Delivering high-quality fuels, lubricants and other chemical-based fluids is a precise business. Keeping customers who need those fluids correctly serviced involves an even greater level of complexity. RelaDyne takes on that challenge every day, bringing the best of the fuel, lubricants and services industries together in one well-oiled enterprise that reaches across the U.S.―and soon internationally.
As a leading distributor of packaged and bulk oils, lubricants, fuels, diesel exhaust fluid, and industrial reliability services, RelaDyne’s specialty is direct delivering limited quantities, from a few hundred to a thousand gallons, to end user customers. Those customers use these fluids for specialized purposes, such as power generation, construction or logging equipment, run in-field agricultural tanks, support applications of generators or do injection molding. There are stringent regulations imposed for these fluids, so RelaDyne offers cleaning, dehydrating and filtering services prior to delivery. They also offer Vendor Maintained Inventory or “keep full” services to make sure fluids are maintained at customers’ designated levels.
Distributing out of 79 locations to over 15,000 refillable tanks at customer sites across the country, it can be difficult and costly for RelaDyne to manage each tank’s status and make deliveries at the optimal time. The situation is compounded by the number of newly acquired businesses, about one per month, that RelaDyne integrates into its enterprise, each bringing with it more tanks. This complexity is where SkyBitz Tank Monitoring makes a significant difference.
The Road to Optimized Operations
Instead of sending a truck when RelaDyne’s staff thinks the customer needs product, the company is integrating the SkyBitz SMARTank® solution to digitally monitor each tank’s status so they can determine the best time to make a delivery. That means fewer delivery runs and more efficient stops on optimized routes.
Doug Oehler, RelaDyne’s Executive Vice President of Branch Distribution, explains that every delivery stop costs the company between $30 and $60, depending on location. Their goal is to deliver at 80 percent of a tank’s capacity or more, but sometimes they undershoot that goal, delivering at only 50 to 60 percent. In such situations, a delivery could have been delayed perhaps by a few days with no consequence to the customer. In eliminating even one or two deliveries per month to all of the 15,000 tanks, the savings can quickly add up. Ultimately, lower RelaDyne costs will translate to customer savings too.
SkyBitz Tank Monitoring is enabling RelaDyne to realize these benefits. Entering a master agreement in 2017, RelaDyne has been integrating the solution at select locations throughout the country, with full deployment planned for the next few years. Previously the company had used as many as six different tank monitoring suppliers, given that they were associated with some of the acquired businesses. That created significant complexity in user interface, multiple data sets and screens to monitor. Oehler noted that “You don’t want to have separate screens up for customers that might be right next door to each other, and end up scheduling multiple deliveries to the same area.”
Another benefit with SkyBitz was the short learning curve for RelaDyne’s team to use and operate the system, given its simple interface. Oehler did note that the culture change associated with moving staff away from their old way of doing things has been challenging. Instead of intuitively anticipating what a customer is going to need and scheduling a delivery, dispatchers can now rely on SkyBitz Tank Monitoring to know who needs product and who doesn’t at any given time. This system typically requires a worker to be fully dedicated to monitors and dispatching―a huge change from traditional operations. Oehler acknowledged that “SkyBitz has done a great job of going out to our locations, training our people and getting them to move that mindset to the monitor system.”
The SkyBitz team also works closely with RelaDyne to ensure service quality, a key part of RelaDyne’s offering and brand differentiation. By going with RelaDyne on customer site visits, helping with implementations and holding monthly follow-up conference calls, SkyBitz supports RelaDyne well beyond just monitoring customer data. The entire team is committed to maximizing operational efficiencies while keeping customers well cared for.
Playing the Long Game – and the Short Game
RelaDyne is working on new systems to calculate ongoing ROI of their SkyBitz investment. Their three main cost elements are fuel, asset depreciation and labor, all of which fluctuate with the economy and customer demands. In the current environment, fuel prices are lower but a driver shortage is increasing labor costs. As SkyBitz Tank Monitoring helps RelaDyne reduce or even potentially eliminate routes, they can better manage labor requirements to prevent unnecessary deliveries and make more efficient use of drivers’ time. With over 1300 trucks in the field, that’s a big logistical challenge; but SkyBitz is helping them analyze utilization and profit down to the per truck level.
Another fiscal benefit comes from the agreement to bundle RelaDyne’s hardware costs into their monthly fee, rather than requiring RelaDyne to purchase equipment outright. Because RelaDyne is private equity owned, this arrangement helps investors assess ROI on a monthly basis, instead of having to wait several years to see the full benefit. So while RelaDyne is building a “100-year company,” they’re doing it with a mindset of 3-to-5 year increments to keep efficiency improvements top of mind.
As they’re buildling that 100-year business, RelaDyne sees new opportunities through closer collaboration with large oil companies who up to now resist third party tank monitoring over their own proprietary methods. As the benefits of advanced digital solutions like SkyBitz become ever-more irrefutable, RelaDyne hopes that the unprecedented data insights and efficiencies available will encourage adoption among these parties for everyone’s mutual benefit. The company is also taking on international expansion with some recent overseas acquisitions. Oehler sees SkyBitz as part of this bright future: “Using SkyBitz has helped us to drive cost savings on both monitoring and efficiency. Whenever I buy a new account, I’ll be able to immediately get them integrated because we’re already set up.”