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bpclerpimplementation by shrey420


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                Case Study Overview

    The Bharat Petroleum Corporation Ltd. (BPCL) case presents an ERP
implementation experience in the context of an integrated energy organisation
which is geographically well spread and characterized by large size operating
in a rapidly changing competitive environment.

   This case study focuses on the company and its implementation of ERP
with the various advantages

   This presentation also talks about ERP, its evolution, features, advantages
and disadvantages.
                   Company Overview
     Bharat Petroleum Corporation Ltd. (BPCL), established in 1976 by the
Government of India, is among the top three petroleum refinery and marketing
companies in India. Its net sales in 2001-02 were Rs 398.29 billion ($ 8.3
billion). The company currently has 22 per cent share of the petroleum
products market, and 11 per cent share of petroleum refining capacity in India.

   The company produces a diverse range of products such as petroleum
products, petrochemicals, and specialty lubricants. It has established 190
installations and depots, 19 aviation service stations, over 4,700 retail outlets,
and 40 LPG bottling plants. Its total manpower count is 12,586.

   With over 4,400 petrol pumps, 960 kerosene dealers, 1,180 LPG distributors
and scores of industrial consumers spread across the country, the Rs 35,000-
crore company was looking for a way to synchronise the entire network. Not to
mention its Trombay, Numaligarh and Kochi refineries, and 250 area offices
scattered all over the country.

  Bharat Petroleum has always been on the forefront of harnessing technology
initiatives for maximising efficiency and achieving greater customer
                   Company Overview
 Originally, BPCL as any company was made up of many separate
- Accounting / Finance / Sales / Retail outlets / Manufacturing / Purchase etc

 Each department would have its own mini-system to process information.
Under this method, a single customer could have several files relating to his or
her basic information, past purchases, and many others.

 Since none of these systems were connected, getting a complete view of a
customer’s profile could be a difficult task. Having duplicate files can cause
data redundancy and low data integrity.

  The more times the same information was repeated, the higher the chance
that some of the information will be incorrect due to errors or information not
getting updated. This they found was a very inefficient way to store date and
led to higher costs.
                   Need for a change

The company wanted to keep its lead in the competitive petroleum and
refining industry through

      Constant Learning,
      Refinement Of Its Business Operations.
      Customer Focus And Orientation
      Identifying Customers Needs
      Facilitate Faster Decision Making
      Facilitate Speedy, Faster And Effective Communication
      Getting Ready To Face Stiff Competition.

It had to transit from a production-driven company to a customer-driven one.
The legacy systems in BPCL and other industries had outlived its life and was
quite obsolete.
        How was ERP implemented at
    Corporate and cultural needs were mapped and implementation methods
    were devised to match these needs.
    A complete Business Process redesign / Reengineering (BPR) was carried
    out prior to implementation.
    A good communication network was established across the organisation.
    Peoples and power users were selected from various units and divisions.
    A balanced team of implementation engineers were put together from
    Coopers and Lybrand for implementation of SAP R/3.
    Implementation methodologies with minimum customization were
    selected. Mapping of business process was put onto the package with
•   Gap Analysis
•   Customization
•   Development of user-specific reports & transaction
    Test runs were conducted.
    Concurrence was taken from user on satisfactory working of the system.
    Power users and end users were thoroughly trained.
            IT initiatives by BPCL …

  Started IT initiatives in the year 1996 and the company began with an
elaborate internal restructuring by forming six strategic business units
(SBUs). The formation of SBUs --

   Retail     Aviation   Lubricants     LPG            &        Refinery

 The immediate focus was on specific customer segments and identify their
needs and was integrated by means of Information systems, Finance, Human
Resources etc
           … IT initiatives by BPCL
 Established intranet with MS Exchange Server as Platform and MS NT server.

 Initially connected three locations on a VSAT to share TDM/TDMA

Criteria for selecting the VSAT network was

 Ease of deployment
 Speed of mail delivery
 Zero message loss
 Faster response time
 Access of employees to personal records

•Its corporate office was connected with various regional offices. Servers were
deployed at the VSAT hub at Bangalore to provide connectivity to users.

•All employees were constantly connected to each other and to the outside
        ERP Implementation at BPCL
   BPCL began implementation of its SAP R/3 enterprise-wide resource
planning package in April 2000. Perhaps the largest ``brick-and-mortar''
company in India to undertake an exercise of this kind, considering the sheer
size of the corporate.

  ERP was planned to be part of BPC's three-pronged initiative -- to create an
intra-company communication network, process transactions with
customers across the country and to create a basic information backbone for
the entire corporation. The implementation project known as ENTRANS
(Enterprise wide Transformation)

  ERP implementation was part of ``Project CUSEC
(Customer Service and Satisfaction) for Bharat
Petroleum, a predominantly marketing company
which had to meet the challenge of an imbalance
between refining and marketing.

  In the first six months beginning February 1999,
the company undertook thorough conceptual
designing and planning for each SBU with actual
implementation for SAP R/3 starting only by April 2000.
         ERP Implementation at BPCL

The company redesigned and restructured its network with all its branches
linked to a central connectivity cloud through routers and switches. These
were connected to servers and workstations.

Security was ensured by using

 Sun Ultra 5 firewalls
 Real secure
 Internet Scanner
 Web trendstarting only by April 2000
 Web Sense
                   Server architecture

Contents of server architecture

  Compaq Proliant NT server
  SCO box
  Sun firewall

CISCO routers 2610  CISCO 1900 switches for distribution

Set up a data warehouse with business object and query by mail and
implemented enterprise system management.
       Benefits of ERP implementation
                   at BPCL
 Bharat Petroleum is reaping the benefits of the integrated system in many
areas of its operations. The early gains of implementation are in the areas of

     Tracking Customer-receivables,
     Monitoring Credit-management,
     Inventory Management,
     Besides Easing The Operations In A Large Number Of Areas.

 Helped in launching e-biz initiatives – tracking of orders online

 Management of inventory and cash management

 Helped launch Petrocard – which tracked around 20000 daily transactions at
 BPCL retail outlets

 A fleet card using the same technology was introduced. Also, the
 manufacturing execution system of the refinery is currently being integrated
 with the system. With the use of GSM technology, the fleet card is expected
 to make it easier to track the position of inventory.
       Benefits of ERP implementation
                   at BPCL
 Real time connectivity with multi-location and multi-groups in the business.

 Increased motivation level of employees with adoption of technology

  Bharat Petroleum has also set up one of the biggest 'Centres of Excellence'
in Asia to provide online support to the end users and also work towards
continuous improvement in business processes and handle product upgrades
and new generation products.

 A large data warehouse project has also been implemented, which facilitates
access to real-time accurate information on key performance indicators at all
Bharat Petroleum locations. This enables the management to take strategic
and business decisions, thus ensuring value-added services, better customer
satisfaction and enhanced shareholder value.

 Has Reduced operating costs of the company with estimated annual
savings attributable to ERP = Rs.42 Crores
     Benefits of ERP implementation
                 at BPCL
•Transaction-centric benefits are referred to those directly conceived to be
the effect of ERP
•Management-centric benefits are the other synergic benefits because of ERP
 ERP thus is not just a product to be purchased but a
process which needs efforts to align the product to the
                 business processes

        Thank you
    Happy ERPeeeeeing
• Intranet is a private network that is contained within an
  enterprise. It may consist of many interlinked area networks
  and also use leased line in WAN. The main purpose of an
  intranet is to share company information and computing
  resources among employees.
• VSAT ( Very Small Aperture Terminal) is an earthbound station
  used in satellite communication of data, voice and video
  signals, excluding broadcast television. For one end user to
  communicate with another, each transmission has to first go to
  the hub station, which retransmits it via the satellite to the
  other end users VSAT.
• TDM (Time Division Multiplexing) / TDMA (Time Division
  Multiple Access) is a protocol, which operates within a point to
  multipoint environment and adapts dynamically to traffic
  conditions on a computer network. This protocol assigns more
  user time to those computer having traffic in order to optimize
  the response time.
• Router is a device that connects any number of LAN. Routers
  use headers and forwarding table to decide where the
  information flows and use Internet Control Message Protocol
  (ICMP) to communicate with each other and configure the best
  route between any two hosts.

• A switch is a device that filters and forwards packets (piece of
  message or information) between LAN segments.

• Firewall is a system used to prevent unauthorized access to or
  from a private network. Helps prevent hacking and intrusions to
  private networks.

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