4 Levels of Automation That Drive Growth for Petroleum Distributors

Levels of Automation for Petro Logisitcs

By Carolina Ruiz • Published July 19, 2021 • 5 minute read

The economic engine of any business can be expressed using a single metric that drives its cash flow and profitability.

For petroleum distributors, this metric is the gross margin per hour of deliveries. The formula for gross margin is revenue (price per gallon multiplied by the gallons delivered) minus fixed and variable delivery costs.

The denominator is the sum of all travel time to delivery locations and time spent on site.

While the metric is simple in theory, getting timely and accurate data when making deliveries to retail, commercial and mobile on-site fueling locations is a challenge if distributors are using traditional analog and paper-based systems.

SkyBitz has a comprehensive automation platform for fuel distributors that combines a robust fleet management dashboard, mobile delivery application and rugged device with a proven register interface.

The platform, SmartTruck, digitizes the order-to-cash cycle for petroleum distributors and provides managers and drivers with the following elements to rev up their economic engines and drive gross margin per hour:

1. Data capture

Petroleum distributors that use analog tank readers and paper-based ticket systems rely on manual input from drivers to account for the number of gallons delivered at customer sites and the data they need to plan future deliveries.

Manual processes introduce operational errors and lack real-time visibility for optimal decision making.

SmartTruck mobile delivery application offers unparalleled visibility, consistency, and integrity of data capture by communicating directly with tank wagon digital registers. The platform directly controls the number of gallons dispensed at customer sites and captures delivery data for accurate invoicing.

For mobile on-site fleet fueling, the workflow can also prompt drivers to capture odometer data from vehicles. This data element allows distributors to alert customers to instances of possible theft if gallons dispensed do not align with mileage traveled between fueling events.

2. Forecasting

Having accurate data is essential for petroleum distributors to forecast and fulfill customer orders profitably by effective delivery planning.

Distributors can use wireless tank monitors from SkyBitz at customer sites to automatically capture fill levels and send inventory data to SmartTruck to create orders. Additionally, distributors can use historical data captured by SmartTruck to predict demand and calculate the profitability of deliveries based on travel time to locations, gallons delivered, and time spent on site, among other details.

A distributor may know that a delivery to a customer site is only profitable when dispensing more than 500 gallons, for example, or when gross margin per hour is a minimum of $65. With granular data on customer deliveries, SmartTruck is able to dynamically add a service charge to orders that do not meet profitability thresholds.

The distributor can establish business rules for pricing in SmartTruck based on forecast customer orders and volume amounts. If a customer order falls short of its volume threshold, the platform can automatically add a service charge to the bill.

3. Dispatching

With the right automation tools, distributors can take on more business and enter new markets without adding more overhead in the form of dispatchers, data reconcilers and billers.

SmartTruck enables petroleum distributors to grow without adding overhead by planning and executing more profitable routes. Dispatchers have all the information they need to plan and schedule deliveries as orders come in.

The workflow of SmartTruck also gives drivers a detailed route plan. When they arrive at a location to deliver, they scan barcodes to verify the right products are going in the right assets.

4. Billing accuracy

Distributors that use traditional analog systems are often challenged by data reconciliation such as when their customers say they did not receive the gallon amounts listed on their invoice.

Without a digital system, when product is remaining in a truck after a delivery route the missing gallons for customer orders have to be found by manually reviewing handwritten notes and tickets.

SmartTruck digital capture process and workflow automatically matches gallons loaded with gallons delivered. The driver workflow confirms the product type and gallons before drivers start their shifts and asks drivers to confirm these details again when ending their shift. The process enables transactions to flow seamlessly from fueling to accounting for invoicing.

By digitizing all four elements in the order-to-cash cycle of petroleum deliveries — data capture, forecasting, dispatch, and billing — petroleum distributors will have back-office automation and real-time information to maximize their gross margin per hour.