ERP IMPLMENTATION IN SUPPLY CHAIN MANAGEMENT OF IOCL
Indian Oil’s move for automation in supply chain is considered as one of the largest automation deployment initiatives globally and Honeywell India initiated and completed that project. Just Indian Oil alone means around 10000 distribution outlets and petrol stations. Broadly, this feature can be divided into two main sections, each of which has been divided into sub-sections. The first section deals mainly with the planning aspect from the IOCL point of view and involves the use of data that is collected, managed and compared from the tools deployed by the organization. This means both hardware and software tools which are mainly sensors which feed the data to the integrated enterprise systems. The second section touches, deployment some of the tools, assuming that all the system integration is in place. Writer have taken the liberty to include some aspects of retail payment automation in this section. 1. Planning and Scheduling
Since the Indian economy had opened, companies are facing increased cost competition. The fluctuation in oil prices has also created the raw material cost pressures in most sectors of the industry. This has compelled companies to look into their supply chain and scope of optimization. Advanced planning and scheduling (APS) play an important role and allows a company to optimize its supply chain. The supply chain challenge for any large multi-site production company like that of Indian Oil Corporation Ltd. can be divided into two major parts - planning and scheduling. At the planning stage most large corporation have to decide factors related to questions such as: * Which feed stock to buy?
* Where to process?
* How much to buy readymade and how much to make?
* What to make and where? How to transport?
Once the decisions related to planning are taken, the degrees of freedom available to an organization reduce. The company still has to take scheduling decisions that are related to queries such as: When and in what order feedstock should arrive at manufacturing facility? When and in what sequence or modes to run the equipments? Which orders to meet and what dates to promise?
Figure 9 Integrated Supply Chain Planning
Source: Hydrocarbon Processing March 2006 issue Pg:106-110
Traditionally different departments or divisions in an organisation handle these decisions. Some of the involved departments could be: Procurements, Corporate Head Quarters, Production, Marketing. In most cases a department or division optimizes its own operation. A conventional planning approach calls for minimization of material procurement and maximization of manufacturing capacity and sales. The marketing division would try to meet its demand numbers and respond quickly to market opportunity by purchasing the production shortfall from other players or selling the excess production to them, while the objective of each production unit would be to maximize the throughput and its margin. Procurement would purchase the feedstock with not the best yields at lowest cost. Supply Chain Planning Solution
The supply chain planning solution, depending on industry segment being considered, can consist of following modules. Demand planning: For demand forecasting and aggregation of the final demand numbers based on requirements of supply chain. Integrated Planning: Planning for the complete supply chain of the customer based on demand numbers. Distribution Planning: Generating operational plans for distribution. Production Planning: Generating operational plans for production. These modules are supported by various enablers that facilitate planning activity that include: (1) Supply Chain Database (SCD)
(2) Geographical Information System (GIS)
To make the supply chain more flexible and responsive to demand, the solution has to be driven by the demand numbers. The demand numbers are fed to an integrated planning(IP) module that...
Please join StudyMode to read the full document