Posted in Operations & IT Articles, Total Reads: 2400
, Published on 31 July 2013
Every time the price of petrol or diesel rises, we became concerned about the lesser quantity we will get in our next fuelling. About 70% of the oil consumed in India is imported from 8 different countries. Currently, there are no strategic oil reserves in the country. Thus, turbulence in international price of crude oil influences the fuel prices in the country in the same fashion. Currently, Oil Marketing Companies update fuel prices in every 15 days in response to the price change in international market. This time period is planned to be reduced to just one day.
I spent 2 months as an intern with Bharat Petroleum Corporation Limited in Delhi territory. Retail outlets (ROs) are the most vital part of distribution network for any Oil Marketing Company. BPCL has 105 retail outlets and holds about 29% of market share in Delhi. To improve sales, company has taken a lot of initiatives. Company runs Pure for Sure programme, to win over customers with an assurance on the quality and quantity of fuel and lubricants sold at its outlets.
Image Courtesy: freedigitalphotos.net
There is another initiative known as Pure for Sure Platinum, and pumps certified under this programme offers many more value added services to the customers. Company has invested in tamper proof tankers and dispensing devices, installing CCTV cameras, fitting Vehicle Tracking System in tank lorries to track the path and check for any unauthorized stoppage, providing 24x7 service to the customers, installing Automated Fuel Transfer (AFT) system that generates e-bills at retail outlets.
My role also involved interacting with customers and analyzing the response of customers towards a better fuel and services that can delight them. Customers had apprehensions about short-selling and adulteration in fuel. Also, customer’s awareness level about branded fuels like Speed, XtraPremium, etc. and their respective parent companies was very low. In order to bring in transparency and put a check on any mal practices that may prevail at a retail outlet, company has already initiated Pure for Sure programme, Pure for Sure Platinum programme, Automation, etc. But, the customer’s awareness level about these initiatives was very low. Another challenge before the company was to market their initiatives and show to the customer that there is transparency in the system in order to win their trust so as to make them purchase repetitively from their outlets.
Solution- Automation System
In order to curb the malpractice of short selling, adulteration or stealing during decantation at RO, all fuel storage tanks and dispensing nozzles have been connected to centralized monitoring system. Automation System keeps track of product received and product sold at retail outlet. Product received at the RO should be same as product dispatched from the oil depots. And same amount of product should be sold. Since there is no manual intervention, quantity received and quantity sold must remain in sync and thus short selling and stealing of product by tank lorry contractor or retail outlet dealer is checked. It also provides density details hence adulteration is also checked. Automation system helps in providing the real time statistics about the product. BPC has leveraged IT to bring in transparency in all the transactions happening at RO.
Automation System includes the following facilities:
1)Auto Tank Gauging: Every underground tank is connected to an automated gauge, which reads the quantity decanted into the tank. This automated gauge is connected to the automated system, thus ensuring the right quantity and density of the product received at RO via tankers.
2)Multi Product Dispensers: MPDs installed at bays are connected to automated system which keeps track of quantity released from each and every nozzle.
3) E-Billing: With every transaction, customer gets automated bill generated by the system mandatorily. E-bill shows name of retail outlet, transaction time stamp at which fuel was filled, volume in litres, nozzle number, total bill amount, vehicle number and tax identification number.
4) Driveway Sales Man’s tag: DSMs before filling fuel has to swipe a RFID tag. This swiping will set the fuel meter counter to zero. Without swiping product will not get dispensed.
5) Vehicle Identification System: In this system, a RFID tag is pasted on vehicle and details like name of customer, vehicle registration number, product preference, default amount/ quantity is stored in automated system. During every visit, customer will get his set preference of fuel of prescribed quantity or amount. Customers under VIS system, gets billing details through SMS.
6) Close Circuit Vigilance Cameras: CCTVs are installed at 4 crucial locations at retail outlets to keep the operations at pump under vigilance. DSMs are trained to perform certain practices to delight customer like wishing the customer, wiping the windscreen, showing zero at counter before starting fuelling, etc. These activities are continuously monitored using CCTVs to provide delight to customers in every fuelling.
Automation has different levels too. Highest standards are maintained by not letting the pump operate if automation system is down. But again the call depends on the business impact. High product selling RO cannot be allowed to shut down for even 10 minutes. Loss may be in crores.
There are different levels of automation. These are:
1) No Paper No Dispensing (NPND): This is the highest level of automation. There will be no dispensing of the product from nozzle, if billing paper is not available or exhausted at Multi Product Dispenser (nozzle). This facility is in addendum to NANO.
2) No Automation No Operation (NANO): Automation system on these ROs will stop all operations; receiving and dispensing if there comes any glitch in the automation system.
3) Manual mode: In case any technical glitch occurs in the automated system, operations can be continued till the system is restored. Issue on the utmost priority is brought to higher authorities.
4) No Automation: Installing an automation system requires investment of ` 15-20 lakhs. Retail outlets having sales less than 200KL per month are not provided with automation system, since returns on these ROs are not enough to recover the fixed and operating cost profitably.
As of now around 82% retail outlets of BPC in Delhi are NANO automated, most of them even having NPND. Around 8% are automated which can be switched to manual mode if needed. Rest do not have any automation because of the profitability issues.
Automated Systems at all the ROs are then connected to the central system, which monitors sales across entire country. It is also monitored at regional level.
Customer buys petrol or diesel without physically checking the product. Hence it’s very important to win trust of customer and make him believe that he is getting right quality and quantity. By bringing in the automation BPC has brought transparency in fuel dispensing and tried to curb any malpractice at its retail outlets.
All these automation techniques have now become easily available to all three OMCs, hence quality and quantity worries of the customers have been addressed to a larger extent.
In oil marketing industry, all companies are selling almost same products at same prices. The only way to create distinction is by providing better customer service and win customer’s trust. Due to continuous monitoring through CCTVs each DSMs way of serving the customer is monitored. Thus, service standards have been improved drastically. Automation has come as a breakthrough to improve satisfaction level of its customers which can be eventually converted to larger sales.
This article has been authored by Tushar Sharma from TAPMI, Manipal