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Blog August 2023 Updated October 2023

Forecast-Driven Deliveries: The Key to Preventing Stock-Outs in Fuel Distribution

Henrik Lerke

AMCS Transport Director EMEA

One of the most significant challenges in downstream fuel distribution is managing stock and predicting customer demand. Relying solely on historical data and immediate orders often results in a reactive approach that can lead to stock-outs., which can cause service disruptions, reputational damage, and lost revenue. This challenge is intensified by the industry's fluctuating demands, uncertain supply, and intricate logistics processes.

Is there a solution to this dilemma? Enter forecast-driven deliveries, a proactive strategy that combines predictive analytics with operational planning.

Understanding the Need for Forecast-Driven Deliveries

Downstream fuel distribution is traditionally a highly reactive industry, with operations often planned based on historical patterns, on-ground inventory, and immediate customer orders. However, this approach can result in inefficiencies, including late deliveries, surplus inventory, and, at worst, stock-outs. When a stock-out situation arises, the results can be detrimental to both the distributor and the customer, with potential service disruptions, reputational damage, and revenue loss.

Forecast-driven deliveries, by contrast, incorporate predictive analytics to anticipate future demand accurately. This strategy enables companies to plan their operations more proactively and thus, avoid the risk of stock-outs.

Why do stockouts occur? 

When the tanks run dry, it's not usually because of an oil crisis. Often, it's the result of poor decisions or planning. They’re often a consequence of inaccurate forecasting, an imbalance in inventory management, or disruptions in the supply chain. Misjudged demand, misguided restocking, or the smallest ripple in the supply chain can have a major impact that leads to a fuel stockout. The solution isn't as simple as ordering more - it's about refining our understanding and management of a complex mix of variables This is the real-world problem that fuel companies face and addressing it can make a significant difference in efficiency and sustainability.

Forecast-Driven Deliveries: A Proactive Approach

Forecast-driven deliveries leverage a combination of advanced technologies, including big data analytics, machine learning, and Artificial Intelligence (AI). These tools analyze historical data, current trends, and market indicators to predict future demand with a higher degree of accuracy.

The fuel distributor can then plan their procurement, storage, and delivery operations based on this accurate forecasted demand. This approach optimizes the entire supply chain process, ensuring the right quantity of fuel is available at the right time and place, thereby reducing the risk of stock-outs significantly.

Introducing AMCS Fuel Planner

The AMCS Fuel Planner is a state-of-the-art digital solution designed specifically for the downstream fuel distribution industry. It incorporates advanced planning algorithms and robust data analytics capabilities to enable forecast-driven deliveries.

With AMCS Fuel Planner, fuel distributors can process large volumes of data rapidly and generate accurate demand forecasts. The system also provides real-time visibility into the supply chain, allowing distributors to monitor inventory levels and adjust their plans as needed. Moreover, the AMCS Fuel Planner integrates seamlessly with existing IT infrastructure, enabling a smooth digital transition. With its intuitive interface, users can quickly generate and visualize forecasts, streamline order management, and optimize delivery schedules.

One key component of AMCS Fuel Planner is its Vendor Managed Inventory (VMI) Manager. This tool takes charge of your inventory levels, ensuring that stock is replenished promptly when it falls below the pre-determined levels, effectively preventing stock-outs.

If you'd like to learn more about how the VMI Manager works, we have created a comprehensive infographic that details its functionalities and benefits. Click here to download the infographic and discover how our VMI Manager in AMCS Fuel Planner can transform your inventory management strategy.

The Real-World impact of VMI and AMCS Fuel Planner: Greenergy’s Success Story

While the theoretical advantages of VMI and forecast-driven deliveries are evident, nothing demonstrates their value better than a real-world example. Greenergy Flexigrid, a leading fuel distribution company in the UK, has significantly benefited from adopting this approach, using AMCS Fuel Planner's VMI capabilities to optimize their operations.

"The VMI capabilities have been exceptional and improved delivery accuracy and efficiency, reducing fuel costs and the impact from emissions," says Rachel Bligh, IT Manager - Logistics.

By integrating AMCS Fuel Planner, including its VMI Manager, into their operations, Greenery has optimized its efficiency, enhanced delivery accuracy, and reduced costs and emissions. The system's advanced predictive capabilities have enabled them to anticipate demand accurately and adjust their inventory levels accordingly, ensuring they can meet their customers' needs without unnecessary surplus or risky stock-outs.

Want to know how they did it? Dive into the full case study here.

Conclusion

Forecast-driven deliveries are no longer a luxury but a necessity for downstream fuel distribution companies seeking to maintain operational efficiency and prevent stock-outs. By leveraging cutting-edge solutions like the AMCS Fuel Planner, including its efficient VMI Manager, distributors can transform their supply chain processes, ensuring timely deliveries, reducing operational costs, and enhancing customer satisfaction. As the industry continues to evolve, those who embrace this data-driven, proactive approach will be best positioned to thrive in the competitive fuel distribution landscape. The question is: Are you in the game or on the side-lines? The world of efficient fuel distribution awaits.

Learn more about all AMCS Group solutions across transport management and its entire portfolio here https://www.amcsgroup.com/solutions/amcs-transport-management-system/

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