Business Process Management - Gas Station Case study

In the past 3 years we have seen in Portugal exponential growth of retail business at gas stations.

Although the concept is not new, it started 20 years ago in A1 highway, SONAE together with  GALP were responsible for the growth of this business concept.

Some stores even have become small coffee shops, where customers stop to drink coffee and read the newspaper headlines.

The main problem is the difficulty in serving customers, especially at peak times, mainly early morning, when people stop to fill up the car and some drink an espresso and buy a newspaper.

There are not enough people to meet payment requests and to serve coffee, and sometimes all the people available are serving coffee and no one is receiving the payments, or vice versa. In order to be served inside the store you need to pay everything simultaneously. You cannot pay fuel first and coffee latter (is this a process constraint?).

Business impact.

• First, fuel sales decrease (a huge loss) once cycle time is to high (more than 10 minutes sometimes). Outside there are cars parked near the fuel pumps waiting to fill the tank, discouraging other customers to enter. If a customer approaches the gas station and verify that all fuel pumps are busy and there are more customers waiting, they will look for the next one.
• Customers get mad for the bad service experience. During the busiest period people want to arrive on time to start working or start the trip quickly.

Solutions:

• Set the number of human resources necessary to process requests. Use queueing theory and Markovian simulation models.
• Business rules for human resource allocation: when there is a sudden increase of payment transactions or coffee delivery, there should be a rule to resource levelling avoiding congestion.
• Finally, something not related with resources: newspaper location. I think the business that Sonae masters (it’s the leader of retail business in Portugal) misleads the process architect. Typically when you enter the supermarket things like milk, rice, are located opposite the aisle entrance to force the consumer walk through the store and buy other products such as Corn Flakes. Inside a gas station shop, causes the client to take longer to reach the place to pay. Sometimes customers that end filling the car after you reach the payment station first (you will wait more 2 minutes). Clearly, the best place to display the newspapers is close to the cash register. Forget chocolates full of dust (what a KPI!) no one buys. It makes much more sense.