R dspo%d!% f *o Comp# dx M 9rk d* D dm 9%ds !% R d* 9!# Pilot Travel Centers Case Study \x7 Pilot Travel Centers Case Study ORganizatiOnal PRO\x9ile Founded in 1958, Pilot Travel Centers LLC is the largest interstate travel center operation in the nation, employing 14,000 people. With annual revenues o2 $7 billion, the company sells nearly 15 percent o2 all over-the-road diesel 2uel sold in the United States and expects to sell 3.6 billion gallons o2 petroleum this year. The Knoxville, Tenn.-based organization operates 262 2acilities in 40 states, including travel centers and 12 leading brands o2 owner-operated 2ast 2ood 2ranchises, and is the regional operator o2 50 convenience stores in Tennessee and Virginia.
Pilot has garnered national recognition including: one o2 the 50 Most In uential Franchises in the World according to Nation 9s Restaurant News; 25th largest restaurant 2ranchise in the country by Restaurant Finance Monitor; 69th in Forbes 9 Top 500 Privately Held Companies in America. i%* d fr 9*!o% S*r d 9m#!% ds Op dr 9*!o%s, Dr!v ds Do-% Cos*s 9%d e%h 9%c ds D dc!s!o% M 9k!% f \x8 Pilot Travel Centers Case Study CHallengeS anD OPPORtUnitieS On the road to expansion since ... more. less.
its 2ounding, Pilot has more than doubled in size since 2000. It added 92 travel centers in a 2001 merger with Marathon Ashland Petroleum and bought 52 retail travel centers 2rom Williams Travel Centers, Inc.<br><br> in 2003. This accelerated growth makes the need 2or improved work ow and increased productivity more important than ever. \x9u d#!% f i% d efc! d%c! ds As the number one diesel provider in the United States, pricing in a market with tight operating margins is top priority.<br><br> Pilot 9s disparate fnancial systems weren 9t inter2aced with 2uel-specifc applications, which made it di2fcult to access key pricing in2ormation. Volatile 2uel prices make it imperative 2or managers to have sales and competitive in2ormation at their fngertips. cThe margin 2or 2uel isn 9t that great, d says David DePrimo, manager o2 corporate systems at Pilot Travel Centers.<br><br> cI2 there are spikes in prices, we need to get that in2ormation out right away or risk losing business. d This crucial task requires a reporting solution that enables them to disseminate timely pricing in2ormation to its many locations 24 hours a day. l 9bor!ous Hum 9% R dsourc d Proc dss ds Pilot 9s human resources and payroll 2unctions ran on three disparate legacy systems with di22erent databases, resulting in signifcant limitations: numerous paper-based processes, tedious manual tasks, time-consuming administrative e22orts and inaccurate in2ormation. These systems also required heavy technical support, making it di2fcult to manage, review, track and maintain data.<br><br> To drive down costs, the organization clearly needs an HR solution that maximizes work2orce e2fciencies. cYou need an automated system to compete because the more people it takes you to process the data, the more overhead it takes. d RealizeD ValUe \x9ROM lawSOn Retail SOlUtiOnS In the early 1990s, Pilot Travel Centers was operating on a mid-range computer system that was not integrated with other applications and lacked the robustness to support an expanding company. A2ter evaluating organization-wide solutions that could streamline its operations and automate business processes, Pilot chose Lawson".<br><br> cLawson was the only one that had a complete package 2or us, d says DePrimo. cWe also needed something that could run on UNIX. Lawson had the most coste22ective system at the time and it appeared to be the best system to grow with our needs. d In November 1992, Pilot implemented Lawson Financials to run its general ledger, accounts payable and project and activity accounting.<br><br> A 2ew years later they purchased Asset Management and Purchase Order 2unctions. Since then the company completed 2our success2ul upgrades to its Lawson system and integrated more than 150 2acilities with the recent Marathon and Williams acquisitions. In 2004, Pilot purchased the Lawson Human Resources Suite including Payroll, Benefts Administration and Manager Sel2-Service to automate HR processes and reduce administrative costs.<br><br> RealizeD ValUe PROO\x9 POintS S!%c d !mp# dm d%*!% f l 9-so% 9s \x9!% 9%c! 9#s su!* d, P!#o* h 9s docum d%* dd s dv dr 9# sp dc!fc b d% df*s, !%c#ud!% f: " Reduced closing monthly fnancial books crom three weeks to about fve or six business days. " Saved $700,000 annually by reducing losses on inside sales crom 4 percent to 3 percent. " In addition to an 8 percent margin increase 4 deli sales increased to $6 million per month 4 by using Lawson analytic data to help it better understand and manage its deli business.<br><br> " Reduced overtime by two-thirds and cut labor costs by 15 percent using a Labor Model that Pilot sta c c built with the help o c Lawson 9s Analytic Architect. \x9 Pilot Travel Centers Case Study i%* d fr 9*!o% Sp d dds D d#!v dry o e i% eorm 9*!o% One o2 the main drivers 2or choosing Lawson was the company 9s ability to integrate with outside systems that were considered critical to Pilot 9s type o2 business 4 such as 2uel accounting. With its high-volume 2uel purchases, Pilot has a special accounting system that reconciles and pays 2or all 2uel purchases.<br><br> That system 2eeds into Lawson General Ledger and Accounts Payable. For example, point-o2-sale in2ormation gets pulled into Pilot 9s central system, which exports the fle into Lawson 2or reporting. The company 9s 2uel shipment, inventory, and tax tracking system data are loaded into Accounts Payable 2or invoice payment and into General Ledger 2or reporting on balance sheet and income statements.<br><br> Lawson 9s reporting solution provides managers critical access to accurate, competitive pricing in2ormation 2or quickly determining whether pricing adjustments need to be made and trans2erring that in2ormation 2rom the home o2fce to all U.S. 2acilities. cIn the 2uel business, a couple o2 pennies margin can make a signifcant di22erence, so i2 there 9s any way you can shave some o2 those costs, it 9s going to make you more e2fcient, d says DePrimo.<br><br> cYou can accomplish that with more automation and taking manual processes out o2 the equation. d B d** dr R dpor*!% f e%h 9%c ds D dc!s!o% M 9k!% f Pilot has streamlined the way it gathers, analyzes and acts upon business data. The company has cut the time it takes to close its books 2rom three weeks to about fve or six business days. cWhen it took us that long to close our books, we weren 9t able to make any adjustments or get things corrected very timely, d says DePrimo.<br><br> cNow we can get in2ormation to our feld people 2aster, which allows them to react, and we are better able to manage our 2ood cost margins and our overtime. d cLawson was the only one that had a complete package 9or us. We also needed something that could run on UNIX. Lawson had the most cost-e 9 9ective system at the time and it appeared to be the best system to grow with our needs. d David DePrimo Manager of Corporate Systems, Pilot Travel Centers \xa Pilot Travel Centers Case Study DePrimo acknowledges that Pilot 9s ability to quickly give its stores analytical in2ormation is key to the organization 9s continued success.<br><br> This in2ormation has helped Pilot reduce losses on inside sales 2rom 4 percent to 3 percent 2or an annual savings o2 about $700,000. Timely analytical data also has enabled Pilot to better understand and manage specifc product lines and its work2orce. cOur deli sales have almost doubled to $6 million per month and margins are up 8 percent, d says Kendall Keller, senior reporting specialist at Pilot Travel Centers.<br><br> cIn 2003, we also used Lawson 9s Analytic Architect to develop a Labor Model that has been the key 2actor in helping us reduce overtime by two-thirds and cutting labor costs by 15 percent. d Be2ore Lawson, Pilot 9s legacy systems weren 9t exible in their reporting capabilities and required a lot o2 manual data entry, which meant the in2ormation was limited and o2ten inaccurate. Now Pilot has analytics to do the data pumps. The company also developed scorecards that tell store managers, restaurant managers, and regional managers how their piece o2 the business is working.<br><br> cIt 9s looking at fnancial, payroll, and labor in2ormation and the parameters that go into these numbers, and it will 2ormulate a score, which you can use to evaluate their per2ormance, d DePrimo explains. cIt 9s a 2orm o2 metrics that looks at sales and proftability and tells you where you need to 2ocus. I2 some are not per2orming as well, you can direct more attention there to bring their numbers up.<br><br> Or you can use it to illustrate how well some are doing as a role model. d Op*!m!0!% f !*s Mos* impor* 9%* R dsourc d 4 P dop# d Pilot is in the middle o2 implementing Lawson 9s Human Resources suite, including the Payroll, Benefts Administration and Employee and Manager Sel2-Service applications. When the implementation is completed in September 2005, the company will automate more o2 its business processes and reduce a lot o2 data entry and manual processes, along with reducing its margin o2 error. cI2 we can get the in2ormation to ow automatically, we can 2ree up people to do more value-added tasks, such as 2ocusing more on recruiting or enhanced training programs, d explains DePrimo.<br><br> He says moving 2rom three disparate HR legacy systems to a single system will improve data quality and virtually eliminate redundancies and reports that aren 9t in sync. Automated benefts administration will allow managers to better distinguish between 2ull-time and part-time employees, cIn the past we might have provided benefts to a part-time employee that didn 9t quali2y 2or them, so we can potentially save $750,000 per year by automating this process, d explains DePrimo. The new HR system also will enable Pilot to set controls on the percent o2 rate increases.<br><br> cWith the use o2 ProcessFlow, regional and divisional managers can approve, disapprove or override the raise percents, there2ore automating the process, d says DePrimo. Employee and Manager Sel2-Service will help Pilot reduce data entry at its Support Center. Employees will be responsible 2or their own in2ormation, which should increase data entry accuracy.<br><br> Employees will be able to do their own salary history look-ups and verifcations, thereby reducing the number o2 phone calls to the Support Center. cWe anticipate a 50 percent reduction in the number o2 calls to the payroll administrators, d says DePrimo. Pilot will then be able to redirect its Support Center manpower to more strategic processes.<br><br> cIn 2003, we also used Lawson 9s Analytic Architect to develop a Labor Model that has been the key 9actor in helping us reduce overtime by two-thirds and cutting labor costs by 15 percent. d Kendall Keller Senior Reporting Specialist, Pilot Travel Centers cBe 9ore Lawson, Pilot 9s legacy systems weren 9t fexible in their reporting capabilities and required a lot o 9 manual data entry, which meant the in 9ormation was limited and o 9ten inaccurate d David DePrimo Manager of Corporate Systems, Pilot Travel Centers \xb Pilot Travel Centers Case Study Once Lawson Human Resources is 2ully implemented, Pilot will gain a number o2 substantial benefts: " Store management can key changes directly into the Payroll system, which will help eliminate clost d Employee Data Manager (EDM) fles and use o2 the EDM system. " Reduce turnover by improving the timing o2 its employee review process. " Retaining 5 percent o2 its hourly employees would save Pilot $1 million in annual personnel costs, because it costs Pilot $1,000 to hire and train a new hourly employee.<br><br> " Web-deployment o2 beneft enrollments and in2ormation changes will potentially save Pilot about $50,000 per year in beneft mailing and handling costs. " Manager Sel2-Service will automate the 45 wage changes per day that take Pilot 9s payroll administrator about 2our minutes each to process, potentially saving Pilot $10,000 in annual clerical labor costs. " Manager Sel2-Service will automate the 60 separations and leaves o2 absence requests that take approximately fve minutes each to process, potentially saving Pilot $15,000 in annual clerical labor costs.<br><br> " The ability to make one-time tax adjustments and retain this modifcation history. " Automatic routing o2 garnishment and payroll check request in2ormation to Lawson 9s Accounts Payable system to eliminate the need to print labels 2or AP check stubs and potentially save 15 hours per week. " The ability to create start and stop dates 2or tax codes.<br><br> " The ability to void a payroll run with a single keystroke instead o2 two hours. " Simplifed COBRA administration via one system will reduce data entry errors and the amount o2 support needed 2rom Technology Services. " Easier payroll management 2or commission-based employees.<br><br> " Better reports 2or tracking employee turnover. " Option to manage Canadian payroll issues i2 Pilot expands there. The bottom-line: 2or an organization that produces 15,000 paychecks a week, improving e2fciencies is a must.<br><br> cOur number one cost is labor. I2 we can reduce our labor by one hour every day at every store, then that will equate to a $1 million annual savings that goes directly to the bottom line, d says DePrimo. \xc Pilot Travel Centers Case Study P!#o* l dv dr 9 f ds Oppor*u%!*y *o improv d SMOOtH ROaD aHeaD The road ahead 2or Pilot is lined with growth opportunities.<br><br> And Pilot executives know that staying on top in an increasingly complex industry requires the latest and best technologies to streamline business processes and optimize resources. cLawson really turned out to be a visionary purchase 2or us, d says Jack Stalker, director o2 Finance at Pilot Travel Centers. cLawson gives us the opportunity to improve based on best practices it has observed in working with other customers. d As the company continues to accelerate the growth o2 its one-stop convenience store, 2uel and restaurant concept, Pilot will continue a strategy it has adhered to 2or the last 12 years 4 trusting Lawson to help run its business.<br><br> cLawson has been around 2or nearly three decades and that speaks 2or itsel2, d says DePrimo. cThey 9re reliable and responsive to our needs, and we see them as a critical partner 2or our business success. d For further information about the Lawson Enterprise Resource Optimization, or other Retail solutions, call 1-800-\x9\xc\xc-1\x8\xa\xc, direct at +1-\xb\xa1-\xc\xb\xc-\xc000, international at +\x9\xb 8 \xa\xa\xa\x7 \xa000. 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