Caltex

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Caltex pumps up service stations with Global Retail Automation Retail Network

As a company, Caltex has strived to build relationships with its customers and strive to understand their needs. This means providing not only fuels and other energy products but also food, beverages and other everyday supplies and services.

Caltex was formed in 1936 based on a sealed partnership between Chevron Corporation and Texaco, Inc. From the U.S. and expanding across the Asia Pacific, Middle East, and Africa, Caltex has grown tremendously and now operates in more than 60 countries across these regions.

In 1999, Caltex moved its operating regional headquarters to Singapore from the US and shifted operations from a geographic to a functional organization in order to meet the challenges of the 21st century.

When parent companies Chevron and Texaco merged in 2001, the merged company, ChevronTexaco, became the fourth largest energy company in the world. With that merger, Caltex is now part of a global energy company with Chevron, Texaco, Caltex and Caltex "Starmart" remaining its flagship brands.

Customer - The driving force

The Caltex Star logo stands for quality, value, service, and commitment to treat customers as individuals and not as numbers. These principles have become a foundation for Caltex to constantly improve its service stations

Aside from Caltex VortexTM fuels (Silver, Gold and Platinum), its other brands include Caltex Havoline, Delo and Revtex quality motor oils. The Star Marts are Caltex's convenience stores, which can be found alongside many Caltex stations, providing a broad range of foods, beverages, home products and everyday items.

The driving force behind all its efforts in building the Caltex stations is the customer. A service station must look attractive to customers from the street and therefore are designed to give them what they want quickly and efficiently. Accessibility is a priority. Customers want to be able to drive in, fuel up and drive out effortlessly. As a result, close attention is paid to station traffic flow.

Staying abreast of what customers want is a continuous job. Many old Caltex stations have been re-imaged and rebuilt continuously - all in an effort to stay up-to-date and in touch with the customer.

Global retail automation

As part of its effort to provide excellent customer service, selected Caltex, Chevron and Texaco service stations in New Zealand, Malaysia, the Philippines, and the United States are borrowing technology from grocery and department stores and are getting new Fujitsu touch-screen point-of-sale (POS) systems, the first pieces of the Global Retail Automation Network (RAN) Project -- a multi-year $300 million effort to help the mother company, ChevronTexaco, to better integrate its global network of retail service stations, standardize technology, and lower overall costs.

According to Mary Lou Starkweather, team leader for Global Point of Sale, at the time of the merger, Caltex and ChevronTexaco were implementing their own retail automation projects, working with more than 20 point-of-sale suppliers.

The company signed a global agreement with a single supplier, Fujitsu, covering all point of sale (POS) hardware, bringing the total number of suppliers to three, including two software suppliers.

The deal with Fujitsu has helped Caltex to reduce the number of suppliers to save money through bulk purchases and easier support, said Paul Redden, RAN project manager. "We'll also be able to share best practices globally and have functionality the old systems can't offer."

"This is a major step-out for us," added Bill Braun, Marketing Systems manager from Asia/Middle East/Africa (AMEA) Products. "We have traditionally relied on the fuel dispenser companies, or 'total solutions providers,' to provide our POS systems, including the POS hardware. As most of these systems run on computer-based platforms, choosing a best-of-breed hardware solution allows us to support our legacy applications, and it acts as a stepping stone to next-generation touch-screen systems that can use the same hardware."

That "functionality" would translate to new products and better ways to operate service stations and convenience stores. These include:

• Sales information from the point of sale to the new head office sales and inventory tracking systems;
• Touch-screen functionality, which is easier for training and use than traditional 'key-based' systems;
• Menus with pictures of products on the screen (such as bakery and other items that can't be scanned) that can change during the day when offers to customers change (donuts in the morning, sandwiches at lunch);
• A highly reliable "Retail Hardened" computer that has been specifically engineered to withstand the requirements of store operation;
• Remote support capabilities, so support staff can monitor and assist quickly with a problem or training issue and can troubleshoot without having to wait for a technician to get onsite;
• Highly field-serviceable computers for which replacement parts can be swapped in quickly to get the store back up and running.

Other than the POS systems, product scanning, pay-at-the-pump, and fuel controls, the Global RAN project also includes two other important components: back-office systems and global connectivity.

Among the functions of the back-office systems are:

• Managing sales effectiveness;
• Making recommendations on product assortment and pricing;
• Efficient ordering to minimize inventory and "stock-outs;"
• Calculating profit margin; and
• Providing franchise support programs.

Global connectivity through satellite or telephone networks allows the company to link the back office with service stations, suppliers, and financial institutions. Sourcing agreements for the back-office and connectivity components are in various stages of the ChevronTexaco Project Development and Execution Process (CPDEP).

Of ChevronTexaco's 25,000 stations worldwide, 19,000 already have some type of POS system. Of those, 12,000 will be replaced over the next five to seven years as part of the project. More than 1,000 Fujitsu units have already been installed.

But because not all service stations need or can afford satellite connections or the powerful computer-based POS systems, project planners are also developing simpler retail automation solutions for stations that don't have reliable electricity or might not even have a cash register yet.

Each service station will fit into a "sophistication ladder," from the "cigar box" station -- that only accepts cash -- to the fully automated, satellite-connected station. As a station's volumes grow or its needs change, the station owners or operators will be able to move up the ladder with the addition of cost-effective technology and employee training.

"This project is about getting global standards across the three brands, identifying best practices and finding what makes sense in different areas," stressed Redden. "That means not just thinking about fancy, high-end solutions but also looking at how we can help low-volume or remote stations as well. We're only just beginning."

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