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Equilon Lubricants Boosts Business by Deploying Microsoft Supplier Enablement Solution in Less Than 45 Days to Automate Trade

Equilon Lubricants is a major supplier of motor oils, coolants, and other petroleum-based products to both retail outlet and major industrial customers.

To meet the demands of its large buyers and to experience significant operational cost savings, Equilon Lubricants deployed the Microsoft® Supplier Enablement Solution on top of its existing IT infrastructure in only six weeks to create a robust, flexible, and cost-effective sell-side connectivity solution. The solution provides Equilon Lubricants with open connectivity to numerous types of customer
e-procurement systems and e-marketplaces, and also provides a rich, 24x7 customer self-service capability that streamlines internal processes while reducing operational costs.

Company Overview

Equilon Enterprises has the brand power of not one but two well-known industry names standing behind it. A joint venture of Shell Oil Company and Texaco Inc., Equilon refines and markets gasoline and other petroleum products through more than 9,000 Shell and Texaco retail outlets in 31 western states. Based in Houston, the company operates four refineries, 65 petroleum terminals, and more than 29,000 miles of pipeline through North America.

One of Equilon’s six business units, Equilon Lubricants, sells products such as motor oils, coolants, antifreeze, heavy-duty engine oil, aviation oil and greases, and lubricant base oils. In addition to marketing its products through its large chain of retailers, Equilon Lubricants also sells directly to major corporate customers such as General Motors and Schlumberger, the world’s leading supplier of services and solutions to the petroleum industry.

Situation Equilon Lubricants needs to communicate quickly and efficiently with its large industrial customers. The company has an established EDI system that it has used for a number of years to communicate with these large clients. However, Equilon Lubricants saw the burgeoning use of the Internet for B2B commerce and recognised a need to create an online B2B trading system that would increase customer satisfaction-and potential profits-through enhanced sell-side capabilities while reducing operational costs significantly with streamlined internal operations.

“When we started looking at how to enrich services offered to customers via the Internet, one of the first things we recognised was the need to have an electronic catalog and to integrate our business systems with both customers and with the emerging e-marketplaces,” says Larry Koenig, director of e-business for Equilon Lubricants. “We needed a system that was flexible, cost-effective, yet very dynamic so that we could provide text information as well as pictures on all of our products, update information regularly, support a variety of catalogs that could be customized to fit the needs of specific large customers, and ultimately integrate our systems with those of our customers who are automating their procurement processes.”

For example, Koenig says, most e-catalog solutions that his team examined were based on the “publish” model that pushed information out to customers, which he says is only effective for static data. “Our products can be very heavy-a drum of motor oil weighs more than 400 pounds-so prices can vary a lot depending on delivery distance, freight rates, the distributor that is being used, and so forth,” he says. “We had to implement an effective Web-based e-commerce system that could enable dynamic catalogs, multichannel trading, and integration with back-end systems. It also needed to help us integrate with the online e-marketplaces that our large customers are starting to use to order products.”

Solution

Equilon already had knowledge of the Internet-based technologies offered by Microsoft; one of Equilon Lubricants’ sister companies was already successfully using Microsoft Commerce Server 2000. That led Equilon Lubricants to seek out a total solution for Internet-based e-commerce. Working with technology consulting partner Capgemini as well as Microsoft Consulting Services (MCS), Equilon Lubricants found what it was looking for in the Microsoft Supplier Enablement Solution.

Like most suppliers, Equilon Lubricants has limited internal IT resources. Yet in a period of less than six weeks, Capgemini, MCS, and Koenig’s team designed a flexible, powerful, and extensible infrastructure using Microsoft Supplier Enablement Solution components that include Windows 2000 Advanced Server, Microsoft SQL Server 2000, Microsoft Commerce Server 2000, Commerce Server 2000, Microsoft BizTalk Server 2000, and Microsoft BizTalk Accelerator for Suppliers.

Capgemini began the rapidly implemented project by working with Equilon Lubricants to identify the core business processes that would let the company achieve its goal of greater customer satisfaction, increased sales, and better internal processes in the fastest time possible. Capgemini delivered a proof of concept that validated the solution’s ability to handle the complex pricing rules that typically were handled by SAP. Upon acceptance of the prototype, Capgemini started on the production application. This included a workshop with Equilon Lubricants to develop business and technology goals, and ultimately a strategy for rapidly rolling out a B2B site using iterative development. To meet the customer’s requested timeframe, Capgemini worked with MCS on an accelerated development schedule that included parallel development efforts and use of Supplier Enablement Solution functionality to help manage elements of Equilon Lubricants’ system.

Business Benefits

Once the implementation was completed, Equilon was quickly able to begin doing business with its customers via the Internet. More importantly, Equilon has a flexible solution in place that enables it to connect to hundreds of e-marketplaces and thousands of e-procurement sites without any further investment in IT infrastructure. As the company continues to grow, Equilon can easily and cost-effectively add additional supply chain and customer relationship management functionality.

By implementing the Microsoft Supplier Enablement Soution, Equilon Lubricants has been able to retain large corporate customers who require integration with their
e-procurement systems. It is also opening channels to other customers and potential customers who want the speed, convenience, and flexibility of online ordering and
e-marketplaces. The solution, which also provides added layes of security with the use of digital signatures, is allowing Equilon Lubricants to integrate its business transactions with an existing SAP system on the backend, cutting order-entry times by more than 50 percent. Company managers are also expecting the automation to save Equilon Lubricants about 10-15 percent in savings over the cost of using the phone to complete transactions.

“One of the real benefits of the Microsoft Supplier Enablement Solution is that all the components are already there-all we had to do was to piece them together to Web-enable our existing IT environment into an open, standards-based system,” says Tim Savoie, project manager for Equilon Lubricants. Savoie says an important element to the company’s situation was finding a means of taking the complex pricing issues and business rules of Equilon Lubricants’ product line and creating a means for translating orders taken from the Ariba marketplace to Equilon’s SAP system, including its iDOCs, the SAP messaging format. The kind of customization required for this “punchout” system could only be achieved by using the Supplier Enablement framework.

“Doing that manually could take a long time, but the extensible technology provided by the Microsoft Supplier Enablement Solution allowed us to create a framework that makes it both possible and relatively easy,” Savoie says, adding that it will make it much easier in the future to add new partners. “Now that we have the framework established, we know what a customer’s order needs to look like before it goes into our system. All we need to do to set up a new customer is to look at the kind of system they have and then map that to the technologies we have using BizTalk. In the past, that process could take a week or more, but now it only takes one or two days, which is a great time and cost savings for us and a great incentive for potential customers.” Retaining Customers with Effective Online Ordering

Savoie says that one of the hurdles Equilon Lubricants had to consider was the actual construction of the infrastructure of the new online catalog system.

“Being able to build this system and put it into a production environment from a single set of Pentium-based machines was key to the rapid deployment and success of the project,” he says. “A big part of this success was due to Supplier Enablement and the tools it provides for designing, testing, and deploying a secure
e-commerce Web site.” Koenig says that while it is still early to make Return on Investment (ROI) projections for the new system, he believes it will bolster the company’s bottom line by saving money over traditional phone orders and by attracting new customers.

“We are excited to be able to receive orders electronically and integrate them with our ERP [Enterprise Resource Planning] system,” he says. “This is a huge advancement from previous paper-based order receiving methods. It will not only increase the number of orders from our existing buyers, but the quality of the orders will be better, enabling us to provide better customer service for a lower cost. Using the Microsoft Supplier Enablement Solution, we’ve deployed a flexible online catalog that can electronically trade with almost any buyer, both existing and new. We are in a unique position to offer our customers a value-added business relationship that can put us a step ahead of our competitors.”

Microsoft Supplier Enablement Solutions are built on the Microsoft .NET Enterprise Servers-a comprehensive family of server applications designed to deliver rapid time-to-market combined with the mission-critical performance, reliability, scalability, and manageability needed by today’s global, Web-enabled enterprise. Built for interoperability from the ground up, .NET Enterprise Servers use open Web standards such as www.microsoft.com/business/supplier

Capgemini is one of the largest management and IT consulting firms in the world. The company offers management and IT consulting services, systems integration, and technology development, design, and outsourcing capabilities on a global scale. Capgemini offers high-value, fast time-to-market solutions to suppliers based on the Microsoft platform at the global Microsoft Advanced Development Centers (ADC). These centers are physically designed and engineered to provide a significant advantage towards serving high-growth, mid-market suppliers most effectively. They include ergonomically designed work centers, easily configured team workspace, high-tech conference rooms, training facilities, and large-group review space. Proven e-business solutions on the Microsoft platform at the ADC include, The Supplier Enablement Solution, the e-Procurement B2B solutions, Knowledge Management, and B2B Collaborative solutions. All of these solutions use an approach that accelerates all phases of solution development-from visioning and definition through building, testing, and implementation-by working concurrently in high-performance, cross-functional teams that are controlled by a rigorous project management process. For more information, please visit: http://www.capgemini.com/.

For More Information For more information about Microsoft products or services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada information Centre at (800) 563-9048. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information via the World Wide Web, go to: http://www.microsoft.com/

For more information on Equilon Enterprises, call 1-800-633-4935 or visit their web site at: http://www.equilon.com/