Continuing increases in fuel costs are wreaking havoc with concrete producers' fuel management programs and are creating huge budget challenges. This is especially true for those where processes are not automated and the fuel data management is decentralized.
There are several examples of how non-automated fuel management is impacted and the ownership of this outdated system of fuel management falls directly on the site operator. Examples include fuel management at retail, cardlock, commercial, or industrial fueling sites.
For years, every day at 9 a.m. the operator has been "sticking" his fuel tanks in order to obtain their inventory level. It might not be the most accurate way to measure product levels, but it lets the operator know how much fuel he has left in the tank and when it is necessary to place the next order.
At a non-retail fueling site, the operations manager knows and trusts his drivers and is confident they will accurately write down on the log sheet the amount of fuel pumped into their vehicles. The operations manager is also certain that when the gallon total is passed on to the accounting department, it will be manually entered correctly into the company's accounting system.
To the operations manager, his way may be "working," but in reality, this inefficient approach may cost his company thousands of dollars a year in fuel, equipment maintenance, liability, and compliance costs.
The operator also may be faced with financial losses due to extensive dispenser downtime or, in a worst-case scenario, an environmental disaster. These costs increase exponentially when managing multiple facilities in different regions.
Centralizing the management of daily operating functions creates greater success in managing multiple facilities. The answer to these concerns can be found in the technology that is driving today's advanced automated Fuel Management Services.
The number one priority of any fueling facility operator should be to know, at any moment, how much product is in each storage tank. Sticking tanks may still be popular with many companies, but accuracy is highly questionable, especially when compared with computer-aided tank-gauging technology that can measure and record fuel levels to the tenth of an inch.
While running out of fuel is the first concern, a less common problem is haulback. This occurs when a misread inventory level leads to too much fuel being delivered with no place to store it. The left over fuel is returned to the facility from which it came and store it until it can be used. The cost associated with not being able to accommodate all of the fuel being delivered is $275 a day for storage at the rack and $1.50 per mile traveled by the transport.
Another challenge is identifying who will be responsible for monitoring and recording inventory levels. While many companies with fuel-storage-tank operations have a national footprint, the management overseeing those operations is typically regionalized, with the fuel-management segment of the business decentralized.
The proper knowledge and experience in managing fueling operations is also becoming more and more important as strict compliance regulations are enforced.
Service costs can also be a drain on a facility that does not have the most advanced fuel-management program. Many sites rely on a local service provider when any maintenance or alarm issues arise. Whenever an equipment breakdown occurs, the normal reaction is to call a local service technician while not knowing exactly what the problem is, or if it can be fixed in-house.
Keeping accurate records when repairs occur is another challenge. Not proactively identifying recurring maintenance issues can result in increased costs brought on by needless service calls.
New, technologically advanced fuel-management services have been designed for ease of use and understanding. These systems can easily provide fueling-facility managers, owners, fuel buyers, and suppliers with an end-to-end fuel management solution. Centralizing the capture and storage of key fueling-site information is done through automation to ensure consistent site operations.
There are five areas where an enhanced fuel-management system can pay additional dividends.
1. Automated Fuel Tracking
This allows real-time access to inventory levels and fueling habits at any time for all of a company's fuel sites. This provides a more accurate account of all of the fuel usage at a facility, and exactly where that fuel is going. This will decrease opportunities for theft. Some studies show that as much as 3% of a company's fuel budget is lost due to theft. Most of the time company employees pilfer the fuel.
Automated fuel tracking enables diesel and gasoline tanks to be monitored separately with their specific delivery requirements tracked independently. This allows fuel inventories to be kept at optimum levels and optimizes delivery schedules.
2. Reduced Maintenance Costs
Maintenance issues cause headaches not only when a piece of equipment fails, but also when the maintenance issue needs to be documented. If this data is not accurately recorded, the site operator runs the risk of overpaying for a service call, or repeating service calls. Fuel-management services can let the operator know how much time the technician spent on-site, the technician's travel time and the time needed to actually complete the service, which is something that can be hard to track by an on-site manager or clerk.
3. Compliance Management
Automated fuel-management systems have been designed to track and update compliance data and incidents 24/7/365. Compliance management at commercial or industrial sites can be a lower priority, but automated management of this process increases its importance in the system without increasing the amount of employee interactions.
4. Alarm Management
Alarm management is traditionally a labor-intensive, manual job. Automated fuel management allows this difficult task to be outsourced to a company that can diagnose, solve and document alarm conditions immediately. These companies also are capable to diagnose and solve alarm events remotely, saving the need for a service call.
5. Manage Contractor Database
Rather than turning to the phone book, automated fuel-management systems allow a contractor database to be set up for the site, often by the company that is providing the fuel-management service. This ensures that contractors who don't have the ability-or even current or correct insurance-are not called for a particular job. Contractors who are called to the site will have the right certification and training, and the right parts and equipment to perform the repairs.
Fueling-site operators who are interested in proactively managing their fueling operations will quickly realize the benefits of an automated fuel management system. By reducing manual processes, unnecessary service calls, potential compliance penalties and many man-hours of unnecessary or inadequate manual work, automated fuel management can result in significant savings.
Peter Cochefski is director of sales and marketing for Ryder Fuel Services, a subsidiary of Ryder System Inc., and a provider of fuel-management programs. Visit www.ryderfs.com.
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