Ever since the days when freight was delivered via horse-drawn wagons, people have been looking for ways to make delivery and distribution of a load a little bit easier. Today, petroleum companies of every size are re-ordering their priorities and re-examining their dispatch and delivery processes with a single goal in mind; to streamline the fuel dispatch and delivery experience and gain the competitive advantage.
According to John Redmond, vice president of product strategy at Advanced Digital Data, Inc., as the economy continues to inch along at a slowly improving rate, companies continue to look for more ways to drive costs out of their business.
“Each company determines their own methodology to accomplish this,” Redmond says. “Some focus on driving more productivity by focusing on fine turning our available delivery forecasting capabilities. Others have elected to reduce miles driven by routing and tracking delivery vehicles. The more successful companies focus on improving all aspects of their delivery operations.” Since 1973, New Jersey-based Advanced Digital Data has been providing computer solutions for the petroleum, propane and convenience store industries.
What’s more, today’s market conditions are extremely challenging. Petroleum prices are volatile and customers are more demanding and have a higher expectation of performance.
“Delivering more with product with the same or less resources should be a goal of every petroleum marketer,” Redmond says. “But servicing the customer at a higher level should not be overlooked. If a customer runs out of product, you are at a high risk of losing them. The logistic products available from ADD Systems and some of our technology partners provide great tools to deliver more with less and service your customers at a higher level.”
As Redmond explains, the ADD Energy E3 is an enterprise product that addresses all of the operational needs of the downstream petroleum market, including fuel oil and propane marketers, gasoline wholesalers and lubricant distributors.
“There are many aspects of our product that address delivery and dispatch. One of our core capabilities is to accurately forecast customer deliveries based on many long proven algorithms,” Redmond says. “We also interface with a number of tank monitoring systems. The tank monitors provide actual daily in-tank volume readings, which are used by E3 to refine the forecasted due date.”
E3 also includes an embedded delivery fleet planning and optimization capability. As such, deliveries can be selected based on a number of criteria, assigned to vehicles and routes can be optimized using sophisticated routing and mapping technology.
“Those assigned deliveries can be shipped off to our on-board Raven truck computing system,” Redmond says. “Vehicles can be tracked on a real time basis, point of sale invoices can be produced and delivery postings to A/R can be fully automated.”
And as Randy Harp, product sales strategy manager at Heartland Payment Systems explains, delivery management and dispatch can have a significant impact on purchasing and on supply chain expenses.
“Delivery management that supports optimization of lowest cost inventory and dispatch that keeps cost as low as possible through efficient supply can keep the low margins on fuel from being negatively affected,” Harp says. “The first step in the chain is the availability of real time tank inventory data. With up to date inventory, purchases can be made at optimal rates at the optimal time. The dispatch function has often been driven by a process of ‘keep full’ inventory management, which is measured primarily by the prevention of any tank run out.”
Network products like Heartland’s SmartLink ProDistributor, powered by FuelQuest ForeSite software, make it easier to connect tank gauges and have access to real time tank data so that delivery and dispatch have the data to avoid retains, which add cost and eliminate run outs, which hurt sales.
As Harp explains, once real time data is available, integration of the back office to the tank inventory data adds the important perspective of fuel sales, which allows the same software tools, found in ProDistributor, to calculate and compare sales to deliveries, identify shortages, thefts, leaks and quantify anticipated sales and inventories to determine inventory needs, time purchasing and pinpoint potential losses to keep costs down.
In addition, the SmartLink offering provides two levels of service; supervisor view and inventory control. “The second level, inventory control, delivers the analysis to determine that sales match inventory and no inventory is missing,” Harp says. “The input of sales data derived from the back office is critical to making inventory control work.”
[SUBHEAD] Making Smart Choices
For many within the petroleum industry, their mission is forward thinking. By embracing emerging dispatch technologies and distribution channels, and capitalizing on new global opportunities, they strive to meet the needs of their customers. Of course, many industry players are frustrated as they constantly throw money back into technology to help their companies do things better, faster, and be more economical through state-of-the-art equipment functions.
According to Harp, there are three key steps in fuel dispatch and delivery management. The first step and most critical aspect of fuel logistics management is knowing what inventories you have and when you will run out.
Remember the good ‘ole days of heading outside to your fuel tanks and putting a stick into the tank to measure the inches of fuel in the ground, then charting it to determine how many gallons of fuel that inch reading represented? Sure, it was archaic, but it got the job done. Now marketers look at a tank gauge to see the gallons or they get a text message on their wireless device that indicated they are running low on fuel in a particular tank.
As Harp explains, the second step is knowing that all fuel is delivered and billed accurately and on time and the third step is to predict inventory needs, which can only be done by pairing the sales data in the back office system with the inventory data provided by automatic tank gauges.
“Relying on manual readings and compiling comparative reports manually, eliminates the ability to make real time decisions,” Harp says. “Just like major stock trading is being done in microseconds to maximize returns, fuel purchasing can be maximized with more timely data.”
Harp says that the trend is toward providing purchasers, delivery management and dispatch with the tools required to make sure every bit of margin is derived from fuel at the lowest cost to the distributor or dealer—first by getting real time, always available inventory data, and secondly, by matching that data to sales info within the back office system.
[SUBHEAD] What the Future Holds
It’s a brave new world out there, relative to fuel supply at the terminals, and fleets are feeling the pain of managing their assets almost by the minute. It has forced industry players to look at how they manage their assets in relationship to supply and whether they have the extra capacity to manage the issues caused by supply or lack thereof.
Experts also agree that fuel margins continue to decline, which plays a key role in fuel dispatch and delivery processes. “Keeping fuel supply chain costs low and making effective buying decisions are dependent on the careful analysis of fuel inventories and back office sales data,” Harp says. “The combination of this key information can now be inexpensively analyzed using tools like SmartLink ProDistributor and FuelQuest ForeSite to keep added costs out of supply, keep the risk of loss to a minimum and provide the right data at the right time to make effective and timely buying decisions.”
Historically, companies with many locations have managed dispatch centers at each of their locations. “In recent years a lot of customers of ADD Systems have consolidated those dispatch locations into fewer, or in some cases one location,” Redmond says. “Technology has been the enabler to make these structural changes possible.”
Indeed, technology is the driving force behind the future of mobile fuel delivery and dispatching systems.
Redmond says extending back office capability to mobile delivery systems will continue to be a trend. For example, ADD Systems’ Raven on-board truck system has been available since 1995.
“For many years Raven was a mobile billing machine producing point-of-sale invoices and automating the posting process to A/R,” Redmond says. “In recent years it has become much more, and integration to our back office ADD Energy E3 product has been our major focus, and we expect that trend to continue.” With ADD Energy E3 and Raven deployed, petroleum marketers have an end-to-end solution that provides improved delivery forecasting, route optimization, customer service and fleet management.
Harp adds that products like Heartland Payment System’s SmartLink are changing the network landscape, making it easier to obtain real time date from tank gauges for monitoring of fuel inventories.
“The move away from manual monitoring, manual retrieval of stale data and infrequent dial polling to obtain inventory data is creating an opportunity to use inventory data and combine it with back office data,” Harp says. “This makes the petroleum retailer much more effective in managing cost and making more efficient purchasing decisions.”