Octane Systems Fuels Growth at Tasco Petroleum

Tasco Petroleum is one of the largest independent distributors of petroleum products within Australia. From its beginnings in 1956 in the Sunraysia region, the company has expanded up and down the length of the Murray River, creating a network of 43 service stations, six major wholesale depots, and four administrative centers. Its operations are found in three states and involve 25 trucks and more than 180 staff.

A different business model

Tasco's business model sees them not being aligned with a single oil company such as Caltex, BP, or Mobil. Tasco manages multiple contracts with multiple partners. This gives the company a larger degree of flexibility ensuring the resilience of supply. If a breakdown occurs at a particular refinery, for example, management knows there are usually supply options with one of its other partners.

At the local level, employees are essential to Tasco's strategy for growth. Although expansion may be fueled by acquisition, it is Tasco's commitment to employee retention that ensures the region is supported by a wealth of experience, as well as local knowledge.

Technology is another key element of the strategy as explained by Evan Newell, Retail Manager and IT Manager for Tasco. "I don't like sitting on the bleeding edge of technology, as I think that's foolish. But we do look to technology as a way of obtaining a competitive advantage to help us adapt to change and to put us in the best position going forward."

Replacing the ERP for business advantage

It was because of this desire to stay ahead that Tasco recently decided to replace its long-standing ERP [enterprise resource planning] system with a modern solution.

"We'd been using our existing ERP since 1996. It was an industry specialist product but it was based on older technology and had reached the stage where there was no particular roadmap for the future," Newell notes.

"We're a business that turns over significant amounts of product per year, so if we don't have a system that's adequately supported, we'd be in a fair bit of strife. Without a forward roadmap, we decided to look for something else," he adds.

The need for industry specialization

First and foremost, the company wanted a solution designed for the petroleum industry. "There are a lot of nuances that need to be carefully managed. We deal with a product that is highly susceptible to temperature change causing expansion and contraction,” Newell states. “We need the right tools to be able to manage that variation."

"We also have a lot of movement of product – so, potentially from the terminal to the truck, then to the depot and into a bulk tank, out of the tank to a truck, and from there to the service station tank, before finally ending up in the tank of a car. There are many opportunities for variation along the way. There are no off-the-shelf products that can deliver this. We work within a very specialized industry," Newell says.

Dealing with more than one supplier

Tasco's business model brought additional complications. Several of the ERP solutions that Newell evaluated were biased toward a particular oil company. Tasco currently interfaces with most major oil companies, and as growth continues, there may be a need to cater to more oil company systems in the future.

Other considerations included the user interface and support. "Many of our depot staff would rather drive a truck than drive a computer, so ease of use was important. But support was the most important part of all. We were about to invest a lot of money in getting the right system, so we wanted to make sure firstly that the company we were investing in was stable, and secondly, that they had a support network capable of servicing our needs."

A critical evaluation

With strict criteria laid down, the search for a solution took the best part of two years. After an exhaustive review of the options, including meetings with users and onsite demonstrations, an Octane ERP solution was chosen as the best fit for the company's needs.

The comprehensive system offered functionality to support all aspects of Tasco's business including fuel distribution; fuel card transaction management; logistics such as on-board truck systems, dispatching and order fulfillment; inventory control; retail systems; accounts and financials integration; fuel tax management and more.

Delivered on budget

Implementation was carried out during the first half of 2013, ready for the switch-over to Octane in July. During this time, Tasco took the opportunity to review its processes, finding ways to use the Octane system to become more efficient.

"We found some real savings through streamlining systems and creating new interfaces to systems," Newell states. "Before we went live, I insisted the system had to be in full working order. Octane dedicated a lot of time for us, and I can't fault their dedication to getting it right," Newell says. "Also, one of the most important parts of the project was that it was all done within budget."

Staff adapted quickly to the change. Some initial training was provided in preparation, but thanks to extensive testing prior to going live, intuitive navigation, and the clarity of the system's user interface, it was a relatively smooth transition. "From a user perspective, I think Octane has been a huge improvement for us," Newell acknowledges.

The IT team is also benefiting from the change. The adoption of an SQL-based solution has given Tasco an ERP that is easier to manage, ensuring a more robust solution than the company's previous system.

Managing fine margins

Newell says Octane has provided Tasco with visibility into all corners of the business. "Octane's reporting is a big one for us. The petroleum industry is high volume, low margin. We work on relatively fine margins and need to account for every liter and every dollar, every day, within our business. Unless you are monitoring this very closely, you may end up going backward at a rapid rate."

Business growth

The scalability and flexibility of the new ERP were tested in early 2014 when the company acquired a South Australian-based BP distributorship encompassing several service stations, depots, and administration centers.

"This was just seven months after going live with Octane and the timeframe to get this up and running on the system was exceptionally tight. I think we officially gave Octane six weeks' notice of the need to go live. We had to get staff, systems, and interfaces organized in that time. It was phenomenal the way we were able to work together and get it done. I'm not sure if there are any other systems within the fuel industry that would have this level of support or the amount of expertise to achieve this in such a short time," Newell asserts.

Looking to the future

With the deployment of Octane, Tasco now has an ERP platform that is continually being enhanced to meet industry needs and to make the most of emerging technologies.

"I like their roadmap," Newell says. "It's comforting to know that they are coming up with new initiatives and ideas. The oil industry is constantly changing, and by going with this system, we have the ability to sit on the edge of that change. We now have the ability to adapt and to take advantage of new opportunities," Newell concludes.

"Many of our depot staff would rather drive a truck than drive a computer, so ease of use was important. But support was the most important part of all."

Evan Newell - Retail & IT Manager

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