Building Systems and Relationships

Profile of Amoco's Chuck Daul.

Chuck Daul displays his patented Stage II bootless, vapor assist nozzles.

“. . . building relationships, in my mind, is the key to success in our industry. We have to work harder now to make that happen."

Although Chuck Daul's primary responsibility is to determine what petroleum equipment goes underground for Amoco in the U.S., he is just as concerned with what's "above ground" -- that is, the people who are involved with designing, building, distributing and installing that equipment.

"During the past 20 years, especially during this decade, major oil companies have had to adapt to significant shifts in the size and makeup of our work force resulting from our changing business needs," said the 28-year Amoco veteran. "This makes doing business even tougher because building relationships, in my mind, is the key to success in our industry. We have to work harder now to make that happen."

At Amoco and through such industry-wide organizations as the American Petroleum Institute (API), Chuck has been involved in forging essential relationships at all levels of the business that ensure continued productivity and profitability.

Since joining the company in 1968, Chuck has held a variety of positions involving new construction, purchasing, service-station design and maintenance.

"I started in a small geographical area in southeastern Wisconsin," he recalled. "Over the years, my responsibilities expanded to include the state, the region, the entire U.S. and most recently, some overseas assignments, including China." In 1989, Chuck assumed his current position at corporate headquarters, which involves designing and installing UST and Stage II Vapor Recovery systems at all of Amoco's 12,000 or so U.S. facilities ( approximately 3,500 service stations and 8,000 jobber accounts).

Upgrading upgrades?
One of Chuck's top priorities has been the UST upgrades, which Amoco embarked on in 1982. He noted: "Our program involved upgrading existing tanks and replacing others that were improperly sized or had suffered from corrosion or other problems. Early upgrading made good business sense because, by working closely with our service-station network, we reduced the incidence of leaks and resulting expensive remediation. By 1993, Amoco's upgrading was 95 percent completed."

Chuck pointed out that some of his counterparts in the petroleum marketing industry also acted to complete the upgrading process well ahead of time. "It would be a disaster if we had all waited right up until the deadline," he said. "Most of the majors got an early start, as did many of the independents."

As Chuck views it, there are disadvantages as well as advantages to complying early with the regulations. "You might invest a lot of money in equipment or a process based on certain regulations that could end up being amended; or the deadlines could be extended, leaving your company at a competitive disadvantage.

“A recent example of this is the 10-gallon-per-minute maximum flow rate legislated three or four years ago. The original deadline was December 1995, but now it's been extended to June 1996. So if you were proactive and put in a slow-flow device before the original deadline, you were stuck with a slower flow rate than some of your competitors."

In addition to changes in federal laws, differences in various state regulations can pose a challenge as well. "Sometimes a certain state's requirements can be more stringent for no apparent reason," Chuck observed. "For example, Florida has mandated double-wall construction for USTs. I would defend their right to do that; but it can be difficult when you are ready to roll out a national program only to find that it doesn't comply with one state's regulations. It would be much easier for us to develop and implement our strategies if we had a federally enforced set of rules and compliance dates."

How API makes the call
One potential means of resolving industry-wide issues, according to Chuck, is through the API. When Chuck assumed his current position with Amoco, he represented Amoco on API's Operations and Engineering (O&E) Advisory Subcommittee. Last year, he became its chairman for a two-year term of office. In that capacity, he serves as a liaison between API and Amoco, making sure that his company stays on top of and involved in issues and practices affecting the industry.

"API provides opportunities for its members to openly discuss issues, such as how to develop and improve equipment to comply with federal regulations, and yet not run into obstacles with individual states," Chuck said. "API is a means for building relationships that are essential to bringing sanity to the process of doing our jobs."

Chuck views API operations as a classic example of the changing business practices that are common today in the petroleum industry. "There have been major shifts in people within the oil business during the past several years due to cutbacks, reorganization and the dynamic movement of people up the career ladder," he noted. "This kind of activity has increased so much that API has had to rethink its own mode of operation.

“. . . We as an industry, have to do a better job of keeping our egos out of the manufacturing end.”

"When I first got involved in API in 1989, the O&E Advisory Subcommittee met quarterly, face to face, for a day and a half. A couple of years later, we decided to cut that back to one day each quarter. Then, two years ago, we realized it would be more efficient to take advantage of technology that allows us to handle some of our tasks via electronic mail and teleconferencing, rather than to ask people to get on a plane. We also have created task forces to work on very specific issues for a small period of time–anywhere from three to 15 months–and then those task forces are disbanded.

"Although these methods improve our efficiency, I have to admit I'm concerned about the trend shifting away from in-person meetings. Our subcommittee tries to get together at least once or twice a year now; but the fact is that for a meeting I was supposed to have just today, by deciding to have a conference call instead, we had twice as much representation. All of this makes relationship-building much more challenging but something we must continue trying to do better."

“. . . API never recommends a specific vendor or piece of equipment as the sole means of compliance with an industry standard or prodecure. The goal. . . is to be as inclusive as possible . . .”

Setting the API standard
The O&E Advisory Subcommittee, which Chuck chairs, is involved in the establishment of the industry codes, standards and recommended practices, which – though they are not legally binding – are excellent guidelines for the industry to follow.

"O&E is the marketing group that deals with retail outlets and wholesale terminals," Chuck explained. "The group encompasses a wide range of members who represent various percentages of ownerships and lease arrangements. This allows for a valuable exchange of experience and opinions when we consider various practices for the industry; and this input usually becomes part of the API document that establishes a standard or procedure.

"As a result of this widespread input, API never recommends a specific vendor or piece of equipment as the sole means of compliance with an industry standard or procedure. The goal is to make clear the intent of a recommended practice and to be as inclusive as possible by suggesting potential options for complying with that standard. We make an extreme effort not to exclude technologies or manufacturers unless they have been proven completely ineffective."

One of the most important relationships that API can help strengthen, according to Chuck, is between the industry's approval authorities and the industry itself. "While API recommends various standards and practices, the approval authorities like ASTM (American Society for Testing and Materials), UL (Underwriters Laboratories), BOCA (Building Officials and Code Administrators International) and NFPA (National Fire Protection Association) have set some marvelous standards," he said. "We need to foster our relationships with these approval authorities so that we don't over or under design. In fact, many API members are active in a number of these associations."

Blueprint for training
Chuck describes training as a crucial means of strengthening industry-wide relationships and im-proving quality control. "This gets back to the constant change in the work force," he stated. "We train the supervisor, but the information has to get down to the people who are actually doing the work. When we specify a certain procedure as being the most important thing on the job – the only instruction underlined on the drawing – and it doesn't get done, then we know something's got to change."

Amoco, says Chuck, is re-examining its contractor training program to make it more effective. "We are considering additional videos, publications and speakers to develop a more concentrated training program," he explained. "It's not just Amoco. Shell's Glenn Marshall concurs that installation is the key area that we all need to get a better handle on. People jokingly call Glenn 'the Chuck Daul of Shell', just as I am called the 'Glenn Marshall of Amoco'.

"We can specify the best equipment in the world, have it manufactured by the best people and make it available through the best distributors. But if the equipment isn't installed properly, we've lost the advantages of having excellent designs and efficient systems."

Training is just one example of the new emphasis on relationship-building that will affect Amoco's future, as well as that of the industry.

Another example is restructuring. "During the past two years, Amoco has restructured from three areas operating more-or-less exclusively – refinery, marketing and chemicals – to 17 sectors The company has taken the design and specificiation function to a shared-services arrangement," said Chuck. "In the past, there was very little interaction between the three areas. Now we have a lot more interchanging of managerial and engineering functions in crossover activities. It's a dynamic change that's essential for our future."

			The sequence of pictures shows a simple device designed by Amoco’s research staff to test Chuck’s patented “Pour-in-place” dispenser pan to allow for temperature cycling and performance testing.

Amoco alliances

In addition to this internal reorganization, Amoco has taken a new direction externally that combines the benefits of efficiency and long-term relationships. "We've begun to recognize that when you have too many manufacturers or suppliers, you place a burden on the people who are responsible for purchasing, design and implementation," Chuck said. "For example, about four years ago, we realized that we had more than 40 different suppliers providing more than 30 different specifications of pipe to our pipeline company. In reality, you only need about three different kinds of pipe supplied by perhaps three to five companies.

"So we came to the conclusion that it would be advantageous to develop alliances with various manufacturers and some distributors. We look at the specifications for functionality of a certain piece of equipment or process, and then we identify the best suppliers to accomplish our goals – and it's not always the current marketplace leader.

"This kind of relationship simplifies our internal processes and also allows us to build relationships with our partners by developing products that are particular to Amoco. This gives us a competitive edge in the marketplace. We've just entered into such an alliance with Tokheim Corporation to manufacture our dispensers."

Establishing alliances has the potential to serve all aspects of the business, Chuck believes. "Amoco has alliances with manufacturers, and we are working on developing alliances with distributors as well," he said. "Amoco also should have alliances with the installing contractors to make the whole thing successful."

Chuck believes the industry is moving toward greater simplification of equipment, which can be facilitated by Amoco's alliances and the activities at API. "We as an industry have to do a better job of keeping our egos out of the manufacturing end," he remarked. "When I was in purchasing and design at Amoco, I tried whenever possible to find existing products that provided excellent service and were less costly, rather than to ask manufacturers to design something to my arbitrary specifications. Sometimes you do need a specially designed product; but more often, if we'd just work together more, we could prevent some duplication and multiple variations on the same product. As members of API, we have the ability to make this happen. And the alliances we're working on at Amoco will facilitate this as well."

One of the most important relationships that API can help strengthen, according to Chuck, is between the industry’s approval authorities and the industry itself.

Won't you be my neighbor?

In addition to these industry alliances, Amoco has been involved in building relationships outside its industry by establishing partnerships with compatible businesses. "The company has established a partnership with McDonald's to create combination outlets," he noted." These facilities are being tested at locations where Amoco is the leading supplier of gasoline, giving the company a natural link to the leading fast-food supplier.

"Amoco had a lot of issues to work out, especially in the area of design; after all, gasoline vapors and food do not mix. The company’s test site in Carol Stream, Illinois, has been a good pilot. It was designed to accommodate the separate needs of each operation and is an outstanding example of how this kind of arrangement can work successfully. Amoco has also partnered with other franchises, such as Burger King, Pizza Hut and Subway."

Chuck collaborates on research projects as well with his coworkers who test service station equipment at the Amoco research center in Naperville, Illinois. "It's nice to be able to kick the tires in our own labs and make our own judgments about equipment, rather than exclusively rely on a third party," he noted.

"These are highly qualified experts who work in a number of different areas, and some of what they work on applies to other industries as well. For example, their testing of the durability of the magnetic stripes on credit cards fundamentally changed the industry – in terms of the credit cards themselves and the equipment used by both service stations and other industries as well."

"Foreign" friendships
The relationship-building that Chuck values, while perhaps a new trend in the United States, is par for the course in China. He has made four trips there during the past 15 months as part of Amoco's decision to develop business in such countries as Russia, Poland, Romania, Bulgaria and Mexico, as well as China.

"The culture in China is very different from ours," Chuck observed. "People there seem to be in constant motion, whether they are going about their business or leisure activities. Whether it's a man speeding by with four bales of hay tied to the basket on the back of his bike or a woman hurrying past with two ducks tied around her neck, the Chinese people I saw were busy. You wouldn't see someone sitting on a park bench for more than a few minutes.

"The people seemed so busy in China that when we got to Hong Kong, we found it very slow by comparison," Chuck noted. "In China, there are relatively few cars. People are doing by hand the work typically done by machines.

"China's whole process for negotiating business partnerships is very different, too," Chuck said. "Americans focus mainly on the bottom line: guaranteeing profits. In the U.S., only after you decide to do business with someone do you take the time to form a relationship.

"The Chinese don't get to the point of discussing what each party might gain in terms of dollars until the end. For them, it's about trust, credibility, becoming friends in order to figure out what's best for both of us. The U.S. trend towards alliances and relationship-building among contractors, manufacturers, distributors, oil companies, approval authorities and certification agencies is the way China has been doing business for a long time."

The people who work here live in apartments above the station. Elaborate gas stations are not an unusual sight in China.

The Daul maker?
Certainly, relationships are key to Chuck's life off the job as well as on. He and his wife, Julie, have a 33-year marriage, five grown children and one grandchild. Recently, Chuck’s oldest son graduated from Marquette University, his Dad's alma mater, which Chuck’s youngest son has just entered as a freshman. And over the years, the costs have multiplied. "The cost of my youngest son's college education is going to be more than his four older siblings combined," Chuck exclaimed.

During his off hours from work, Chuck enjoys skiing with his family and golf (every Saturday morning in warm weather when it doesn't rain). He makes cabinets and does other home remodeling projects as well, including a three bed- and bathroom addition. Chuck also uses his carpentry skills as a volunteer for Habitat For Humanity.

But even during his many leisurely pursuits, Amoco is ever-present in his thoughts, and he seems to have converted his family as well. "My wife does unofficial field research for me," he said with a smile. "She'll come home and say she saw something at a station and wonder why; and I'll look into it. I can hardly even take a vacation without surveying the Amoco gas stations we use along the way."

When asked to name one of his most satisfying projects, Chuck recalled that, in 1981, he supervised the construction of a ground-up terminal in Milwaukee. "We turned a bare piece of dirt into a major distribution pipeline terminal – ahead of time and under budget – that's still standing today," he said. "But I'd really have to say that my favorite job is always my next job. I enjoy the challenges in front of me even more than the accomplishments behind me." And with all of the changes ahead for the industry, Chuck has a lot to look forward to.

The American Petroleum Institute
The American Petroleum Institute (API), founded in 1919, is the U.S. petroleum industry’s primary trade association. Its membership consists of a broad cross section of petroleum and allied industries in exploration, production, transportation, refining and marketing. The API’s membership currently includes more than 300 companies.

API is headquartered at 1220 L Street, N.W., Washington, D.C. 20005.

API provides public policy development, advocacy, research and technical services to enhance the ability of the petroleum industry to fulfill its mission, which includes:

• Meeting the nation’s energy needs, developing energy sources, and supplying high-quality products and services.

• Enhancing the environmental, health, and safety performance of the petroleum industry.

• Conducting research to advance petroleum technology, and developing industry equipment and performance standards.

• Advocating government decision-making to encourage efficient and economic oil and natural gas development, refining, transportation and use; promoting public understanding of the industry’s value to society, and serving as a forum on issues affecting the petroleum industry.

API activities are led by committees composed of representatives from all sectors of the industry and from companies of all sizes. Through these committees, API determines policy and positions on issues affecting the industry; plans programs and activities; deals with problems and developments of industry concern; and provides a wide range of services to member companies.

To strengthen its environmental stewardship, in 1990 API and its member companies created STEP – Strategies for Today’s Environmental Partnership. STEP is the framework the industry uses to improve its environmental, health, and safety performance; measure progress; and report the results. Through STEP, the industry is striving to prevent pollution, promote safe operating practices, conserve resources, promote product stewardship, maintain crisis readiness, address community concerns, and work with the government to create responsible rules to safeguard the community, the workplace and the environment.

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