Page 292 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Unit 14: Operations Scheduling

would transform BPCL into a learning organization (Senge, 1990) and IT would contribute Notes
significantly in this. Thus began the project for evolving an information system for the
organization.
A small team of nine people set out to map the existing business systems (legacy systems)
vis-à-vis the future needs characterized by customer focus, resource-optimization,
integration, and flexibility. The challenge was to ensure that all the integrated elements
(of the complex multi-modular integrated solutions that impact the entire workflow of
the organization) work seamlessly across the length and breadth of the country, including
the remote locations. The team concluded that it was imperative to replace the existing
batch-process-oriented legacy systems with a state-of-the-art ERP system.
A detailed technical selection process was undertaken to find the ‘best fit’ ERP package for
current and future needs of BPCL. SAP R/3 software was selected for implementation. The
top management decided to name the project for implementation of SAP R/3 as project for
implementation of SAP R/3 as project ENTRAINS, a short form for Enterprise
Transformation. The name signified the top management’s vision of a totally transformed
organization—a new BPCL. “The unique thing about BPCL’s ERP implementation is that
right from its conception – it has been a business initiative. We just performed the necessary
catalytic role” –paradoxically, this expression of pride came from the Head of IT in BPCL.

The SAP modules implemented during the pilot implementation were Financial
Accounting/Asset Management, Materials Management at Refinery and Marketing
Locations, Sales and Distribution, Quality Management, Plant Maintenance and Service at
Refinery and Marketing Locations, Production Planning at Two Lube Plants, and the
Indian version for Excise, MODVAT, TDS, Sales Tax, Octroi, etc.
However, implementing the program was not easy. For example, at Wadilub, the staff
thought many simple tasks had now become tedious involving many steps and demanding
longer working hours than before. The system would not allow them to take short cuts
that they were used to. For instance, container suppliers used to directly despatch containers
to the third party blenders without making Goods Receipt (GR) and Goods Issue (GI). The
system would not physically receive if it did not have any issues for such materials. It
would require the necessary documentation at both ends of a transaction to register. In
addition, many configuration problems were also encountered, causing agitation among
the staff.

Notwithstanding these difficulties, Mr. Vairamohan, the Plant Manager, recounted the
benefits from the pilot implementation saying, “SAP system imposed strict discipline
among the staff to follow a certain sequence of operation. As a result, there is no suspense
issue at Wadilub today. We are able to get many logistics information such as material
inventory, product despatches, and pending indents”.
Bharat Petroleum found that by having information available, its capabilities along the
entire value chain were enhanced. It is reaping the benefits of the integrated system in
many areas of its operations. The early gains of implementation were in the areas of
tracking customer-receivables, monitoring credit-management, inventory management,
besides easing the operations in a large number of areas. It also enabled the management
to take better strategic and business decisions, thus ensuring value-added services, better
customer satisfaction and enhanced shareholder value.

Source: Upendra Kachru, Production and Operations Management – Text and Cases, First Edition, Excel Books, New
Delhi 2007.

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