8 McBroom Extended OG Supply Chain
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Transcript of 8 McBroom Extended OG Supply Chain
The Extended Oil & Gas Supply Chain
SAP Business Forum ’05 SeriesHouston, TexasMarch 22, 2005
Mickey McBroom, Industry Principal Downstream
Dirk Williams, Manager, Field Services, IBU Oil & Gas
Introduction & SCM Business OverviewSAP Solution OverviewExtending the SAP SCM SolutionNext Steps
© SAP AG 2005, Shell SCM Overview, Speaker Name 3
The Ecosystem and the Oil & Gas Supply Chain
Crude
NGL / LPG
LubricantsNatural Gas
RefinerRefiner DistributorDistributorProducerProducer RetailerRetailer
Refined Products
DistributorDistributor DistributorDistributorRefinerRefinerProducerProducer
Upstream Midstream Supply Refining Primary
SupplySecondary Distribution
Service Station &
Convenience Retailing
© SAP AG 2005, Shell SCM Overview, Speaker Name 4
Large quantities of products managed on a global basisTypically long lead times for transportationHighly fungible market, both in terms of products and partnersLong term contracts the normal basis for business
Key Characteristics in Oil & Gas
What is Downstream Oil & Gas Supply Chain Management?
“Integrated Supply Chain Management (ISCM) is a process-oriented, integrated approach to procuring, producing, and delivering products and services to customers.” [M.I.T] Supply chain management involves coordinating, integrating and executing these
flows both within and between companies.SCM’s aim is to optimize the activities occurring along the supply chain to maximize
asset usage, minimize costs and drive maximum revenue from the activity.Within the Oil and Gas Industry, we typically describe SCM stages of planning,
scheduling and execution as taking place, with constant and ongoing trackingparallel to these.
What is Supply Chain Management? A few definitions …
© SAP AG 2005, Shell SCM Overview, Speaker Name 5
Creates imbalances and inefficiencies along supply chain
Lack of collaboration between supply chain partners
Creates disruptions to company operations and management
Creates possibility of distress spot contracts
High occurrence of M&A
Lack of Risk Management
ObservationsKey IssuesLack of visibility and lack of integration of supply chain
Rationalizing Supply Chain network
Need for real time data visibility and ability to perform “what if” scenarios to quickly adjust operating plans
Lack of ability to rapidly respond to real world scenarios
Lack of central source of mission critical dataLack of global industry wide standards
Key Issues for Supply Chain Management
© SAP AG 2005, Shell SCM Overview, Speaker Name 6
All Steps of the Process are Integrated and Seamless1. Planning & Optimization
Demand PlanningRefinery planningUpstream planningCrude supply planningProduct supply planningTrading Plan
2. Operations & SchedulingSchedule BuildingSchedule BalancingSchedule updatesInventory Management Trading Operations
3. Execution & SettlementCustody TransferEvent managementBack Office UpdatesInvoicing / Payments
4. Evaluation & AnalysisProfit Loss AnalysisOptimization of InventoryRisk ManagementPerformance Monitoring
A Fully Integrated, Closed-Loop Process
© SAP AG 2005, Shell SCM Overview, Speaker Name 7
SAP Oil & Gas SCM Solution Release Timeline
Global Industry Advisory Council
Oil & Gas Components
mySAP SCM Components
Industry
Industry Experience
TSW Focus Group
SAP APO started
Demand Planning
Network Planning
Production Planning
Event Manager
Inventory Hubs
Pilot case CITGO live
Saudi Aramco
Equiva
BHPBilliton / TOTAL
Pemex Gas +++
TSW started
1st release
Major 4.6cGas
SCM Integration
Time / Releases
A Collaborative Approach to Solution Development
Introduction & SCM Business OverviewSAP Solution OverviewExtending the SAP SCM SolutionNext Steps
© SAP AG 2005, Shell SCM Overview, Speaker Name 9
Supply Network Scenario - Geographical
Off-/Onshore Wells
Sugarland Crude Pipeline
Colonial Products Pipeline
Baton Rouge Refinery / Terminal
St. James Terminal
O/G
Marine Supply
© SAP AG 2005, Shell SCM Overview, Speaker Name 10
Off Galveston
NWE Rotterdam
Onshore / Offshore Wells
Doraville
Greensboro
Baton Rouge
St. James
Off Galveston
NWE Rotterdam
Onshore / Offshore Wells
Doraville
Greensboro
Baton Rouge
St. James
Major Roles in the Supply Chain - Pipeline
Crude Pipe Scheduler
Crude Marine Scheduler
Colonial Pipeline
Scheduler
Refinery Manager
Terminal Manager
Crude Trader
Products Trader
Marine Carrier
Pipeline OperatorPartner
TraderPartners
Demand Manager
Supply Manager
Exchange Manager
Supply Network Manager
© SAP AG 2005, Shell SCM Overview, Speaker Name 11
What’s happening? Supply Chain Management
Doraville
Greensboro
Baton Rouge
Doraville
Greensboro
Baton Rouge
Rack exchange
Rack sales• Partner• Own
Rack exchange
Rack sales• Partner• Own
Bulk contract sales
Rack exchanges
Rack sales• Partner• Own
Bulk contract salesBulk transfers
Bulk transfers
Bulk transfers
Own statistical Forecast
Customer Nomination
Partner Supplied forecast
Own Scheduling and Nomination
© SAP AG 2005, Shell SCM Overview, Speaker Name 12
SAP for Oil & Gas Solution Map:Supply, Transmission and Trading
Suppliers & Partners Customers & Channels
Exploration & Appraisal
Development & Production
Hydrocarbon Supply & Gas Transmission
Refining & Manufacturing
Primary Distribution
Terminal Management
Secondary Distribution
Commercial Sales &
Retailing
Upstream Exploration and Appraisal
E&P Contract Management Field Development
Liquid and Gas Production Allocation and Settlement
Oil Field Service and Repair Operations
Supply, Transmission & Trading Bulk Supply Chain Planning and Optimization Bulk Supply Chain Operations and Scheduling Bulk Supply Chain Execution and Settlement Bulk Supply Chain Reporting and Analytics Physical Oil and Gas Commodity Trading
Oil and Gas Paper Trading and Risk Management
Refining & Manufacturing
Refining Operations Lubes Manufacturing Operations
Downstream Marketing & Retailing
Marketing Planning and Execution Sales Planning and Account Management
Opportunity to Cash Customer Service
Terminal Management Hydrocarbon Products Transportation
Service Station Fuel Management Convenience Retailing
Asset Management Enterprise Asset Management
Enterprise Management & Support Analytics Financials
Human Capital Management Corporate Services Operations Support
© SAP AG 2005, Shell SCM Overview, Speaker Name 13
Mapping the SAP Solution
Supply, Transmission & Trading Bulk Supply Chain Planning and Optimization
Supply, Transmission & Trading Bulk Supply Chain Operations and Scheduling
SAP Solution
• SAP Advanced Planning & Optimization (SAP APO)• Demand & Supply Planning & Forecasting• Collaborative Planning• Supply Network Planning & System Balancing• Global Available to Promise
•See also overlapping area below …
SAP Solution
• SAP Traders’ & Schedulers’ Workbench (SAP TSW)• Planning to Operations and Scheduling Cycle• Nomination Management• Inventory Planning• Custody Transfer Handling
• SAP Event Management (SAP EM)• Integration into Real World events• Monitoring & Alerting
1. Planning & OptimizationDemand PlanningRefinery planningUpstream planningCrude supply planningProduct supply planningTrading Plan
2. Operations & SchedulingSchedule BuildingSchedule BalancingSchedule updatesInventory Management Trading Operations
© SAP AG 2005, Shell SCM Overview, Speaker Name 14
Mapping the SAP Solution
Supply, Transmission & Trading Bulk Supply Chain Execution and Settlement
Supply, Transmission & Trading Bulk Supply Chain Reporting and Analytics
SAP Solution
• SAP IS-Oil Downstream (IS-Oil) including…• Exchanges• Commodity Pricing (formula / average pricing)• Quantity Conversion handling• Tax and Duty Handling• Silo Management• TAS Interfacing• Transportation Execution & Settlement
• SAP Event Management (SAP EM)
SAP Solution
• SAP Business Information Warehouse (SAP BW)• Standard Reporting• Flexible definition reporting• Supports KPI analyses
• Strategic Enterprise Management (SAP SEM)• Linking in data from the overall solution set and
external data sources
3. Execution & SettlementCustody TransferEvent managementBack Office UpdatesInvoicing / Payments
4. Evaluation & AnalysisProfit Loss AnalysisOptimization of InventoryRisk ManagementPerformance Monitoring
© SAP AG 2005, Shell SCM Overview, Speaker Name 15
Off Galveston
NWE Rotterdam
Onshore / Off
Galveston
NWE Rotterdam
Onshore / Offshore Wells
DoravilleProd. Terminal
GreensboroProd. Terminal
Baton RougeRefinery
St. JamesCrude Terminal
Reservoir to Terminal – The Solution(s)
APO
APO – Advanced Planner & OptimizerAPO – Advanced Planner & Optimizer
APO
APO
TSW
TSW
TSW
TSW
TSW
TSW
TSW – Traders‘ & Schedulers‘ WorkbenchTSW – Traders‘ & Schedulers‘ Workbench
EM – Event ManagerEM – Event Manager
IS-OIL – Industry Solution OilIS-OIL – Industry Solution Oil
Marine
Crude Pipeline
Product Pipeline
Introduction & SCM Business OverviewSAP Solution OverviewExtending the SAP SCM SolutionNext Steps
© SAP AG 2005, Shell SCM Overview, Speaker Name 17
Introducing Trading for Oil & GasSupply, Transmission & Trading Physical Oil and Gas Commodity Trading
Supply, Transmission & Trading Oil and Gas Paper Trading and Risk Management
SAP Solution
• SAP Global Trade Management (SAP GTM)• Trading Contract• Contract Management• Trade Expense Management• Position Reporting
SAP Solution
• SAP Treasury & Risk Management (SAP TRM)• Paper Deal Capture• Risk Management• Hedging• Reporting
© SAP AG 2005, Shell SCM Overview, Speaker Name 18
NetWeaver for Integrated Trading & Operations
NetWeaver
NetWeaver
Deal Capture Nomination Shipment SettlementPosition
Planning
InventoryERP Terminal(external)SchedulingTrading
(external)Trading (internal)
Supply /DemandPlanning
MDM
Portal BI
XI
Collaboration
Process Integration
Trading office
Operations Office
Accounting
© SAP AG 2005, Shell SCM Overview, Speaker Name 19
Trading & Operations Business Landscape
Physical Trade Management
Paper Trade and Risk Management
Complex Risk Management and
Modeling
Logistics Operations Management
Financial Execution and Management
Enterprise Reporting and Analysis
Deal Capture
Market Tracking & Analysis
Trading Decision Support & Optimization
© SAP AG 2005, Shell SCM Overview, Speaker Name 20
Physical Trade Management
Paper Trade and Risk Management
Complex Risk Management and
Modeling
Logistics Operations Management
Financial Execution and Management
Enterprise Reporting and Analysis
Deal Capture
Market Tracking & Analysis
Trading Decision Support & Optimization
SAP Oil & Gas Integrated Trading, Risk Mgmt & Operations Initiative
TSW and IS-Oil / mySAP ERP
mySAP BI (BW and SEM)
SAP GTM
Integration
SAP BW / 3rd Party Solution
SAP Deal Capture
SAP TRM
SAP BW Basis
© SAP AG 2005, Shell SCM Overview, Speaker Name 21
Physical Trade Management
Paper Trade and Risk Management
Complex Risk Management and
Modeling
Logistics Operations Management
Financial Execution and Management
Enterprise Reporting and Analysis
Deal Capture
Market Tracking & Analysis
Trading Decision Support & Optimization
SAP Oil & Gas Integrated Trading, Risk Mgmt & Operations Initiative
TSW and IS-Oil / mySAP ERP
mySAP BI (BW and SEM)
SAP GTM
Integration
SAP BW / 3rd Party Solution
SAP Deal Capture
SAP TRM
SAP BW Basis
xITRO
Introduction & SCM Business OverviewSAP Solution OverviewExtending the SAP SCM SolutionNext Steps
© SAP AG 2005, Shell SCM Overview, Speaker Name 23
Next Steps
Industry Workshops to Gather Requirements
Develop Industry Momentum
Quantify Industry Support
Finalize Development Business Case (SAP)
Develop Collaborative Buildout/Rollout Plan