BP Chemicals implemented a large supply chain management project across 17 business units over multiple years using AspenTech's software. The project was highly successful due to excellent project management, which included lessons learned from an initial phase. Key lessons included staggering sub-projects, developing initial "rough-cut" models for user feedback, defining central and local management roles, balancing standardization and customization, and ongoing budgeting for maintenance and improvements.

1. THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN
ARC INSIGHTS
By Simon Bragg
BP’s SCM Project Management Lessons
• Stagger sub-projects
• For each sub-project, first develop a
rough-cut model
• Define central and local project
management roles and responsibilities
• Clarify policy regarding standardization
vs localization
• Budget 5 to 10 percent/year of project
costs for support, maintenance, and
continuous improvement
INSIGHT# 2003-12E & MP
MARCH 19, 2003
Best Practices:
Implement Massive SCM Projects
Keywords
OpX, SCM, Project Management, Chemical
Summary
Managers currently regard large, multi-site, multi-year Supply Chain Man-
agement (SCM) implementations as too risky. Indeed, such projects require
extremely skilled project management. BP Chemicals implemented Aspen-
tech’s MIMI supply chain management solution across 17 businesses. It
was a huge, highly successful project, largely because of excellent project
management.
BP Chemicals
BP Chemicals manufactures petrochemicals, intermediates, and plastics,
which includes acetic acid, acrylonitrile, aromatics, purified terephthalic
acid (PTA), olefins, polyethylene, and polypro-
pylene. With 35 manufacturing sites
worldwide, BP Chemicals produces around 27
million tons of product a year. The supply
chain planning task is huge, around 100 unique
products, several thousand SKUs due to grade
and pack types, thousands of customers, and
hundreds of delivery points.
Project drivers were fairly typical of most large
chemical companies. By BP standards prior to
implementation, forecast accuracy, data and
information visibility, customer responsiveness (e.g. right product in right
place), were unsatisfactory. Some businesses had problems completing
their monthly planning cycle within four weeks, and purchasing would
procure against out of date forecasts. In addition, BP wanted to run proac-
tively, with a better understanding of customers’ requirements and wanted
to react faster to order changes.

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The Supply Chain Implementation
For each business, the new process was:
1. Propose Supply Plan: incorporate maintenance plans, production ca-
pacity, co-producer capacity, and raw material availability.
2. Propose Demand Plan: incorporate segmentation and demand rules.
3. Resolve Supply Issues: obtain feedback from production.
4. Resolve Demand Issues: use feedback from sales managers.
5. Apply Supply Plan: use detailed production schedule and stock replen-
ishment movements including VMI.
6. Apply Demand Plan: communicate constrained demand plan, perform
ATP checks as appropriate, confirm customer order, schedule and exe-
cute delivery.
Across all 17 business lines, around 250 users touch collaborative demand
planning, including product, account, and sales managers. Approximately
30 users handle supply chain planning, and about 50 users tackle produc-
tion planning and scheduling.
BP split the implementation into two phases. Preliminary project definition
work and vendor selection began in September 1999. The first 9 business
lines, those that were most enthusiastic, began implementation in July 2000,
with completion in 12-18 months. Phase 2 kicked off in October 2001, and
is almost finished. BP split each phase into some 40 smaller sub-projects,
for instance focusing on demand forecasting for a business, or production
planning for a manufacturing plant. In total, the project required over 60
man years of effort and employed 40 outside consultants at its peak.
Project Payback
The quantified benefits are confidential, although BP would agree that most
projects achieved payback in a year. Based on our understanding of Aspen-
tech’s technology and the chemical industry, we suspect payback was
achieved within months.
Recommendations: The Lessons of BP
Phase 1 adopted many well-known good practices. The team sold each
sub-project to every business unit leader before beginning implementation.
The business unit leaders had to agree to the time commitments required of

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their people, the scope of work, and the project timeline, cost, and value
delivery. After Phase 1, BP conducted an internal review of what worked
and what didn’t. This revealed 70 lessons; the main ones are:
Stagger Sub-projects
Kick-off one or two business lines and projects every month. Although this
extends the elapsed time, BP gained cost effective management of external
resources and better sharing of project lessons. In Phase 1, all business lines
kicked off together, proceeded in parallel, and ended more or less together.
This over-burdened central project management by requiring support for
all projects at about the same time and meant that project lessons could not
be shared across sub-projects.
For Each Sub-project, First Develop a Rough-cut Model
On each sub-project, have consultants develop a new rough-cut business
process and mathematical model to deliver some value in 1-3 months.
Then let users try it. Since sub-projects were staggered, BP central project
management could switch these consultants onto other projects. A few
months later, have the consultants return to the rough-cut model to incor-
porate users’ ideas and rework a final, definitive process and mathematical
model.
In Phase 1, for each sub-project, project consultants typically defined the
new processes and changes, then developed the mathematical model, and
handed it over to users. Unfortunately, at the outset, the users didn’t know
enough to, for instance, fully define some heuristics. The result was that
some models were too simple, others too complex. It also took 6-10 months
to put a model in front of the user.
Phase 1 work enabled BP to develop standard processes and model tem-
plates based on Aspen’s MIMI Configured Applications (CAPs). In Phase
2, these CAPs cut implementation work by up to 50 percent.
Balance Central and Local Management
Define clear roles and responsibilities for central and local project manage-
ment. For each business line, BP identified a local lead, responsible for
delivering an appropriate solution to their business line. The local lead, for
example, organized meetings with the implementation team, ensured end-
users were appropriately involved and trained, and solved the data issues.

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Ideally, the local lead is a skilled networker, a good communicator with
plenty of initiative, and understands the entire business. At a minimum,
the lead should know the business areas where the most opportunity is ex-
pected. Some knowledge of supply chain concepts is nice, but an aptitude
for the technology outweighs an initial understanding.
BP’s central project management team managed the vendor relationship,
external resources, and schedules. By allocating available resources across
the sub-projects, it manages the trade-off between total costs and time-
scales. BP used more local consultants in Phase 2 because it found that hav-
ing Phase 1 consultants in time zones 6-8 hours away created difficulties.
Clarify Policy Regarding Standardization vs. Localization
Strike a balance between “thou shalt do this” and “this is the way, if you
wish to adopt it.” BP expected demand and production planning to be
common platforms because BP has many internal supply chains. Common
platforms enable visibility and supply chain optimization across multiple
business units. It’s the business unit’s decision whether or not to adopt the
other solutions, using their own ”fit-for-purpose” criteria.
Budget 5 to 10% of Project Costs for Continual Improvement
Continue tweaking your supply chain model, adding constraints and func-
tionality to reflect business and market changes. Going live does not equal
project completion. In the first year after going live, budget around 10 per-
cent of the total project cost for support, software maintenance, and
enhancements. Thereafter, budget about 5 percent of total project cost each
year. However, the costs of changing the planning model to handle a major
business change such as a plant closure or an acquisition should be borne
by that activity.
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transmittal e-mail or at www.arcweb.com/myarc in the Client Area. For further
information, contact your account manager or the author at sbragg@arcweb.com.
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