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................
Bharat Petroleum Corporation Ltd.
Petroleum products directly touch the lives of people in many ways. From energizing the two wheelers that ride down the narrow lanes to fuelling airplanes that cut across the skies which makes faraway places closer, from lighting homes in remote places to illuminating modern ones, and from charging industrial furnaces to lubricating a labyrinth of gears. The list is endless and over billions of lives globally are energized by the petroleum products in one form or the other.............
BPCL Kochi Refinery
In a sleepy village on a small hill-top near Kochi, the seeds for a grass-root refinery were sown almost five decades ago when the Government of India, Philips Petroleum Company of USA and Duncan Brothers of Calcutta (presently known as Kolkata) have executed an agreement for the construction of a petroleum refinery in South India. The erstwhile Kochi Refineries Limited thus started out as a stand-alone refinery named Cochin Refineries Limited (CRL), formally registered on September 6th 1963 in Ernakulum, Kerala...........
The IT Transformation Journey
The computerization at KRL started in 1980 with the IBM Batch Processing System and followed by online computerization with HP9000 servers based on the UNIX system in 1995. Materials accounting, Financial accounting, Oil accounting and HR Payroll applications were computerized during this period with Ingress as the database base management system.............
The IT Master Plan
The IT transformation journey of KRL started with an IT master plan (Exhibit III). The primary objective of the master plan was to enable the KRL in enhancing the competitive advantages through operational excellence. The major challenges faced by the IT team in formulating the master plan included: .........
SAP implementation: Project Mantra
The SAP implementation project was named as ‘Project Mantra’, an acronym form for ‘Project Managing Transformation’, by the top management of KRL. The name reflected the vision and expectation of the top management that SAP ERP implementation would make KRL a totally transformed organization...........
SAP R/3 Implementation
The economic climate always demands for a fast return on investment, often within a year or the same year of implementation. Customers always look for implementation acceleration and best practices. Accelerated SAP (ASAP) is known for a proven, repeatable and successful approach to SAP implementation. ASAP also provides content, tools and expertise from thousands of successful implementations. The ASAP divides the implementation process into five phases namely, Project preparation,.............
Implementation Training
Training is very crucial and important for any successful ERP implementation. Two types of training were planned during the SAP implementation – Implementation Training and End-User Training. The first training was for the core team members who would be implementing the system and second training was for the end user. A unique and innovative method was adopted in this project for the training programs..............
End-User Training
The end-user training, a key success factor of the project, was also handled very efficiently and effectively. The “Just-in-Time” training concept was adopted for the end-user training also. The end-users were trained two weeks ahead of “Go-live” of the project so that when the system went live, the knowledge they acquired were fresh. .............
Change Management
All communication tools used during the change management process were communicating the key message “Together we make IT happen”. Conveying this message right across all the levels was considered to be the most crucial aspect of the change management. Exclusive training programs and motivational workshops were conducted throughout the organization in small and big groups to drive home the message. A special in-house bulletin called Mantradhwani was released to disseminate the different aspects of the SAP R/3 implementation,................
Project Synergy
KRL was an independent company and a subsidiary of BPCL Corporate till 2006. In July 2006, KRL was merged with BPCL. The IT challenge during the merger was the alignment and consolidation of all IT systems including SAP. The biggest challenge was SAP consolidation. “Project Synergy” was launched for consolidating the SAP systems of KRL and BPCL............
Project Aryabhatta – Defining IT Strategy for Aggressive Business Growth
In the year 2006, BPCL Corporate also embarked into a new journey with a project called “Project Destiny” to achieve aggressive growth in the next 5 years. Each business unit of BPCL has initiated strategic measures to meet the goals set under the Project Destiny. i.e., `Double the volume and quadruple the profits’. The Integrated Information Systems (IIS) came up............
What’s Next?
Being one of the leaders in IT-enabled transformation, BPCL KRL continues its effort to leverage IT with a view to achieve greater efficiency in all its refinery operations.
BPCL-KRL won many accolades including NASSCOM-CNBC TV18 IT User Award for 2010 in the Energy & Utilities category.............
Assignment Questions
I. Why Key performance indicators are important for an ERP project? What are the KPI’s of the BPCLKR implementation?
II. What are the critical success factors for an ERP implementation? How do these factors applied in this case?
III. What are the key risk factors in ERP implementations? Identify the major risks in the BPCL-KRL ERP implementation and show how they were mitigated.
IV....................
Exhibits
Exhibit I: Oil and Gas Supply Chain Overview
Exhibit II: Business Lines of BPCL
Exhibit III: Journey of IT Transformation at Kochi Refinery
Exhibit IV: Key guiding principles and deliverables of Master plan
Exhibit V: Phases of ASAP Implementation
Exhibit VI: Phases of SAP Implementation at KRL
Exhibit VII (a): SAP Modules Implemented
Exhibit VII (b): SAP Modules Implemented
Exhibit VIII: Mantradhwani - Sample Copy
Exhibit IX (a): FAQ of SAP
Exhibit IX (b): FAQ of SAP
Exhibit X: KPI and Benefits of SAP Implementation
Exhibit XI: IT Strategy Plan
Exhibit XII: IT Strategy Objectives for KRL
Exhibit XIII: MES Modules Implemented
