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Making IT Happen @ BPCL Kochi Refinery: Defining New Paradigms of Operational Excellence through IT Transformation

CASE STUDY, INFORMATION TECHNOLOGY
IIM Kozhikode, 20 pages

Case Preview

Making IT happen @ BPCL Kochi Refinery: Defining new paradigms of Operational Excellence through IT Transformation

 

At a time when sweeping changes were going on in the Indian Oil Industry and there were clarion calls of change in 2000, the only solution was to think fast forward or stay put. As Mr. E. Nandakumar rightly stated “Our sustainability is in our operational excellence leveraging the seamless networking of our manufacturing and business parameters.” Mr. E. Nandakumar was on the Steering committee of almost all IT implementation projects in Kochi Refinery, and presently heads the Refinery that is all set to grow into a 15.5 MMTPA refinery and diversify into Petrochemicals.

The major changes in 2000 were de-regulation of Indian refining industry, implying both new competitors and new paradigms of business, increased environmental regulations, benchmarking with world-wide refining technologies and competition from new large private sector refineries. The challenges staring at the public sector oil companies were many - most of which had to be battled from within.

Towards meeting these challenges, Kochi Refineries Limited (KRL) invested in the new and expanded processing capacity aimed at producing more value added products. However, there were still challenges such as tough competition, latest technology of the new refineries without the burden of legacy engineering or systems, etc. Producing world class products, maximizing Gross Refinery Margin (GRM), and staying ahead of the competition remained uphill tasks. These challenges necessitated KRL to go for major ITenabled transformation projects.

KRL embarked on the process of formulating an Integrated Refinery Information System strategy in tune with the world’s best refineries to achieve more efficient operations, and maximize GRM. KRL set out on the task of creating an IT Master Plan in alignment with the Business Strategy. A change was desired and the path slowly became visible................

Teaching Note Preview

Making IT happen @ BPCL Kochi Refinery: Defining new paradigms of Operational Excellence through IT Transformation

 

Synopsis

Petroleum products touch the lives of people in many ways. From energizing the two wheelers that ride down the narrow lanes to fueling airplanes that cut across the skies making distances closer, from lighting homes in remote places of illuminating modern ones, and from charging industrial furnaces to lubricating a labyrinth of gears,the list is endless and over billions of lives are energized by petroleum products in one form or the other. Playing a pivotal role in energizing the life of Indians, Bharat Petroleum Corporation Limited (BPCL) is a leading player in the petroleum sector in India, and is a Global Fortune 500 and Forbes 2000 company.

The refineries manufacture different petroleum products. Refining and Marketing are the core activities of BPCL. Kochi Refinery is one of the four Refineries of BPCL. Kochi Refineries Limited started operations in September 1966 and was a separate company till 2006. In the year 2006, Kochi Refineries Limited (KRL) was merged with Bharat Petroleum Corporation Limited.

This case study is about the IT transformational journey at BPCL Kochi Refinery for achieving operational excellence. The IT journey at KRL started with an IT Master Plan followed by its implementation through various strategic and transformational IT projects. These include implementation of SAP, core refinery applications like Manufacturing Execution System (MES), Asset Integrity Management Systems (AIMS), Laboratory Information Management System (LIMS) and many refinery business process automation and compliance systems. Several innovative and best practices in IT planning, change management, just-in-time training methodology, special project organization and execution methodology, KPI formulation and monitoring, benefit evaluation and realization methods were some of the key Critical Success Factors (CSF) for the successful implementation. The structured methodology for the IT strategy planning and the unique framework adopted for ensuring guaranteed business benefits for the key projects are also discussed.

Case Positioning and Setting

The case study is developed for students and practicing executives to understand the need and process of IT strategy, challenges and best practices during the implementation of strategic IT projects, business value identification and realization, and how strategic IT projects can transform organizations. The case is meant for classroom discussions of Postgraduate Diploma in Management (PGDM), MBA and Executive management program for Business Information Systems, Management Information Systems (MIS), Enterprise Resource Planning (ERP), and IT Strategy Planning and Implementation in Information systems area.

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Product code: IT-1-0001, IT-1-0001A

Abstract


Petroleum products touch the lives of people in many ways. From energizing the two wheelers that ride down the narrow lanes to fueling airplanes that cut across the skies making distances closer; from lighting homes in remote places of illuminating modern ones; and from charging industrial furnaces to lubricating a labyrinth of gears, the list is endless and over billions of lives are energized by petroleum products in one form or the other. Playing a pivotal role in energizing the life of Indians, Bharat Petroleum Corporation Limited (BPCL) is a leading player in the petrochemical sector in India, and is a Global Fortune 500 and Forbes 2000 company.

The refineries manufacture different petroleum products. Refining and Marketing are the core activities of BPCL. Kochi Refinery is one of the four Refineries of BPCL. Kochi Refineries Limited started operations in September 1966 and was a separate company till 2006. In the year 2006, Kochi Refineries Limited (KRL) was merged with Bharat Petroleum Corporation Limited.

This case study is about the IT transformational journey at BPCL Kochi Refinery for achieving operational excellence. The IT journey at KRL started with an IT Master Plan followed by its implementation through various strategic and transformational IT projects. These include implementation of SAP, core refinery applications like Manufacturing Execution System (MES), Asset Integrity Management Systems (AIMS), Laboratory Information Management System (LIMS) and many refinery business process automation and compliance systems. Several innovative and best practices in IT planning, change management, just-in-time training methodology, special project organization and execution methodology, KPI formulation and monitoring, benefit evaluation and realization methods were some of the key Critical Success Factors (CSF) for the successful implementation. The structured methodology for the IT strategy planning and the unique framework adopted for ensuring guaranteed business benefits for the key projects are also discussed.



Pedagogical Objectives

This case enables students to discuss, deliberate and understand the major aspects IT transformation such as IT Strategic Planning and implementation. The specific teaching goals include:

  • The IT Transformation journey in a process manufacturing industry
  • How is IT an enabler in the transformation of an organization?
  • The importance of IT Master Plan and Strategy for an enterprise, and also the methodology and processes adopted for the IT master plan and strategy
  • The challenges in the SAP ERP implementation and how the key innovations and best practices became the key critical success factors in making a successful implementation
  • The competitive environment of an enterprise and what capabilities the enterprise software brings for competitive advantage

Case Positioning and Setting

The case is meant for classroom discussions of Postgraduate Diploma in Management (PGDM), MBA and Executive management program for Business Information Systems, Management Information Systems (MIS), Enterprise Resource Planning (ERP), and IT Strategy Planning and Implementation in Information systems area.





This Case Pack Includes:
 - Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
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