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Blog August 2021

How to make your fuel deliveries cost effective

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Jan Tønder Intelligent Optimization Solution Advisor

No room for error or inefficiencies

Your margins leave no room for error or inefficiencies. Product availability is always fluctuating. You have to deal with laid-in costs and prices at fuel depots. High oil prices and other factors can lead to demand contraction.

For petrol stations, fuel is typically a loss leader, and the fizzy drinks and snacks sold inside are where their profits are made. For the fuel distributor, transportation costs are around 45% of operating costs, with the cost of fuel to transport the product accounting for 40% of that figure. Any fluctuation in price can have a significant impact on business.

According to the American Petroleum Institute, other costs include inventory carryover, which accounts for up to 24% of your operating costs. Storage, 22%. And administration, 10%. Every company and region will vary, so take these figures as approximates.

Another issue confronting your margins: As of this writing – April 2021 – EU gas storage sites are less than 30% full due to a cold spell earlier in the month, which meant facilities switched back to net withdrawals. According to S&P Global, the market is concerned about whether or not stocks can be refilled over the summer. As a result, European gas prices for Q3 delivery are on the rise.

This is the volatile world of downstream fuel distribution: complex, challenging and not for the faint of heart.

Making it easier on yourself and your margins

According to the World Economic Forum, digitalization could create $1 trillion U.S. of value in the oil and gas supply industry. To get a piece of that, fuel distributors need to maximize the potential in their companies. And to do that, they’ll need to embrace digitalization.

It’s really a simple concept. The silos within companies and supply chains give way to interconnectivity, replacing time-consuming manual processes. Devices communicate with each other at every stage of the supply chain. This is the Internet of Things (IoT). Processes are monitored in real-time. Cloud computing enables central coordination. Your company is run with incredible efficiency so that operating costs fall and profit rise.

AMCS Fuel Planner: how it works

AMCS Fuel Planner is a best-in-class system designed specifically for the fuel distribution industry. Especially, it’s SaaS, operating on the cloud. Its rich functionality handles the entire planning process, including operational planning and scheduling, execution in real-time, and delivery of operational data.

AMCS VMI Manager is an integrated module of Fuel Planner. They work seamlessly together to ensure you keep operating costs down. The system calculates expected demand based on historical data and either data from sensors or dip readings, and then automatically generates replenishment orders. (Note, manual dip readings are more prone to error than sensors and require labor, but they can still work.)

A closer look: With a user-friendly interface, planners and dispatchers can see images representing tanks of a fuel truck. They can also see specific tanks at specific petrol stations. For example, you can see different tanks of petrol and diesel, and an overview of the current stock levels, time to minimum stock level, critical time and then someone can be sent to fill those tanks. Before delivery is sent, it considers other strategies, such as pairing tanks and simultaneous dry runs. That’s when the order is generated, which is then planned and optimized in combination with the total pool of orders.

Mobile solution and stakeholder web portals

The onboard computer and cab table enables the driver to update and receive data as needed. You can find out the specifics of delivery or lift in real-time, for example. Paper is no longer needed, which speeds up the processes the driver is responsible for. It provides smooth back-office integration while reducing overheads and manual work. A specialty web portal lets the customer access their account to view past and current orders, alleviating customer service.  Third-party haulers can also access information through their own web portal. This is about streamlining the accessibility of information and allowing your office to focus on other jobs.

At a glance:

Here are the ways AMCS Fuel Planner boosts your company’s efficiencies, which in turn makes your deliveries more cost-effective:

The numbers: cost-effective deliveries

By reducing operating costs, you also improve cash flow. And by optimizing workflows and integrating your IT systems, you significantly reduce operating costs, along with stress on colleagues and your margins.

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AMCS Fuel Planner is a revolutionary standardised system developed specifically to optimise the distribution of liquid fuel through efficient automatic planning and optimisation facilities.

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Improving efficiency and improve margins in Downstream Fuel Industry

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Improving efficiency and improve margins in Downstream Fuel Industry

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