The Shape Of Things To Come
BP lift bitumen industry standards to new heights
Since the dawn of the PC revolution, technology experts have been predicting that paperless offices will soon be as common as paperclips.
The benefits to customers of electronic information exchange throughout the supply chain, including the ability to receive electronic invoices from suppliers directly into their accounting systems, have long been clearly understood, although the quest for a seamless electronic trading environment, particularly within the construction products industry, is far from over.
The development of the exchange of electronic information within the UK construction business is still restricted by the apprehensive nature of the industry concerning e-billing. Major culture changes are cited as the main reason for the lack of e-billing integration into the industry — a mindset that has been slow to change since the 'dotcom' fever of five years ago.
According to industry analyst reports, however, the demand for such a service is immense and global and attitudes are changing. Every year in the UK billions of invoices are transferred between customers and suppliers. Each invoice must be manually keyed into a company's accounting system, paid and then stored for several years.
Client expectations are also beginning to change and e-billing solutions, however mistrusted, can streamline and offer significantly reduced costs. In the case of the supply of bitumen, which is a strategic matter for clients, the fundamental requirements are quality, good service, price and reliability. Customers are attaching more importance in contracts to supplier reliability and to service generally, meaning that the ability to directly link information between the back-office systems, for example, is fast becoming a commercial and practical commitment.
BP Bitumen have strengthened their own commitment to improving the overall performance of the UK asphalt industry by becoming the first UK bitumen supplier and the first company within BP to connect with their customers via the Causeway Tradex electronic trading service — an online electronic platform for the exchange of invoices and other trading documents. By exchanging and storing documents electronically, BP Bitumen, who were selected to trial Tradex by their largest customer, Aggregate Industries, will significantly reduce administrative costs and the time spent tracking documents and handling queries.
‘Electronic trading is a medium for adding value to the relationships that we enjoy with our customers,’ said BP Bitumen’s global business development manager, Gareth Evans. ‘Through the elimination of time-consuming manual processes, we become more responsive by providing faster access to supply chain information. Our ultimate aim is to increasingly deliver a higher-quality service to our customers and we are committed to reducing costs and focusing on innovative ways of improving customer relationships.
‘This initiative has brought together a number of key factors that help achieve these benefits, including a reduction in the cost of administration and the time required to handle documents, and greater transaction reliability thanks to a more efficient audit trail. For BP, this is about moving away from the old supplier/customer relationship. Our aim is to become more closely associated with customers and to be their partners in the future.’
A drastic reduction in the inefficiencies inherent in paper-based trading is certainly an incentive for all suppliers of construction products to harness this type of genuine low-cost alternative to the daily office paperchase. For most companies today, particularly in the bitumen industry, B2B transactions start and end with the purchase order — with billing and payment still largely done the old-fashioned way, on paper. Causeway Tradex, however, integrates?with back-office systems used by supply chain partners and is designed to speed up and cut the cost of document processing, eliminating the need for paper-based document handling and manual re-keying and covering all important business documents including invoices, purchase orders and goods-received notes.
But as with many e-billing applications, it is the purchasers of goods and services, rather than the suppliers, that are driving adoption, although simply seeing an invoice electronically rather than on paper does not save customers’ money. The real payoff comes when companies can use their supply chain management systems to reconcile the invoice with purchase orders and delivery records, and net out what they owe without anyone having to re-key data or pick up the phone to address queries.
Bitumen suppliers are learning that technology is the best way to achieve their ultimate goals: elevating customer service, lowering costs and preparing for a future in which competition and consolidation are expected and e-billing creates both opportunities and challenges to keep up.
The technological metamorphosis of the bitumen industry from a relative IT backwater to one where technology plays a central role is indicative of the seismic shift occurring in this industry. But modernizing back-office systems to participate in the Internet age is only part of the story.
The supply of asphalt to road-building projects in the UK is already benefiting from greater flexibility, increased certainty of supply and quicker speed of response thanks to an initiative by BP Bitumen to improve the HSE performance and processing efficiency of a number of strategic asphalt manufacturing plants. The modernization work, which includes the construction of new 150m3 storage tanks and the use of Internet-based remote stock monitoring (RSM), has been successfully implemented at five key asphalt manufacturing plants in the UK with another five scheduled to undergo similar improvements over the next year.
BP Bitumen, who are also the first bitumen supplier in the UK to use RSM, have invested in a new fleet of higher-capacity road tankers. For the end-user, the surfacing contractor, it means guaranteed supply, on time and in full, greatly reducing the risk of so-called ‘stock-out’, when a site simply runs out of product causing projects to run into overtime, which is both costly for the contractor and, in the case of maintenance projects, a major inconvenience for the road user.
The asphalt industry produces more than 26 million tonnes of asphalt every year. Bitumen manufacturers operate in an extremely competitive environment and, in order to ensure success, they have to match unrivalled customer service with manufacturing excellence. It is a fine balance but BP Bitumen’s supply and logistics manager, Peter Clement, said: ‘The work we are doing to increase HSE performance and process efficiency will help our customers remain competitive in their own markets.’
Some of the new high-capacity storage tanks purchased by BP utilize a transfer system that automatically fills existing smaller working tanks when their contents reach pre-described levels. The tanks are also fitted with Siemens’ telemetry system Levelwatch, which allows remote monitoring of the contents of each tank via the Internet. ‘This allows us to plan delivery requirements more efficiently, rather than relying on ‘just-in-time’ telephone orders, which place unwanted pressure on scheduling,’ said Mr Clement.
Levelwatch, which is linked either via a cellular or landline telecommunications device fitted at the site, is fully integrated so that the customer, BP Bitumen and their logistics supplier, Exel, are linked in a communication network. The levels of tanks, some of which are monitored by a non-contact radar device, allow Exel to maintain a 24/7 ‘Levelwatch’.
The sites modernized so far include Aggregate Industries asphalt plants in Leicestershire and Peterborough, Hanson asphalt plants in Builth Wells and Penderyn in Wales, and Foster Yeoman’s Purfleet plant in Essex, one of the largest in the UK.
‘This is about setting new standards and we have worked hard to establish a benchmark in HSE performance with the bitumen industry,’ said Peter Clement. ‘We are delivering real benefits that go beyond financials, including environmental performance, safety, process efficiency and customer satisfaction.’
BP Bitumen, Technical Building, Llandarcy, Neath SA10 6JQ; tel: (01792) 322772; fax: (01792) 322786; email: enquiries@ bpbitumen.co.uk
