Bharat Petroleum Corporation Limited

Bharat Petroleum Corporation Limited
There are companies and then there is Bharat Petroleum Corporation Limited (BPCL) - an organisation that has redefined the petroleum and refining business, treading a unique path. At BPCL, it is all about having a clear vision, discovering new avenues for growth and harnessing latest technology to drive Customer aspiration.
 
Success in the corporate world emanates from the relentless pursuit of excellence. The BPCL story is a case in point. Post its nationalisation in 1976, the company’s growth has been phenomenal. For the year 2004-05, its turnover stands at a staggering Rs. 63857 crores and its profits after tax (PAT) have climbed to a new high of 965.8 crores.
 
BPCL is organized into 6 Strategic Business Units (SBUs) comprising of Industrial & Commercial (I&C), Retail, Lubricants, LPG, Aviation and Refinery. It markets the products through a country wide network of 33 installation & oil terminals, 63 company operated depots, 45 LPG bottling plants and 19 Aviation service stations which provide logistical support for  7077 petrol stations, 1008 Kerosene / LDO dealers and 2124 LPG distributors, besides supplying fuel directly to hundreds of industries, and several international and domestic airlines.
 
Benefits derived by company by focusing on e-revolution
The company was quick to realise the enormous advantages of e-nabling business and resources. By making an early entry into Enterprise wide Resource Planning (ERP), BPCL has reaped the rewards of this futuristic model. The benefits have accrued to the company in terms of operational efficiency and enhanced fiscal discipline. In fact, BPCL’s upgrade to the most recent SAP/R3 is a first of its scale in the country. B2B & B2C platforms were also created for Customer convenience and smooth business transactions.
 
Information Technology has been the cornerstone of the company’s operations. At a snap of the fingers, Business Warehouse (BW) delivers data on business intelligence. Similarly another innovation, MES – an IT based manufacturing engineering system was adopted for the refinery operations, which was seamlessly, fully integrated with the corporate ERP. Support systems such as Intralink, Cyber Docs, Facility management, Data warehouse, E-mail, link to facilitate smoother customer service. Today, vendors’ cheques are cleared through ‘Electronic Fund Transfer’ minimising delays.
 
Clearly, BPCL is one of the few Indian corporate houses that have walked the talk when it comes to using the information super highway including providing corporate governance a new dimension and giving it an “e-edge”. A proof of this is the company’s induction into the ‘Global Advisory Committee’ of the international powerhouse in information systems- SAP.
 
Technology has always been one of the other drivers for BPCL in all activities. Elaborate Pipeline networks carry finished products from Refineries to the nearby areas and the SCADA (Supervisory Control and Data Acquisition) system effectively monitors the safe functioning of the pipelines. BPCL is the only Oil Company in India to provide “Astronova” -- Apron Fuel Management System for Aviation customers, BPCL effectively leveraged the smart card technology to design and offer loyalty cards, B2B and B2C transactional platforms created to assist Industrial customers & global aviation consumers to transact business online.
 
What are the IT initiatives of BPCL in the year 2005 - 2006?
BPCL has implemented following major IT projects / modules during last one year:
 
• Supply Chain Management (SCM) for Lubes Business
• Real Estate module of SAP R/3 for better manageability of the BPCL real estate
  assets
• Corporate Financial Management (CFM) module of SAP R/3 for better 
  manageability of short / long term investments done by BPCL.
• Fund Management module of SAP R/3 to implement better control over revenue
  expenditures of the corporation
• Vendor Portal to provide real time information on Request For Quotations (RFQs),
  Contracts, Purchase Orders, Statement of Accounts, their product stock at BPCL
  plants (selected vendors) from backend SAP R/3 system over Internet
• SMS PULL Applications for Smart Fleetcard owners to know their balance, to set
  limit or block the usage for any of their fleetcards and also to track the location of 
  the vehicle based on the usage of fleetcard.
 
Description of SCM project undertaken by BPCL
The SCM project in lubes was undertaken with a view to handle various business challenges faced in lubes business. The lubes business has challenges like
      • Large number of players
      • Brand loyalties
      • Declining margins
      • Quality and service support
      • Attractive packaging
      • Improved offerings in terms of new grades and availability
      • Large number of products
      • Obsolete stocks
      • Reactive logistics and production
      • Optimization of distribution net work
      • Optimizing Inventory
 
The implementation of SCM was undertaken with a view to address these challenges and address end to end supply chain issues. The project was undertaken with following clear Goals:
     • Improve responsiveness to market demand while substantially lowering overall
       supply-chain costs.
     • Improve the performance relative to competitors, by implementing better
       processes for supply chain planning and execution. 
     • Manage increased volume as per vision with our own base oil source.
 
Keeping these goals the project was undertaken to meet following objectives which were converted in to Measurable and monitored KPI with clear roles and responsibilities assigned.
    •Increase customer service
         o Fill Rate (forecast accuracy)
         o Delivery Performance/Dispatch adherence
    • Cost Optimization across supply chain
         o Optimized Finished Goods inventory across supply chain
         o Optimal sourcing
    • Effective asset management
         o Reduce cash to cash cycle time
         o Reduce Obsolescence                                                                         
    • Reduction in lost sales due to reduced stock outs   
 
The following KPI were agreed
  • Inventory Days of Supply  (average)
  • Forecast Accuracy (weighted average)
  • Delivery Performance
  • Production adherence
  • Procurement adherence
Nature of the project: 
To implement end to end supply chain planning processes using SAP Solution viz. Advance Planner & Optimizer.  The following modules were implemented:
    • Demand Planning,
    • Supply Network Planning
    • Production Planning and Detail Scheduling.
 
Who all are the beneficiaries of the project?
Lubes SBU, BPCL and customers and suppliers/transporters are the beneficiary of the project.
 
Business Benefits imparted through the project in terms of Business metrics  
The project is in the stabilization phase. It has provided major benefits in terms of:
         • Complete visibility & transparency for the entire supply chain 
         • Planning tool being integrated with execution system the adherence and  
           execution of plan is monitored and visible
         • Inventory optimization across Lubes supply network
         • Smooth production planning and execution
         • Proactive logistics with transportation planning
         • Procurement requirement planning and execution for raw materials, packing
           materials with timely call offs.
Major Benefits expected are reduction in the supply chain cost mainly inventory cost while improving service levels for the availability of the product which are being quantified. 
 
Description of Real Estate Management project taken up by BPCL
Objectives of the Projects Undertaken
        • To have powerful information system on properties owned and leased-in for 
          a meaningful analysis of information for decision making
        • Streamlining of rental payments and receipts for better rental management
        • Efficient Management of Real Estate properties to maximize return on 
          investments
 
Nature of the project
        • Real Estate module, one of the components of SAP (RE FX) has been
          implemented to handle the Real Estate process across BPCL. The project
          involved understanding and configuration of the “To Be Process” requirement
          and information needs of the Business to manage Real Estate properties
          spread across the company effectively.
       • The project also involved collection and cleaning of huge master data
         on real estate properties owned and leased by BPCL against a challenging
         timeline.
 
Who all are the beneficiaries of these projects?
All the Business units and HRS department who manage real estate properties for commercial, production, residential and office purposes are the ultimate beneficiaries of the project.   

What are the benefits derived from IT Projects by BPCL?
Benefits to Customers / Vendors
       • Quicker response - Improved professional service
       • Timely product supplies
       • Accurate Pricing/Discounts
       • Reduction in billing errors – cleaner SOA
       • Simplified and faster payments process
       • Reduction in admin. Costs for customers/vendors
       • Value added services (SoA in internet, B2B, E-Biz etc)
 
Benefits to Internal Customers 
       • Online information (Purchases, Sales, Inventory, Financials)
       • Elimination of reconciliation of accounts/error processing
       • Reduction in accounting cycle times
       • Less duplication of job – utlisation of manpower in value adding roles
       • Reduction in paper flow, data processing, printing, mailing
       • Timely & correct asset capitalisation
       • Credit Management (customers)
       • Better plant maintenance
       • Better treasury operations
 
Benefits to Shareholders
      • Accurate & transparent information
      • Good controls over receivables
      • Better inventory management
      • Improved reporting of accounts
      • Audit trail
      • Branding
 
Benefits to Employees
      • Easy access to data /information
      • Working with world class system
      • Knowledge /Skill build-up
      • More availability of time
      • Adaptability to change