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Management Information System for tracing Operations and Maintenance Expenses

Summer Internship Program at Gujarat State Petronet Limited

OBJECTIVES
Not just an academic project
I did not want a project that would just reinforce some theoretical concept that can be gathered from a text book

Develop a MIS for tracing O&M expenses


The reports must be helpful for the management System must be user friendly System must be easy to implement

Do real work

I wanted to provide service that would be of some value to the company or contribute towards an ongoing project undertaken by the company

Develop a similar system for Administrative and Other expenses Develop a reporting tool that would help monitor cash flow at Gandhinagar head-office

INITIAL OBSERVATIONS
For the year 2007-08, Operations and Maintenance expenses constitute to about one third of total expenditure if we discount Depreciation, Provisions and Financial Charges.

FY 2007-08 Total Expenditure Connectivity charges 3,370,357,933 90,801,537

% of total 100.00 2.69

Gas Transportation Charges


Interest and Financial Charges Direct Expenditure Employee Cost Depreciation

34,879,009
668,312,560 7,679,164 67,176,227 1,679,106,683

1.03
19.83 0.23 1.99 49.82

Administrative, O&M and Other


Administrative O&M Other Provision for tax current year

329,622,460
25,035,057 177,850,195 126,737,208 441,250,079

9.78
0.74 5.28 3.76 13.09

Provision for Deferred Tax

51,530,210

1.53

INITIAL OBSERVATIONS
For the year 2007-08, Operations and Maintenance expenses constitute to about one third of total expenditure if we discount Depreciation, Provisions and Financial Charges.

FY 2007-08 Total Expenditure Connectivity charges 3,370,357,933 90,801,537

% of total 100.00 2.69

Real Expenditure 34,879,009 1.03 Total Expenditure 530,158,397 100 % Interest and Financial Charges 668,312,560 19.83 Connectivity charges 90,801,537 17.13 % Direct Expenditure 7,679,164 0.23 Gas Transportation Employee Cost 67,176,227 Charges 34,879,009 6.58 %1.99 Direct Expenditure 7,679,164 Depreciation 1,679,106,683 1.45 % 49.82 Employee Cost 67,176,227 12.67 %9.78 Administrative, O&M and Other 329,622,460 Administrative 25,035,057 4.72 %0.74 Administrative 25,035,057 O&M 177,850,195 33.55 %5.28 O&M 177,850,195 Other 126,737,208 23.91 %
Gas Transportation Charges
Other 126,737,208 441,250,079 3.76 Provision for tax current year 13.09

Provision for Deferred Tax

51,530,210

1.53

INITIAL OBSERVATIONS

FY 2007-08 Total Expenditure

% of total 100.00 2.69

Gas Transportation Charges 34,879,009 1.03 For the year 2007-08, Total Expenditure 530,158,397 100 % Interest and Financial Charges 668,312,560 19.83 Operations and Connectivity charges Expense Ratio 17.13 % 90,801,537 Value of Pipeline O&M Maintenance expenses Direct Expenditure 7,679,164 0.23 Gas Transportation 16,088,552,885 112,158,779 0.007 constitute to about2005-06 Employee Cost one 67,176,227 Charges 34,879,009 6.58 %1.99 third of total expenditure if Depreciation 2006-07 16,833,295,573 1,679,106,683 49.82 Direct Expenditure 159,068,239 0.00941.45 % 7,679,164 we discount Depreciation, 2007-08 17,322,796,167 Employee Cost 67,176,227 12.67 %9.78 Administrative, O&M and 177,850,195 0.0103 Other 329,622,460 Provisions and Financial Administrative 25,035,057 4.72 %0.74 Administrative 25,035,057 CAGR 0.1377 Charges.

O&M expenses have increased Connectivity charges 90,801,537 by 11.8% in the year 2007-08 Real Expenditure

3,370,357,933

2012-13

Ratio of O&M expenditure to the value of pipeline has shown an increasing trend since last three years

O&M O&M Value of pipeline has Other

Provision for tax current year

increased by 2.9%

Other

177,850,195 33.55 %5.28 177,850,195 0.0196 126,737,208 23.91 %


126,737,208 441,250,079 3.76

13.09

Provision for Deferred Tax

51,530,210

1.53

INITIAL OBSERVATIONS
For the year 2007-08, Operations and Maintenance expenses constitute to about2005-06 one third of total expenditure if 2006-07 we discount Depreciation, 2007-08 Provisions and Financial CAGR Charges.
2012-13

FY 2007-08 Total Expenditure Connectivity charges 3,370,357,933 90,801,537

% of total 100.00 2.69

Other 126,737,208 3.76 Ratio of O&M expenditure the Operations and Maintenance activities 441,250,079 13.09 to the value of pipeline has Provision for tax current year would cost Rs. 339,042,738 if no 51,530,210 177,850,195 1.53 shown an increasing trend Provision for Deferred Tax additional pipeline is added to the grid since last three years

Real Expenditure 34,879,009 1.03 Total Expenditure 530,158,397 100 % Interest and Financial Charges 668,312,560 19.83 Connectivity charges Expense Ratio 17.13 % 90,801,537 Value of Pipeline O&M Direct Expenditure 7,679,164 0.23 Gas Transportation 16,088,552,885 112,158,779 0.007 Employee Cost 67,176,227 Charges 34,879,009 6.58 %1.99 16,833,295,573 Depreciation 1,679,106,683 49.82 Direct Expenditure 159,068,239 0.00941.45 % 7,679,164 17,322,796,167 Employee Cost 67,176,227 12.67 %9.78 Administrative, O&M and 177,850,195 0.0103 Other 329,622,460 Administrative 25,035,057 4.72 %0.74 Administrative 25,035,057 0.1377 O&M 177,850,195 33.55 %5.28 0.0196 O&M 177,850,195 Other 126,737,208 23.91 %
Gas Transportation Charges

TIME FLOW
Week 1: Identification of project Weeks 2, 3: Understanding the Operations and Maintenance activities Weeks 4, 5, 6: Analyzing the data and developing a relevant reporting system Week 7: Training the officers of Finance and Accounts department on using the system Week 8: Systems for tracing Admin and Other costs and a reporting tool for cash flow. In parallel with other activities: Understanding the SAP system and extracting data from the system

O&M COSTS
Expenses can be grouped under five broad heads as:
administrative expenses, consumption of stores and spares, repairs and maintenance work, electricity expenses and capital expenses.

Reported under 24 ledger accounts Five cost centers

O&M COSTS
Expenses can be grouped under five broad heads as:
administrative expenses, manpower consumption of stores and spares, and salary for staff, furniture and fixtures, running repairs and maintenance work, and maintenance of vehicles, electricity expenses and communication expenses, pest housekeeping of terminals, control, green belt development, capital expenses.

Reported under 24 ledger accounts Five cost centers

office stationary and equipment

O&M COSTS
Expenses can be grouped under five broad heads as:
administrative expenses, consumption of stores and spares, repairs and maintenance work, tools like wrenches, electricity expenses and instrument fittings, cables, AC spanners, general spares like capital expenses. compressors, generator fittings, batteries;

Reported under 24 ledger accounts Five cost centers

Consumables may be gaskets of different sizes, engine oil for generators, grease for valves, and hydraulic oil for actuators; Telecom spares and health and safety equipment

O&M COSTS
Expenses can be grouped under five broad Annual maintenance contracts for heads as: equipment , environment
administrative expenses, monitoring expenses and any expenses due to miscellaneous consumption of stores and repair work spares, repairs and maintenance work, electricity expenses and capital expenses.

Reported under 24 ledger accounts Five cost centers

O&M COSTS
Expenses can be grouped under five broad heads as:
administrative expenses, consumption of stores and spares, repairs and maintenance work, power and fuel expenses and capital expenses.

fuel for DG sets, electrical expenses, electricity bill expenses

Reported under 24 ledger accounts Five cost centers

O&M COSTS
Expenses can be grouped under five broad heads as:
administrative expenses, consumption of stores and spares, repairs and maintenance work, electricity expenses and capital expenses. Civil and mechanical work,

Reported under 24 ledger accounts Five cost centers

building repairs, purchase of new maintenance systems

O&M COSTS
Expenses can be grouped under five broad heads as:
administrative expenses, consumption of stores and spares, repairs and maintenance work, electricity expenses and capital expenses.

Reported under 24 ledger accounts Five cost centers

ANALYSIS OF O&M COSTS


Data

Increased pipeline length explains increase in:


CPS (cathode protection system) maintenance Land revenue expense stores and consumables repairs and maintenance payment to outsourced personnel

Reduced expenses under Other O&M implies better reporting Problem areas are those marked with yellow

EXPECTATIONS FROM THE MIS


STATED
The reports must be helpful for the management System must be user friendly System must be easy to implement

UNSTATED
Tabular and pictorial representation of data Analysis of real time data Comparison of costs with other cost centers and past data Trends and patterns in O&M costs It will be used for controlling costs Must help O&M dept. in planning/budgeting

TYPES OF REPORTS
Amount by GL account: The manager can see how much amount was spent on what type of maintenance activity. Amount by cost centers: This report summarizes the total amount spent at individual cost centers irrespective of the type of maintenance. Amount by months: Yearly, quarterly and monthly expenses incurred by the company as a whole are reported here. GL accounts VS Months: Expenses booked under individual ledger accounts, or type of maintenance activity, are broken down into monthly components and displayed in a single graph.

TYPES OF REPORTS
Cost centers VS Months: Expenses booked under individual cost centers are broken down into monthly components. GL accounts VS Cost centers: What type of maintenance activity, and how much of it, was carried out at which cost center can be seen through this report. Drill-Down Report: Costs can be drilled down into quarterly and monthly costs, which may further be broken down into more components. Ultimately amount spent on individual dates can also be viewed by the manager.

The system intends to identify and present various types of reports that might be helpful in tracing operations and maintenance costs. Almost any possible type of report may be generated through this

THE SYSTEM
LINK

THANK YOU
Ameesh Sharma
08FN011 Institute of Management Technology, Nagpur

LEDGER ACCOUNTS
Back
1. Repairs and maintenance expenses 2. Consumption of spares 3. AMC of UPS Systems 4. Fuel for diesel generators 5. Gas Sample Analysis 6. Modification work for UPS system 7. O&M civil & mechanical 8. O&M cathode protection monitoring & maintenance 9. O&M diesel generator sets 10. Repairs & maintenance of diesel generator sets 11. Trunk radio air time for walky-talky 12. Other AMCs 13. Stores & consumables 14. Transportation 15. Repairs building 16. Electrical expenses 17. AMC of pressure reduction system & gas measuring equipment 18. Land revenue 19. Manpower charges 20. O&M office expenses 21. Payment to outsourced personnel 22. Other O&M expenses 23. Security expenses 24. Electricity bill expenses

COST CENTRES
Back

Ahmadabad: Mehsana and Himmatnagar to Anand Baroda: Halol to Dahej Hazira: Dahej to Hazira Rajkot: Anand to Jamnagar Vapi: Hazira to Vapi

Pipeline Map