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Business Process Re-Engineering at Hindustan Petroleum

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UPES does not own the content in this presentation. These are presentations presented in 2002 during the 2nd HR Round Table.

UPES does not own the content in this presentation. These are presentations presented in 2002 during the 2nd HR Round Table.

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  • 1. BUSINESS PROCESS RE-ENGINEERING AT HINDUSTAN PETROLEUM Presented by Mr Arun Balahrisgnan HR Round Table organized by ISPe
  • 2. BUSINESS PROCESS RE-ENGINEERING AT HPCL
    • OIL INDUSTRY IN 1990's
    • STRUCTURE AT HPCL
    • LIBERALISATION - A NEW AWAKENING
    • CHANGES IN HPCL
    • BPR OBJECTIVES
    • MAJOR CHANGES INITIATED
    • SCENARIO - 2003
    • HPCL - 2003
    2 of 13
  • 3. OIL INDUSTRY IN 1990's
    • All major products regulated by OCC / Govt.
    • Profitability determined by permitted returns (12% Post Tax)
    • Market Share determined by Govt. / OCC
    • Imports of Crude & Products determined by Oil Economy Budget (OEB)
    • Planning (Corporate, Investment in Mktg & Ref. facilities etc) prerogative of OCC
    • Product shortages in Market
    3 of 13
  • 4. STRUCTURE AT HPCL
    • Organization structure in line with market requirements
    • Focus on meeting Govt. Guidelines
    • Customer at a distant horizon
    • Strong focus on Project implementation to ensure continued profitability
    • Distribution key function of marketing
    • Command & Control Structure
    4 of 13
  • 5. LIBERALISATION - A NEW AWAKENING
    • Severe Foreign Exchange crises in 1990's leads to Liberalisation of the Indian Economy
    • Oil Industry becomes focus area for change in view of large investments required to meet energy demand
    • Marketing of Lubricants and other products de-regulated in early 1990s
    • JVC's in the Refinery Sector and Licensing of Private Sector Refineries
    5 of 13
  • 6. CHANGES IN HPCL
    • Govt. sponsored industry reports indicate impending changes in Indian Oil Industry
    • HPCL (in 1995) introspects on preparedness to meet external challenges
    • Resorts to periodic structural changes to enhance speed of decision making
    • Identifies need for external help
    • Appoints Anderson Consulting (now Accenture) to carry out Business Process Re-Engineering
    6 of 13
  • 7. BPR OBJECTIVES
    • Visualise the structure of Indian Oil Industry in the next decade
    • Study the possible effects of private and MNC competition
    • Identify Focus Areas in Refining & Marketing
    • Re-Design Organization structure to meet the new, emerging requirements
    • Learnings from other countries to be used
    7 of 13
  • 8. MAJOR CHANGES INITIATED
    • In search of the elusive customer :
      • defining the customer
      • understanding customer requirements
      • providing economically viable options
    • Re-designing the organization structure to focus on customer requirements :
      • Formation of SBU's
      • Redefining jobs
      • Reduction in hierarchical layers
    8 of 13
  • 9. MAJOR CHANGES INITIATED
    • Re-vitalising processes for faster, better decision making :
      • Enhanced financial limits at all levels
      • Delegation of authority & responsibility
      • Tools for better decision making
    • Implementation of ERP system for :
      • Better Customer Service
      • Accurate & timely transactions
      • Updated data for decision making
    9 of 13
  • 10. MAJOR CHANGES INITIATED
    • Focus on Profitability :
      • SBU's become profit centres
      • are self contained units
      • extend across the value chain
      • Specialization for better customer service
    10 of 13
  • 11. SCENARIO - 2003
    • Refining sector de-regulated in 1998
    • Marketing de-regulated in 2002
    • Private sector Refining a force to reckon with
    • Retailing rights available with a number of companies
    • Traders & end consumers free to import their requirements
    11 of 13
  • 12. HPCL - 2003
    • SBU structure in place
    • ERP under implementation
    • Better focussed to meet customer requirement & Competition
    • Remarkable upgradation in employee competencies
    • Many successes, some failures
    • A very profitable, best managed company
    12 of 13
  • 13. Shri M.B. Lal, Chairman, HPCL, receiving the “ BEST MANAGED COMPANY AWARD ” (instituted by “ BUSINESS TODAY ” & “ A T KEARNEY ” ) from Shri Jaswant Singh, Hon ’ ble Minister for Finance.
  • 14. THANK YOU