Return to Previous Page

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

CASE STUDY, INFORMATION TECHNOLOGY
IIM Kozhikode, 20 pages
AUTHOR(S) : L L Ramachandran (BPCL), R Radhakrishna Pillai(Indian Institute of Management Kozhikode), M P Sebastian (Indian Institute of Management Kozhikode)

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................

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

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.

.............................

$7.31
Rs 0
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)


**Electronic downloadable links (PDFs, PPTs, Supplements etc.) are available immediately after purchase. Please use Indian Currency Option (INR) when you are Making Payment within India. "No. of Copies" reflects the number of permissions you intend to use in Classroom Discussions / Corporate Trainings.

No. of Copies
$7.31
Rs 0

Related products




Request for an Inspection Copy

(Strictly for Review Purpose, Not to be Used for Classroom Discussion/Trainings)