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Friday, April 27, 2012

ERP: Enterprise Resource Planning In Pakistan State Oil



ERP: Enterprise Resource Planning In Pakistan State Oil

ERP: Enterprise Resource Planning
Enterprise Resource Planning is a term originally derived from manufacturing resource planning (MRP II) that followed material requirements planning (MRP). MRP evolved into ERP when "routings" became major part of the software architecture and a company's capacity planning activity also became a part of the standard software activity
Enterprise Resource Planning systems (ERPs) integrate (or attempt to integrate) all data and processes of an organization into a unified system. A typical ERP system will use multiple components of computer software and hardware to achieve the integration. A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules.


The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. However, the use of ERP has changed and is extremely comprehensive, today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization - large or small.
In order for a software system to be considered ERP, it must provide an organization with functionality for two or more systems. While some ERP packages exist that only cover two functions for an organization (QuickBooks: Payroll & Accounting), most ERP systems cover several functions.
Today's ERP systems can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were all once stand alone software applications, usually housed with their own database and network, today, they can all fit under one umbrella-the ERP System.
Although the ideal configuration would be one ERP system for an entire organization, many larger organizations usually create and ERP system and then build upon the system and external interface for other stand alone systems which might be more powerful and perform better in fulfilling an organizations needs. Usually this type of configuration can be time consuming and does require lots of labor hours.

THE IDEAL ERP SYSTEM:

An ideal ERP system is when a single database is utilized and contains all data for various software modules. These software modules can include:
Manufacturing: Some of the functions include; engineering, capacity, workflow management, quality control, bills of material, manufacturing process, etc.
Financials: Accounts payable, accounts receivable, fixed assets, general ledger and cash management, etc.
Human Resources: Benefits, training, payroll, time and attendance, etc
Supply Chain Management: Inventory, supply chain planning, supplier scheduling, claim processing, order entry, purchasing, etc.
Projects: Costing, billing, activity management, time and expense, etc.
Customer Relationship Management: sales and marketing, service, commissions, customer contact, calls center support, etc.
Data Warehouse: Usually this is a module that can be accessed by an organizations customers, suppliers and employees.










ERP IMPROVES PRODUCITIVITY:

Before ERP systems, each department in an organization would most likely have their own computer system, data and database. Unfortunately, many of these systems would not be able to communicate with one another or need to store or rewrite data to make it possible for cross computer system communication. For instance, the financials of a company were on a separate computer system than the HR system, making it more intensive and complicated to process certain functions.
Once an ERP system is in place, usually all aspects of an organization can work in harmony instead of every single system needing to be compatible with each other. For large organizations, increased productivity and less types of software are a result.
FIGURE:


ERP Working Areas:

ERPs are cross-functional and enterprise wide. All functional departments that are involved in operations or production are integrated in one system. In addition to manufacturing, warehousing, logistics, and Information Technology, this would include
  • Product Management
  • Customer Relationship Management (CRM)
  • Supply Chain Management (SCM)
  • Supplier Management
  • Manufacturing Management
  • Financial Management
  • Business Intelligence
  • Collaboration & Integration


FIGURE:

1. Product Management

Deliver products on time and within budget by managing your product design processes.

2. Customer Relationship Management (CRM)

Manage and improve every customer-facing business process, from winning new customers to providing excellent post-sales service.


3. Supply Chain Management (SCM)

Streamline your supply chain, synchronize global supply and demand, and instantly respond to changes.

4. Supplier Management

Manage your suppliers and control inventory levels more efficiently with end-to-end functionality.

5. Manufacturing Management

Control all aspects of production including manufacturing planning, materials management and production execution.

6. Financial Management

Keep your business in the back with powerful, integrated, and flexible financial management tools.

7. Business Intelligence

Powerful reporting and analytics tools keep your business on the track and improve your operations continuously.

8. Collaboration & Integration

Integrate with your customers, suppliers and trading partners to share information and automate business processes.

Implementing of an ERP System:

Implementing an ERP system is not an easy task to achieve, in fact it takes lots of planning, consulting and in most cases 3 months to 1 year +. ERP systems are extraordinary wide in scope and for many larger organizations can be extremely complex. Implementing an ERP system will ultimately require significant changes on staff and work practices. While it may seem reasonable for an in house IT staff to head the project, it is widely advised that ERP implementation consultants be used, due to the fact that consultants are usually more cost effective and are specifically trained in implementing these types of systems.
One of the most important traits that an organization should have when implementing an ERP system is ownership of the project. Because so many changes take place and its broad effect on almost every individual in the organization, it is important to make sure that everyone is on board and will help make the project and using the new ERP system a success.
Usually organizations use ERP vendors or consulting companies to implement their customized ERP system. There are three types of professional services that are provided when implementing an ERP system, they are Consulting, Customization and Support.
Consulting Services - usually consulting services are responsible for the initial stages of ERP implementation, they help an organization go live with their new system, with product training, workflow, improve ERP's use in the specific organization, etc.
Customization Services - Customization services work by extending the use of the new ERP system or changing its use by creating customized interfaces and/or underlying application code. While ERP systems are made for many core routines, there are still some needs that need to be built or customized for an organization.
Support Services- Support services include both support and maintenance of ERP systems. For instance, trouble shooting and assistance with ERP issues.
Figure:

Advantages:

In the absence of an ERP system, a large manufacturer may find itself with many software applications that do not talk to each other and do not effectively interface. Tasks that need to interface with one another may involve:
  • Design engineering (how to best make the product)
  • Order tracking from acceptance through fulfillment
  • The revenue cycle from invoice through cash receipt
  • Managing interdependencies of complex Bill of Materials
  • Tracking the 3-way match between Purchase orders (what was ordered), Inventory receipts (what arrived), and Costing (what the vendor invoiced)
  • The Accounting for all of these tasks, tracking the Revenue, Cost and Profit on a granular level

Disadvantages:

  • Personnel turnover; companies can employ new managers lacking education in the company's ERP system, proposing changes in business practices that are out of synchronization with the best utilization of the company's selected ERP
  • Customization of the ERP software is limited. Some customization may involve changing of the ERP software structure which is usually not allowed.
  • Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage.
  • ERP systems can be very expensive to install often ranging from 30,000 to 500,000,000 for multinational companies
  • ERP vendors can charge sums of money for annual license renewal that is unrelated to the size of the company using the ERP or its profitability.
  • Technical support personnel often give replies to callers that are inappropriate for the caller's corporate structure. Computer security concerns arise, for example when telling a non-programmer how to change a database on the fly, at a company that requires an audit trail of changes so as to meet some regulatory standards.

The Evolution of ERP

ERP has grown over the years to become part of the entire enterprise. From its beginning as a tool for materials planning, it has extended to warehousing, distribution and order entry. With its next evolution, ERP expands to the front-office. Now administrative, sales, marketing, and human resources staff can share a tool that is truly “enterprise-wide”.
ERP is not just about manufacturing, distribution, and accounting. Projects, workflow, sales, documentation, and employees play an important role in the enterprise and its day-to-day operations.
This diagram shows how ERP has grown since the 1990’s to accommodate the needs of the entire organization.



ERP MODULES v.4.6

­•SAP BC (BASIS Components) accessed through SAPGUI
SAP BASIS addresses all security issues by incorporating an authorization module. With increased potential for security breaches in the computer systems around the world, BASIS consultants face a tough task of maintaining the integrity and administering the security of SAP systems. In SAP, security is administered for objects (profiles and authorizations). Users are only authorized to see or change the parts of the system required by their respective job responsibilities.
SAP FI (Financial Accounting)
The SAP FI (Financial Accounting) Module has the competence of meeting all the accounting and financial needs of an organization. Along with other managers, Financial Managers within your business and same module can review the financial position of the company in real time as contrasted to legacy systems which necessitate overnight updates before financial statements frequently and can be generated for management review. The real-time functionality of the SAP modules allows for better decision making and strategic planning. The FI Module incorporates with other SAP Modules such as MM (Materials Management), PP (Production Planning), SD (Sales and Distribution), PM (Plant Maintenance), and PS (Project Systems). The FI Module also assimilates with HR (Human Resources) that includes PM (Personnel Management), Time Management, Travel Management, Payroll. Document transactions occurring within the precise modules generate account postings by means of account determination tables.






SAP CO (Controlling)
The SAP CO (Controlling) Module provides supporting information to Management for the purpose of planning, reporting, as well as monitoring the operations of their business. Management decision-making can be achieved with the level of information provided by this module. Some of the components of the CO(Controlling) Module are as follows: 
·         Cost Element Accounting
·         Cost Center Accounting
·         Internal Orders
·         Activity-Based Costing (ABC)
·         Product Cost Controlling
·         Profitability Analysis
·         Profit Center Accounting

SAP HR/HCM (Human Resource/Human Capital Management)
SAP Human Capital Management (SAP HCM) is a global Human Resources management system solution, with personal administration, organization management, personnel development, recruitment, benefits, and payroll and time management capabilities including standard language, currency and regulatory requirements for more than 30 countries. This SAP HCM training course not only prepares you for the SAP HCM certification exam, but it also equips you with core configuration skills and sound functional knowledge, to perform an impressive work at job. 

SAP AM (Asset Management) / EAM (Enterprise Asset Management)
Enterprise asset management (EAM) means the whole life optimal management of the physical assets of an organization to maximize value. It covers such things as the design, construction, commissioning, operations, maintenance and decommissioning/replacement of plant, equipment and facilities. "Enterprise" refers to the management of the assets across departments, locations, facilities and, in some cases, business units. By managing assets across the facility, organizations can improve utilization and performance, reduce capital costs, reduce asset-related operating costs, extend asset life and subsequently improve ROA (return on assets).

SAP MM (Material Management), MRP (Materials Requirement Planning), Material Ledger)
SAP MM is the materials management module of the SAP ERP software package from SAP AG that is used for Procurement Handling and Inventory Management. Materials management is integrated with other modules such as SD, PP and QM. Materials management is used for procurement and inventory management.
The module has two important master data - material and vendor. Broadly, the various levels that can be defined for a SAP MM implementation are: Client, Company Code, Plant, Storage Location and Purchase Organization.
SAP Materials management covers all tasks within the supply chain, including consumption-based planning, planning, vendor evaluation and invoice verification. It also includes inventory and warehouse management to manage stock until usage dictates the cycle should begin again. Electronic Kanab/Just-in-Time delivery is supported.
It can be divided into five major components. There are: materials management, plant maintenance, quality management, production planning and control, and a project management system. Each is divided into number of subcomponents.
SAP MM is all about managing the materials i.e the resources of an organization. These resources include man, manpower and materials. The main functionality within MM includes purchasing, Inventory management, valuation and assignment, batch management and classification.

SAP SD (Sales & Distribution)
SAP SD handles sales activities and distribution, also called shipping. The main activities are the sales order handling, and the distribution of shipments to customers. Also the billing process, customer invoice, delivery, and risk management is handled from the SD module.

SAP PP/DS (Production Planning and Detailed Scheduling)
Manufacturing in any company has at its disposal various resources. The nature and the constraints of these resources are determined by some strategic decisions. The day-to-day running of manufacturing rests with Production Planning and Control (PP&C) The purpose of PP&C is to ensure that manufacturing runs effectively and efficiently and produces products as required by customers. SAP R/3 has a highly integrated Production Planning System. The PP module is divided into two Sub-modules, 'PP-PI' and 'Production General'. PP-PI sub-module is designed for process industries like Oil and Gas.

SAP PM (Plant Maintenance)
The SAP Plant Maintenance comprises of the following activities such as inspection, to measures and establishes the actual condition of a technical system, preventive maintenance to measures and maintains the ideal condition of a technical system, repair to measures and restores the ideal condition of a technical system and other measures that need to be taken using the maintenance organization. SAP PM is closely integrated with other modules (for example, Materials Management, Production, Sales and Distribution, Personnel Management, and Controlling) the data is always kept current and processes that are necessary for Plant Maintenance and Customer Service are automatically triggered in other areas (for example, a purchase requisition for non-stock material in the Materials Management/Purchasing area).

SAP QM (Quality Management)
The SAP QM module supports tasks associated with quality planning, quality inspection and quality control throughout an enterprise. It sets the specifications for quality and standard testing procedures, controls the creation of quality certificates and manages notifications related to quality. It also stores the quality data for raw materials, goods-in-process and finished goods.

SAP PLM (Product Lifecycle Management)
SAP Product Lifecycle Management (PLM) is the integrated SAP solution that focuses on all product-related information needed for efficient product development and manufacturing from start to end. It supports exchanging essential information with business partners and provides access via Web technology.

SAP PS (Project System)
Projects are generally part of the internal processes of a company. To be able to control all tasks in project execution, you need an organizational form that is specific to the project and which is shared by all departments involved. Before you can carry out a project in its entirety, the project goals must be precisely described and the project activities to be carried out must be structured. A clear, unambiguous project structure is the basis for successful project planning, monitoring, and control.

SAP DMS (Document Management System)
SAP DMS are for storing documents such as CAD drawings, Materials pictures etc. with the document management system, users will be able to view the documents with ease within their SAP systems.

SAP BW (Business Warehouse) BIW (Business Intelligence & Data Warehousing)
In the fiercely increasing competition amongst corporations it has become mandatory to make quick and sound crucial business decisions based on analysis of business critical data. This is the point where data warehouses come into play. Although many companies are relying on data warehouses, they are still struggling to achieve positive results due to fragmented and inconsistent data. For them SAP’s Business Information Warehouse (BW) provides a complete information factory solution. BW is the central component in the SAP suite of applications with an added advantage of being a software package that can be used in both SAP and non-SAP environments.
SAP Business Information Warehouse (SAP BW) is the name of the Business Intelligence, analytical, reporting and Data Warehousing (DW) solution which is one of the major enterprise software applications produced by SAP AG. It was originally named SAP BIW, (Business Information Warehouse), but is now known as "SAP Net Weaver BI".




ERP 6.0 (2005) with ECC 6

SAP CRM (Customer Relationship Management)
Customer relationship management (CRM) is a broadly used term that covers concepts used by organizations to manage their relationships with customers and stakeholders to reduce costs and increase profitability by solidifying customer loyalty. CRM brings together information from all sources within and outside an organization to give one, holistic view of each customer in real time. Customers can benefit from their data being utilized within a CRM system. For instance, an increase in unsolicited telemarketing calls is generally resented by customers while a small number of relevant offers is generally appreciated by customers. CRM software can enhance the collection and analysis of customer behavior leading to more relevant communications with customer.
Figure:


SAP SCM (Supply Chain Management)
Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service. Supply chain management’s three main flows: The Product Flow, the Information Flow, and the Finance Flow.
The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.
The SAP® Supply Chain Management (SAP SCM) application offers companies not only planning and execution solutions to manage operations but also helps boost visibility and collaboration to extend their operations beyond corporate boundaries. SAP SCM empowers companies to adapt their supply chain processes to an ever-changing competitive environment, transforming traditional supply chains from linear, sequential processes into an adaptive supply chain network in which communities of customer-centric, demand-driven companies share knowledge, intelligently adapt to market changes and proactively respond to shorter, less predictable life cycles.




Figure:



SAP SRM (Supplier Relationship Management)
Supplier relationship management is a comprehensive approach to managing an enterprise's interactions with the organizations that supply the goods and services it uses. The goal of supplier relationship management (SRM) is to streamline and make more effective the processes between an enterprise and its suppliers just as customer relationship management (CRM) is intended to streamline and make more effective the processes between an enterprise and its customers. SRM includes both business practices and software and is part of the information flow component of supply chain management (SCM). SRM practices create a common frame of reference to enable effective communication between an enterprise and suppliers who may use quite different business practices and terminology. As a result, SRM increases the efficiency of processes associated with acquiring goods and services, managing inventory, and processing materials.
According to proponents, the use of SRM software can lead to lower production costs and a higher quality, but lower priced end product. SRM products are available from a number of vendors, including 12 Technologies, Manugistics, PeopleSoft, and SAP.
SAP SRM simplifies and automates procurement. The SAP SRM process integrates supplier qualification, negotiation, and contract management more tightly and cost-effectively with other enterprise functions and their suppliers’ processes – through a single framework with support for multichannel suppliers.
The SAP SRM application is designed as a long-term foundation to secure the cost and quality advantages of center-led purchasing and broadened supplier involvement for enduring value and long-term results.
Figure:

Master Data Management (MDM 5.5 SP04)
There is a wish for consistent master data, but its realization is made difficult by increasingly scattered storage of data in different systems, the global use of master data and employment of one and the same set of data in various contexts. Managing an object’s partial attributes in different systems, caused by system-spanning processes, is becoming more complicated. Approaches aimed at integrating systems are only partially capable of solving the problems of scattered data because integration scenarios are built on correct master data that is often not available. Without consistent master data, however, the complexity of business information processes cannot be reduced. In addition, incorrect or insufficient master data management will result in significantly restricted data quality in the medium to long term. This will lead to increased efforts being required for ongoing maintenance and migration, increased cost, and, in the worst case, a loss of business partners or competitiveness. SAP Master Data Management provides users with a tool to optimally master any challenges with respect to central master data management and maintenance.
BENEFITS:
Companies that manage their business processes based on consistent data across system boundaries will derive significant benefits from master data management, such as:
  • Companywide consistent data
  • Data consistency across systems and the company within the business network
  • Improved collaboration with business partners
  • Optimized business processes
  • High-quality data
  • Cleaned-up inconsistent or outdated master data
  • Lower cost for data management, data distribution and correction of erroneous data
  • Improved competitiveness








FIGURE:












SAP CPM (Corporate Performance Management)
SAP-systems consulting services to help companies get fit for Business Intelligence and Corporate Performance Management and gives support to cover all questions and matters concerning strategy, conceptual design and corporate-wide implementation of SAP BI & CPM software components.
  • Introduce key performance indicator systems
  • Set up control loops for operative process improvements
  • Set up and optimize corporate-wide information systems and data warehouses
  • Set up solutions for integrated planning, simulation, and forecasting
  • Introduce integrated control solutions and management cockpits


Figure





SAP SEM (Strategic Enterprise Management)
SAP Strategic Enterprise Management (SAP SEM) delivers end-to-end ERP software capabilities to support the entire performance management life cycle, including:
  • Consolidated financial reporting – With SAP SEM, you can generate consolidated financial and managerial reports for a globally distributed business or entity. The application can aggregate financial data from SAP and non-SAP systems into a single analytical reporting environment, enabling you to monitor the financial performance of individual subunits.
  • Planning, budgeting, and forecasting – SAP SEM helps enables you to model various planning options and use preconfigured planning software to get a quick start on operational planning tasks such as cost center planning and sales planning. The application supports traditional budgeting and rolling forecasts as well as collaborative planning.
  • Corporate performance management and scorecards – With SAP SEM, you can develop KPIs that support a number of popular scorecard methodologies, including balanced scorecard, economic value-added and activity-based costing methods. You can link operational and strategic plans and develop scorecards and performance measures based on financial and nonfinancial data.
  • Risk management – SAP SEM helps you identify, quantify, and analyze business risks within individual business units and manage risk-reducing activities.

Scope of ERP in Pakistan


  • Integrate Financial Information
  • Integrate Customer Order Information and Store Customer History
  • Streamline the manufacturing process
  • Standardizing HR Information
  • Store and Analyze productivity information for employees and facilities
  • Allow inter-departmental process monitoring and reporting
  • Reports with data from across the organization
  • Allow Marketing and Management to monitor and analyze all stages required to provide
  • the clients with the client with products and services
  • Allow users limited and monitored access to data across the organization according to needs.


















Companies with ERP implemented


Companies Name


ERP software
Introduction

Pakistan State oil (PSO)

SAP
The creation of Pakistan State Oil (PSO) can be traced back to the year 1974, when on January 1st; the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL). Pakistan State Oil, the largest oil marketing company in the country, is currently engaged in storage, distribution and marketing of various POL products. The company’s current market share of 82.3% in the black oil market and 59.4% share in the white oil market, alone speak volumes about its success.

Parco

SAP
PAK ARAB REFINERY LTD (PARCO) is a Joint Venture between Government of Pakistan and the Emirate of Abu Dhabi, incorporated as a public limited company in 1974. 60% of the share holding is by the Government of Pakistan and 40% by the Emirate of Abu Dhabi through its Abu Dhabi Petroleum Investment Company (ADPI), a subsidiary group of International Petroleum Investment Company. To maintain PARCO’s flagship role in the country’s energy sector by making it a fully integrated oil conglomerate through broader vision, accentuated drive and professional excellence. A continuous struggle is needed to make PARCO a symbol of success that can offer unmatched benefits to its owners, employees, business associates and the community it operates in.


BOSICOR

SAP
Bosicor Pakistan Limited was incorporated in 1995 and commenced commercial operations in 2004. 55 % its shares owned by Bosicor Corporation Limited (a foreign entity). Our Mission is to proactively invest to develop infrastructure in order to become a single source chain for meeting the Economy's Chemicals, Energy, Petroleum and Petrochemical requirements, thereby provide the best possible returns to our stakeholders.


UNLEVER

SAP
UPL was established some fifty years ago in the then newly created Pakistan. The town of Rahim Yar Khan was the site chosen for setting up a vegetable oil factory in 1958 and that is where the first UPL manufacturing facility developed. The long-term success of our business is intimately interconnected with the vitality of the environment and the communities in which we operate. The environment provides us with our raw materials and the ingredients we need to make our products. Healthy, prosperous communities provide us with a healthy, growing consumer base



National Foods

SAP
National Foods was founded in 1970 and started out as a Spice company. 3 decades later it has diversified into a versatile Food Company

Nestle

SAP
NestlĂ© has been serving Pakistani consumers since 1988, when our parent company, the Switzerland-based NestlĂ© SA, first acquired a share in Milkpak Ltd. Lead a dynamic motivated and professional workforce – proud of its heritage and bullish about the future.
Meet the nutritional needs of consumers of all age groups – from infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded food and beverage products of the highest quality.



UBL

SAP
Establish in November7-1959Our mission is to serve all your corporate needs and ensure your full satisfaction through product innovation, personalized banking, and top notch service. The CBG department of UBL defines corporate banking in Pakistan. Amongst the local banks UBL CBG is the pioneer in providing innovative solutions to its diversified and satisfied customer base. UBL CBG is considered to be a major player in the financial market of Pakistan.

PTCL

SAP
PTCL is all set to redefine the established boundaries of the telecommunication market and is shifting the productivity frontier to new heights. Today, for millions of people, we demand instant access to new products and ideas. More importantly we want them for their better living standards with increased values in this ever-shrinking globe of ours. We are setting free the spirit of innovation.
PTCL is going to be your first choice in the future as well, just as it has been over the past six decades.


Bank Al Habib

oracle
To be a quality financial service provider maintaining the highest standards in banking practices. To be a strong and stable financial institution offering innovative products and services while contributing towards the National economic and social development

Kentax

Oracle
KENTAX Sirgroh Ltd. was launched as a sole proprietor company in 1998 and has been in business for almost a decade now. a well known name in Pakistan has successfully launched various world class brands in Pakistan in Entertainment Systems, Home Appliances and modern accessories. KENTAX is proud to launch FUSION, yet another world class brand from New Zealand, and a range of FUSION products including Subwoofer, Amplifiers, Speakers and more!



Progress of ERP in Pakistan

SAP looks to increase its presence in Pakistan…


SAP seems to once again making a push further into Pakistan. It is looking for people to hire, and for business partners (resellers and system integrators). It’s been all over the informal newswire and SAP has been giving out large ads in the papers going “we’re hiring!!” If you’re a lowly paid or out of work SAP consultant in the US, time to move back here…
Pakistan, India, China and the ME region are a hot market for ERPs, and possibly the last “real, large” market for enterprise ERP systems.
SAP currently is installed at over 20 of the largest companies in Pakistan, with the customer list including the likes of PSO, Indus Motors, etc
Oracle isn’t sitting on the sidelines either; they have closed quite a few projects through several system integrators in the country in the last 8 months. With their acquisition of iFLEX, a core banking suite they are also now wading into the banking sector in Pakistan, much to the annoyance of IBM+Misys.
All this while Microsoft’s Dynamics (Their ERP suite: GP, Solomon, etc) initiatives look as cold as an uncooked kettle of fish, as usual. I guess the regular licensing and ISV sales are more than making up for it.

SYSTEM, APPLICATION, PRODUCTS (SAP):

SAP the company was founded in Germany in 1972 by five ex-IBM engineers.SAP stands for Systeme, Andwendungen, Produkte in der Datenverarbeitung which - translated to English - means Systems, Applications, Products in Data Processing. Being incorporated in Germany, the full name of the parent company is SAP AG. It is located in Walldorf, Germany which is close to the beautiful town of Heidelberg.
SAP R/3 is delivered to a customer with selected standard process turned on, and many other optional processes and features turned off. At the heart of SAP R/3 are about 10,000 tables which control the way the processes are executed. Configuration is the process of adjusting the settings of these tables to get SAP to run the way you want it to. SAP functionality included is truly enterprise wide including: Financial Accounting (e.g. general ledger, accounts receivable etc), Management Accounting (e.g. cost centers, profitability analysis etc), Sales, Distribution, Manufacturing, Production Planning, Purchasing, Human Resources, Payroll etc For a full description of the modules included in SAP. All of these modules are tightly integrated which is a huge blessing.

Benefits of SAP

SAP ERP delivers a set of proven, robust solutions. With their extended cross-enterprise functionality, you can manage corporate assets and critical business processes better. By giving you access to data locked away in legacy and non-SAP software systems, they protect your IT investment. SAP ERP provides the tools to leverage the skills and training of your staff. As new business scenarios and technologies emerge, you will find SAP ERP has already positioned your organization for accelerated change.
SAP ERP delivers a comprehensive set of integrated, cross-functional business processes. With SAP ERP, you can gain the following benefits:
Improve Financial Management
Enhance your financial management skills with integrated business analytics. Gain insight into your organization’s key performance indicators. Take actions that improve overall performance and profitability. Employ comprehensive analytics and reporting functionality to ensure regulatory compliance.





Manage Your Most Valuable Asset – Your People – Well
Support your employees through every phase of their employment, from recruitment and training to development and promotion. Empower your global workforce with a host of easy-to-use self-services. Provide a single point of contact for all HR service requests through an employee interaction centre. Track costs and the ROI associated with your HR projects.
Respond Faster
Empower the people in your organization by providing the information they need to react promptly and respond proactively to market changes and competitive challenges.
Reach Further
Extend the reach of your business processes beyond your enterprise. Promote collaboration by providing easy access to a consolidated and consistent view of your business processes. Enable partners, suppliers, and customers to engage with you in real time.
Sharpen Business Insight
Master analytics and performance management to proactively identify opportunities and align strategy across your business. Profit from direct access to enterprise information. Operate effectively by using streamlined dashboards to inform your strategic and operational decisions. 
Improve Extensibility
Extend your business processes to include just the right mix of customer relationship management, supply chain management, product life-cycle management, and other functionality as business needs evolve. Augment functionality and business processes by implementing the SAP xApps™ family of composite applications, high-quality software from SAP and its expanding ecosystem of software partners.
Curb Integration Costs
Position your business to adapt to business requirements as you discover them. Significantly reduce total cost of ownership. Deploy only the components you need at the time your business needs require them.


INTRODUCTION TO THE COMPANY

Pakistan State Oil is the oil market leader in Pakistan’s energy sector. The company has the largest network of retail outlets of over 3,800 outlets, representing 80% participation in total industry network, to serve the automotive sector and is the major fuel supplier to aviation, railways, power projects, armed forces and agriculture sector. PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow.
Pakistan State Oil, the largest oil marketing company in the country, is currently engaged in storage, distribution and marketing of various POL products. The company’s current value of Rs. 75 billion, its 82.1% share in the black oil market and 61.2% share in the white oil market, alone speak volumes about its success.
PSO has the widest strategic oil distribution network. This network comprises of 29 storage depots and 9 installations, 860,000 MTs of capacity i.e. almost 81% of total national storage, numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot.
The fact that PSO serves 2.8 million retail customers on daily basis, along with 2000 industrial units and business houses, is indicative of its vast customer base. The company has also been meeting the fuel needs of various government entities, armed forces, railways, agriculture sector, IPPs and industrial units. PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports.
PSO is considered as one of the most successful mergers in the history of Pakistan. The company has been the winner of Karachi Stock Exchange Top Companies Award for many years and because of its astounding growth in terms of sales and turnover, combined with its status of being the first Pakistani Public Sector Company to become a member of the World Economic Forum (WEF) had made PSO a notable company world over.

PSO OVER THE YEARS:

COMPANY PROFILE

As the largest oil marketing company of Pakistan, PSO is engaged in storage, import, distribution marketing of petroleum products petrochemicals aviation and bunker fuels LPG and CNG dominates the country’s fuel and energy need. The company has largest retail network in the country and the most extensive terminal and depot network. PSO has listed in Asia’s largest 1000 companies by Asia Week.
Since its inception in 1976, the company has been meeting more than 70% of country’s fuel needs. PSO’s 3805 outlets all across the country markets more than 12 million tons of fuel products annually.
VISION:
To excel in delivering value to customers as an innovative and dynamic energy company that gets to the future first.”


MISSION:
We are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers, based on:
  • Professionally trained, high quality, motivated workforce, working as a team in an environment, which recognizes and rewards performance, innovation and creativity, and provides for personal growth and development
  • Lowest cost operations and assured access to long-term and cost effective supply sources.
  • Sustained growth in earnings in real terms
  • Highly ethical, safe environment friendly and socially responsible business practices”


SAP MODULES LIVE AT PSO
  • Financial Accounting (FI)
  • Controlling (CO)
  • Material Management (MM)
  • Sales & Distribution (SD)
  • Project System (PS)
  • Quality Management (QM)
  • Production Planning (PP)
  • Plant Maintenance (PM)
  • Human Resource & Salaries (HRS)
  • Oil & Gas Solutions (OGS)
  • Basis Application Module (BC)

Detail of Modules Implemented:

Financial Accounting (FI)

  • Designed for automated management and external reporting of general ledger, accounts receivable, accounts payable and other sub-ledger accounts with user-defined charts of accounts.
  • Key Elements:
  • General Ledger
  • Accounts Payable
  • Accounts Receivable
  • Consolidation
  • Treasury Management

Controlling (CO)

  • Represents the company’s flow of cost and revenue. A management instrument for organizational decisions.
  • Key Elements:
  • Overhead Cost Controlling
  • Cost Center Accounting
  • Activity Based Costing
  • Internal Orders
  • Profit Center Accounting

Material Management (MM)

SCM (Supply Chain Management) is being handled through this module. Process comprises of Purchasing, Inventory Management and Vendor Payment. Strong MIS ensures the timely availability of reports ranging from the middle management to higher management.
  • Key Element:
  • Purchasing
  • Inventory Management
  • Warehouse Management
  • Invoice Verification
  • Corporate planning
  • Finance (General Accounts, Treasury, Insurance)
  • Vendor Material Valuation
  • Logistic Info System
  • Operations with all depots and terminal
  • Procurement & Services
  • Retail with all divisional offices
  • Security & Services
  • Supply
  • T & OD






Sales & Distribution (SD)

  • Designed to support all the tasks and activities needed to carry out customer sales, order entry, shipping, delivery and billing.
  • Key Element:
  • Pre-Sales Support
  • Sales
  • Shipping and Transportation
  • Billing
  • Credit and Risk Management
  • Returns and Repair Processing



Production Planning (PP)

  • To plan and control the manufacturing activities of a company.
  • Key Elements:
  • Bills of Materials, Routings and Work Center
  • Capacity Planning
  • Material Requirement Planning
  • Sales and Operational Planning
  • Demand Management



Plant Maintenance (PM)

  • To maintain your equipment (e.g. a machine, an oil rig, an aircraft etc).
  • Key Elements:
  • Preventative Maintenance
  • Maintenance Order Management
  • Maintenance Planning
  • Equipment and Technical Objects









Project System (PS)

Project System is an Integrated Project Management Tool. The primary functions of Project System are to plan, execute and monitor the Costs and Progress of the Project. The business process starts from Budget Proposal phase to Capitalization of the cost into Assets.

  • Key Elements:
  • Budget Proposals
  • Operational Structure
  • Project Planning
  • Budget Approval
  • Information System
  • Project Execution and Integration
  • Work Breakdown Structure





Quality Management (QM)

  • To maintain inspection, specification, record inspection results and to perform evaluation.
  • Key Element:
  • Quality Inspection
  • Quality Control
  • Quality Notification
  • Test Equipment Management
  • QM-IS

Human Resources (HR)

  • Complete integrated system for supporting the planning and control of personnel activities and information.
  • Key Element:
  • PA Recruitment
  • Personnel Administration
  • Benefits
  • Personnel Development
  • Compensation Management
  • Personnel Cost
  • Time Management
  • Shift Planning
  • Incentives Wages
  • Time Sheet
  • Travel Management
  • Travel Planning
  • Travel Expenses Human Resources Information System


Basis Application Module (BC)

  • Systems Administration, security and connectivity functions.
  • Client / Server Architecture.
  • Presentation Layer.
  • Application Layer.
  • Database.
  • Application Architecture
  • Application can run on different hardware and software platforms.

SAP Terminologies

  • Company Code:
  • Means an independent unit producing its own balance sheet.
  • Plant:
  • An organizational unit within logistics that subdivides an enterprise from the view point of production, procurement and material planning.
  • A plant may represents a variety of entities like:
  • Production facility
  • Distribution center
  • Regional office
  • Corporate headquarters
  • Maintenance location
  • Masters:
  • Master data are records that remain in the database for a long period of time.
  • It is created and maintained centrally.
  • A centralized database prevents data redundancy.
  • Transaction:
  • Graphical screen view of a logical process/document.


SAP Benefits

  • SAP offers Best Practices for all Industries.
  • Standardized business processes and approach across companies.
  • Long term strategy for business system.
  • Global system environment: multi-currency, multi-language and country specific support for government reporting and taxation.
  • Integration of application, processes and data.
  • Dramatic increase in business information.

PERCENTAGES OF MODULE

SAP is very huge software its all modules in full percentage cannot be implemented in all the places. Pakistan State Oil (PSO) also has implemented only 11 modules and only 70%-80% of these modules are working in present stage in PSO. Percentage wise these modules are represented below:

LIST OF BUSINESS PROCESS

Following is list of Business Processes of Sales and Distribution Module implemented in PSO.

This file contains evaluation, development and scope of ERP in Pakistan and in what major companies it is implemented recently. Implementation details of ERP module in PSO. Business processes and Percentage wise their representation in a chart.

INTERVIEW


We had an interview of Naveed Anjum Zaidi (DGM of NBD, PSO Petroleum) and
SHAEBH AMAN (DGM of SAP, PSO Petroleum)

Q1. What is ERP?
Ans. Software Interrogated solution to run the business.


Q2. Which ERP software using?
Ans. We are using SAP software.


Q3. When it was installed?
Ans. Negotiation was made in March 2003 and start implementing it.


Q4. Who is your vendor?
Ans. We purchase this software from German company Siemens. It is the 1st largest company who is selling integrated software SAP.


Q5. Time required for implementing ERP?
Ans. Decided to be installed in 9th months but due to company personal problems. It was complete implemented in December 2004 and went live in July 2005. First HR module was installed in July 2004 and in January 2005 testing was being started.


Q6. How many modules are installed?
Ans. we have installed 10 modules:
  • Financial Accounting (FI)
  • Controlling (CO)
  • Material Management (MM)
  • Silo Management (SILO)
  • Sale & Distribution (SD)
  • Transportation & Distribution (TD)
  • Project System (PS)
  • Quality Management (QM)
  • Production Planning (PP)
  • Plant Maintenance (PM)
  • Human Resource & Salaries (HRS)


Q7. What complications were faced while implementing?
Ans. People were not accepting this new software they took some time to adjust and learn how to work in this software.

Q8. Effect on number of employees?
Ans. There was no such effect on number of employees because we have decided before implementation that we will not layout our any old employee and neither have we hired any employees.
Q9. Which software was being used before SAP in PSO?
Ans. Legacy was used before SAP.


Q10. What is your future planning? How many modules are there to be installed?
Ans. We have implanted all modules no other modules are left to be implemented.


Q11. What were the benefits you gain by implementing SAP?
Ans. It is very easy to use. It is time saving and once the person have understood how to used it, It gets easier and easier. Due to SAP the expansion rate of business is high and once we have feed one entry it will never go wrong.



NOTE: Pictures used in PSO Modules doesn’t give the entire concept of any business workflow in an organization. It just provides general step by step processes of an organization. 

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