Evolution of ERP in streamlining Supply Chain in Oil & Gas sector.

1. Course on Independent Study
JOYDEEP MUKHERJEE
2008 1020
PGP - 08
January 30, 2015
PRESENTED TO
PROFESSOR SUDHIR YADAV

2. 1.
• Basics of ERP
2.
• Literature Review
3.
• Research Study: Implementation of ERP
in Oil & Gas Industry
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

3. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

4. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR
It is a business management system (IT System) that
integrates all facets of the business, including planning,
manufacturing, sales, and marketing.
Two key components of an ERP system are:
•Common database
•Modular software design
Integration is the most important benefit of ERP. ERP's
main goal is to integrate data and processes from all areas
of an organization and unify it for easy access and work
flow.

5. Manufacturing
Financials
Human Resources
Supply Chain Management
Projects
Customer Relationship Management
Business Intelligence
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

6. Materials
Requirement
Planning
(MRP)
Closed Loop
MRP
Manufacture
Resource
Planning
(MRP II)
Enterprise
Resource
Planning
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR
Focusing only on
basic
Procurement
Feedback System
initialized
Finance & Simulation
incorporated
Entire Supply Chain,
Finance, HR…

7. A totally integrated system
The ability to streamline different processes and
workflows
The ability to easily share data across various
departments in an organization
Improved efficiency and productivity levels
Better tracking and forecasting
Lower costs
Improved customer service
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

8. Customization in many situations is limited
The need to reengineer business processes
ERP systems can be cost prohibitive to install and
run
Technical support can be shoddy
ERP's may be too rigid for specific organizations that
are either new or want to move in a new direction in
the near future
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

9. Requirements management is the process of ensuring
that people involved in a project are aware of requirements
they have and that they have a process for ensuring those
requirements are addressed.
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR
Level 1
• No metrics in
place
• Ad hoc
changes
Level 2
• Disciplined
process is in
place
• Project
baselines are
established
Level 3
• Documented
development
process
• Improvement
of
management
of resources
Level 4
• Repeatable,
documented
process
• Use of metrics
and
adjustments
to deliver
predictability
Level 5
• Continuous
process
improvement
• Use of root-
cause analysis
to understand
why defects
occur
SEI Capability Maturity Model Levels

10. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

11. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

12. 1
• Carry out an exhaustive requirement analysis and build a case for need of an ERP system.
2
• Define the objective of your selection process.
3
• Form selection or evaluation committee.
4
• Define your product requirements.
5
• Develop pre-evaluation selection criteria.
6
• Shortlist 4–5 ERP Packages.
7
• Conduct extensive research on shortlisted ERP packages.
8
• Formulate final selection criteria.
9
• Evaluate vendors based on selection criteria and product demonstration.
10
• Check for successful ERP implementations by the vendor.
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

13. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

14. Paper Title
(year)
Author Research Objective Methodology Conclusion
Aligning your Data
Collection & ERP
Implementation
(2000)
Intermec
 The role of
automated data
collection (ADC) for
ERP systems.
Aligning ERP and ADC
through GAP
Analysis.
The right ADC system,
then, is more than just a
smart addition to ERP, as
without reliable data,
every ERP system, will be
deficient at best, a failure
at worst.
The ERP Revolution:
Surviving & Thriving
(1999)
J. W. Ross
 Examination of how
firms generate
business value from
their investments in
ERP
implementations.
Data Collection and
Analysis on the ERP
implementation:
(a)sponsor of
implementation,
(b) implementation
(c) impact of
implementation.
(15 org)
ERP implementation can
lead to a totally new
organizational
environment
characterized by an
increased emphasis on
process, strategic vendor
alliances, and constant
change.
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

15. Paper Title
(year)
Author Research Objective Methodology Conclusion
Enterprise
Resource
Planning
(2009)
J. Lamb
 With implementation
of ERP across the
globe, how the agility
and ability to make
changes is an
important feature of
the ERP.
Specific cases have
been cited with
respect to ERP
service providers
providing interface
platforms for
different ERP
systems to interact
& provide benefit to
the consumer.
The need to integrate ERP systems
and add additional functionality
has spawned a large service
industry. ERP systems may become
more open with the arrival of
service oriented architectures
(SOAs) in which software modules
are presented as services with
standard protocols and
functionality.
Supply
Management:
The ROI in ERP
(2008)
Frank O’
Nell
 Determine the
benefits of an ERP
system in improving
reporting, resource
management, time
management and
other aspects of
operation.
Case Study
approach; analysis
of how a specific ERP
has brought about
benefits to an
Electronic company.
ERP implementation allows
manufacturers to conveniently run
their businesses with advanced
functionality.
A modern, supportable operating
environment with many
enhancements and improved ease-
of-use from the prior system;
reduced inventory; improved
ability to satisfy customer orders
on time; ability to generate custom
reports; increased data access.
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

16. Title Author Case Study Objective Industry Conclusion
ERP
Implementation
at BPCL
BPCL
 To study the ERP
planning,
implementation process
and impact in the Oil &
Gas company. The
challenges and the
benefits of the system
have also been
analyzed.
Oil & Gas
(downstream)
ERP implementation led to reduction
of time lag in processing orders
through the efficient tracking of status
of orders. The idea was to translate
operations which have been so far
considered B2B to B2C. The ERP
industry revived in India after the
successful implementation after many
failures.
ONGC drills into IT S. Jain
 To analyze how ONGC
had streamlined its
processes with ERP
implementation and the
benefits it has received.
Oil & Gas
(upstream)
The IT infrastructure helps the
company knit together those disparate
operations, turn its global scale and
gargantuan size to its advantage. The
cost advantage has helped the
company aim even higher- from
running its newly set up oil retailing
businesses to exploration in foreign
countries. Paper work was reduced to
minimal. In came a transparent
organization with a mixture of
understanding and administrative
decisions.
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

17. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

18. 1
• To learn the theoretical steps of implementing ERP in
organization.
2
• To observe & document the process of implementation
of ERP in different organizations in the Oil & Gas
Sector.
3
• To analyze the processes in upstream, midstream,
downstream & service provider companies.
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

19.  Primary Data
 Interview with industry people
 Response to Questionnaire
 Sources:
 GSPC (Upstream Player)
 GSPL (Midstream Player)
 BPCL (Downstream Player)
 Weatherford (Service Provider)
 Secondary Data
 Websites pertaining to ERP Implementation
 Case Studies
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

20. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR
Need for Implementation of ERP
•Upstream organizations have a special focus on the procurement.
•Midstream organizations have an obvious focus on logistics.
•Downstream organizations have a focus on logistics as well as inventory.
•Service providers have a focus on procurement and inventory.
•Decision of implementing the ERP has been consistently taken by the top
management of the respective organizations.
Selection of ERP Service Provider
•Main parameter is the conformity of the system with the organization’s
processes those are already in place.
•Cost of services charged by the vendor, & after sales service is also important.
•Bidding is done to attract vendors in the public sector units, whereas the
private players have the option of nomination

21. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR
Feasibility of ERP
•Process change management is a key feature in ERP implementation and has
to be managed perfectly for the implementation to be successful.
•Employment of 3rd party reviewer or consultants for fine tuning the
performance of the ERP system. They have conducted cost benefit analysis and
pruned out the unnecessary parts and also carried out performance
measurement of the ERP service providers.
Challenges & Improvements
•The data migration from the manual data bases to the ERP database is a
significant challenge that all organizations have to face. Specifically in case of
downstream sector, the past data is of immense value to manage inventory.
•The control of access of data is another challenge, with wider networks more
prone to security breaches.
•Merged & Acquired entities needs to be enfolded into the system sooner.

22. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR
It can be that a BOO (Build-Own-Operate)
model may be applicable to such IT strategies
of large Oil Enterprises so that they can be
more agile and can handle transitions better.
Today's large Oil Enterprises are looking more
towards outside agencies to run their IT
infrastructure, so that they can concentrate on
their core business activities.

23. SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR

24.  A. Rodriguez, C. W. (2006, June 04). Asset Count Policy. Middle East.
 A. Rodriguez, C. W. (2005, May 12). Fixed Assets. Middle East.
 A. Rodriguez, C. W. (2004, December 31). Inventory Count Policy. Middle East.
 Akpinar, B. K. (2009). ERP Software Selection using Fuzzy Methodology. Turkey: Journal of Applied Sciences.
 al-Mashari, M. A. (2001). Implementing ERP through SAP R/3: A Process Change Management Perspective.
Saudi Arabia: King Saud University.
 Barbara Bragg, W. (2008, March 27). Receiving Procedure. US.
 Bjorklund, J. (2009). 10 Ways to use ERP to lean the Manufacturing Supply Chain. IFS AB.
 BPCL. ERP Implementation at BPCL. BPCL.
 Brian Hall, W. (2004, September 23). Information Security Policy. US.
 ClusterStar. (2008). Supply Chain Management and E-Business. Germany.
 EPIQ - Advanced Supply Management. (n.d.). Home: EPIQ. Retrieved April 15, 2009, from A Epiq Web site:
http://www.epiqtech.com/
 FOCUS Research. (May 2009). ERP Systems Buyer's Guide. FOCUS.
 Gross, P. How to Implement ERP Correctly. Canada: Pemeco.
 Gross, P. Rapid ERP Deployments. Canada: Pemeco.
 Gross, P. The ERP Project "Emotional Curve". Canada: Pemeco.
 Intermec. (2000). Aligning Your Data Collection and ERP Implementation Decisions. US.
 The Institute of Working Futures. (n.d.). Advanced Diploma in Logistics and Management. Retrieved April 15,
2009, from The Institute of Working Futures Web site: http://www.marcbowles.com/courses/adv_dip/index.htm
 Toncich, P. S. (2005). Integration of Production Planning, Project Management and Logistics Systems for Supply
Chain Management. Australia: International Journal of Production Research.
 Weatherford International Ltd. (2008). Completion: Weatherford International Oil Field Services. Retrieved
March 31, 2009, from Weatherford International Ltd. Web site:
http://www.weatherford.com/weatherford/groups/public/documents/completion/completion.hcsp
SCHOOL OF PETROLEUM MANAGEMENT, GANDHINAGAR