The petrochemical industry has been one of the fastest growing industries. This industry not only has an immense importance in the growth of economy of the country but also in growth and development of manufacturing industry .It provides the foundation for manufacturing.
The petrochemical industry is oligopolistic in nature. At a large extent there were only four major company’s viz. Reliance Industries Ltd (RIL), Indian Petrochemicals Corporation Ltd. (IPCL), Gas Authority of India Ltd. (GAIL) and Haldia Petrochemicals Ltd. (HPL) who used to dominate the industry. The recent amalgamation of IPCL with RIL has made the industry more concentrated further, as they jointly account for over 70% of country’s total petrochemical capacity.
The petrochemical industry is a cyclical industry. This industry is dominated by volatile feedstock prices and sulky demand. India consumes one of the lowest per capita consumptions of petrochemical products.
During 1970s, the petrochemical industry came into existence. The rapid growths for this industry were seen in 1980s and 1990s. The actual reason for this growth was there was a huge demand for petrochemicals in India during that time at an annual rate of 13 to 14%. It is also known for rapid expansion of capacity. In India the average annual growth is 14 to 16% over 2007-2011. However, the industry suffered setbacks in 2008 due to change in the price of crude oil . It will be tough for Indian petrochemical industry by 2012 to plug the deficit of 5mn TPA of ethylene and 4mn TPA of polymer.
Presently India has three gas-based and three naphtha-based cracker complexes which has capacity to produce 2.9 MMT of ethylene annually.
What are petrochemicals?
Petrochemicals are products which are derived from petroleum . Many chemical compounds which are derived from petroleum are obtained from fossil fuels like coal or natural gas, or from renewable sources such as sugar cane.
Two petrochemical classes are olefins and aromatic. Olefins include ethylene and propylene, and aromatics includes benzene, toluene and xylene isomers. Oil refineries produce olefins in chemical plants by steam cracking of natural gas liquids like ethane and propane and aromatics by fluid catalytic cracking of petroleum fractions. Aromatics are produced by catalytic reforming of naphtha, Olefins and aromatics are the building blocks for solvents, detergents, and adhesives. Olefins are also the basis for polymers and oligomers used in plastics, resins, fibres, lubricants, and gels.
Primary petrochemicals depending on their chemical structure are divided into three groups:
Olefins include ethylene, propylene, and butadiene. Important sources of industrial chemicals and plastics products include Ethylene and propylene . Butadiene is used in making synthetic rubber.
Aromatics include benzene, toluene, and xylens.. The raw material used for preparing dyes and synthetic detergents is benzene, and that for preparing isocyanates materials used are benzene and toluene. MDI and TDI are used in making polyurethanes. Manufacturers use xylenes to produce plastics and synthetic fibers.
A product of carbon monoxide and hydrogen can be used to make ammonia and methanol. Ammonia which is further used to prepare urea which can be used as a fertilizer. Methanol is used as a solvent as well as a chemical intermediate.
Manufacturing and production
Manufacturing is a process which uses labour and machines to produce goods for use or sale. It is usually applied to industrial production where the raw materials are converted into finished products.
Manufacturing and production information system
A manufacturing system is a system which facilitates for a quicker and an efficient change from making one product to another product, using often robotics and other automation. Usually the change is computer-controlled.
This consists of 3 steps
Material requirements planning (MRP)
It determines when finished products are needed
It determines the deadlines accordingly
Manufacturing resource planning (MRPII)
Improves customer service
Just in time (JIT) inventory system
inventory and materials that are delivered right before usage
A production system is a computer program which provides us with some form of artificial intelligence primarily consisting of a set of rules about behaviour. These rules which are termed as productions are a basic representation which is useful in automated planning, expert systems and action selection. This system provides us with mechanisms which are necessary to execute productions in order to achieve some goal for the system.
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South Asian Petrochem Produces Management Reports in Minutes with New ERP Solution
South Asian Petrochem which is Headquartered in Kolkata, India, manufactures and markets polyethylene Terepthalate (PET) resins which is used in the packaging of mineral water, carbonated soft drinks, edible oil, and pharmaceuticals. The organization operates a 200,000-ton per annum (TPA) processing plant which is export-oriented at Haldia in West Bengal, and records a 43% increase in profit in the last financial year before tax. On July 26, 2008, Petrochem discussed to contribute around 70% of the initial equity required to establish a 315,000 TPA PET plant in Egypt at its annual general meeting.
Haldia plant is going into commercial production in September 2003 to support planned growth. The Petrochem needs to implement an enterprise resource planning package. The organization engaged PricewaterhouseCoopers (PwC) India to develop a strategic information system plan and undertake an enterprise-wide business transformation exercise based on Oracle E-Business Suite.
New PET Plant Delivers Product Quality
Zimmer AG Germany has designed and built a system for South Asian Petrochem’s Haldia plant using leading-edge technologies. The PET produced by the plant which is bottle-graded is clear, strong, and they can be easily moulded to various complex shapes, that give customers scope to customize their designs to meet the brand and the market requirements.
With continuous polycondensation lines, it has started delivering a broad product range and operational flexibility. A DCS which is distributed control system optimizes the process line performance, and an uninterrupted supply is ensured by a captive power plant. The Haldia facility ensures that the product quality meets the exacting customer standards. With the organization’s professional marketing team and technical services staff that are available around the clock to respond to customer requirements controls the quality.
South Asian Petrochem has migrated from its existing Tally business accounting and inventory management software to a system which is highly functional, scalable, and powerful enterprise resource planning system to take full advantage of the potential of the products and quality of the staff.
ERP Provides Platform for Growth
South Asian Petrochem has opted to implement a system which is based on modules from Oracle E-Business Suite after reviewing a range of competing solution like one of which includes SAP to undertake preventive maintenance that has tremendously reduced production losses from equipment failure.
If proper maintenance is taken into account then the costs incurred would be in fixing the equipments rather than ensuring that the parts are maintained and replaced in line with a proper schedule. Oracle also gives the system the controls that are necessary to optimize the equipment maintenance and usage throughout the plant and it also meets the customers’ demands.
South Asian Petrochem has planned to integrate the Oracle Fixed Assets with the Oracle Enterprise Asset Management to ensure that it can not only track its assets but it can also identify the costs incurred in maintaining the individual items.
The Oracle system allows South Asian Petrochem to prepare management reports which gives critical updates on the inventories ranging from raw materials to finished products within minutes and also on those areas which affects the commercial operation of its plant. It is reported that using this system a report can be prepared that combines month to date production, dispatch, finished stocks, and orders that can be produced in a minute to 90 seconds. Before implementation of Oracle, the reports were not obtained nearly as quickly or in as much detail. Using oracle discoverer better-informed and quick business decisions reports can be prepared which improves the customer service.
South Asian Petrochem has the ability to closely monitor its dispatch schedule, quality control and stock position that allows the organization to adhere to its customers commitments. Any grievances caused to the customers can be attended quickly by identifying the lot which was dispatched can be isolated and dealt with any quality aspects.
The Petrochem is also planning to integrate the DCS which is governing the plant with Oracle to ensure proper production schedules and information which can be shared in an automated way between the systems. This would help the organisation in further reducing the work and time which is required to reconcile the jobs and to manage the consumption of the raw materials effectively.
South Asian Petrochem has selected Oracle E-Business Suite as a foundation for its new system after undergoing detailed evaluations of alternatives from Navision, Ram co, and SAP.
Oracle has a strong philosophy and business model, as it delivers greater value compared to the other competitors. Also the solution modules can be implemented in phased fashion.
As the manufacturing plant at Haldia is charged with implementing Oracle E-Business Suite to improve process control, PwC has divided this project into two phases.
The first phase which had been started in May 2003 was completed in September 2003 included spanned purchasing ,management of orders , inventory and financial modules like fixed assets ,accounts payable and receivable , general lodger and cash management.
The second phase was commenced in January 2004 which covered the entire Enterprise Asset Management and the suite for process manufacturing, including the Formula Management, Production Supervision, Quality & Costing, and Manufacturing Accounting Controller.
The first phase was over in just four months which highlighted PwC’s sound project management and gave an effective solution for delivery .The phase was completed in October 2006 and it has allowed South Asian Petrochem take full advantage of the stability of the database. This software has not only enhanced functionality of the newer applications suite but also has ensured continued support. This software is being used by a huge range of staff that is located both at the plant as well as at the headquarters, including also the senior management and accounts employees.
Conclusion and Findings
The increased stability of Oracle E-Business Suite has given the confidence to proceed with the integration. The company is determined that the accuracy of the records would increase and our staff resources could be redirected to higher value jobs. They would be a lot more efficient and would also achieve faster reconciliation of information and reduce the consumption of raw materials by integrating the oracle software with the control systems located at the plant.
With this software the company has started producing management reports within few minutes giving all the important details about production, dispatch and information regarding the finished stock.
It has also reduced the outages due to breakdown of the equipments by improving the preventive maintenance scheduling.
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