National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.
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MARKETING & SUPPLY specific tanks at specific retail sites; and the distance to the terminal and the retail sites and the most effective order for delivery. GPS tracking is often incorporated and the driver typically is provided with a range of tools to improve the delivery process, reporting accuracy and accountability in a real-time manner. “The driver receives load options for each single loaded request, for example, ‘Go here first,’ based upon the best price, but if the line is really long, it can pull from this alternative terminal that also has a really good price and this shows up on the handheld device in prioritized order,” said Warren. SMARTLogix does all pre-and post-trip inspections on the hand-held device for DOT compliance. “We also have an in-cab scanner so that the driver can actually scan the phys- ical BOL or delivery sales tickets and have those back in the office real-time. Any document associated with the delivery can be scanned. So I could go four states away and have the confirmation of what the driver punched in with his finger and you have another source which gets you that Sarbanes- Oxley with two different references.” Because of the ability to remotely and accurately track fuel deliveries and automate the accounting process regard- less of the location of the terminal, truck and retail sites, this technology can even open up new ways to do business. “We have companies like Great Lakes Petroleum that drop a truck in every market that they want to go into, and it stays there,” said Warren. “They hire a driver, and they pay some rent to park the truck inside a fenced in repair shop, and they pull from a local terminal. They hire sales reps in that area and they have no office or accounting people because everything is coming back to the central office real-time for billing. There is not the overhead that other people have to buy to set up in the market. They can go to where the money is and not just the next town over.” A common component of a fuel logistics package is a forecasting model. Basically, the model develops a history of the fuel usage at each site (and even each tank) and helps forecast an expected delivery process. Of course, this forecast is cross checked with live data from the tank gauge to spot any abnormalities. “Automation gets you predictability and consistency,” said Scott Cilento, FuelQuest’s senior vice president of oper- ations. “Software such as ours has an automated forecasting engine that supplies a set of rules to the unique attributes to the specific fuel and fuel tank. The replenishment order of fuel would be automatically generated and it would always be generated by those rules as opposed to doing it manually where human error and human opinion can enter into the equation. So the net result is a more predictable and ratable and consistent output.” 14 APRIL 2011 A core component of automated fuel logistics solutions is the ability to integrate with industry-common back office accounting software. Some solutions are provided as mod- ules from back office accounting and operations software package providers and some are stand-alone solutions that integrate into the common back-office solutions in the industry. The importance of accuracy and efficiency in the basic accounting function cannot be overlooked. “While it’s in vogue for marketers to focus on just-in-time inventory, a big need that’s sometimes overlooked is the ability to catch a bill of lading quickly,” said Pinnacle’s Reynolds. In today’s industry, it is important for a fuel logistics solu- tion to facilitate the central management of an operation across multiple business units and often with multiple lega- cy issues. “Fuel marketers’ top three concerns are managing all their business units with one system, ensuring their pric- ing and margins are accurate, and being alerted to critical issues as they occur,” said Tom Lane, vice president of sales for Vancouver,Wash.-based DM2 Software. DM2 Software’s Petroleum Insights system handles all core financials along with fuel, lubricant, home heating oil and propane sales, cardlock and c-store management, supply chain automation, business analytics, and customer rela- tionship management. Paperless office and e-business mod- ules can help petroleum marketers further manage and grow their businesses. The latest release, reports includes a cus- tomer relationship management (CRM) option. Lane said that a system, such as DM2’s, can be set up to “automatically import pricing, make it easier to keep up with mid-day price changes, enable you to choose the right pricing formulas and auditing tools that ensure your mar- gins are set correctly, and alert you to user-determined con- ditions such as credit limits being exceeded.” Based in Monroe, La., AIMS Inc. provides petroleum wholesalers and distributors an accounting system that addresses tank management, dispatching, and fuel logistics. President Robert Canterbury noted, “Rising oil prices can impact not only product costs but transport costs. And with the cost of transporting fuel going up, increased fuel sur- charges from contract carriers may soon follow.” Accurate inventory reconciliation will ensure that fuel retail- ers and wholesalers not only “know how much fuel they have on hand,” Canterbury explained, “it will help them determine the appropriate amount of fuel to be delivered so they can be assured of maximizing the value from each transport load.” Retailers are not the only ones who must manage their costs. “As a wholesaler and distributor, it’s even more impor- tant now to review the profitability of each customer account,”Canterbury said. “In a rising price scenario, every- one wants to buy only as much product in a 24-hour period as they need and know they can sell. That requires better NPN Magazine www.npnweb.com