Supply Chain Logistics Part 1: Fuel Procurement, Contracts & Allocation

Managing fuel for a distributed fleet, network of retail or commercial and industrial (C&I) locations is a constant challenge, with varying needs and never-ending demand. Furthermore, keeping track of contracts, buying fuel at the best price, and ensuring that you aren’t over-allocated is a daunting task. 

Now, throw outdated software and manual processes into the mix. Suddenly, an already complex task becomes a maze of endless spreadsheets and paperwork. It’s slow, error-prone, and ultimately eats away at your profits. This is the reality most fuel operators face today–but it doesn’t have to be. 

From Manual to Modern 

In the past, fuel management relied on guesswork and siloed information. But the fuel industry, like many others, is embracing digital solutions. With the influx of real-time data feeds like DTN, innovative operators are ditching the traditional approach in favor of smart supply management software. 

As part of optimizing fuel assets, innovative operators may choose to enlist a supply management solution. This software automates tasks, unlocks valuable data, provides real-time visibility around fuel pricing, supply, and demand to appropriate team members so they can execute the most profitable strategy.

In short, automation optimizes every step of supply management. It acts as a centralized hub with all your procurement, sales, and supply-related data in one digitally integrated command center. Accessible to everyone who needs it, this hub lets stakeholders across teams view critical documents like contracts, pricing information, remaining allocation, and other data feeds.  

By continuously processing multiple data streams, the supply management software helps you make the best fuel purchasing decisions, like real-time ‘best buys’ for your business. It continuously evaluates various factors such as price, volume and freight to present the best options with the greatest impact on your operations and revenue margins.  

Simplified Allocation   

Consider this scenario: An operator needs to determine the most cost-effective option for scheduling, pickup, and delivery of a load from one of three different terminals. Those terminals are each governed by distinct supply contracts.   

• Legacy system: Contracts and all related purchasing data exist in disparate holding areas, unable to be evaluated side-by-side.  

• Integrated system: With all your key records in one place, you can leverage historical sales data alongside variables like distance, pricing, and contracts to find the optimal course of action.  

De-Siloed Operations  

Supply chain logistics management systems also eliminate the disconnect between contracts and dispatch by:  

• Keeping a master log of load codes that can be accessed by multiple users, updated and exported to dispatchers and drivers   
• Creating simple and complex index or market-based pricing plans which can be assigned to multiple contracts   
• Monitoring allocation levels at terminals, providing immediate data insights into contract performance so fuel operators can see how they’re performing against contracts to ensure they’re facilitating the best contract performance. 
• Providing all data above in a digestible and traceable format based on delivery BOL so operators can see load codes, cost, pricing, revenue, profit and remaining allocation for each BOL transaction   

Expedited Invoicing   

Once a BOL is provided, the benefits of an automated supply management solution continue. Data-driven automation can seamlessly generate buy and sell prices, streamlining processes in which records are matched, reconciled, and invoiced in a fraction of the time. Manual intervention is minimized, enhancing accuracy and boosting efficiency across the entire procurement and sales lifecycle.   

Stay Tuned for the Next Post! 

Coming up in this series, we’ll explore how industry-specific technology can facilitate consumption-based demand forecasting and inventory management. 

To speak with a Titan Cloud solutions consultant about how our supply and logistics module can help you optimize fuel planning and automate for success, visit us here.