlocked in the system.
4.5 IMPORT AND STORAGE FACILITIES:
HPCL have LPG storage facility of 65000 tons of LPG bottling plants and
import terminals.
Storage facilities of three types:
1) Above grounds bullets of capacity 50 MT TO 150 MT each.
2) Spheres of capacity 600 MT TO 1400 MT each.
3) Mounded storage of capacity 200 MT to 1000 MT each.
4.6 QUALITY ASSURANCE
Refinery crude processing is based on crude with all impurities as
input. Step by step it tries to reduce impurities by changing it to less
harmful component or remove after converting to separable
component. Processes like desulfurization, hydrogenation, hydro
cracking etc. are used to achieve this.
1) Viscosity
Viscosity reduction is achieved by removing impurities that contributes
to higher viscosity, which includes polycyclic aromatics.
Reduction of viscosity is carried out using some chemical processing
which enables more rapid and uniform feedstock management,
improved heat transfer, faster mixing and shorter residence time
ensuring consistent quality.
2) API Gravity
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Operations Management Project Report
API gravity is the most frequently used measure to estimate the quality
of a crude oil. It is one of the parameters focused for determining the
price of crude oil, the thickness of oil is reduced and fluidity is
increased.
3) Sulphur
De-sulphurization unit in HPCL removes sulfur with complex molecules
selectively from crude oil. These are normally high boiling sulfur
compounds, i.e. boiling at 565oC and ends up partly in residue and gas
oils. Lower boiling sulfur compounds are separated and treated.
Removal of sulfur from crude is mainly done in gaseous form.
Quality control and quality assurance both are very important aspects
of quality management in refineries. It helps reduce production cost
and increase productivity. At the same time quality is the main weapon
in competition. HPCL has high customer loyalty due to its high quality
products.
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CONTROL ROOM OF HPCL,MAHUL
Operations Management Project Report
5 WORK MEASUREMENT
Work measurement is a process of establishing a time that a given task
would take when performed by a qualified worker working at a defined
level of performance.
5.1 WORK MEASUREMENT:
Work measurement is the process of establishing the time that a given
task would take when performed by a qualified worker working at a
defined level of performance.
A qualified worker is one who has acquired the skill, knowledge and
other attributes to carry out the work in hand to satisfactory standards of
quantity, quality and safety
Work measurement also refers to the process of estimating the amount
of worker time required to produce one unit of output.
goal of work measurement is to develop labor standards that can be
used for planning and controlling operations.
5.2 LABOR STANDARDS:
A labor standard is the number of worker-minutes required to complete
an element, operation, or product under ordinary operating conditions.
Labor standards are used in:
Cost estimation
Pricing of products and services
Incentive pay systems
Capacity planning
Production scheduling
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Operations Management Project Report
5.3 RECRUITMENTS AND PROMOTIONS:
Upon successful completion of training, OTs are absorbed at the entry
level in the Management Cadre in Salary Grade "A" .
After absorption, the officer is on probation for next 6 months.
On successful completion of probationary period, the officer is confirmed
as the employee of the Corporation.
Officers
Most of the recruitment is made at entry level only. However, HPCL may
recruit Officers at senior levels, through open advertisements, to meet
some specific requirements, like Exploration & Production, R&D etc. for
which expertise may not be available internally.
IT Officers and Accounts Officers are also directly recruited through open
advertisement in S/G ‘A’.
Campus Recruitment:
HPCL also visits Engineering & Management Institutes for campus
recruitment of
Engineers – From IITs,NITs, etc.
MBAs – Premier Management Institutions
Chartered Accountants – Institute of Chartered
Accountants of India (ICAI).
All Officers are entitled to other applicable benefits:
Contributory Provident Fund
Contributory Medical Insurance Scheme
Group Savings Linked Insurance Scheme
Group Personal Accident Insurance Scheme
Gratuity and are members of the HPCL Employees Superannuation
Benefit Fund Scheme
DA, HRA, Conveyance etc.
Benefits like Furniture Loan, Vehicle Loan, Housing Loan, Medical,
Home Lease etc. are also available to Officers satisfying minimum
service criteria.
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Learning & Development and Career Progression
Systematic & continuous quality Training and Job rotation is provided to
all Employees to gain wider exposure which facilitates overall
development of the Officer.
HPCL believes in pro-active Human Resource Development and nurtures
the internal talent of the organization by practicing the following, to
name a few :
Reward and Recognition Schemes Providing challenging work environment
Balanced Score Card based performance appraisal system along
with Competency Development Programme
Profit sharing and Performance Linked Incentive Scheme
At HPCL the work measurement practice followed is “Standard
operating procedure” (SOP) and Job definition (JD). The process is
standardized based on time and motion studies. It aims to make it a
function of time and efforts.
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HIGHLY COMPLEX NATURE & AUTOMATION HELPS IN TIME MINIMIZATION & IDLE TIME REDUCTION
Operations Management Project Report
6 ENVIRONMENTAL MANAGEMENT
Crude oil is a major source of energy and feedstock for petrochemicals.
Oily sludge, bio-sludge and chemical sludge are the major sludges
generated from the processes and effluent treatment plants of the
refineries engaged in crude oil refining operations.
Refineries in India generate about 28,220 tons of sludge per annum.
Various types of pollutants like phenols, heavy metals, etc. are present
in the sludges and they are treated as hazardous waste.
Petrochemical plants generate solid waste and sludges, some of which
may be considered hazardous because of the presence of toxic
organics and heavy metals.
Accidental discharges as a result of abnormal operation can be a major
environmental hazard, releasing large quantities of pollutants and
products into the environment. The presence of objectionable
conditions such as offensive odors and accumulation of debris have
been reported to decrease the proper value and recreational uses of
water.
Wastewaters released by petrochemical industries are characterized by
the presence of large quantities of polycyclic and aromatic
hydrocarbons, phenols, metal derivatives, surface-active substances,
sulphides, naphthylenic acids and other chemicals.
Ineffectiveness of purification systems can become seriously
dangerous, leading to the accumulation of toxic products in the
receiving water bodies with potentially serious consequences on the
ecosystem. Several investigations have shown positive correlation
between pollutions from petrochemical effluents and the health of
aquatic organisms.
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Operations Management Project Report
6.1 EFFLUENTS AND SOLID WASTE ANALYSIS IN HPCL
PETROCHEMICAL REFINERY:
On regular basis analytical studies of effluents and soil samples where
sediments from the treated effluents are dumped is carried out. These
are then analyzed for physicochemical properties, metallic and non-
metallic ions.
These parameters are compared with established international
standard (FEPA). Effluents were classified as:
PROCESS WASTE WATER (PWW) : Process waste water (PWW) is water that is
intended to come into contact with hydrocarbons or treated chemicals at the
petrochemical plant.
CLARIFIED WATER (CW): Clarified water (CW) is a combination of PWW
and sewage.
FINAL DISCHARGE (FD): The final discharge water (FD) is the effluent,
which has undergone both chemical and biological treatment to
eliminate or reduce waste contents to acceptable levels.
Some of the Effluent Treatment Methods Used:
The treatment procedure of the effluent in the company is as shown
below:
1) Equalization
2) Sedimentation
3) Flocculation
4) Floatation Dissolved Air Basin
5) Biodegradation
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6.2 ANALYSIS OF WASTE WATER AND EFFLUENT TREATMENT
METHODS:
Waste Water Analysis: Determinations of major parameters are
carried out according to standard methods.
1. Determination of Biological Oxygen Demand (BOD),
2. Determination of Dissolved Oxygen (DO),
3. Determination of Chemical Oxygen Demand (COD),
4. The determination of Total Dissolved Solid (TDS),
5. Total suspended solid (TSS),
6. Total Hydrocarbon (THC),
7. pH determination
8. H) Level of Cl-, (PO4) 3-, (SO4) 2- and NO3
9. I) Determination of the heavy metals including nickel (Ni), lead
(Pb), zinc (Zn), iron (Fe), copper (Cu), cobalt (Co) and cadmium
Analysis of Sediments: Sediment samples are air-dried by thinly
spreading on a clean laboratory bench surface at room temperature,
and brought to a relatively homogenous state by thoroughly mixing,
and sieving with 2 mm mesh before being treated. In the case of fresh
samples, large stones and roots were picked out before mixing and
weighing.
Moisture determination of duplicate samples of the sediment was
carried out for dry weight correction. The sediment samples are then
prepared (extraction method) for the various physicochemical
determinations.
Various physicochemical properties are determined by various
analytical methods.
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Operations Management Project Report
6.3 SAFETY AND HAZARDS MANAGEMENT:
Causes of Accidents in Refineries: Refinery accidents are often the
result of unexpected interaction between automated process
equipment and operators. Equipment failures or operator errors can
lead to sudden and unexpected changes in the plant operation. If these
disruptions to normal process operation exceed the capabilities of the
operators or the capacity of the safety systems, a severe accident can
occur, potentially producing a devastating fire, explosion, or toxic
release.
Safety Department: Special team of experts is present in HPCL to
investigate loss in such accidents, including material failures, fires, and
explosions. These investigations range from high-loss disasters to small
incidents.
In the drive to improve safety and reliability, chemical process facilities
tend to rely heavily on automation using sophisticated instrumentation,
computers, and programmable logic controllers to run their plants.
Honeywell does all the instrumentation work for HPCL Mahul, Mumbai.
In an effort to improve energy efficiency and reduce pollution, various
pieces of equipment are interconnected in ways that complicate their
operation.
Safety department of the refinery performs following functions:
1. Accident and incident investigation
2. Root-cause analysis (RCA)
3. Fire and explosion analysis
4. Fire protection engineering
5. Fitness-for-service evaluation
6. Specification, corrosion control, and failure analysis of materials
7. Evaluation of pressure relief systems, vessels, and piping
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Operations Management Project Report
8. Analysis of atmospheric releases, spills, and environmental fate
9. Groundwater and soil remediation support
10. Compliance with standards and regulations
11. Risk and reliability analysis and quantitative risk
assessment
12. Process hazards analysis (PHA)
13. Hazard and operability analysis (HAZOP)
14. Failure modes and effects analysis (FMEA)
15. Review of process safety management (PSM) and risk
management program (RMP)
16. Safety and health training
17. Environmental impact and baseline assessments
18. Site security and vulnerability analysis
19. Site investigation and remediation
20. Hydrology and groundwater monitoring
21. Project management, performance, scheduling, and
construction delay analysis
Benefits of Having Safety Department includes better understanding of
employee exposures to potentially hazardous situations, current
knowledge of asset vulnerabilities, identification of opportunities for
cost-effective mitigation measures to reduce potential losses, and
better knowledge of loss exposures from an insurance perspective.
Their experience provides engineers and scientists unique insights in
addressing various risk and reliability issues and assessing
environmental and health impacts, to help increase the safety of
workers, processes, and facilities and minimize operational disruptions
and property loss.
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Operations Management Project Report
7 VALUE ENGINEERING
Value engineering at HPCL is carried out in the following steps:
7.1 FEASIBILITY PHASE
During the initial phase, current constraints such as product quality, current market demand, existing refinery capacity and existing refinery condition are established. Typically, this type of investigation includes physical on site examination of equipment as well as a review of inspection and other records. A process simulation will be performed to obtain a model for use in further design and to establish the operating constraints.
Existing legislation and product standards, locally and internationally, are reviewed to establish likely future product requirements. Market research based on current economic conditions and expected future conditions, are used to predict demand. This research is often done using the expertise of consultants with appropriate local experience.
This phase could take 4 to 6 weeks, depending on the complexity of the system.
7.2 CONCEPTUAL PHASE
The predicted future demand is used to establish various revamp scenarios. Using the simulation and existing equipment data, the extent of revamp required to reach different demand cases is determined. Using conceptual estimating techniques, an order-of-magnitude cost estimate for the different scenarios is obtained. The emphasis for this type of cost estimate is on establishing the differences between different options.
The cost estimates for different demands are compared with revenue generated and the information is used to plan a revamp process to meet demand for the required period into the future.
At this stage, a formal value engineering exercise is carried out to establish where opportunity exists for increasing value. Typically, a number of alternate designs or options are generated, the best of which are investigated further. The optimum alternatives are then incorporated into the design for further engineering. As the design progresses and more detail and firmer costs become available, it is often useful to perform another value engineering exercise.
The conceptual phase takes 6 to 8 weeks depending on the required estimating accuracy, complexity of solutions/options and the number of scenarios to be estimated. Typically at the end of this phase the following are available:
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Operations Management Project Report
Process flow diagrams, mass and energy balances
Equipment lists
Preliminary equipment sizing
Order-of-magnitude cost estimates
Economic evaluation
7.3 BASIC ENGINEERING
After the concept has been finalised and agreed with the refinery management, the design proceeds to firm up details. Process conditions are frozen and detailed equipment specifications are produced. Input from mechanical, piping, control systems, electrical and civil engineering disciplines is included to complete the design. Experts are used from other organisations where specialised skills are required. Detailed Piping and Instrumentation Diagrams (P&ID's) are produced showing the requirements of all disciplines. Equipment, instrumentation and material specifications are sent to suppliers to obtain quotations and details of required items. Global procurement is used to source material in the most effective manner, from both cost and schedule considerations.
During this phase, which could last about 3 months, reviews are held with clients, suppliers and internally to ensure the refinery's requirements are met and that the suppliers understand their requirements. Suppliers are often selected at this stage, although orders are not yet placed.
At the end of this phase a Hazard and Operability study (HAZOP) is held to ensure the design is workable and safe. The cost estimate is updated with an improved accuracy, based on the additional information.
7.4 DETAILED ENGINEERING AND CONSTRUCTION
Once all the planning and analysis is complete, the engineering departments get into full swing. Orders are placed for equipment, especially long delivery items. Any items not yet firmed up are defined and engineering completed. Any changes or updating are extremely tightly controlled to prevent omissions, schedule threats or escalating costs. The duration of this phase normally depends on equipment delivery. Careful planning is required to reconcile delivery times and commissioning and start-up requirements. Material must arrive on site
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Operations Management Project Report
in time to facilitate construction. Effort is concentrated on expediting and inspection to ensure that items reach site on time and are correct.
Any delays during engineering can cause an impact on the construction team, who need the flexibility to respond appropriately. A key consideration during construction phase is the safety of construction labour and other people in the vicinity of the site. At the end of construction the site is normally handed back to the owner for commissioning and start-up.
7.5 COMMISSIONING AND START-UP
During this final phase, the process of transferring the revamped refinery back to the operations department is done.
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Crude oil pipe line is connected from Alibagh to Mahul, LPG distribution is from Mahul to Ahemednagar & other cities.
Designing a plant in cost effective way is also a part of Value engineering
Operations Management Project Report
8 KEY FINANCIALS
8.1 FIXED ASSETS
Particulars Amount (Rs)Gross Block 19570.04Less: Depreciation 7640.77Net Block 11929.27Capital Work-in-Progress 3315.95TOTAL 15245.22
8.2 CURRENT ASSETS, LOANS AND ADVANCES
Particulars Amount (Rs)Inventories 12020.28Sundry Debtors 1710.66Cash and Bank Balances 294.01Other Current Assets 49.46Loans and Advances 5222.96TOTAL 19297.37
8.3 INCOME
Particulars Amount (Rs)Sale Of Products 103837.43Less:Excise Duty Paid 7394.51Net Sales 96442.92Recovery Under Subsidy Schemes 8260.84Other Income 1197.97TOTAL 105901.73
Book Value of Assets= Fixed Assets + Current Assets =15245.22 + 19297.37 =Rs.34542.59/-
8.4 RETURN ON INVESTMENT
Return Of Investment (ROI) Of the company= Net Income / Book Value of Assets =105901.73 / 34542.59 =3.0658
Other Than Intangible Assets
Gross Block At Cost As At 01-
Additions/Reclassifications
DeducTions/ReClassifiCations
Gross Block At Cost As At 31-03-
DeprecIation
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Operations Management Project Report
04-2007 2008Land - Freehold
477.68 22.94 - 500.62 -
Roads and Culverts
771.66 228.05 1.25 998.46 15.58
Buildings 1,498.73
333.82 2.73 1,829.82 36.19
Leasehold Property – Land
90.04 15.36 - 105.40 3.50
Railway Siding and Rolling Stock
281.40 0.90 0.43 281.87 12.88
Plant and equipment
12,043.51
3,227.21 42.55 15,228.17
750.07
Furniture, Fixtures and Office/Lab Equipment
321.50 103.31 8.56 416.25 28.93
Transport Equipment
100.50 22.22 2.41 120.31 3.96
Unallocated capital Expenditure on Land Development
0.20 - - 0.20 -
Unallocated Capital Expenditureand Materials at Site 2,647.14 3,683.14Advances for Capital Expenditure 372.72 83.68Capital Stores 19.46 33.44Capital Stores lying with Contractors 17.07
109.87Capital goods in transit 24.58 124.62
3,080.96 4,034.75
Construction period expenses pending apportionment(Net of recovery):Establishment charges 29.80 57.36Interest 102.05 130.06Other Borrowing Cost * 103.06 21.09Depreciation 0.08 0.30
234.99 208.81 3,315.95 4,243.56
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Operations Management Project Report
9 BIBLOGRAPHY
Refernces:
1. Production and operations management :Ashwathappa/ Bhat
2. Operations management : Roberta Russell/Bernard Taylor
3. Productions operations management : Buffa/Sarin
Website:
1. www.hpcl.com
2. www.hindustanpetroleum.com
3. www.managementarticles.com
4. www.moneycontrol.com
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