Case Study
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Headline:
Cadec Helps David Buy Goliath
Subhead:
A Houston crude oil supplier signs a "marriage contract" with Cadec to
develop an information system to respond to the needs of the oilfield
market... then buys out a multi-state operation twice its size.
In 1990, the Scurlock Oil Company had 400 truck operators/drivers
and a fleet of 190 vehicles. It purchased and gathered crude oil in and
around Texas and Louisiana. The Permian Corporation, another oil
purchaser and gathering company, was a giant in the business. Twice
the size of Scurlock, it had 1,100 employees, a tractor-trailer fleet of
550 vehicles and a strong presence in 15 oil states.
In July of 1991, Ashland Oil, the parent of the Scurlock Oil Company,
announced that it had bought The Permian Corporation.
How did David manage to buy Goliath?
The answer, at least in part, is the Cadec vehicle information system,
which was installed on Scurlock's fleet. ''The Cadec information
helped us to assess the challenges, risks, and costs associated with
acquiring The Permian Corporation," said Duane Gilliam, president of
what is now the Scurlock Permian Corporation (SPC). "It helped us to
arrive at what was a realistic bid... Without Cadec, it would have taken
a veritable army of people countless hours to record, gather, process,
manage and utilize the data."
…
Rugged Computers, for a Start
In the first stage of the relationship, Scurlock used the Cadec product
because it provided Scurlock with immediate, tangible benefits. For
example, trucks that deliver crude oil have to withstand nearly
constant vibration, relentless travel on dirt and limestone roads,
blistering heat, and freezing cold. So too, do their onboard computers.
Cadec's rugged OBCs not only passed the durability test, they
provided data that helped identify inefficient patterns of vehicle
operation. Scurlock took this information and implemented a more
decentralized dispatching system. Further. Scurlock's administrative
team found that the Cadec systems improved productivity and
response time and cut company costs.
It was not much longer before Scurlock had installed Cadec onboard
computers on its entire fleet.
SPC Defines a Need, Cadec Provides a solution
After installation, Cadec continued working closely with Scurlock
Permian personnel. In this, the second stage of their relationship,
Cadec focused on meeting the needs and solving the problems of its
customer. SPC requested reports and software uniquely suited to its
needs as a crude oil gatherer. Cadec responded by developing the Oil
Field Manager.
Scurlock Permian uses the Oil Field Manager to automate the tracking
of DOT hours of service in its fleet. The Oil Field Manager works as a
comprehensive electronic log, eliminating manual logkeeping and
improving log accuracy. Its onboard computer messages use oil field
terminology so that SPC drivers enter information specific to the
crude oil gathering business. Such terminology includes "lease,"
"ticket," "tank," "reject IDs," “split loads,” and so on.
In other words, the Oil Field Manager speaks the language of the oil
field business.
"Using (Cadec's Oil Field Manager) taught both truck operators and
our field people more about our business so we could plan for and
take advantage of synergies," said Gilliam.
George Coiner, Scurlock Permian's controller and vice president of
administration, is especially keen on the use of Cadec and the Oil Field
Manager to improve customer service. "Cadec gives us information
about each current and prospective customer so we more clearly
understand what it will require to service that customer. Using the
Cadec data, we are better able to bid a job, to track our performance,
and to audit our efficiency," Coiner said.
…
The Last Word
"I believe use of the Cadec system has given Scurlock Permian a
competitive edge," Gilliam concluded. "Even some of our customers
have paid attention to the positive changes that have resulted from our
use of the Cadec onboard computers, and have followed suit in their
use of the Cadec product."
Greg Joyce
Writer in the House
email joyce at writerinthehouse dot com