This PPT explains the logistics and supply chain of ONGC and IOC. Detailed analysis and comparison of these companies are given.

1. LSCM PROJECT
Anand S 14016
Nikita Lalwani 14089
Rohit Shettar 14124
Rony Francis 14126
Tony Sebastian 14171

2. OIL AND GAS INDUSTRY
• The oil and gas sector is one of the six core industries in India.
• India is the fourth-largest energy consumer (2013) of oil & gas in
the world, accounting for 37 per cent of total energy consumption.
• India has 19 refineries in the public sector and three in the private
sector.
• Domestic oil output is anticipated to grow to 1MBPD by FY16.
• Domestic production accounts for more than three-quarter of the
country’s total gas consumption.
• India increasingly relies on imported LNG; the country was the
fifth-largest LNG importer in 2013

3. GROWTH DRIVERS
• The country’s natural gas pipeline network amounted to over
15,340 KMs in 2013 and a proposed expansion of 30,000 KMs is
envisaged by 2018-19.
• The government has decided to set up strategic storage of 5.03
MMT of crude oil at 3 locations – Visakhapatnam, Mangalore and
Padur.
• major discoveries in the Barmer basin in Rajasthan and the offshore
Krishna-Godavari basin by smaller companies such as the Gujarat
State Petroleum Corporation and Andhra Pradesh Gas Infrastructure
Corporation hold some potential to diversify the country’s
production.
• The government unveiled plans to add another 91 Million barrels to

4. 45.50%
41%
13.50%
Shares in Crude pipeline by length
IOCL ONGC Others
In terms of length, IOCL
accounts for 45.5% (4448
km) of India’s crude
pipeline network
Continued..

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0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
2008
2009
2010
2011
2012
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2016
Oil Consumption In India (MBPD)
Oil Consumption In India…

6. SUPPLY CHAIN OF OIL AND GAS
INDUSTRY
• Exploration includes seismic, geophysical and geological
operations.
• Production operations include drilling, reservoir, production, and
facilities engineering.
• Refining is a complex operation and its output is the input to
marketing.
• In the oil and gas industry, almost all significant and important
operations are planned in advance.

7. INDIAN OIL CORPORATION LIMITED (IOCL)
• Indian Oil Corporation Limited, or Indian Oil, is an Indian state-owned
oil and gas corporation with its headquarters in New Delhi, India.
• It is the world's 88th largest corporation, according to the Fortune
Global 500 list, and the largest public corporation in India when
ranked by revenue.
• Indian Oil and its subsidiaries account for a 49% share in the petroleum
products market, 31% share in refining capacity and 67% downstream
sector pipelines capacity in India.
• The main services offered by Indian Oil are Refining, Marketing,
Pipelines, R&D and Training.
• The company is mainly controlled by Government of India which owns

8. SUPPLY CHAIN OF INDIAN OIL CORPORATION
LIMITED (IOCL)
Indian Oil Corporation Limited (IOCL) has implemented Honeywell’s
Supply Chain Management solution to integrate and optimize the supply
chain of five separate refineries. The project has resulted in the
following benefits:
• Integrated supply chain planning which optimizes the entire supply
chain.
• Optimal distribution planning considering transportation costs, taxes
and duties and transportation constraints.
• Optimal refinery production planning considering crude assays, unit

9. The Supply Chain Management solution provided by Honeywell
consisted of the following modules:
• Demand planning: for demand forecasting and aggregation of the final
demand numbers
• Integrated planning: for the complete IOCL refining supply chain
• Distribution planning: for generating operational plans for allocation
and product distribution
• Refinery production planning: for generating operational plans for
production

10. 1. FACILITIES
The Indian oil group of companies owns and operates 10 of India's 22
refineries with a combined refining capacity of 65.7 million metric
tonnes per annum (MMTPA).It has over 23,900 petrol and diesel
stations, including over 6000 Kisan Seva Kendras (KSKs) in the rural
markets.
2. INVENTORY
Indian Oil Corporation encompasses all raw materials, work in progress,
and finished good in large bulk. Main raw material crude Oil, is
purchased from OPEC countries to meet the demand.
LOGISTICS DRIVERS OF SUPPLY CHAIN OF IOCL

11. 3. TRANSPORTATION
For Transportation Indian Oil Corporations uses pipeline, ship, rail or
road. LNG is transported in specially-built tanks on double-hulled ships.
Coastal cities can be supplied through sea.
4. INFORMATION
IOCL deployed SAP NetWeaver Process Integration technology and the
SAP NetWeaver technology platform. This ERP Improved data accuracy by
99% and Minimized inventory levels.
5. PRICING
The company use flexible price for its products. The price is mainly
based on international crude oil price.

12. ONGC
• SIZE IS WORTH RS. 2,100 CRORE ANNUALLY AND THEY EMPLOY NEARLY 2,000
PEOPLE.
• THERE ARE 22 ONSHORE LOCATIONS, HAVING DECENTRALISED LOGISTICS AND
SUPPLY CHAIN MANAGEMENT, WHERE PRODUCTION AND EXPLORATION ARE IN
PROGRESS.
• ONGC HAVE TOTAL OF 21 RIGS, NINE OF THEM DEPLOYED ON THE EAST COAST
AND 12 OTHERS ON THE WEST.
• BOTH ONSHORE AND OFFSHORE OPERATIONS

13. SUPPLY CHAIN STAGES IN ONGC
• ACQUISITION OF ONSHORE AND OFFSHORE FOR EXPLORATION
• OPERATIONS – EXPLORATION, FORECASTING, PRODUCTION.
• LOGISTICS MANAGEMENT - DELIVERING CRUDE OIL FROM REMOTELY LOCATED
OIL WELLS TO REFINERIES

14. LOGISTICS DRIVERS OF SUPPLY CHAIN OF
ONGC
1. FACILITIES
THEY HAVE A TOTAL OF 21 RIGS, NINE OF THEM DEPLOYED ON THE EAST COAST AND
12 OTHERS ON THE WEST.
TWELVE OF THEM ARE ONE HIRE WHILE NINE OTHERS ARE OWNED BY THEM
HAVE NEARLY 5,000 KM OF PIPELINE FOR OPERATION AND MAINTENANCE.
2. INVENTORY
• INVENTORY IN ONGC HAS BEEN CLASSIFIED INTO TWO BROAD GROUPS:
• STORES
• SPARES

15. 3. TRANSPORTATION
FOR TRANSPORTATION ONGC USES PIPELINE, SHIP, RAIL OR ROAD. PIPELINE IS THE
CHEAPEST FOR THE BULK TRANSPORTATION BUT CANNOT BE USED FOR SMALL
QUANTITY.
SMALL QUANTITIES ARE SUPPLIED THROUGH ROAD IN REMOTE AREAS. COASTAL
CITIES CAN BE SUPPLIED THROUGH SEA.
4. INFORMATION
OIL AND NATURAL GAS CORPORATION LIMITED (ONGC) HAS CHOSEN THE SAP
NETWEAVER PROCESS INTEGRATION (SAP NETWEAVER PI) OFFERING.
NOW ONGC COLLABORATES IN REAL-TIME – GAINING VAST EFFICIENCIES IN
PRODUCTION AND ACCOUNTS PAYABLE.
5. SOURCING
STATE-OWNED OIL AND NATURAL GAS CORP (ONGC) HAS EXTENDED PACT WITH
HINDUJA GROUP FOR SOURCING OF LIQUEFIED NATURAL GAS FROM IRAN AND

16. 6. PRICING
THE STEEP FALL IN CRUDE PRICES MEANS THAT THE DISCOUNT ONGC HAS TO
GIVE ON ITS PRODUCE IS HIGHER THAN THE ACTUAL OIL PRICE.
WHILE ONGC HAS TO GIVE A DISCOUNT OF $56 A BARREL TO PUBLIC SECTOR
BUYERS AS PART OF THE GOVERNMENT’S SUBSIDY-SHARING MECHANISM,
INTERNATIONAL CRUDE OIL PRICES ARE $6-7/BARREL BELOW THAT LEVEL.
ONGC AND OIL INDIA OFFER DISCOUNTS TO THEIR COUNTERPARTS IN THE
REFINING-CUM-RETAILING BUSINESS.

17. COMPARISON BETWEEN THE TWO COMPANIES
• INDIAN OIL CORPORATION LIMITED (INDIAN OIL) IS THE LARGEST OIL REFINING AND
MARKETING COMPANY IN INDIA.
• APART FROM THE 61.7 MMTPA (MILLION TONNES PER ANNUM) OF EXISTING
REFINING CAPACITY WITHIN THE INDIAN OIL GROUP, A NEW REFINERY AT PARADIP,
ORISSA IS COMING UP WITH A CAPACITY OF 15 MMTPA.
• THE COMPANY ALSO OPERATES OVER 10,541 KILOMETERS OF CRUDE OIL AND
PRODUCT PIPELINES.
• IT ALSO HAS A RETAIL NETWORK OF OVER 18,643 OUTLETS. ITS GROUP COMPANIES
INCLUDE CHENNAI PETROLEUM CORPORATION LIMITED, INDIANOIL (MAURITIUS)
LTD, LANKA IOC PLC, IOC MIDDLE EAST FZE, INDIANOIL TECHNOLOGIES LTD AND
INDIANOIL - CREDA BIOFUELS LIMITED.
• TECHNOLOGY USED: PROCESS INTEGRATION TECHNOLOGY, SAP NETWEAVER
TECHNOLOGY PLATFORM

18. • ONGC IS THE COUNTRY'S LARGEST OIL EXPLORATION AND PRODUCTION (E&P)
COMPANY ACCOUNTING FOR NEARLY 90% OF INDIA'S PROVEN OIL AND GAS
RESERVES.
• AT THE CURRENT RATE OF PRODUCTION, THE COMPANY ACCOUNTS FOR OVER
80% OF OIL AND GAS PRODUCTION. APART FROM E&P, THE COMPANY ALSO
PRODUCES VALUE-ADDED PETROLEUM PRODUCTS SUCH AS LPG, KEROSENE,
NAPHTHA AND DIESEL.
• WHILE LPG IS SOLD TO THE PSU MARKETING COMPANIES, A MAJOR CHUNK OF
NAPHTHA IS EXPORTED AND DIESEL IS USED FOR CAPTIVE CONSUMPTION. ONGC
ALSO HAS A 72% STAKE IN MRPL, A STAND-ALONE REFINERY WITH A CAPACITY
OF NEARLY 9.7 MMT (MILLION METRIC TONNES).
• TECHNOLOGY USED : UOP TECHNOLOGY, BIOREMEDIATION TECHNOLOGY
MNRE, LED ERP, SAP, R3

19. FINANCIAL
COMPARISON
INDIAN OIL CORPORATION
2014 2013 2012 2011 2010
Number of Days In Working
Capital 18.76 33.14 30.55 26.43 13.2
Inventory Turnover Ratio 7.31 7.54 8.15 7.56 8.37
Return On Capital Employed(%) 9.11 8.64 13.08 10.32 15.83
Operating Profit Margin(%) 3.31 3.07 4.2 3.8 5.6
Average Raw Material Holding 58.23 62.8 60.85 56.27 45.53
Average Finished Goods Held 22.8 24.65 26.32 23.96 24.77
ONGC
2014 2013 2012 2011 2010
Number of Days In Working
Capital 6.1 47.82 80.99 46.43 151.48
Inventory Turnover Ratio 14.26 14.55 14.81 16.59 87.82
Return On Capital Employed(%) 23.53 24.6 28.56 28.38 34.54
Operating Profit Margin(%) 52.72 52.53 60.01 58.81 62.57
Average Raw Material Holding 2.34 2.5 3.4 1.5 0.27
Average Finished Goods Held 8.5 9.21 6.24 10.8 7.42

20. ISSUES
• Complex operations- logistical coordination for large complicated projects
becomes a problem
• End to end visibility- this is also an issue since there exits a time lag between
operations on the ground or at sea and information available to the
management in the offices
• Fragmented supply chains- since there are numerous stakeholders and
multiple drilling sites, visibility of materials becomes an issue and this results
in fragmented supply chains
• Unpredictability- Due to presence of multiple stakeholders and with data
management and materials monitoring being an issue there exists a degree of

21. RECOMMENDATIONS AND SUGGESTIONS
 Segment Customers Based Their Needs:
 Form Partnerships to Enhance Supply-Chains
 Apply Strategic Sourcing
 Adapt a Supply-Chain Wide Technology Strategy