Introducing_a_multi-plant_information_sy.pdf - Long Range...

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Long Range Planning, Vol. 25, No. 2, pp. 89 to 96, 1992 Printed in Great Britain 0024-6301/92 $5.00 + .OO Pergamon Press Ltd Introducing a Multi-plant Information System at Indian Oil 89 P. R. Rau, V. Shekhar and H. Raghav Rao The Indian Oil Corporation is an S8bn corporation. The company exists in a unique environment: a heavily protected market, a large and thriving bureaucracy and rigid regulatory framework. Indian Oil also has its share of uncertainties in terms of the supply of raw materials, human resources, technology etc. This article discusses the planning, design and implementation of a multi-plant computerized information system at Indian Oil and illustrates how a system meant for operational control can also serve the strategic aims of the company. India has been one of the most heavily protected markets in the world. This was one of the major ideas underlying its development in the past. Only by acquiring control of the commanding heights of the economy, it was felt, would rapid socio-economic progress be achieved. Among the important results of this experiment has been the development of an enormous public-sector. Many of these public sector companies are monopolies or at best members of oligopolies with large bureau- cracies. In today’s rapidly changing enviroment, these protected industries face uncertainties in the supply of raw materials, human resources, technology etc. But strategic planning is highly centralized due to the lack of success of the participative style of management in India, decentralization is not encouraged. Usually divisional and departmental strategies are decided at the corporate level and administered as law to the lower levels of manage- ment. The largest public sector company in India is the Indian Oil Corporation. (IOC). With an organiza- tion strectching across the country, IOC faced a problem in its routine transactions processing and IOC commissioned a turnkey solution from CMC P. R. Rau is with INSEAD, France, V. Shekhar is with CMC Ltd., New Delhi and H. Raghav Rao is Assistant Professor of Management at the State University of New York at Buffalo. Ltd.-another public sector company which had several large projects to its credit. The objectives of this article are: (1) to describe the Plant-Dot system-a system meant to document all the operations in the LPG bottling plants owned by IOC; (2) to describe its effect on the corporation and to illustrate how a system meant for operational control can also serve the strategic aims of the company. It also describes the problems involved in computer- izing such a large bureaucracy-this was the first large-scale computerization to be introduced in IOC. India’s Largest Corporation Indian Oil is the largest commercial organization in India. It owns and operates six of the nation’s 12 refineries, has a pipeline network of 3850 km and sold over 31 million tonnes of products in 1989-1990. It achieved a sales turnover of over US$8bn in 1989-1990 with a profit before tax of US$420m.* IOC is the only Indian company in the world’s top 100 companies.
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