SCM To Help HPCL Bridge Demand Supply Gap

HPCL belongs to the downstream oil industry, which incorporates refining of crude oil coupled with selling and distribution of natural gas and other products derived from crude oil. The company has adopted server virtualisation at its DC and is also implementing a SCM project to optimise transportation and other ancillary costs. There is also an RFID pilot underway at one of the company plants. Biztech2.0 spoke to S T Sathiavageeswaran, GM – Information Systems, HPCL, to find out the company’s future plans with reference to leveraging IT.

The recent spurt in oil prices has affected the budget allocations of most OMCs (Oil Marketing Companies). How is HPCL trying to optimise its IT budget?

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We have adopted the concept of server virtualisation at the DC that will enable a reduction of the DC footprint and will allow service provisioning for more applications. The company has plans to consolidate all its zonal DCs and to construct a new DC in Hyderabad to meet growth needs. The zonal consolidation will give us two-fold advantage of cost reduction and having a single repository of data with concentration of resources in one location.

We are trying to tap all opportunities offered by IT to control costs. For example, the Company is on MPLS technology and has a nation-wide network. We are leveraging the network by collaboration to control travel costs. We may also consider elimination of value-added services to cut costs.

What are HPCL’s initiatives on the SCM front?

On the SCM front, our LPG and retail marketing units are implementing solutions from Honeywell to aid both primary and secondary distribution. The project is underway and the applications will provide information on demand forecast from the market and parallel availability of products at the refineries. This will help us to match the demand and supply, identify a gap if there is any and procure products from peer oil companies or import them to fill the gap. Supplying accurate amounts of products to destination markets as per demand forecast also helps the company to optimise transportation costs.
How does the company plan to leverage BI?

On the BI front, we have equipped the top management with information portals that provide succinct information on business process dynamics. However, these portals extract information from the JD Edwards ERP solution, which limits the scope of the information to the ERP level. We want to source data from other levels too and are evaluating BI solutions for that purpose.

Can you shed some light on the Information Security project underway at the company?

On the information security front, there is a major project underway that deals with various security aspects like Firewall, IDS and anti-virus systems. The new security policies system will act as a directive for users handling Information Systems.

One of the major components of this project deals with awareness creation about appropriate working habits at the desktop level, the application level, the password security level and finally while using e-mail. All this will strengthen the security of our Information assets.
Which wireless technologies are helping your company to enhance performance optimisation?

The company is running a pilot project that involves tagging of LPG cylinders with the help of RFID technology at one of the plants. This project includes monitoring the movement of the cylinders within the plant coupled with supervision of movement between the distributor and the company. Overall, it will help HPCL to have a single-window view of the exact location of all its cylinders.

Does the company use IT for oil refining per se?

The refining division has implemented a DCS or a Distributed Control System. This helps monitoring of production activities at all plants as well as inventory supervision. The DCS system is highly automated and enhances our refinery operations in many ways. The refinery division also uses SCADA for its pipelines.