Making IT Happen

at BPCL Kochi
Refinery
PRESENTED BY:
URVASHI KALSON
SHRISTI KHUSIRAM
PRANAV KOUNDINYA
VISHAKH BHARADWAJ
SUJITH SUBRAMANIAM
BHUVANESH PRAKASH
SULEKH JAIN
PARIKSHIT JHAJHARIA
M.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.
INDIAN SCENARIO The core activity of
an oil refinery lies at
it’s
 The oil and gas sector is one of the six core
Operations.
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)
 BPCL
 A 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 products
 Core Activity being refining it has four refineries strategically located to cover India’s
geographic belt
 Has a pan India presence to serve a wide array of consumers in metros as well as rural India

KRL is a five decade old refinery which became BPCL subsidiary in 2001 situated in Kochi

BPCL: It Grew from 7.5 MMTPA in 1994 to 9.5 MMTPA in 2006 showing the success of the amalgamation

KOCHI
The refinery maintained excellent ratings in health, safety and environment management systems.
REFINERY
Refinery had a world class ERP system along with EMS, QMS and many other quality control
certifications
 Connecting Corporates Through
Integrations: BPCL KRL IT
Transformation
 De-regulations of Indian refinery industry: technological innovations, profit
maximization, IT enabled transformation
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 IT Journey: Different Components rolled out
to create a robust foundation – A Timeline

Strategic Milestone 200

MES 9
Project
ERP Milestone AIMS 200
Project 9
ERP related Milestone
Project
Aryabhatta 200
MES related Milestone
7
Project
Synergy 200
7
New Data
Employee Center 200
Online Y2K Self 6
system 200
upgrade Service 4 BPA
implementati 200
200 3
Study for
on 199 199 200 200
MES
7 8 0 1 3
Project Mantra &
Email & Master Plan SAP
Intranet Study Implementation
 Do 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 all
• The technologies used like SAP and state-of-the-art implementation
• GUI was provided at all work stations for ease of operability
• SAP decomposed the whole system into modules like Finance, Controlling, HR etc, and
then implemented the same
• Effectiveness of Change management
• The end-user training was handled effectively and efficiently along with “Just-in-Time”
training
• Various initiatives to make the implementation successful across the organization included
• Special in-house bulletin called “Mantradhwani” to report progress, changes and
benefits of the system
• Banners and posters were displayed
• Next in line were MES and AIMS projects
• All the above technological transformations provided BPCL KR with a competitive edge
• Various ISO certifications and national awards and rating
Success Factors • Best-in-Class • Vendor Support
Security

• Support of Top Management

• IT Strategy Senior
Divided IT
Manageme
• Implementation Methodology Strategy
nt
• External Sponsorship and Support
• Strength of Security
• Quality Assurance and Testing Organizatio Legacy
n- System
• Minimal Customization and Package Selection Technology Manageme
fit nt
• Risk Mitigation
• External • Testing and QA
Consultants
BPCL was divided into • Sun Ultra • SAPs best PM
6-Strategic Business Firewall Software –R/3
Units :
• Retail
• Aviation
• Lubricants Mr. Split the IT
Nandakumar’s domain into 6
• Liquefied Petroleum Efforts Industries
Gas (LPG) BPCL’s
• Industrial and
Commercial
- End User
View
•3-pronged
Refinery IT
Strategy: Organization-
Training
-
Implementatio
Point
• Create Technology fit
n Training
Communication - Change -
Network Management

• Basic Information • Coopers and • Best SAP testing

Network setup Lybrand platforms
• Process Transactions
with customers
Major IT strategic projects implemented and
their success factors
 SAP ERP: known as ‘Project Mantra’, a business initiative rather than IT
initiative
 Significant role of the Steering committee: issue resolution
 Implemented 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 method
 Continuous and systematic monitoring throughout the progress
 The end result was a Structured Issue Methodology, made the issue resolution
prompt
 A three level training model was followed for better learning process: Level 1-
Overview, Level 2: Functional detailed, Level 3: Module configuration
 ‘Just in Time’ concept was used to retain the gained knowledge fresh, training was
conducted just before ‘Go-live’ of the project
 FAQs 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 operations
 A proper solution architecture and integrated framework was to be
suggested along with the quantitative business benefits
 Alignment of IT system SAP R/3 with other business requirements: ‘Project
Synergy’
 Lead 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 solutions
 Technology support in providing holistic decision support and execution
system
Cont…..
 Asset Integrated management system: focused on asset reliability and integrity
 Integrated with SAP PM module
 The critical factor was the benefit realization methodology, followed in MES
 All the projects were implemented in phased manner
 A baseline study and post go-live audit were conducted to assess the success of the
projects
 Studies revealed that improvement in the business benefits of the refinery exceeded the
bench marks
 Automation and optimization of refinery operational processes
 End to end integrated systems provided a structured approach to the problems:
Seamless networking
 Increased visibility across downstream supply chain
 Implementation of pilot projects, accessing the feasibility of the project, thus saving
overall efforts and future risk mitigation
 And 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
refinery
• As-is process –> to-be process
1st phase – • Various gaps and resolutions were
identified
Conceptual design • Continuous change management
planning (CDP) initiatives were also started

• SAP R/3 configuration

2 phase –
nd
• Master data collection
Detailed Design & • Validating and clearing
Implementation • Baseline and integration testing
(DDI) • Authorization and end-user training
Accelerated SAP Implementation
methodology Different Module implementation

Materials
Controlling Management
Finance (FI)
(CO)
(MM)

Sales & Project India

Distribution systems localization
(SD) (PS) (CIN)

Plant Human Oil (Industry

Maintenance resources specific)
(PM) (HR) IS - Oil
Risks of Implementation :
SAP-ERP
• Scaling up of the implementation due to merger Scaling
Legacy Data
between KRL and BPCL, data compatibility issues Problems due to
Compatibility
and time taken to align the functioning of ERP. merger
Reason is BPCL has a larger user base and scaling
up could take more time and it is an expensive
Data
process. Operational
Harmonizing
Efficiency at
• ERP has generally 3 kinds of inputs: material bills, and seamless
stake
inventory records, master production schedule. If integration
anyone of the input is faulty, the generated
output – net requirement plan (NRP) will be
problematic. Security and Synchronization
Authorization and
• Crucial technical support for Internet connectivity, Issues Redundancy
maintenance and upgrade activity of ERP system
could be risky if the vendors are not paid on time
or do not do their tasks. Technical
• In-house SAP experts knowledge may not be Support and Improper KT
completely shared with the core members, which Connectivity
could lead to ineffective exploitation of ERP
 Risk Mitigation: SAP-ERP
• Proper planning phase by phase which involves IT experts and
core members during implementation as well as post Phased Phased User-
implementation. Implementation Training
• 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. Business-
Continuous
Structure based
• Security and authorization of way of access to data to be Tech-Support
designed based on the business structure. Governance, Risk
data-access
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 Regular
company standards. Auditing
Risk Mitigation through training

Implementation training End User training Change Management

• Just-in-time training • One of the key success • “Together we make IT

concept factors of the project happen” – key message

• Three levels – overview, • Training two-weeks ahead • “Mantradhwani” – special

functional, module of “Go-live” of the project in-house bulletin
configuration in a phased
manner to employees • Infopak – online reference • Special booklet consisting
point of modules & FAQs

• Banners and posters

Big Bang Strategy
http://www.accenture.com/microsites/bigbangdisruption/Pages
/home.aspx
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.
Cont.…
Advantages
 The 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 time
 It is well designed for rapid implementations
 It 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 live
 Bottleneck of critical resources, like lack of funds, non availability of professionals,
etc. during the implementation can result in failed implementations
 The 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 business
Big Bang Approach in BPCL Kochi
Refinery
Plant
Mainten Finance
ance

The implementation instead of

The transition to the SAP
selecting few functions at a Hum
India an ERP was very smooth as
time took all of them at once Localisa
tion Reso ascertained by positive
and successfully completed urce
level of acceptance. This
the integration one month
implementation became
ahead of schedule because of
one of the best ERP
proper internal communication Contro Project
lling System
implementations in the
and good change management
industry
practices
Material Sales
s &
Manage Distrib
ment
ution
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 MES
 It aggressively pursued its IT planning in accordance with an IT Master
Plan, to enable KRL in enhancing the competitive advantage through
operational excellence.
Cont…

KEY GUIDING PRINCIPLES OF THE MASTER PLAN

 Integrate best in class packages
 Use proven technology that has a sustainable future
 Provide 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 stations
 Use the knowledge built into existing systems.
 Capture data only once at the source
 Cont…
KEY DELIVERABLES OF THE MASTER PLAN
 IT 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 methodologies
 Road map for business supporting applications and workflows
Cont…
 Benefit methodology for analyzing benefits was adopted.
 Benefits were classified into three main categories:
1)Benefits that could be measured and audited
2)Benefits that could be measured but not audited.
3)Benefits which are difficult to measure

 Future Technological
Challenges
 Sustainability of existing IT applications
 Building a IT competency center for refineries
 Optimize the existing IT systems for more business value
 Identifying and implementing new IT systems aligning with the business
strategies
 Adoption of refinery specific IT applications based on emerging technologies like –
Mobility, Analytics and cloud computing
 Integration with source and destination nodes to balance supply and demand
 Continuous and automated quality monitoring from the crude stage till delivery
using IT services
 Monitoring competitors products from India and abroad and integrating changes
in our production to counter them
http://www.atkearney.com/paper/-/asset_publisher/dVxv4Hz2h8bS/content/refining-2021-who-will-be-in-the-
game-/10192