Critical Operating Decisions Require Focus On Key Metrics, Cutting Unnecessary Paperwork

(October 15, 2019) — Look at the numbers that matter and only the numbers that matter. This is an excellent practice that will help managers make critical operating decisions. Mike Shilts says that with the right tools and habits, managers can have the numbers they need and not be distracted by those they don’t.
Shilts is vice president of marketing and business development at K & K Management Solutions (Indianapolis), a company that provides software to manage propane and refined fuel delivery.
Mike Shilts professional with K&K Management solutions a Propane and rerfined fuels Software company shares tips about what key metrics need to be tracked reports BPN magazine the propane industry's trusted source for news since 1939. Oct. 2019
He has degrees in psychology and finance/accounting (CPA) and a background that includes 15 years as director of retail operations at a family-owned propane business that had seven branches.

In his seminar at the NPGA Southeastern Convention, “Drowning in Data? How to Make Critical Decisions With Key Metrics and Cut Paperwork 90%,” Shilts shared with the audience the types of data he used to manage those branches. He walked attendees through 10 Excel worksheets and explained the key metrics they display. By focusing on these metrics, he added, marketers can improve their businesses while also cutting out unnecessary paperwork.

Each of his worksheets is designed so that a customer service representative can fill it out in less than five minutes. When a worksheet is complete, he said, it creates a visual display that quickly portrays your most important and timely information.

“You can’t improve and modernize your business if you have to spend all your time digging up these numbers,” Shilts said. “You should have these numbers right at your fingertips.”

Among the numbers that are to be recorded on the worksheets, and the reasons they are there, are the following:

Gallons (Units) Metrics: Gallons delivered each month and year to date are recorded on this worksheet. The totals are broken down by location, branch, or entity and by type of customer (domestic, commercial, etc.). Each of these is compared to last year, the goal, or the budget. “This is the most important metric; no money is made unless gas is delivered to a customer’s tank,” Shilts said.

Tank Sets, Pickups, Net Sets Metrics: This worksheet records the number of sets and pickups and the net sets—the difference between the two—for each month and year to date. The totals are broken down by location, branch, or entity. Each of these is compared to last year. “You don’t want pickups unless you’re not running fuel through those tanks because of the very high cost of steel.” A seminar attendee asked if he has kept metrics on the reasons for pickup. Shilts answered, “Not here, but I did track controllable and uncontrollable reasons for pickups. You want to know the total number first, then you can investigate why. You start with the big level, then ‘drill down’ to the next level.”
Shilts KK Propane Software Seminar Advises LPG leaders Key Metrics to track reports BPN propane industry trusted source for news since 1939 oct 2019
Goal Metrics (Gallons/Tank Sets): This worksheet tracks progress toward goals in the number of gallons delivered and tank sets/customers. For each, it records the location’s goal, total to date, percent of goal, and number of units above or below the goal. “These are the numbers you should show employees—the top-level goals and where they stand toward those goals, which are great company-wide motivators,” Shilts said.

Margin Metrics (Aggregate/By Product): The number of gallons delivered and the aggregate margin dollars are recorded on this worksheet. These are broken down by customer type (domestic, commercial, industrial, and wholesale) and by location. During the seminar, Shilts showed a sample worksheet with the numbers for three marketers: one high-margin, one equal products, and one low-margin. “They all sold the same number of gallons, but they have wildly different margins,” he noted. “That is what buyers look at, so you should look at what is generating the highest margins and cash flow.”

Valuation Metrics (EBITDA/Multiples): This worksheet calculates earnings before interest, taxes, depreciation, and amortization (EBITDA); free cash flow; and buyer’s cash flow. It also shows projected valuations and projected gallon sales multiples. “You want to be sure that you are selling a ‘castle’ and not a ‘shack’ to a prospective buyer,” Shilts said. “They are not interested in the number of gallons, but the aggregate margin on those gallons.”

Delivery Metrics (Increased Drop Size Savings): On this worksheet, users insert their data or projections for annual gallons delivered, projected increase in gallons per drop, initial average gallons per drop, and cost per drop. The worksheet then calculates the decrease in the number of drops by increasing drop size and the annual savings by increasing drop size. “The fewer times you handle the product, the fewer stops you make, the more money you make since this is primarily a distribution business,” Shilts noted. “This worksheet shows the effect of five-gallon improvements per drop. You can set these as a goal, plus it helps explain why you need to closely monitor will-call deliveries.”
Mike Shilts w K&K Software Managment for propane and refined fuels shares tips for propane professionals to track reports BPN magazine the LPG industrys trusted source for news since 1939. Oct 2019
Delivery Metrics (Reduced Excess Drops Savings): Here, users insert their data or projections for total drops, initial “excess drops” percentage, projected decrease percentage in “excess drops,” and cost per drop. The worksheet then calculates the decrease in the number of excess drops and the savings by decreasing excess drops. “This number should be zero—it’s excess, so reducing excess is a step in the right direction,” Shilts said. “Yes, we want to take care of the customer, but we don’t want to deliver when they are at 60%. Bobtails and driver costs are way too expensive to make excess drops.”

Cash Flow Metrics (12-Month Rolling): This worksheet records beginning cash balance; inflow and outflow in cash from operations, cash from investments, and cash from financing; net cash in or out; and end cash balance. It records this for each month and for the year. “Cash flow is what counts; you have to generate cash flow,” Shilts said. “It is 12-month rolling, so you can see what to expect on a continuing basis and continuously make adjustments.”

Break-even Metrics (Revenue and Units): Revenue, variable costs, fixed costs, net income (profit), and contribution margin are recorded on this worksheet. “This worksheet answers the question, ‘What’s my nut of fixed costs I have to overcome before I make a profit?’ It helps you see what margin you need to break even.”

Financing Metrics (Banker’s Ratios and Tools): This worksheet records net income; earnings before interest and taxes (EBIT); earnings before interest, taxes, depreciation, and amortization (EBITDA); adjusted EBITDA; and total cash flow after debt service. It also calculates ratios between these figures. “These are what a banker looks at,” Shilts explained. “They are about mitigating risk.”

Throughout the seminar, Shilts offered some additional tips for recording key metrics and cutting paperwork.
First, he advised attendees to stamp out “Excel-itis.” “That is the biggest time-waster,” he said. To limit the time spent keying in data, take information electronically from propane software. Then, focus on the big picture. Having too much data is as bad as having too little data.

Second, Shilts advised propane marketers to never make operating decisions from the financial statements. “You want to measure everything in cents per gallon on a timely basis,” he said. “You won’t get that from a financial statement.”

Third, Shilts suggested that attendees focus on the big picture by looking at only three digits (representing thousands) on worksheets. For example, “444=444 thousand,” not “444,444.” He explained, “You don’t need that level of detail to make ‘30,000-foot’ decisions. You want to get the big picture, not see all the detailed numbers at once.”

In addition to his role at K & K Management Solutions, Mike Shilts is a consultant and public speaker. He offers seven presentations as well as custom presentations that share best practices for a variety of industry audiences. To get an Excel file that contains all these worksheets, plus a brochure about the presentations, send an email to This email address is being protected from spambots. You need JavaScript enabled to view it. with BPNews in the subject line. For more information, contact him at (517) 815-4052 or This email address is being protected from spambots. You need JavaScript enabled to view it.. — Steve Relyea

In Memorium: Charles Ory Mourned By Propane Industry

(October 14, 2019) — Charles (Charlie) Louis Ory passed away peacefully at his home in Mesa, Arizona, on October 3, 2019, with family by his side. He fought his cancer valiantly throughout the last year of his life and kept his sense of humor till the very end. His family is heartbroken at his loss but know that he is no longer in pain nor confined to watching endless westerns and political shows from his bed.

Charles Ory longtime propane industry leader passed away Oct 2019 reports BPN mag the LPG industry trusted source for news since 1939Charles was born on February 18, 1948, to Sterling and Lona Ory in Greenville, Mississippi. His family moved to New Orleans during his junior high years. Charlie met the love of his life, Teri, during his junior year at John McDonogh High School. After five years of being an item, they married on July 4, 1969.
 
Driving a Frito-Lay truck in the rainy, muggy New Orleans weather lost its appeal and Teri and Charlie moved to Mesa, Arizona, where he continued to work for Frito-Lay and she taught school.
 
Seeking a career change, Charlie found his way to the propane industry, working for several companies before joining his friend, Jeff, to become co-owner of Aero Propane. When economic times became challenging, they started separate companies and Charlie became sole owner of Family Propane. The highlight of his career was his involvement with the Arizona Propane Gas Association (APGA) and the National Propane Gas Association (NPGA). In 2015 NPGA selected Charlie to be the chairman of the association. Through APGA and NPGA he formed many friendships that he treasured throughout the last 20 plus years of his life.
 
While he loved his industry, his family was the most important part of his life. His sons Chuck and David are a testimony to the man he was. His daughters-in-law, Nicole and Maria, are the perfect women for his sons and he loved them dearly. Grandchildren, however, enriched his life the most. Amelia, Ellie, and Apollo were blessed with a grandpa beyond compare, and they meant the world to him.
 
Charlie is preceded in death by his parents, Lona and Stering Ory, his sister Shirley, and his brother Bobby, as well as his in-laws Mary and Irvin Trimmer, and their sons Ken and Allan Trimmer.
 
In addition to his wife Teri, their sons Chuck and David, his daughters-in-law Nicole and Maria, and those precious grandchildren Amelia, Ellie, and Apollo, Charlie is survived by his sisters-in-law Dawn Trimmer and Nancy Chalstrom, and his nephews Chris Trimmer and Todd Trimmer, and his nieces Kelle Ory and Linda Early Arseneau.
 
A memorial service will be held on Saturday, November 16, at 11:00 am, at Mariposa Gardens located at 6747 E. Broadway Road, Mesa, Arizona. The service will be followed by a reception at Mariposa Gardens.
 
The APGA has established a scholarship in Charlie's honor. Donations in Charlie’s name may be made online here or may be sent to the National Propane Gas Foundation Scholarship Fund: NPGF – Scholarship Fund, 1899 L Street N.W. Suite 350, Washington, D.C. 20036. Donations are tax-deductible.

Paraco Gas Invests In Recruitment For Service Techs and Drivers

(October 14, 2019) — Paraco Gas of Rye Brook, N.Y. is investing in new ways to recruit drivers and technicians as the industry faces challenges in attracting employees. Family-owned Paraco has introduced a new benefits package with some untraditional perks for those in the driving and service fields.
Paraco Propane recruitment program to attract LPG service techs and drivers into workforce w big benefits reports BPN mag oct 2019
The company offers parental leave for employees who have completed one year of service, tuition reimbursement, and a revised paid time-off policy. The benefits are part of a comprehensive benefits package that Paraco Gas offers full-time, regular employees and dependents, including, but not limited to, the traditional medical, dental, vision, 401K, flexible spending, life insurance, disability income, sick leave, and paid holidays.

“Our ultimate goal is to get customers their propane safely, but also focus on a best-in-class customer experience,” said Christina Armentano, executive vice president of sales and business development. “We’ve decided to think creatively on how to position the company to attract and retain the next generation of drivers and service technicians. We are now focusing on the employee experience, offering newer benefits that are more likely to entice and retain a healthy workforce.”

“As a first-time father, I am grateful Paraco gave me the opportunity to be home to care for my child and support my wife,” said Marcus Moore, a motor fuel and barbecue cylinder delivery driver at the company. “Parental leave is a great addition to Paraco’s benefits.”

In addition, Paraco is working to empower employees by offering a referral program to boost workforce numbers, and by providing an apprenticeship program for service technicians, which includes paying for classes and assigning a mentor throughout the training process.

“We recognize how important work/life balance and support for personal and professional growth have become with the younger generation, and we need to adapt to their needs if we want them to consider joining our family,” Armentano said. “We also recognize that the shortage of these skilled workers is not limited to our industry or geographic markets; it’s a nationwide problem, with fewer people entering these fields. So, we are investing in training people from the ground up. We don’t know many others in our industry—or similar industries—who are offering all of this, but I’m sure many will start to follow.”

(SOURCE: The Weekly Propane Newsletter, October 14, 2019. Available by subscription.)

"Electrify Everything" Movement Becoming Major Focus Of Industry

(October 14, 2019) — Amid changes in leadership and issues of focus at the National Propane Gas Association (NPGA), vice president and general counsel Jeff Petrash said that while some key issues are requiring less focus, a tsunami is brewing in the form of the “electrify everything” movement. “The Crane Rule hasn’t come up as a significant issue for almost a year,” Petrash said. “Natural gas expansion has also slowed, but we continue to monitor it and we can address concerns as they arise.” For Petrash and the staff at NPGA, weekly advocacy meetings of the staff help determine priorities and they, as well as the NPGA leadership, are concerned about a movement to cut carbon emissions that doesn’t consider the full fuel cycle of each form of energy.
General Counsel Jeff Petrash for National Propane Gas Assoc discusses with BPN magazine the misguided Electrify Everything movement BPN magazine is the propane industry's trusted source for news since 1939
“The promotion of electricity as a fuel with zero carbon emissions is very misleading,” Petrash explained. “We are decades and decades away from most electricity being renewable, and coal and natural gas are used predominantly to create electricity.” He added that when coal and natural gas are used to create electricity, efficiency is much lower than heating with propane or natural gas directly. “A full 70% of the energy value disappears before the electricity powers the house. Meanwhile, with propane and natural gas, nearly 90% of the fuel gets to the house. In these situations, an electric water heater will leave more than double the carbon footprint.”

Petrash commented he has seen an electric-powered Tesla with the license plate message, “No More Gas.” With the electricity likely created from coal, the emission of carbon into the environment is much greater than from a propane-powered vehicle, even though the emissions occur at the plant where electricity is produced. Petrash feels a license plate that says, “Coal Pwd” on an electric vehicle is a more fitting message. “Some in state legislatures across the United States would like to limit our fuel choices, literally ruling out propane-powered options in favor of higher carbon-producing energy in the full fuel cycle,” he said. “All of this is in the name of cutting carbon emissions and helping the environment, believe it or not!”

“NPGA has added staff to focus more on the activity of state legislatures. The state government level is where more of the movement is to cut fossil fuel usage in favor of electricity. We are not likely to see as much activity on the federal level as long as Republicans keep control of the White House and Senate.” Having a relationship with many key agencies and state government officials will only help the cause, according to Petrash. “We’ve worked with the governor’s energy advisors in many states. This has given us a seat at the table for other issues as they arise.

“Hours of service is another issue where we are able to answer questions that come up.” Being part of the National Association of State Energy Officials (NASEO) has been important. “Three of us have been attending NASEO events,” he said. “We attended their winter meeting and five recent regional meetings.”

It is expected that NPGA and the Propane Education & Research Council (PERC) will work together closely on the challenge to the electric movement. “NPGA will focus more on advocacy. PERC cannot lobby due to its governing statute, but can provide funding and speakers for educational programs and educational materials. We have Tucker Perkins, CEO at PERC, lined up to speak at a NASEO roundtable in Los Angeles,” Petrash said.

“Carbon labeling of consumer appliances is one advocacy approach NPGA is working on. It is encouraging that overall efficiency of consumer appliances be done through full fuel cycle (FFC) policy. We want carbon footprint information to be included on consumer appliances so that people have this information during the purchasing decision.”

In September, NPGA announced Stephen T. (Steve) Kaminski had been selected to serve as new president and CEO. "The new CEO joins NPGA at the time there is a need to ramp up our initiatives on challenging the ‘electrify everything’ movement,’” Petrash said. He noted that the staff has been working on updating winter preparation plans; internal policies and procedures; and other key documents to make sure the association is in good shape when it’s turned over from the current CEO, Rick Roldan, to the new CEO. “We don’t want the new CEO to have to worry about a lot of details like this. I feel confident the board has hired someone who is in lockstep with us on the challenge of electricity.” — Pat Thornton

Propane People "In The News"

Bill Kroll Anova acquires Wesroc propane industry announces(October 11, 2019) — Anova (Providence, N.J.) has appointed industry veteran, William Kroll, as its first advisor to support the company through a period of extensive expansion. In April, Anova became the new name for DataOnline, WESROC, Wikon, and iTank, and most recently joined forces with Portugal-based Intelligent Sensing Anywhere (ISA). Kroll, who has more than 40 years of experience, spent more than half of his career with Matheson, most recently as chairman and CEO. He has a wealth of knowledge and expertise spanning nearly every facet of business. During his years with Matheson, he focused on the strategic direction and growth of the company, particularly the development of its activities in the electronics market sector. More recently, he focused on the growth of the company implemented corporate culture changes that drove organic expansion. As a key advisor to Anova’s executive leadership team, Kroll will add a valuable perspective to enable the company to meet current and future market demands.

Skotty Morris of Monte Vista Co-op (Monte Vista) was recently sworn in as president of the Colorado Propane Gas Association. Serving with Morris for the 2019-2020 term are Ray Martin of High Plains LP Services (Trinidad), vice president; Cathy Buxton, Wallace Gas & Oil (Lamar), treasurer; and Nathan Nicholson, Country Gas (Cortez), secretary.

George Jenkins industry expert machinist joins Marshall Excelsior as OEM specialist autogas propane pumps reports BPN propane industry's trusted source for news since 1939. Oct. 2019Marshall Excelsior Company (MEC) is pleased to announce that George Jenkins has joined its team as the OEM Truck and Plant Sales Manager. George has served in the propane and NH3 industry for over 38 years. In 1979, he began his career as a machinist at Corken, global leader of industrial compression and pumping solutions. Over time he worked his way into the Quality Control Department and also led the Shipping and Receiving team prior to moving into Customer Service. After his stint in customer service, Jenkins transitioned to Outside Sales where he focused on servicing the Industrial Gas & LPG market. The company welcomes George’s extensive knowledge, outgoing personality, and the significant asset he will be to the MEC team, as well as OEM’s and equipment distributors within the LPG and Industrial Gas industry. George will be headquartered in Oklahoma City, Okl. where he has lived for 43 years. He will be available to all that wish to work with him and utilize his expertise.
Paula Laney joins Energy Distribution Partners as Director of Safety Training reports BPN magazine the propane industrys trusted news source since 1939
Energy Distribution Partners (EDP; Chicago) is pleased to announce Paula Laney has joined the company as Director of Safety and Training. Laney brings to her role more than 25 years of propane industry experience, including more than 20 years in the area of safety training and education. She grew up in the propane industry, gaining experience early-on working with her parents in their family-owned propane operation, Liberty Propane in Cookson, Oklahoma. For nearly 20 years, Laney served as the Director of Safety, Training and Education for the Oklahoma LP Gas Research, Marketing and Safety Commission. She has served as the propane industry representative on the Oklahoma Uniform Building Code Commission’s Alternative Fuels Technical Committee and the Fuel Gas, Mechanical, and Plumbing Technical Committee. As a long-respected propane industry professional, Laney has served on the NPGA’s Education Training & Safety (ETS) Committee, and has worked closely with PERC and other safety professionals to deliver essential safety and training materials to the industry.

Propane People in the News Don Vicari joins Energy Distribution Partners EDP reports BPN magazine the propane industry's trusted source for news since 1939. Oct. 2019 oct 2019Don Vicari has also joined EDP as general manager for Ebbetts Pass Gas Service, which serves residential, commercial, and industrial customers in the Sierra Nevada mountain area of Calaveras and Alpine counties in California. Vicari, who has more than 25 years of management experience, spent the first 10 years of his propane career as the owner and operator of a Suburban Cylinder Express franchise operation in the Sacramento area. After selling his business, he joined AmeriGas to manage the Hawthorne and then Reno, Nev., territories. In his new position with Ebbetts Pass Gas Service, Vicari will manage all aspects of the business with a focus on providing an exceptional work environment and excellent customer service. He is an active member of the Western Propane Gas Association.

The New Mexico Propane Gas Association has installed its officers for 2019-2020. Serving as president is Wendell Nicholson of Gallup Propane (Gallup); vice president, Carl Fox of Cross Country Propane (Bosque Farms); and secretary treasurer, Lynn Dunson of Country Gas (Farmington).

Bruce Whitney has been selected as executive director of the New York Propane Gas Association (NYPGA) effective Aug. 2019. He has held senior management roles with a focus on marketing, training, business development, and client retention for energy and energy equipment since 1999. Whitney was director of marketing for many years at Ray Murray Inc. (RMI), and a senior director at Unitil electric and gas utility in its Usource energy management and procurement division. He also co-founded a Vermont business association decades ago. Whitney has been involved with NYPGA as a member, show exhibitor, and active participant on the Legislative Committee.

The Louisiana Propane Gas Association (LPGA) has installed its officers for the 2019-2020 term. Serving as president is Ralph Poole of Bergquist Inc. (Alexandria); vice president, Al Cadwallader of Southern LP Gas (Winnfield); and secretary/treasurer, Jerry McCain of Lacox (Covington). Holding the position of Northern District Director is Clint Vegas of Delta Fuel (Ferriday); Southern District director, Kenny Lucero of Cajun Propane (Scott); North at-large director, Neil Wise of O’Nealgas (Wise Choice Investments; Tallulah); and South at-large director, John McManus of ReedGas Propane (Eunice). In addition, Steve Higginson of Meeder Equipment (Tyler, Texas) will serve as Supplier committee chairman; and Steve Sampson of CUI (Simpsonville, S.C.), Supplier-elect.

George Jenkins, a propane industry veteran of 38 years has joined the Marshall Excelsior Co. (MEC) as OEM Truck and Plant Sales Manager. Jenkins will be based in Oklahoma City, his home of 43 years. Jenkins began his propane industry career in 1979 as a machinist for Corken, a global leader in industrial compression and propane pumping solutions for autogas filling stations, bulk plants, tank car unloading, propane delivery truck, propane transport, and agricultural agricultural ammonia transport applications. Jenkins has also provided outside sales services to the industrial gas and LPG market sales.

David Stewart, Heartland Propane (Girard) has been sworn in as president of the Propane Marketers Association of Kansas for the 2019-2020 term. Serving with him are Hannah Ramriez, Trinity Ag LLC (Smith Center), vice president; David Monroe, Alliance Ag & Grain (Protection), secretary/treasurer; and Karl Serrien of Central Valley Ag (Beloit), immediate past president.

Jack Potts, partial owner and president of Squibb Taylor (Dallas), passed away May 31. He was 83. Mr. Potts retired from the company in December 2017. Our thoughts and prayers go out to his family and friends.

The Western Propane Gas Association has installed its officers for 2019-2020. Richard Martinelli of InterState Propane (Sacramento) is serving as chairman; Ben McWhorter, Sequoia Gas Co. (Fortuna, Calif.), vice chairman; and Julie Johnson, Ted Johnson Propane (Baldwin Park, Calif.), secretary/treasurer. Patti Grantham of Targa Resources (San Ramon, Calif.) is past chairwoman.