Creating commercial opportunities and protecting margins at AVIA

Introduction

AVIA Netherlands is a cooperative of five independent companies, who together operate over 360 fuel stations throughout the country and serve a significant number of home-base customers. A shared services center has been set up, which in turn has outsourced planning and transport for three of its member companies to Bottomline, representing 80% of AVIA’s fuel stations in the Netherlands..

The challenge

Thomas Bogaers (General Manager, AVIA Vollenhoven) “Until 2015 each of the companies used to take care of its own procurement, planning and transport – with its own trucks and drivers. But it made sense to pool resources and achieve benefits of scale, which is why we set up a shared services center.”

Niels Seinen (Financial Director, AVIA Weghorst): “One major advantage is that by combining volumes we can negotiate better purchase prices from our suppliers. But right from the start the idea was also to outsource and optimize planning and transport.”

Why Bottomline?

Bogaers: “We knew Bottomline provided an all-in service for several players in this market. And they convinced us by building a simulation model demonstrating the potential cost savings in our particular situation. And those were significant.”

“One of the things that stood out was that Bottomline is able to put a very exact figure on the cost of delivery per individual site. That’s important, because in addition to replenishing our own fuel stations, which can be done 24/7, we also serve many home-base customers. Those deliveries are harder to plan and cost more. Bottomline’s reports enable us to pin down those costs very precisely and adjust our sale price accordingly, which is important to ensure healthy margins.”

Seinen: “What we also liked, was that Bottomline offered planning and transport as separate services. The cost of transport far exceeds that of planning, and we didn’t necessarily want to tie ourselves to one transport company. So we made separate arrangements for transport, with Bottomline’s partner Schenk, which so far has proved very satisfactory as well.”

The results

Bogaers: “Working with Bottomline has meant that we are ensured of timely deliveries, preventing stock-outs, but also that we have been able to reduce transport costs through smarter planning.”

Seinen: “Working together, within the cooperative and with Bottomline, also means we have created a nationwide network. Each of our companies has a particularly strong presence in a certain region, and where those regions touch or overlap Bottomline can optimize costs by combining transports. And it creates new commercial opportunities: it has become much easier to serve customers outside our traditional operating areas.”

Bogaers: “Outsourcing planning and transport also allows to focus on our core business. And Bottomline has proved a very constructive, reliable partner. A telling detail is that they employed one of our planners, someone with over 30 years’ experience at AVIA Vollenhoven who nevertheless seamlessly fitted into Bottomline’s team and has been taken very good care of.”