Oct-2010

Real-time downstream dashboard

Real-time infrastructure enabled an organisational transformation to achieve integration in a highly complex downstream supply chain

Toto Nugroho Pranatyasto and Agus Witjaksono Pertamina
Craig Harclerode OSIsoft

Article Summary

Pertamina is Indonesia’s state oil and gas company. Its main purpose is to ensure a secure supply of fuel products at competitive prices throughout the archipelago. The supply chain consists of six refineries with a combined capacity of 1 million b/d, 145 depots, 134 vessels and more than 4200 fuel stations spread across 13 000 islands, with a sales volume of 1.2 million b/d (see Figure 1). It is essential for Pertamina to be able to have an integrated view of real-time data from crude procurement all the way to secondary distribution.

Pertamina decided on a real-time information infrastructure to support an organisational redesign forming the integrated supply chain division. This transformation included the construction of a real-time downstream control room in order to provide the new team with a comprehensive real-time view of all planning and operations data, with appropriate tools for real-time situational awareness of situations and the capability to respond. This article describes the design, data integration, software development and hardware selection for the downstream control room project.

Business drivers
Prior to 2006, Pertamina was a regulated national oil company with a primary charter to provide a secure supply of petroleum products to Indonesia. Indonesia produces around 1 million b/d of crude oil, but due to refinery 
feedstock compatibility issues, Pertamina still imports 200–300 000 b/d of crude oil. Coupled with the need to distribute petroleum products across the 13 000 islands equipped with minimal pipeline capacity, this required a large marine fleet of 134 vessels. In short, Pertamina was faced with operating in one of the world’s most complex petroleum supply chains.

The problem of a complex geography of mountains, rivers and islands was compounded by an organisational structure that inhibited information flows and ownership for the performance of the supply chain. The combination of these factors led to supply chain disruptions, and, ultimately, jeopardised the company’s ability to deliver on the governmental mandate to provide a secure supply of petroleum products.

To address these problems, the Indonesian oil industry was deregulated with the aim of providing more diversity, security and efficiency of supply. The deregulation required Pertamina to refocus on sustainability in the face of foreign competition. The transformation exposed high crude import costs and overall low downstream margins as a result of Indonesia’s close proximity to the Singapore market and, therefore, the ability to import petroleum products at competitive prices. In summary, the charter of Pertamina shifted from a focus on security of supply to one of balancing the economics of supply.

To complicate matters, Pertamina’s downstream business processes were based on functional units with associated planning focused on functional targets. This downstream legacy structure featured rigid interfaces between refining, planning and scheduling, and marketing, as well as dificulty in a sharing operational information. As a result, there was no real single point of accountability for either the downstream margin or for co-ordination of supply chain operations.

Reflecting this segmented, organisational structure, there was a lack of an integrated system for planning optimisation and scheduling, resulting in the inability to track “plan” versus “actual”. In summary, Pertamina did not have a timely and coherent view of its downstream operational data, which in turn jeopardised its sustainability in a deregulated market. 

Evolution of real-time infrastructure
The last 30 years have seen significant technological growth and change. The technology can be categorised into megatrends that are well documented and discussed. However, one of these megatrends that is often overlooked is the growing importance of real-time data 
in a global real-time business environment.

The evolution of the real-time infrastructure enables advanced business integration in real-time, horizontally across the supply chain and vertically from operations to business systems. Without the use of a real-time infrastructure, companies are forced to develop complex networks, procure or develop point solutions, and cobble these together with custom interfaces and integration methodologies.

The real-time infrastructure fits architecturally into the dataflow between data sources and end users. Today’s enterprises sometimes comprise hundreds of assets, each with thousands of pieces of data in multiple systems, ranging from distributed control systems (DCS), supervisory control and data acquisition (SCADA), programmable logic controllers (PLC), and a multitude of other systems. The data can be in various forms, from time series to transactional, batch, quality, manually entered and many others.

The challenge is to gather this data, organise it in some consistent structure, validate its accuracy, and provide it in context to end users and applications to analyse and use the information to make decisions and deliver business value. The real-time infrastructure facilitates the collection, historicising, organising, analysing, notifying and visualising of this vast amount of information in a consistent way.

Applied to a supply chain like Pertamina’s, traditionally disparate and segregated supply chain applications can employ the evolved real-time integration infrastructure to migrate a majority of the traditional functionality of supply chain applications to the real-time infrastructure, and can integrate best-of-breed components, resulting in a much simpler and cost-
effective supply chain environment. Combined with an organisational redesign such as Pertamina’s, the result can be a unified and aligned real-time global supply chain.

Downstream transformation
The transformation of Pertamina’s downstream organisation started with a vision of a fully integrated and accountable team responsible for the downstream supply chain.

The model of organisational transformation is shown in Figure 2 and features the formation of a new ISC division responsible for the co-ordination, management and optimisation of the crude and product supply and distribution, marketing, refining and trading operations. The reorganisation included the redesign of associated business processes and procedures with associated performance metrics and incentives.