Automated Trading, Scheduling Fuel Energy TraderBy Mel Duvall | Posted 2005-10-06 Email Print
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Trading, pipeline scheduling and accounting systems boost revenue-without big staff increases.Revenue Per Employee $62 million
Two years ago, James Emison, chief executive of Eden Prairie, Minn.-based Western Petroleum, went on a hiring spree. He added three new employees to help manage the company's burgeoning business, which had more than doubled in sales from $688 million in 2002 to $1.9 billion in 2003.
But no more Mr. Free Spender. Employment was capped at 58 in 2004, while revenue, spurred by rocketing fuel prices, almost doubled again to $3.6 billion. In what should surely cement Western Petroleum in the Productivity Hall of Fame, that translates into $62 million in revenue per employee.
The remarkable figure is a byproduct of the business Emison is in; his company buys millions of dollars of petroleum products such as automotive gas, propane and airline fuel from refineries, and resells them to consuming companies like gas stations, airlines and large manufacturers.
But it's also a factor of technology.
The volume of gas, propane and other products Western Petroleum has sold since it began operations in 1969 has grown exponentially, but technology in the form of sophisticated trading, pipeline scheduling and accounting systems has allowed it to grow with close to the same head count as a decade ago. In many ways, Western Petroleum was a virtual company long before the term, or the Internet, came into existence.
"A business like ours has to live by its wits. Every day, we get up and hustle for a living," says Emison, the privately held company's principal owner, who has worked in the oil and gas business since being discharged from the Marines in 1954. "We operate on razor-thin margins, so controlling our costs and head count is how we make a profit at the end of the day."