cost and inventory management
TRANSCRIPT
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COST AND INVENTORY MANAGEMENT OF CRUDE
REFINED PRODUCTS
Arnab Kr ChatterjeeMudit Kansal
Riddhima KartikKoustav Naha
Mentored By: Dr. Sudhir Yadav
Group - 6
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Table of Contents■ SCO’s Pronged Strategy ■ PIMS Model ■ Demand Forecasting
Improvements ■ New Approach for
– Term Crude Purchasing – Spot Crude Purchasing– Refinery Monthly Production
Plan■ Crude Optimization ■ Inventory Management
■ BPCL Best Practice for Inventory Management
■ SCO, investment in PIMS ■ Refinery Wise Costing Comparison ■ Year Wise Comparison ■ E-Revolution ■ Evaluating Petroleum Supply Chain
Performance■ Products ■ Technologies Imported
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SCO’s Four Pronged StrategyTo Manage Attendant Complexities and Drive Successful Transformation
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PIMS Model : Based on LP Principles
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BPCL Moving Towards Best Practice In Demand Forecasting Through Four Improvements
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New Approach For Term Crude Purchasing
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New Approach For Spot Crude Purchasing
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New Approach For Refinery Monthly Production Planning
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Crude Optimization
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Inventory Management■ To set location-wise Inventory Norms, using Statistical Tool. ■ Objective to maintain optimal levels of Inventory and Release Blocked Working
Capital. ■ Every fortnight, the overall inventory being reviewed with Logistics for taking
corrective actions. ■ Export plans can be drawn based on the Supply Demand Scenario and the
Inventory Situation.
Challenge – Reduction of Dead Stock
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BPCL Plans Towards Moving Into Best Practice In Inventory Management
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SCO, Investment in PIMS Linear Programming Technology, with Surrounding Modules
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BPCL Refinery-wise Costing ComparisonMumbai
Refinery
(2013-14)
Kochi Refinery
(2013-14)
Mumbai Refinery
(2014-15)
Kochi Refinery
(2014-15)Throughput 13.03 MMT 10.32 MMT 12.96 MMT 10.40 MMT
GRM 3.95 USD 4.80 USD 3.97 USD 3.17 USD
Overall Gross Margin
Rs. 2340 Cr Rs.2249 Cr Rs. 2363 Cr Rs.1514 Cr
Capacity Utilization
108.6% 108.65% 108% 109.46%
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Year-wise Comparison Particulars 2013-14 2014-15
Cost of raw materials consumed
Rs.94424.39 Cr Rs.109197.43 Cr
Raw material Inventory
Rs. 3538.35 Cr Rs. 3439.66 Cr
Finished goods Inventory
Rs. 8,986.00 Cr Rs. 6,065.55 Cr
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E- Revolution:- ■ Bharat Petroleum, the $9.5 billion petroleum refining and marketing
company, was the first public-sector oil company in India to implement SAP® R/3® cross-industry solutions, along with software from the SAP for Oil & Gas portfolio.
1. SAP: By making an early entry into ERP, BPCL has reaped the reward of this futuristic model. Benefits accrued are:
a) Operational Efficiency b) Enhanced Fiscal Discipline
SAP: Up to 10,000 credit is accepted, above that not accepted. BPCL is the first to upgrade SAP/R3 in its scale in the country
Benefits to BPCL by SAP ■Reduction in days in inventory (average) : 56%■ Improvement in demand fulfillment index : 14%■ Reduction in logistics Costs : 2.5%
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Evaluating petroleum supply chain performance
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ProductsProduct Name Selling Unit Mumbai Delhi Chennai Kolkata
SPEED LITRE 65.46 59.84 58.60 63.10SPEED 97 LITRE 79.70 74.38 73.84 76.14Hi SPEED DIESEL LITRE 56.64 49.87 50.51 51.93
MOTOR SPIRIT LITRE 62.70 56.69 55.90 61.11
HSD(0.05% Sulphur) LITRE 53.03 46.48 47.06 49.09
Product Name Selling Unit Mumbai Delhi Chennai Kolkata
AVIATION TURBINE
FUEL (DOMESTIC)
KL 38,425.94 39,301.30 41,991.64 46,038.15
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Products (Contd.)Product Name Selling Unit Mumbai Delhi Chennai Kolkata
LPG PACKED -(19 Kg’s) -
COMMERCIAL
CYLINDER 984.50 932.00 1097.50 1006.50
Product Name Selling Unit Mumbai Delhi Chennai Kolkata
LPG PACKED -(14.2 Kgs) -
Non Subsidized
CYLINDER 522.50 513.50 525.50 541.00
LPG PACKED -(14.2 Kgs) CYLINDER 454 419 406.50 421
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Product Name Selling Unit Mumbai Delhi Chennai Kolkata
LSHS MT 15,250.00 15,860.00 15,770.00 16,040.00NAPHTHA MT 26,490.00 27,200.00 26,900.00 27,120.00
URNACE OIL MT 13,750.00 14,460.00 14,270.00 14,540.00
City Petrol DieselMumbai 62.70 53.03Delhi 56.69 46.48 Kolkata 61.11 49.09Chennai 55.90 47.06
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Technologies Imported■ Fixed bed plat forming process for production of high Octane Motor Spirit blend
stock and for increasing capacity.
■ Iso-dewaxing / Hydro-finishing technology for production of Group II Lube Oil Base Stocks
■ DHDS Reactor catalyst change to new generation HDS catalyst TK 576 BRIM as a part of the unit revamp for producing Euro IV Diesel.
■ Naphtha HDS Catalyst.
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Group - 6
Arnab Kr. Chatterjee
Koustav Naha
Mudit Kansal
Riddhima Kartik