A Project Report on

Operation Management

SUBMITTED BY: Anushree Kulkarni Deepak Doddamani Pankaj Dashmukhe Rohini Varadkar Ashmita Mahakul Dinky Chhabria Rahul Mahadik Sonal Jog

Submitted in partial fulfillment of the requirement of Ist Semester of MMS course, Mumbai University

Bharti Vidyapeeths Institute of Management Studies and Research 2008-2009

OPERATIONS MANAGEMENT
PROJECT REPORT P O EC EP

HINDUSTAN PETROLEUM CORPORATION LIMITED

By
Sonall Jog Sona J og Rohiinii Varadkar Roh n Varadkar Diinky Chhabriia D nky Chhabr a Asmiita Mahakull Asm ta Maha ku Anushree Kullkarnii Anushree Ku kar n Pankajj Dashmukhe Panka Dashmukhe Deepak Dodda manii Dee pak Doddama n Rahull Ma hadiik Rahu Mahad k

Operations Management

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ACKNOWLEDGEMENT

We wish to express our deep gratitude towards all the persons who contributed for this project and helped develop ideas and approach in report writing. We thank Mr. Shailendra Thasale, Senior Engineer, Honeywell, and all officials of HPCL Mahul refinery who guided us in this project. We are grateful to Professor N. K. Agarwal, Faculty of subject Operations Management, MMS-I, B.V.I.M.S.R. (Belapur, Navi Mumbai), for his guidance throughout our project work. We would like to thank Prof. Dr. D.Y Patil, the director of Bharti Vidyapeeths institute of management studies and research, Belapur, Navi Mumbai for his kind permission to carry on our project work and his cooperation. Last but not the least we would like to thanks all our college friends for their encouragement and morale support.

Sonal Jog Rohini Varadkar Dinky Chhabria Asmita Mahakul Anushree Kulkarni Pankaj Dashmukhe Deepak Doddamani Rahul Mahadik

: (19) : (07) : (08) : (30) : (26) : (09) : (11) : (29)

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Table of Contents
1 2 INTRODUCTION ................................ ................................ ................................ ...... 4 HPCL COMPANY AND OPERATIONS ................................ ................................ .. 5
2.1 Profile ................................ ................................ ................................ ........................... 5 2.2 Background of company and operations................................ ................................ ........ 5 2.3 Type of Industry ................................ ................................ ................................ ........... 5 2.4 Capacity ................................ ................................ ................................ ....................... 6 2.5 Location selection criteria ................................ ................................ ............................. 6 2.6 Functional Groups ................................ ................................ ................................ ........ 9 2.7 Production strategy: ................................ ................................ ................................ .....11 2.8 PLANT LAYOUT: ................................ ................................ ................................ ......12 2.9 PROCESS LAYOUT: ................................ ................................ ................................ ..14 2.10 Production Planning and Scheduling ................................ ................................ ..........15 2.11 Materials management ................................ ................................ ............................... 16

ENTERPRISE RESOURCE PLANNING AT HPCL ................................ ..................... 18

3.1 Boosting Service to Customers and Vendors ................................ ................................ 19 3.2 Streamlining Distribution Workflows ................................ ................................ ...........19 3.3 Training Encourages Greater User Acceptance................................ ............................. 19

QUALITY MANAGEMENT................................ ................................ ...................... 21

4.1 Quality Control & Maintenance ................................ ................................ ................... 21 4.2 Asset Integrity Management (AIM)................................ ................................ ..............22 4.3 High tech infrastructure and stringent quality control ................................ ................... 22 4.4 Fully AUTOMATION ................................ ................................ ................................ .22 4.5 Import and Storage facilities: ................................ ................................ ....................... 23 4.6 Quality Assurance................................ ................................ ................................ ........23

WORK MEASUREMENT ................................ ................................ ......................... 25

5.1 WORK MEASUREMENT: ................................ ................................ ........................ 25 5.2 LABOR STANDARDS: ................................ ................................ .............................. 25 5.3 RECRUITMENTS AND PROMOTIONS: ................................ ................................ ...26

ENVIRONMENTAL MANAGEMENT ................................ ................................ ....... 28

6.1 Effluents and Solid Waste Analysis in HPCL Petrochemical Refinery: ......................... 29 6.2 Analysis of Waste Water and Effluent Treatment Methods: ................................ ..........30 6.3 Safety and Hazards Management: ................................ ................................ ................ 31

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VALUE ENGINEERING ................................ ................................ ........................... 33

7.1 Feasibility Phase ................................ ................................ ................................ ..........33 7.2 Conceptual Phase................................ ................................ ................................ .........33 7.3 Basic Engineering ................................ ................................ ................................ ........34 7.4 Detailed Engineering and Construction ................................ ................................ ........34 7.5 Commissioning and Start-Up ................................ ................................ ....................... 35

KEY FINANCIALS................................ ................................ ................................ ... 36

8.1 Fixed Assets ................................ ................................ ................................ ................ 36 8.2 Current Assets, Loans and advances................................ ................................ .............36 8.3 Income................................ ................................ ................................ ......................... 36 8.4 Return on investment ................................ ................................ ................................ ...36

BIBLOGRAPHY ................................ ................................ ................................ ....... 38

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INTRODUCTION

Operations management is understood as the process whereby resources or inputs are converted into more useful products. A petrochemical industry basically converts petroleum and natural gas in useful products. Petroleum refinery use crude petroleum as a raw material and converts it into different products like petrol, kerosene, diesel, low-density oils, hydrocarbons like propane and propylene, butane and butylene, pentane, hexane, toluene, benzene, and other products like tar, lubricants base, etc.

HPCL REFINERY

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HPCL COMPANY AND OPERATIONS

2.1 PROFILE

Name Incorporation Constitution Sector Industry Activities

: Hindustan Petroleum Corporation Limited (HPCL) : 1974 : Public Limited Company : Petroleum Refinery : Petroleum : Bitumen, LPG, CNG, and downstream petroleum products.

2.2 BACKGROUND OF COMPANY AND OPERATIONS

HPCL is the second largest player in Indian Oil sector and in highly competitive lubricants market. It was formed in 1974 on nationalization of ESSO India operations. HPCL has two refineries producing a wide variety of petroleum products-one in Mumbai (West Coast) and the other in Visakhapatnam (East Coast). The HPCL refinery in Mumbai is situated in Mahul, west coast. It is in an M.I.D.C. area, which also has other big industries like Indian Oil Corporation limited (IOCL), Bharat Petroleum Corporation limited (BPCL), Tata power plant etc. The Corporation also holds major equity in Mangalore Refinery and Petrochemicals Limited, and is proposing to set up a refinery in the state of Punjab.

2.3 TYPE OF INDUSTRY

HPCL refinery can be classified as an analytical type of industry. It is petrochemical industry i.e. broadly speaking chemical engineering industry. Petroleum refinery is a production industry where raw material crude petroleum is transformed into various useful products using some chemical processes.

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2.4 CAPACITY
HPCL Mumbai refinery has a capacity 5.5MMPTA.HPCL Mumbai is operating one of the largest lube oil refinery in the country which has a capacity of 335TMT. This Lube Refinery accounts for over 40% of the India's total Lube Base Oil production. The refining capacity steadily increased from 5.5 million tonnes in 1984/85 to 13.70 million metric tonnes (MMT) presently. According to Auto Fuel Policy, EURO-IV norms are to be followed in metro cities by 2010.To supply it in future additional capacity planning is being done. Diesel hydro treating (DHT) of about 2.2MMTPA will be introduced in HPCL. Majority of EURO -IV HSD will be produced in HPCL, Mumbai.

2.5 LOCATION SELECTION CRITERIA

Oil Refineries process millions of gallons of oil that have been drilled from the Earths crust. Choosing the location of an oil refinery is not an easy task because a number of environmental and safety concerns need to be taken into account. India does not have high crude oil reserves, and hence it depends totally on import of petroleum crude oil. Gulf countries are the main suppliers to India. Transportations and refining costs are very high for any refinery and hence these factors take priority in considering plant location.

Refinery (west coast) Mumbai.

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Oil Refineries are often located on the coast and away from busy cities. When choosing the location for an oil refinery, the following factors need to be taken into consideration:

Coast: HPCL is located at its Chembur in Mumbai and Vizag in Andhra Pradesh because
of the proximity of sea routes from the plant location. As for transportation purpose, the raw material used in the production in HPCL i.e. crude oil can be easily transported via the sea routes. There is a rail route specially built for transportation of coal, from vadala to refinery area. Almost all oil refineries like BPCL, IOCL are situated at the Mahul gaon location at Chembur in Mumbai. HPCL petroleum refinery is on Mumbai west coast because generally refining is carried on along the coast, where low cost water transportation can be used.

Transportation: The oil refinery must be near to rail, road or sea links and close to the
site the oil has been drilled. HPCL has port near to it.

Available workforce: It may be tempting to build an oil refinery in a remote location

where no people or animals can be affected. However, a refinery needs workers living relatively nearby. Even though HPCL refinery is far from residential area transport facilities from workers quarters is available.

Available customers: Oil refineries need to be within easy reach of customers. It is

essential to have good transport links. Some refineries are pipelines as a method of transportation.

Air pollution : Although industries are regulated by strict controls regarding the
amount of pollution they release into the atmosphere, oil refineries emit number of polluting gases. To reduce the effects of air pollution on people, refineries should be built away from the built-up areas. Care should be also taken to position the refinery so that prevailing winds do not carry pollution in the direction of towns and cities. One can see boards specifying height from sea level in entire HPCL refinery area.

Water pollution : Some refineries use water from local rivers and streams for cooling
purposes. This means that the water is pumped out of the river or stream, circulated around a cooling tower and returned to the river at a higher temperature. This increase in water temperature is called thermal pollution. Some species of fish are unable to

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survive in these conditions. Waste products from refinery may also be washed into local rivers and streams.

Noise Pollution : Machinery that operates 24 hours a day can make a lot of noise for
people living nearby. Lorries and trains that come to pick up refined products also contribute to the noise.

Special sites of interest: Like other buildings, oil refineries must avoid areas of special
scientific interests. These can include regions where rare animals are being protected.

Top view of HPCL refinery, Mahul Mumbai on Google earth

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2.6 FUNCTIONAL GROUPS

HPCL refinery is spread over a very large area. It has many plants within its campus area. So management of such a big organization becomes very challenging. HPCL has managed it very well till now by organizing itself into appropriate functional departments. The various departments are as under:

Human resource: HPCL HR department has taken number of HR initiatives to make the
Corporation a great place to work. The Balanced Scorecard tool to set up performance targets and evaluation, Competency Mapping and Development Centers to enhance employee capabilities. Six Sigma for quality improvement have yielded rich dividends and are being constantly upgraded to higher levels of sophistication. A significant HR event of the period was the conduct of an International Program on Emotional Intelligence in association with TISS wherein a large number of professionals and students participated and appreciated the program. The Corporation continues to give utmost importance to training by nominating employees both for in-house and external programs. HPCL has bagged DMA Erehwon Innovative HR Award because it has successfully taken an HR idea from concept to reality and has sustained results. They also got Amity HR Excellence Award for achieving enviable position of one of the best and most admired companies due to innovative strategies for Human Resource Management and Development

Finance: The finance function involves keeping record of financial data related to fixed
assets, intangible assets, which forms most important part of a refinery operation. Additionally it also monitors the construction period expenses on projects occurring on monthly and quarterly basis and keeps record of other important financial depreciation, impairment of assets, foreign transactions, investments, inventories, duties on bonded stocks, Grants provision, exploration and production expenses, employee benefit, sales of products, research and development., Taxes on income, contingent liabilities and commitment capitals, accounting, classification of expenditure and income.etc.

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Marketing: LPG Marketing in India has traditionally been confined to domestic & non domestic consumers in urban/semi urban markets and all efforts till date have been in meeting the demands of these markets. With the saturation of urban and semi urban markets and the adequate availability of LPG in India, there is a need to look for alternative markets. Rural India presents a big opportunity for growth of LPG in India. HPCL is a major bunker fuel supplier to the ships (vessels) at major Indian ports viz Calcutta, Haldia, Visakhapatnam, Kakinada, Chennai, Cochin, Mangalore, Goa-Vasco, Mumbai, Kandla. HPCL also supplies other petrochemicals like hydrocarbons, lube base oils, tar, petrol, and diesel, ATF etc. Hence it has very good chain of distributors.

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2.7 PRODUCTION STRATEGY:

A very high priority is attached by the Government of India to conservation of petroleum products in view of the need to reduce gap between demand of petroleum products and indigenous supply of crude oil. Sporadic tension in the Middle East region that is the main source of our oil imports as well as a heavy import bill is a potent reason for continued emphasis on conservation and sparing use of petroleum products. Accordingly, strategic storage of crude oil becomes very important. HPCL, Mumbai plant has high capacity tanks for storage of crude oil as well as finished products. Every shipment of raw materials is after 15 days. But continuous production is carried out to make-to-stock the products. HPCL has trying to do backward integration by taking part in exploration and production process in country and outside country in joint ventures with some of the big companies. But more emphasize is given to production of high products length which are kept in stocks. HPCL, in partnership with consortium, currently has 20 E & P blocks in India and two overseas, including a service contract for the western offshore marginal fields under cluster-7 near Mumbai High. Its upstream JVC Prize Petroleum Company, which was formed in 1998, currently operates marginal fields in Gujarat and Mumbai High and onshore blocks in Gujarat and Madhya Pradesh. HPCL has been participating in the new exploration licensing policys (NELP) fourth round. During NELP-VI, HPCL participated along with major operators like ONGC, OIL, GSPC and GAIL. The Centre has awarded 15 blocks in which HPCLs participation interest ranges from 10 to 20%. The 15 blocks include 11 deepwater ones in Krishna Godavari and Cauvery basins, two shallow water blocks in Mumbai High and two onshore blocks in Rajasthan.

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2.8 PLANT LAYOUT:

DHDS CPP GF FR
B

LR

OMS

QM

TA F&G

LPG

LAYOUT OF HPCL REFINERY, MUMBAI DHPS : De-hydrocarbonaton de-sulphurisation LR : Lube Refinery CPP : Captive Power Plant GF : Green Fuel FR : Fuel Refinery OMS : Oil Management & Supply QM : Quality management F&G : Fire and Gas TA : Tank Area LPG : LPG Storage and Supply

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GHASLET

GHASLET

STORAGE AREA OVERVIEW

SOLVENT

CRUDE OIL

STORAGE AREA OVERVIEW

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2.9 PROCESS LAYOUT:

j PROCESSES IN HPCL: There are many different units in petroleum refineries, for carrying out different processes like distillation, separation, filteration etc. Depending on the products produced by the refineries process HPCL layout in a such way that a) There be very short distance between reactors or units of plant that has to be followed according to requirement. b) Less piping and cooling, heating expenses. c) Pumps, valves and other materials required between successive processes should be limited and controllable in number. d) Waiting time for the next process should be minimum. e) Very little manual labor is required and automation and instrumentation can be done effectively.

f) Planning and scheduling of specific product can be done accurately and

storage and distribution should be properly maintained.

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2.10 PRODUCTION PLANNING AND SCHEDULING

The main objective of this work is to discuss planning and scheduling applications for refinery operations in HPCL, Mumbai.

Major Steps Involved In Planning:

STEP 1: Nonlinear planning model for refinery production is developed. The model represents a general refinery topology and allows the implementation of nonlinear process models as well as blending relations. STEP 2: Optimization model is developed considering the market limitations for each oil derivative usually supplied by the refinery. The optimization model defines all operating points, thus increasing the production of more valuable products, while satisfying all specification constraints.

Major Steps Involved In Scheduling:

STEP 1: To overcome scheduling problems in oil refineries mixed integer optimization models are formulated that rely on both continuous and discrete time representations. This model takes care of the problem of crude oil inventory management that involves the optimal operation of crude oil unloading from pipelines, transfer to storage tanks and the charging schedule for each crude oil distillation unit. STEP 2: Development and solution of optimization models for short-term scheduling of a set of operations that includes: product receiving from processing units, storage and inventory management in intermediate tanks, blending in order to attend oil specifications and demands, and transport sequencing in oil pipelines.

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2.11 MATERIALS MANAGEMENT HPCL has emerged a front-runner, in providing excellent services to the customers, and also delivering state - of - art - products. Various products of HPCL are as under: y Bitumen: Bitumen is one such product being manufactured and marketed at HPCL refineries at Mumbai. They produce and market all the three grades of bitumen viz., 80/100, 60/70 & 30/40. The quality control measures are observed very stringently, and the bitumen is tested as per the requirement of the BIS. HPCL has made a foray into newer products such as rubberized and polymerized bitumen. y Fuels: HPCL produces variety of fuels. Some of them are listed below. o Petrol (MS), EURO-II, EURO-III o High Speed Diesel (HSD) o Furnace Oil (FO) o Light Diesel Oil (LDO) o Low Sulphur Heavy Stock (LSHS) o Naphtha o Lube base oils o ATF y Marine Bunker Fuels: The bunker fuels offered are: o Heavy oil 180 cst (fuel oil: FO) o Marine diesel oil (light diesel oil: LDO) o Marine gas oil (high flash diesel: HFHSD) y Marine Lubes: HPCL is the Marine Lube partner of Total Lubricants, France and manufactures TOTAL brand primary marine Lube grades. Secondary grades are of HPCL formulations and are certified by TOTAL

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as equivalents.

Bunker lubes are supplied duty free & duty paid for

international and coastal - run vessels respectively. ELF marine lubes offered are: o Atlanta Marine D3005 o Talusia HR 70 o Disola M 3015 & M 4015 o Aurelia 3030 & 4030 o Aurelia XT 4040 & XT 4055 y Special Products: The products include: o Hexane o Propylene o Jute Batch Oil o Solvent 1425 o Turpentine Oil (MTO 2445) o Carbon Black Feed Stock (CBFS) o Molten Sulphur y LPG & ATF: LPG is the very important product produced by HPCL.HP gas has large customer base and very large distribution network. LPG is sold at very subsidized rate that is loss for the company. But it recovers that loss by selling ATF at very high margi n.

LUBE REFINERY OF HPCL

HYDROCARBONS: HPCL also produces solvents like propane, hexane, benzene, toluene, and many other hydrocarbons, which are separated by distillation.

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ENTERPRISE RESOURCE PLANNING AT HPCL

To strengthen business management and improve customer service, HPCL implemented an advanced enterprise resource planning (ERP) system based on range of JD Edwards Enterprise One application from Oracle.

The ERP system was implemented at more than 430 locations across India from 2003 to 2005, and is used by over 2,000 employees. HPCL is continuously looking at innovative ways of enhancing customer satisfaction by leveraging technology.

The real time, on-line availability of information from across all the geographically spread locations of the corporation on a centralized system, has enabled HPCL to improve efficiencies in the Ares of tracking and monitoring customer receivables, credit management, inventory management and provide enhanced service to customers and other stake holders.

Upgrading to an integrated business management platform gave HPCL an enterprise-wide view of its finance, manufacturing human resources, and sales and distribution processes. Online access to information ensured managers could keep track of procurement, inventory, production schedules, and customer orders.

The company also standardized business practices, ensuring process consistency across multiple locations. A document archival system is an integral part of the ERP system, allowing HPCL to store invoices, purchase orders, checks, and other material. This ensures the company can locate critical documents quickly and efficiently.

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3.1 BOOSTING SERVICE TO CUSTOMERS AND VENDORS In keeping with HPCLs aim of enhancing customer satisfaction, the company designed portals that draw on information gathered by its ERP system to provide clients with dispatch details, account statements, and a history of sales transactions completed over the past three years. Customers log in to the portal using a secure user ID and password. Separate portals for aviation, direct sales, LPG, and retail customers were established. HPCL also developed an electronic payment system to promote smoother and faster payments to its vendors, contractors, transporters, and other service providers. The system is integrated with the companys banking institution, enabling payment information to be seamlessly transmitted between the two organizations and ensuring timely payment to suppliers.

3.2 STREAMLINING DISTRIBUTION WORKFLOWS HPCL realized another efficiency improvement when it streamlined its distribution processes and implemented new notification alerts. For example, the companys dealers and distributors now receive e-mails and text messages via their cell phones informing them of impending shipments. This information is sent to dealers and distributors immediately following the generation of an invoice, enabling them to keep track of their orders.

3.3 TRAINING ENCOURAGES GREATER USER ACCEPTANCE A change management program was established to facilitate a smooth transition to the new system for employees. Comprehensive training was provided to staff during the implementation, followed by refresher courses post-deployment. Competency development programs for specific user groups such as regional managers, finance staff, heads of terminal/depot/LPG plants, sales officers, project engineers, HR officers and clerical staff are also conducted regularly.

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HPCL organizes virtual training sessions from time to time to allow staff in remote locations to learn about new system features. This reduces travel time and cost for participants and enables quick dissemination of new information to users. A state-of-the-art data center at HPCLs head office at Mumbai houses powerful IBM enterprise servers that run the database and applications. The company uses a virtual private network (VPN), dedicated telephone lines, very small aperture terminals (VSATs),

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QUALITY MANAGEMENT

Quality refers to the sum of the attributes of properties that describe a product. In petrochemical industry quality is generally expressed in terms of specific product characteristics such as color, specific gravity, viscosity etc. HPCL have latest quality control technology that is mandatory for improvement of refinery throughput, quality and yield. Its quality control department has been successful in carrying out improvement in crude oil viscosity, API gravity, and reduction /removal of sulfur, increase crude distillation yield and overcome other operational problems from time to time using upgraded technologies in petroleum refineries.

4.1 QUALITY CONTROL & MAINTENANCE Quality control is achieved in HPCL by following ways: 1) All material supplies are affected from approved suppliers and manufactures only. 2) All items procured are inspected /tested. 3) Sampling of the products is done thrice a day and analysis at each stage is carried out. Strict quality control is ensured. 4) Stage wise inspection and certification of jobs by inspectors. 5) In HPCL highly experienced and higly skilled craftsmen handle jobs. Prequalified and highly skilled Engineers inspect quality departments. Even refinery workers, welders etc are tested and certified for job. Maintenance plays a crucial role in the production process in the Refineries / Petrochemical plants. A plant may be regarded as successful when it operates without interruptions, which can however be achieved only when its facilities are in perfect working order at all times. The strategic importance of maintenance

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increases with increasing sophistication. The overall objective is to m aximize production output at minimum total cost.

4.2 ASSET INTEGRITY MANAGEMENT (AIM) This type of program involves world-class standards of inspection and maintenance of refinery facilities and pipelines to ensure the uninterrupted, reliable and efficient operation. This program, which utilizes advanced technologies and methodologies, is vital to minimize the risks and vulnerabilities of large scale petroleum operations, protect the safety of the workforce and neighboring population, and to maximize energy security for India. HPCL will be adopting it in near future.

4.3

HIGH

TECH

INFRASTRUCTURE

AND

STRINGENT

QUALITY

CONTROL HP the second largest integrated oil company of India has 40 well spread out bottling plants and 2 tap off points on Jamnagar Loni LP G pipeline of GAIL with online automatic quality control equipment ensures total quality checks of cylinders at bottling plants. These equipments are upgraded from time to time.

4.4 FULLY AUTOMATION HPCL has adopted a strategy of complex pipelines so as to decrease the idle times of plants and machineries. It is highly automated. Controlling of process is done from control rooms of HPCL. HPCL have 20 electronic carousel of automatic type which fills cylinders automatically basis. Filling of cylinders are interlocked in the system.

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4.5 IMPORT AND STORAGE FACILITIES: HPCL have LPG storage facility of 65000 tons of LPG bottling plants and import terminals. Storage facilities of three types: 1) Above grounds bullets of capacity 50 MT TO 150 MT each. 2) Spheres of capacity 600 MT TO 1400 MT each. 3) Mounded storage of capacity 200 MT to 1000 MT each.

4.6 QUALITY ASSURANCE Refinery crude processing is based on crude with all impurities as input. Step by step it tries to reduce impurities by changing it to less harmful component or remove after converting to separable component. Processes like desulfurization, hydrogenation, hydro cracking etc. are used to achieve this.

1) Viscosity Viscosity reduction is achieved by removing impurities that contributes to higher viscosity, which includes polycyclic aromatics. Reduction of viscosity is carried out using some chemical processing which enables more rapid and uniform feedstock management, improved heat transfer, faster mixing and shorter residence time ensuring consistent quality.

2) API Gravity API gravity is the most frequently used measure to estimate the quality of a crude oil. It is one of the parameters focused for determining the price of crude oil, the thickness of oil is reduced and fluidity is increased.

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3) Sulphur De-sulphurization unit in HPCL removes sulfur with complex molecules selectively from crude oil. These are normally high boiling sulfur compounds, i.e. boiling at 565 oC and ends up partly in residue and gas oils. Lower boiling sulfur compounds are separated and treated. Removal of sulfur from crude is mainly done in gaseous form. Quality control and quality assurance both are very important aspects of quality management in refineries. It helps reduce production cost and increase productivity. At the same time quality is the main weapon in competition. HPCL has high customer loyalty due to its high quality products.

CONTROL ROOM OF HPCL,MAHUL

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WORK MEASUREMENT

Work measurement is a process of establishing a time that a given task would take when performed by a qualified worker working at a defined level of performance.

5.1 WORK MEASUREMENT:

Work measurement is the process of establishing the time that a given task would take when performed by a qualified worker working at a defined level of performance. A qualified worker is one who has acquired the skill, knowledge and other attributes to carry out the work in hand to satisfactory standards of quantity, quality and safety Work measurement also refers to the process of estimating the amount of worker time required to produce one unit of output. goal of work measurement is to develop labor standards that can be for planning and controlling operations. used

5.2 LABOR STANDARDS:

A labor standard is the number of worker-minutes required to complete an element, operation, or product under ordinary operating conditions. Labor standards are used in: Cost estimation Pricing of products and services Incentive pay systems Capacity planning Production scheduling

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5.3 RECRUITMENTS AND PROMOTIONS: Upon successful completion of training, OTs are absorbed at the entry level in the Management Cadre in Salary Grade "A" . After absorption, the officer is on probation for next 6 months. On successful completion of probationary period, the officer is confirmed as the employee of the Corporation. Officers Most of the recruitment is made at entry level only. However, HPCL may recruit Officers at senior levels, through open advertisements, to meet some specific requirements, like Exploration & Production, R&D etc. for which experti se may not be available internally. IT Officers and Accounts Officers are also directly recruited through open advertisement in S/G A. Campus Recruitment: HPCL also visits Engineering & Management Institutes for campus recruitment of Engineers From IITs,NITs, etc. MBAs Premier Management Institutions Chartered Accountants Institute of Chartered Accountants of India (ICAI). All Officers are entitled to other applicable benefits: Contributory Provident Fund Contributory Medical Insurance Scheme Group Savings Linked Insurance Scheme Group Personal Accident Insurance Scheme Gratuity and are members of the HPCL Employees Superannuation Benefit Fund Scheme DA, HRA, Conveyance etc. Benefits like Furniture Loan, Vehicle Loan, Housing Loan, Medical, Home Lease etc. are also available to Officers satisfying minimum service criteria.

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Learning & Development and Career Progression Systematic & continuous quality Training and Job rotation is provided to all Employees to gain wider exposure which facilitates overall development of the Officer. HPCL believes in pro-active Human Resource Development and nurtures the internal talent of the organization by practicing the following, to name a few : Reward and Recognition Schemes Providing challenging work environment Balanced Score Card based performance appraisal system along with Competency Development Programme Profit sharing and Performance Linked Incentive Scheme

At HPCL the work measurement practice followed is Standard operating procedure (SOP) and Job definition (JD). The process is standardized based on time and motion studies. It aims to make it a function of time and efforts.

HIGHLY COMPLEX NATURE & AUTOMATION HELPS IN TIME MINIMIZATION & IDLE TIME REDUCTION

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ENVIRONMENTAL MANAGEMENT

Crude oil is a major source of energy and feedstock for petrochemicals. Oily sludge, bio-sludge and chemical sludge are the major sludges generated from the processes and effluent treatment plants of the refineries engaged in crude oil refining operations. Refineries in India generate about 28,220 tons of sludge per annum. Various types of pollutants like phenols, heavy metals, etc. are present in the sludges and they are treated as hazardous waste. Petrochemical plants generate solid waste and sludges, some of which may be considered hazardous because of the presence of toxic organics and heavy metals. Accidental discharges as a result of abnormal operation can be a major environmental hazard, releasing large quantities of pollutants and products into the environment. The presence of objectionable conditions such as offensive odors and accumulation of debris have been reported to decrease the proper value and recreational uses of water. Wastewaters released by petrochemical industries are characterized by the presence of large quantities of polycyclic and aromatic hydrocarbons, phenols, metal derivatives, surface-active substances, sulphides, naphthylenic acids and other chemicals. Ineffectiveness of purification systems can become seriously dangerous, leading to the accumulation of toxic products in the receiving water bodies with potentially serious consequences on the ecosystem. Several investigations have shown positive correlation between pollutions from petrochemical effluents and the health of aquatic organisms.

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6.1

EFFLUENTS

AND

SOLID

WASTE

ANALYSIS

IN

HPCL

PETROCHEMICAL REFINERY: On regular basis analytical studies of effluents and soil samples where sediments from the treated effluents are dumped is carried out. These are then analyzed for physicochemical properties, metallic and non-metallic ions. These parameters are compared with established international standard (FEPA). Effluents were classified as:

PROCESS WASTE WATER (PWW): Process waste water (PWW) is water that is intended to come into contact with hydrocarbons or treated chemicals at the petrochemical plant. CLARIFIED WATER (CW): Clarified water (CW) is a combination of PWW and
sewage.

FINAL DISCHARGE (FD): The final discharge water (FD) is the effluent, which
has undergone both chemical and biological treatment to eliminate or reduce waste contents to acceptable levels.

Some of the Effluent Treatment Methods Used: The treatment procedure of the effluent in the company is as shown below: 1) Equalization 2) Sedimentation 3) Flocculation 4) Floatation Dissolved Air Basin 5) Biodegradation

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6.2 ANALYSIS OF WASTE WATER AND EFFLUENT TREATMENT METHODS: Waste Water Analysis: Determinations of major parameters are carried out according to standard methods. 1. Determination of Biological Oxygen Demand (BOD), 2. Determination of Dissolved Oxygen (DO), 3. Determination of Chemical Oxygen Demand (COD), 4. The determination of Total Dissolved Solid (TDS), 5. Total suspended solid (TSS), 6. Total Hydrocarbon (THC), 7. pH determination 8. H) Level of Cl-, (PO4) 3-, (SO4) 2- and NO3 9. I) Determination of the heavy metals including nickel (Ni), lead (Pb), zinc (Zn), iron (Fe), copper (Cu), cobalt (Co) and cadmium

Analysis of Sediments: Sediment samples are air-dried by thinly spreading on a clean laboratory bench surface at room temperature, and brought to a relatively homogenous state by thoroughly mixing, and sieving with 2 mm mesh before being treated. In the case of fresh samples, large stones and roots were picked out before mixing and weighing. Moisture determination of duplicate samples of the sediment was carried out for dry weight correction. The sediment samples are then prepared (extraction method) for the various physicochemical determinations. Various physicochemical properties are determined by various analytical methods.

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6.3 SAFETY AND HAZARDS MANAGEMENT: Causes of Accidents in Refineries: Refinery accidents are often the result of unexpected interaction between automated process equipment and operators. Equipment failures or operator errors can lead to sudden and unexpected changes in the plant operation. If these disruptions to normal process operation exceed the capabilities of the operators or the capacity of the safety systems, a severe accident can occur, potentially producing a devastating fire, explosion, or toxic release. Safety Department: Special team of experts is present in HPCL to investigate loss in such accidents, including material failures, fires, and explosions. These investigations range from high-loss disasters to small incidents. In the drive to improve safety and reliability, chemical process facilities tend to rely heavily on automation using sophisticated instrumentation, computers, and programmable logic controllers to run their plants. Honeywell does all the instrumentation work for HPCL Mahul, Mumbai. In an effort to improve energy efficiency and reduce pollution, various pieces of equipment are interconnected in ways that complicate their operation. Safety department of the refinery performs following functions: 1. Accident and incident investigation 2. Root-cause analysis (RCA) 3. Fire and explosion analysis 4. Fire protection engineering 5. Fitness-for-service evaluation 6. Specification, corrosion control, and failure analysis of materials 7. Evaluation of pressure relief systems, vessels, and piping 8. Analysis of atmospheric releases, spills, and environmental fate

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9. Groundwater and soil remediation support 10. Compliance with standards and regulations 11. Risk and reliability analysis and quantitative risk assessment 12. Process hazards analysis (PHA) 13. Hazard and operability analysis (HAZOP) 14. Failure modes and effects analysis (FMEA) 15. Review of process safety management (PSM) and risk management program (RMP) 16. Safety and health training 17. Environmental impact and baseline assessments 18. Site security and vulnerability analysis 19. Site investigation and remediation 20. Hydrology and groundwater monitoring 21. Project management, performance, scheduling, and construction delay analysis Benefits of Having Safety Department includes better understanding of employee exposures to potentially hazardous situations, current knowledge of asset vulnerabilities, identification of opportunities for cost-effective mitigation measures to reduce potential losses, and better knowledge of loss exposures from an insurance perspective. Their experience provides engineers and scientists unique insights in addressing various risk and reliability issues and assessing environmental and health impacts, to help increase the safety of workers, processes, and facilities and minimize operational disruptions and property loss.

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VALUE ENGINEERING

Value engineering at HPCL is carried out in the following steps: 7.1 FEASIBILITY PHASE During the initial phase, current constraints such as product quality, current market demand, existing refinery capacity and existing refinery condition are established. Typically, this type of investigation includes physical on site examination of equipment as well as a review of inspection and other records. A process simulation will be performed to obtain a model for use in further design and to establish the operating constraints. Existing legislation and product standards, locally and internationally, are reviewed to establish likely future product requirements. Market research based on current economic conditions and expected future conditions, are used to predict demand. This research is often done using the expertise of consultants with appropriate local experience. This phase could take 4 to 6 weeks, depending on the complexity of the system. 7.2 CONCEPTUAL PHASE The predicted future demand is used to establish various revamp scenarios. Using the simulation and existing equipment data, the extent of revamp required to reach different demand cases is determined. Using conceptual estimating techniques, an order-of-magnitude cost estimate for the different scenarios is obtained. The emphasis for this type of cost estimate is on establishing the differences between different options. The cost estimates for different demands are compared with revenue generated and the information is used to plan a revamp process to meet demand for the required period into the future. At this stage, a formal value engineering exercise is carried out to establish where opportunity exists for increasing value. Typically, a number of alternate designs or options are generated, the best of which are investigated further. The optimum alternatives are then incorporated into the design for further engineering. As the design progresses and more detail and firmer costs become available, it is often useful to perform another value engineering exercise. The conceptual phase takes 6 to 8 weeks depending on the required estimating accuracy, complexity of solutions/options and the number of scenarios to be estimated. Typically at the end of this phase the following are available: y y Process flow diagrams, mass and energy balances Equipment lists

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y y y

Preliminary equipment sizing Order-of-magnitude cost estimates Economic evaluation

7.3 BASIC ENGINEERING After the concept has been finalised and agreed with the refinery management, the design proceeds to firm up details. Process conditions are frozen and detailed equipment specifications are produced. Input from mechanical, piping, control systems, electrical and civil engineering disciplines is included to complete the design. Experts are used from other organisations where specialised skills are required. Detailed Piping and Instrumentation Diagrams (P&ID's) are produced showing the requirements of all disciplines. Equipment, instrumentation and material specifications are sent to suppliers to obtain quotations and details of required items. Global procurement is used to source material in the most effective manner, from both cost and schedule considerations. During this phase, which could last about 3 months, reviews are held with clients, suppliers and internally to ensure the refinery's requirements are met and that the suppliers understand their requirements. Suppliers are often selected at this stage, although orders are not yet placed. At the end of this phase a Hazard and Operability study (HAZOP) is held to ensure the design is workable and safe. The cost estimate is updated with an improved accuracy, based on the additional information.

7.4 DETAILED ENGINEERING AND CONSTRUCTION Once all the planning and analysis is complete, the engineering departments get into full swing. Orders are placed for equipment, especially long delivery items. Any items not yet firmed up are defined and engineering completed. Any changes or updating are extremely tightly controlled to prevent omissions, schedule threats or escalating costs. The duration of this phase normally depends on equipment delivery. Careful planning is required to reconcile delivery times and commissioning and start-up requirements. Material must arrive on site in time to facilitate construction. Effort is concentrated on expediting and inspection to ensure that items reach site on time and are correct. Any delays during engineering can cause an impact on the construction team, who need the flexibility to respond appropriately. A key consideration during construction phase is the safety of construction labour and other people in the

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vicinity of the site. At the end of construction the site is normally handed back to the owner for commissioning and start-up.

7.5 COMMISSIONING AND START-UP During this final phase, the process of transferring the revamped refinery back to the operations department is done.

Designing a plant in cost effective way is also a part of Value engineering

Crude oil pipe line is connected from Alibagh to Mahul, LPG distribution is from Mahul to Ahemednagar & other cities.

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KEY FINANCIALS

8.1 FIXED ASSETS Particulars Gross Block Less: Depreciation Net Block Capital Work-in-Progress TOTAL Amount (Rs) 19570.04 7640.77 11929.27 3315.95 15245.22

8.2 CURRENT ASSETS, LOANS AND ADVANCES Particulars Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances TOTAL 8.3 INCOME Particulars Sale Of Products Less:Excise Duty Paid Net Sales Recovery Under Subsidy Schemes Other Income TOTAL Amount (Rs) 103837.43 7394.51 96442.92 8260.84 1197.97 105901.73 Amount (Rs) 12020.28 1710.66 294.01 49.46 5222.96 19297.37

Book Value of Assets= Fixed Assets + Current Assets =15245.22 + 19297.37 =Rs.34542.59/8.4 RETURN ON INVESTMENT Return Of Investment (ROI) Of the company= Net Income / Book Value of Assets =105901.73 / 34542.59 =3.0658
Other Than Intangible Assets Gross Block At Cost As Additions /Reclassifications Deduc Tions/Re Classifi Gross Block At Cost As At Deprec Iation

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At 01-042007 Cations

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31-03-2008

Land 477.68 Freehold Roads and 771.66 Culverts Buildings 1,498.73 Leasehold 90.04 Property Land Railway Siding 281.40 and Rolling Stock Plant and 12,043.51 equipment Furniture, 321.50 Fixtures and Office/Lab Equipment Transport 100.50 Equipment Unallocated 0.20 capital Expenditure on Land Development

22.94 228.05 333.82 15.36

1.25 2.73 -

500.62 998.46 1,829.82 105.40

15.58 36.19 3.50

0.90

0.43

281.87

12.88

3,227.21 103.31

42.55 8.56

15,228.17 416.25

750.07 28.93

22.22 -

2.41 -

120.31 0.20

3.96 -

Unallocated Capital Expenditure and Materials at Site Advances for Capital Expenditure Capital Stores Capital Stores lying with Contractors Capital goods in transit

2,647.14 372.72 19.46 17.07 24.58 3,080.96

3,683.14 83.68 33.44 109.87 124.62 4,034.75

Construction period expenses pending apportionment (Net of recovery): Establishment charges 29.80 Interest 102.05 Other Borrowing Cost * 103.06 Depreciation 0.08 234.99 3,315.95

57.36 130.06 21.09 0.30 208.81 4,243.56

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BIBLOGRAPHY

Refernces: 1. Production and operations management :Ashwathappa/ Bhat 2. Operations management : Roberta Russell/Bernard Taylor 3. Productions operations management : Buffa/Sarin

Website: 1. www.hpcl.com 2. www.hindustanpetroleum.com 3. www.managementarticles.com 4. www.moneycontrol.com

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