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 oil and gas sector is one of the six core
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)

The core activity of

an oil refinery lies at
its
Operations.

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 Indias
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:
KOCHI
REFINERY

It Grew from 7.5 MMTPA in 1994 to 9.5 MMTPA in 2006 showing the success of the amalgamation
The refinery maintained excellent ratings in health, safety and environment management systems.
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

Pro
j ec

20
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ab ject
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tta

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for tudy
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Ma Pro
ntr jec
aS t
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20
01
Ma
ste
rP
Stu lan
dy

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gra K
de

20

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De-regulations of Indian refinery industry: technological innovations, profit

maximization, IT enabled transformation

IT Journey: Different Components rolled out

to create a robust foundation A Timeline
200

Strategic Milestone

MES
9
Project
AIMS
200
Project
9
Project
Aryabhatta
200

ERP Milestone
ERP related Milestone
MES related Milestone

Project
Synergy

Online
system
implementati
199
199
on
7

Email &
Intranet

Employee
Self
Service

Y2K
upgrade
200
0

200
1

200
3

Master Plan
Study

New Data
Center
200
3

7
200
7

200
6

200
4

Project Mantra &

SAP
Implementation

BPA
Study for
MES

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

Support of Top Management

IT Strategy

Implementation Methodology

External Sponsorship and Support

Strength of Security

Quality Assurance and Testing

Minimal Customization and Package Selection

Risk Mitigation

Best-in-Class
Security

External
Consultants

Vendor Support

Senior
Manageme
nt

Divided IT
Strategy

Organizatio
nTechnology
fit

Legacy
System
Manageme
nt

Testing and QA

BPCL was divided into

6-Strategic Business
Units :
Retail
Aviation
Lubricants
Liquefied Petroleum
Gas (LPG)
Industrial and
Commercial
3-pronged
Refinery IT
Strategy:
Create
Communication
Network
Basic Information
Network setup
Process Transactions
with customers

Sun Ultra
Firewall

Coopers and
Lybrand

SAPs best PM
Software R/3

Mr.
Nandakumars
Efforts

Split the IT
domain into 6
Industries

OrganizationTechnology fit

- End User
Training
Implementatio
n Training
- Change Management

BPCLs
View
Point

Best SAP testing

platforms

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 1Overview, 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
1st phase
Conceptual design
planning (CDP)

As-is process > to-be process

Various gaps and resolutions were
identified
Continuous change management
initiatives were also started

2 phase
Detailed Design &
Implementation
(DDI)

nd

SAP R/3 configuration

Master data collection
Validating and clearing
Baseline and integration testing
Authorization and end-user training

Accelerated SAP Implementation

methodology Different Module implementation

Finance (FI)

Controlling
(CO)

Materials
Management
(MM)

Sales &
Distribution
(SD)

Project
systems
(PS)

India
localization
(CIN)

Plant
Maintenance
(PM)

Human
resources
(HR)

Oil (Industry
specific)
IS - Oil

Risks of Implementation :
SAP-ERP

Scaling up of the implementation due to merger

between KRL and BPCL, data compatibility issues
and time taken to align the functioning of ERP.
Reason is BPCL has a larger user base and scaling
up could take more time and it is an expensive
process.
ERP has generally 3 kinds of inputs: material bills,
inventory records, master production schedule. If
anyone of the input is faulty, the generated
output net requirement plan (NRP) will be
problematic.
Crucial technical support for Internet connectivity,
maintenance and upgrade activity of ERP system
could be risky if the vendors are not paid on time
or do not do their tasks.
In-house SAP experts knowledge may not be
completely shared with the core members, which
could lead to ineffective exploitation of ERP

Legacy Data
Compatibility

Scaling
Problems due to
merger

Operational
Efficiency at
stake

Data
Harmonizing
and seamless
integration

Security and
Authorization
Issues

Synchronization
and
Redundancy

Technical
Support and
Connectivity

Improper KT

Risk Mitigation: SAP-ERP

Proper planning phase by phase which involves IT experts and

core members during implementation as well as post
implementation.

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.

Security and authorization of way of access to data to be

designed based on the business structure. Governance, Risk
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
company standards.

Phased
Implementation

Phased UserTraining

Continuous
Tech-Support

BusinessStructure based
data-access

Regular
Auditing

Risk Mitigation through training

Implementation training

End User training

Change Management

Just-in-time training
concept

One of the key success

factors of the project

Together we make IT
happen key message

Three levels overview,

functional, module
configuration in a phased
manner to employees

Training two-weeks ahead

of Go-live of the project

Mantradhwani special
in-house bulletin

Infopak online reference

point

Special booklet consisting

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
ance

The implementation instead of

selecting few functions at a
time took all of them at once
and successfully completed
the integration one month
ahead of schedule because of
proper internal communication
and good change management
practices

Finance

Hum
an
Reso
urce

India
Localisa
tion

Contro
lling

Project
System

Material
s
Manage
ment

Sales
&
Distrib
ution

The transition to the SAP

ERP was very smooth as
ascertained by positive
level of acceptance. This
implementation became
one of the best ERP
implementations in the
industry

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-thegame-/10192