SUMMER INTERNSHIP REPORT

Name: VERAAT.S.BHARAT

Sap ID: 500021923

Roll No.: R170212044

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 HINDUSTAN PETROLEUM CORPORATION LIMITED

Area of Research

Oil & Gas

Summer Internship Report

In the Partial Requirement of the Completion of BBA (Oil & Gas)

BUSINESS IMPACT OF SOP IN RETAIL OUTLET OPERATIONS

Urban /Highways Dealers

Submitted by

Veraat.S.Bharat

Student Intern

BBA (Oil & Gas) 4th SEM

2012-15

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 Table of Contents

1. Acknowledgement……………………………………………………4

2. Executive Summary………………………………………………….5

3. List of Figures & Tables………………………………………….….6

4. Introduction………………………………………………………….7

5. Rationale & Motivation for the Research…………………………..10

6. Research Objectives………………………………………………...11

7. Literature Review………………………………………………...…12

8. Research Methodology……………………………………………..16

9. Data Analysis…………………………………………………..…...18

10. Findings and Discussions……………………………………...…..20

11. Conclusion & Recommendations…………………….……….…. .22

12. References………………………………………………..………..23

13. Abbreviations………………………………………………...……24

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 ACKNOWLEGEMENT

An endeavor over a period can be successful only with the advice and support of the well-
wishers. I take this opportunity to express my gratitude and appreciation to all those who
encouraged me to complete this project.

First and foremost, I would like to express my gratitude towards my Education Institution,
University of Petroleum and Energy Studies (UPES) and my company, Hindustan
Petroleum Corporation Limited (HPCL) for providing me a magnificent opportunity in the
form of this internship to learn and get the real work experience.

At very first I would like to express my profound and sincere thanks to my company
mentor Mr. Raj Jindal who guided me through my whole period of Internship and Mr. Ajay
Bharadwaj, retail senior manager who took out time from his busy schedule and provided
his valuable guidance and support, which helped me in giving shape to my study.

Also I would like to thank my college mentor, Mr. Suresh Malodia for his external support
and guidance and my parents and friends who consistently motivated and encouraged me to
perform my study and internship with full strength and efficiency.

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 EXECUTIVE SUMMARY

The purpose of my research is to know the business impact of Standard Operating

Procedures in retail outlet operations in case of Urban/Highway dealers and thus I will be
able to know the importance of SOP in Petro Retailing Industry.
SOP is a set of instructions that serves as a framework for organizational policy –
providing direction and structure.

It is foundation for:

 job descriptions,
 employee training
 corrective action and discipline, and
 Performance review.

Since following standard operating procedures increases sales, boosts worker productivity
and enhances a store's image thus Retail pumps must follow the guidelines of SOP as much
as possible in order to satisfy and meet the demand of customers in a better way.

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 LIST OF FIGURES AND TABLES

Figure 1. Retail market share in Petro retailing industry in India…………………..12(Pg.)

Figure 2. Percent share of the SOP Enabled Retail outlets in all three

cities i.e. Noida, Meerut & Muzaffarnagar…………...…………………..18(Pg.)

Figure 3. Percent share of maintenance of five main components of

SOP……………………………………………………………………......19(Pg.)

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 INTRODUCTION

About HPCL
Hindustan Petroleum Corporation Limited (HPCL) is an Indian state
owned oil and natural gas company which was founded in 1974, with its headquarters
at Mumbai, Maharashtra and with Navratna status. The Chairman and MD of HPCL is Ms.
Nishi Vasudeva. It has been ranked 260th in the Fortune Global 500 rankings of the world's
biggest corporations (2013) and 4th among India's Companies for the year 2012. HPCL has
about 25% marketing share in India among PSUs and a strong marketing infrastructure.
The President of India owns 51.11%shares in HPCL.

Operations
HPCL operates two major refineries producing a wide variety of petroleum fuels &
specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tonnes Per Annum
(MMTPA) capacity and the other in Vishakapatnam, (East Coast) with a capacity of 8.3
MMTPA. HPCL holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals
Limited (MRPL), a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA.
Another Refinery of 9 MMTPA, set up in Bathinda, Punjab by HMEL, a Joint Venture
with Mittal Energy Investments Pte. Ltd. HMEL has commenced commercial operations.
HPCL has signed a MOU with Government of Rajasthan for setting up a Refinery near
Barmer in Rajasthan. It would be operated under a JV Company called HPCL-Rajasthan
Refinery Limited.

HPCL also owns and operates the largest lube refinery in India producing Lube Base Oils
of international standards, with a capacity of 335 TMT. This lube refinery accounts for
over 40% of India's total lube base oil production. Presently HPCL produces over 300+
grades of lubes, specialities and greases.

The marketing network of HPCL consists of 13 zonal offices in major cities and 101
regional offices facilitated by a Supply & Distribution infrastructure comprising Terminals,
Aviation Service Facilities, LPG Bottling Plants, Lube filling plants, Inland Relay Depots,
Retail Outlets (Petrol Pumps) and LPG & Lube Distributorships. HPCL has state of art
information technology infrastructure to support its core business. The data center is
located at Hitech city in Hyderabad.

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HPCL MEERUT

HPCL has one of its main regional offices in Meerut. Meerut comes under Lucknow zonal
office. Meerut regional office looks after 16 districts like Meerut, Noida, Muzaffarnagar,
Saharanpur and many more. There are 3 depots under Meerut regional office:

1) Meerut
2) Nazibabad
3) Aola (Bareily district) – closed right now

There are 5 sales areas under Meerut regional office. And they have their respective sales
offices they are:

1. Meerut
2. Noida
3. Saharanpur
4. Moradabad
5. Bareily

In depots, products come from HPCL Bathinda refinery which is in joint venture with the
Mittal Energy Investments. Products come through pipeline from Bathinda to Bahadurgarh
and after that in rail wagons.

There are 284 retail outlets under Meerut Regional Office in which 115 are SOP enabled.

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Standard Operating Procedures (SOP)

A Standard Operating Procedure is set of instructions that document a routine or repetitive

activity followed by an organization and having the force of a directive, covering those
features of operations that lend themselves to a definite or standardized procedure without
loss of effectiveness.

Operational procedures are vital to the business of running a retail store. Procedures
typically cover all activities in the store, from sales transactions to customer support to
inventory. The development and use of SOP has various advantages for the organization.
Following standard operating procedures increases sales, boosts worker productivity and
enhances a store's image.

The presence of these quality documents is essential when inspections take place since the
most frequent reported deficiencies during inspections are the lack of written SOPs and/or
the failure to adhere to them. The SOP writing process is critical to successful
implementation of SOPs. As Oil & Gas companies search for ever more ways to improve
performance, increase efficiency and control costs, we need not only “best practice” to
achieve maximum performance but also “common practice” to standardize best practice
throughout the company.

In HPCL head offices, a SOP Manual is maintained for retail outlets comprising the
standard procedures and guidelines to operate the retail outlet in an efficient manner. It
details the procedures, processes & provides checklists that are required to ensure correct,
safe & laid down procedures for positive customer experience.

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 RATIONALE & MOTIVATION FOR THE RESEARCH

The importance of my research study i.e. the business impact of SOP in retail outlet
operations: Urban/Highway dealers is very significant especially in case of Oil & Gas
Industry. The purpose of a SOP is to carry out the operations correctly and always in the
same manner thus Operational procedures are vital to the business of running a retail store.
Procedures typically cover all activities in the store, from sales transactions to customer
support to inventory.

Since the SOP document serves as an instructional resource that allows employees to act
without asking for directions, reassurance, or guidance, the step-by-step written procedure
can help hold employees accountable because employee expectations are documented and
their actions can be measured against the SOP. Communicating procedures that anyone in
the operation can follow with consistent results will ensure the operation continually
provides high quality products and services.

This whole research study will help me in my future career in this petroleum industry and
will make me aware of the importance of Standard Operating Procedures in Petro retailing
industry.

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 RESEARCH OBJECTIVES

The main objectives of my research study:

1. To know the business impact of Standard Operating Procedures in Retail outlet

operations: urban/highway dealers.
2. To know the difference between the SOP enabled retail outlets and the other outlets
which are not SOP enabled.
3. To check and inspect whether the SOP Retail outlets are following the SOP Manual
which is been provided by the HPCL Company.

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 LITERATURE REVIEW

The Indian Petroleum industry is largely in the public domain with skills and technical
know-how comparable to the highest international standards. The testimony of its vigor
and success during the past five decades is the significant increase in crude oil production
from 0.25 to 33 million tons per annum and refining capacity from 0.3 to 213million metric
tons per annum (MMTPA). The consumption of petroleum products has grown 70 times in
the last 60 years from 3 million tons during 1948-49 to about 213 million tons in 2012-
2013. A vast network of over 40,000 dealerships and distributionships have been
developed backed by over 400 storage points over the years to serve the people even in the
remote and once-inaccessible areas.

Today in the present time, the dealerships and distributions in retail outlets (Petrol pumps)
of all three oil companies i.e. HPCL, IOCL & BPCL work upon the basis of Standard
Operating Procedures (SOPs). As Oil & Gas companies search for ever more ways to
improve performance, increase efficiency and control costs, they need not only “best
practice” to achieve maximum performance but also “common practice” to standardize best
practice throughout the company.

Here is the market share of Petro retailing in India as a whole by private as well as public
oil companies.

The Retail Industry is changing at a fast pace. To retain customers, Retailers are striving to
improve customer service through established deliver processes. With the introduction of
formats, increasing use of technology, bench marking of RVI and modernization, HPCL
retail outlets have created a strong customer pull. The challenge is to identify the key

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processes and carryout all the operations at the retail outlet in a safe, efficient and correct
manner.

The practices at a retail outlet have been divided into the following five chapters, viz.

1. Retail Outlet Operations

2. Customer Care
3. Gaseous Fuels
4. Equipment’s and Facilities
5. Health, Safety and Environment

These contents of SOP for HP ROs include many sub-parts which govern the operational
practices.

1. RO Operations
It includes the operational initiatives, opening & closing day, processes, Audit

A1. Day Opening – daily operation (6 AM)

A2. Shift Change – daily operation (2PM-10PM)
A3. Day Closing – Daily operation (10PM)
A4. Fueling Process
A5. Product Indenting
A6. Finance Accounting
A7. Technology initiatives
A8. Statutory Requirements
A9. Self-Audit

 Housekeeping – It includes the procedure to achieve cleanliness and maintain a

pleasant ambience at Retail Outlet
 Tank Truck Decantation- It includes unloading of tank trucks in retail pumps
to fill in underground tanks of retail pumps.
 Manpower- It refers to the workers/employees working as forecourt salesmen &
providing free air.
 Documentation, Displays & Statutory requirements: These are the statutory
displays that must be displayed around dispensing units and also essential
documents that must be present in the office of the retail pumps.

2. Customer care-It includes the facilities that are there and provided to the customers
in the retail pumps to ensure that the proper care of the customer is done.

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  Air facility- Free air facility that is provided in retail pumps for four-wheelers
as well as two-wheelers.
 First Aid- First aid facility is provided in each HP Retail pumps
 Mandatory Facilities- It refers to facilities that are mandatory to be provided to
the customers in retail pumps.
 Retail Automation- It refers to the whole retailing process that is done in retail
pumps is done with the help of automated systems & equipment.
 Quantity & Quality- It refers to the quantity and quality checks and equipment
whose facility is available at the retail pumps.
 Loyalty Cards- a loyalty card, rewards card, point’s card, or club card is a
plastic or paper card, visually similar to a credit card or debit card, that
identifies the card holder as a member in a commercial incentives programme.
Loyalty cards are a system of the loyalty business model.
 Grievance handling- In this the grievances or complains are properly handled
of the customers if any in order to make them satisfy completely.

3. Gaseous Fuels

 Auto LPG Dispensing Station

4. Equipment

 Equipments & Facilties

5. Health, Safety & Environment (HSE)

According to SOP GUIDELINES, the equipment and facilities that must be there in a SOP
enabled HP Retail outlet:

 Quantity & Quality check equipments

 Pollution Under Control(PUC) facility
 Ingress and outgress should be clean and well maintained
 Yellow lines at the ingress and outgress should be clean and maintained
 Quick Air Point (QCP) facility must be there at pumps
 Toilets should be well maintained
 Clean drinking water pumps should be maintained
 Canopy should be maintained

Business impact of SOP in Retail Outlet Operations Page 14

  Forecourt should be clean
 Dispensing unit should be maintained
 Signature pylons should be well maintained
 Free air facility must be there
 First aid kit must be there in retail pumps
 Tagging visual display should be clean and maintained
 Fire safety equipment like fire extinguishers, sand, etc. should be well maintained
and checked weekly.

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 RESEARCH METHODOLOGY

I planned and did my research on my project i.e. the business impact of SOP in retail outlet
operations, by performing field works assigned to me by my company HPCL in the
locations of Uttar Pradesh i.e. Noida, Meerut & Muzaffarnagar in order to do surveys at the
Urban/Highway dealer retail pumps.

My research data includes two types:

 Primary data which was collected through interaction and surveys in the field work
visits to SOP enabled Retail Pumps of HP
 While the secondary data was collected from reports, articles and publications on
the internet in case of SOP for petro retailing

TYPES OF RESEARCH DATA

Collected through surveying, feedback which
was done in the field work visits in HP Retail
Primary Data
pumps
Collected from the SOP Manual of HP,
Internet, newspapers.
Secondary Data

I did surveying and inspection of the SOP enabled retail pumps of HP in the above
mentioned locations. In these retail pumps during my survey I took feedback of not only
the Dealers but also the employees and the customers.

I took feedback of employees, customers and dealers with the help of the questions of my
Questionnaire.

 For example in NOIDA region,

I visited and surveyed, Sector 51, 62, 82 Retail pumps; Sec. 41, Lt. Vijayant motors
HP and the Autocare HP Retail Pump

 Similarly, in Meerut region,

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 I visited and surveyed, Hari Filling Point of HP, Shakti Service Station, Hamara
Pump Rohta – Hp

 Similarly, in Muzaffernagar region,

I visited and surveyed, Naveen Service station, hp; Raj Service Station, hp, etc.

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 DATA ANALYSIS
With the help of surveying during my field work visits to SOP Enabled HP Retail Outlets
in Noida, Meerut and Muzafferrnagar and going through the Primary as well as Secondary
Research data, I maintained certain analysis. They are

 Percent share of the SOP Enabled Retail outlets in all three cities i.e. Noida,
Meerut & Muzaffernagar
 Percent maintenance of five main components (Infrastructural components,
processes and equipments & Facilities) of SOP in all three cities that I think help
in attracting the customers, meeting customers’ demand and building outlet’s
image..

SOP Enabled Retail outlets

NOIDA- 80%
MEERUT- 60%
MUZAFFARNAGAR-
40%

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Five main components (Infrastructural components, processes and equipments
& Facilities) of SOP in all three cities that I think help in attracting the
customers, meeting customers’ demand and building outlet’s image.
The components are

 Pylon
 Canopy
 Forecourt
 Equipment and Facilities
 Inventory Management

Maintenance of the 5 main components of SOP

10
9
8
7
6
5
4
3 NOIDA
MEERUT
2 MUZAFFARNAGAR
1
0
N Y T IES T
YLO NOP O UR LIT M
EN
P C I E
CA RE FA
C
AG
FO & A N
NTS Y M
E
PM OR
UI
ENT
EQ V
IN

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 FINDINGS AND DISCUSIONS

In Greater Noida, the Autocare centre of HP is built on large scale and is a best example of
SOP enabled retail outlet. It is equipped with best quality equipments and provides best
quality service. It follows the guidelines of SOP and maintains the complete check list.
Similarly, ROs in sector 51, 62, 82 are also built in large scale and are best examples of
SOP enabled ROs.

Similarly, in MEERUT, the Hari Filling Point of HP near Hapur bypass is also well build
and maintained and is a best example of SOP enabled retail outlet. It is a 5 DUs dispensing
station & is equipped with best quality equipments and provides best quality service. It
follows the guidelines of SOP and maintains the complete check list. Similarly, other ROs
i.e. Shakti Service Station, Hamara Pump Rohta – HP are also build in large scale and are
best examples of SOP enabled ROs

Also in MUZAFFARNAGAR, Naveen Service Station and Raj Service Station for HP are
good examples SOP enabled retail outlets. They are also equipped with proper auto system
and facilities. Being, less spacious, still they are able follow the guidelines and meet the
demand of the customers.

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 Problems noticed while Surveying Retail Pumps

In NOIDA, MEERUT & MUZAFFARNAGAR while surveying & inspection of HP Retail

Pumps, it was seen that some retail pumps had:

 Broken Canopy

 Bad and poor conditioned toilets,

 No Vapor Recovery Systems(VRS)

 Petrol sold in plastic bottles

 No Pollution under control (PUC) Facility,

 Drivers were seen sitting in vehicles only while filling CNG

 Customers were not welcomed properly

 Driveways not in good condition

 Yellow lines not maintained at the Ingress & the Outgress

 Electric Panel room built within the office premises.

 Forecourts not maintained as per guidelines

 Dispensing Units were not clean

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 CONCLUSION AND RECOMMENDATIONS

I would like to conclude that through such thorough survey only, I was able to know that
following the standard operating procedures helps in increasing sales, boosts worker
productivity and enhances a retail pump's image and thus knowing the business impact of
Standard Operating Procedures on the retail pump operations.

Thus I would like to suggest and recommend that:

 Retail pumps should be well maintained and if the equipments or the

infrastructural components (VRS, CANOPY, DRIVEWAYS, YELLOW LINES,
DRINKING WATER PUMPS, TOILETS, FORECOURTS, and PYLONS) are
not maintained, they should be maintained and cleaned.

 Satisfying and meeting the demand of the customers should be the first priority.

 Weekly Inspections must take place of the SOP Enabled retail pumps by the
inspection officers or sales officers, that whether the retail pumps are following
the guidelines of SOP or not.

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 REFERENCES

1. http://www.hindustanpetroleum.com/retailhome
2. http://en.wikipedia.org/wiki/Hindustan_Petroleum
3. http://www.extension.iastate.edu/foodsafety/toolkit/communication/OverviewofSOP
s.pdf
4. http://www.britannica.com/EBchecked/topic/1583440/standard-operating-
procedure-SOP
5. http://yourbusiness.azcentral.com/sop-retail-17046.html

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 ABBREVIATIONS

Important Abbreviations in Petro Retailing Sector in case of SOP:

• MS Motor Spirit
• HSD High Speed Diesel
• SKO Superior Kerosene Oil
• MDG Market Discipline Guidelines
• SOA Statement of Account
• BOS Back Office System
• POS Point of Sales
• FCC Forecourt Controller
• TVD Tagging Visual Display
• ATG Auto Tank Gauging
• OPT Outdoor Payment Terminal
• CO Controlling Office
• ATC Auto Tank Calibration
• Q&Q Quality & Quantity
• ALDS Auto LPG Dispensing Station
• WSC Wind Shield Cleaning
• FS Forecourt Salesman
• QCP Quick Care Point
• TT Tank Truck
• DSR Daily Sales Record/ Daily Stock Register
• VRS Vapor Recovery System
• HPVV High Pressure Vent Valve
• PCV Power Conditioning Unit
• TIN Trading Identification Number
• DSO District Supply Officer
• ASTM American Society for Testing and Materials
• ARB Allied Retail Business
• CCMS Central Cash Management System
• CPR Cardio Pulmonary Resuscitation
• W&M Weights & Measures
• EFT Electronic Fund Transfer
• MAG Mechanic Air Gauge
• FLP Gland Flame Proof Gland

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 • FSM Forecourt Sales Man
• AEGO Automotive Engine and Gear Oils
• MCB Miniature Circuit Breaking
• MPD Multi Product Dispenser
• PUC Pollution Under Control
• PESO Petroleum and Explosive Society Organization
• RVI Retail Visual Identity

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