Iocs Manthan To Integrate Ibp Dealers Soon

Indian Oil Corporation (IOC) intends to roll out its SAP-R/3 ERP (enterprise resource planning) package, codenamed "Manthan", to integrate the dealer network of IBP Ltd at the earliest.

"We will soon initiate allocation of customer codes to IBP dealers and integrate them into the Manthan network," top IOC sources told Business Standard.

The SAP roll-out will also prepare the IOC-IBP combine to assess stocks, funds position and pricing issues on a daily basis. This will be a major improvement to the existing monthly monitoring system at IBP, sources said. IBP sales account for around nine per cent of the national market.

IOC has already introduced the software in January this year and it will now be in a position to maximise the efficiency of IBP's 1,551-outlet network. However, this will also add to the complexity of the application given the specialised functions performed by IOC such as canalised imports of several types of fuel and pipeline carriage, and the only-retail business model of IBP.

"IOC has rolled out the system in a way that will enable the company to take full advantage of the dismantling of the administered price mechanism (APM) and regulatory controls," an IOC source said. SAP and the project consultant, PricewaterhouseCoopers (PwC), have both described the project as the "most complex ever".

The company would be able to quantify the benefits of the roll-out only after a few quarters, but the possibilities were immense, particularly on price-related issues, the source said. In addition, "the company can monitor its stocks at different levels on a daily basis, track the cash flow and focus on accurate purchase of stocks from the nearest source besides being able to regulate crude and bulk purchase on a corporate basis," he pointed out.

IOC holds stocks at over 60 locations. Elimination of the duplication of work in functions such as finance, sales, distribution, plant maintenance, human resources, production planning and quality management would be taken up on a war footing.

PwC sources confirmed that the system was designed in a way that would permit IOC to benchmark itself against the best in the world in a liberalised environment. "The roll-out has covered 900 users already and will involve 5,000 users by December 2002, with the ultimate target of covering 15,000-plus users by September 2003," said the PwC executive director and project director Anjan Majumdar.

The roll-out involved elaborate business process implementation and in-depth changes within IOC. "The uniqueness of the roll-out was that it involved all six SAP modules while other Indian users have implemented one module at a time," said Majumdar.