What keeps you up at night? Weather unpredictability, price volatility, and safety and compliance keep us all tossing and turning. The good news is that you have some control over what can feel like an otherwise chaotic and unpredictable business world. Whether you’re a propane retailer serving local communities or a wholesaler supplying a network of distributors, you can start by controlling fuel inventory management.
Why fuel inventory management? Optimizing your fuel inventory ensures you can meet your customers’ needs even during peak demand, which in turn reinforces customer trust and improves your company’s reputation. Managing stock levels optimizes capital use, so you find the sweet spot in between too much and too little. When it comes to inventory and safety, however, more doesn’t always mean better for your storage tanks.
With a clear overview of the potential upsides, here are four steps for propane retailers and wholesalers to optimize fuel inventory management.
1. Secure the Right Solution
Understanding the capabilities of your current vendor — and what additional capabilities might be available from other providers — is strategically critical. And having the right technology is necessary for all the other steps in your optimization blueprint to be successful.
When it comes to your existing vendor, make sure you’re talking regularly on the phone and in person when you can. If you’re not already discussing the bigger picture, begin a conversation about your broader business goals and ask how their solution can support you in achieving them. Have candid and open conversations about what you’re each seeing in the industry and take advantage of the educational opportunities your solution provider offers.
Don’t underestimate the power of connection at this step. For example, I love getting to talk to PDI customers, whether it’s a one-on-one conversation, at a tradeshow or in an educational webinar through our learning platform. These connections can significantly strengthen relationships and create the chance for a vendor to affirm it’s meeting your needs and helping you plan for your business.
When it’s time to look at new vendors for your fuel inventory management solution, solicit referrals from your peers. Review case studies and other content shared by the vendors. Doing your homework in advance will prepare you for the conversations you’ll have as you evaluate your options.
2. Account for Your Entire Fleet
In our industry, every gallon — and every vehicle — matters. Regular and accurate fuel inventory management should account for your entire fleet comprehensively. This isn’t simply knowing where a truck is; it’s understanding each vehicle’s capacity, current load and delivery history. Whether it’s your main depot or a remote storage site, you need to know exact inventory levels at any fixed point to achieve a real-time picture of your propane flow. You should track every gallon, from your tank to the customer’s tank, with no room for guesswork.
Having fleet-wide visibility also helps ensure that each delivery has a specific truck and driver assigned to it (which results in the right truck being dispatched for each job) and that the routes are optimized. It also creates a clear chain of custody for auditing, if needed. For example, if a customer reports a shortfall or inventory numbers don’t align, you can trace the issue to a specific delivery, truck and driver to facilitate quick resolution.
Finally, you can’t overlook the mobile capabilities of your solution. Using in-truck digital applications helps to increase adoption of fuel inventory management software. Drivers can log deliveries, record tank readings and even capture customer signatures in real time. This immediacy not only improves accuracy and efficiency — it also speeds up billing cycles considerably.
3. Take Advantage of Reporting & Analytics
Data is like an expansive all-you-can-eat buffet. There’s a lot to choose from and (most of) it looks appetizing. But where do you start? How do you know what “good” data is? And if you don’t “digest” it properly, you’re in a worse place than where you started.
Food comparisons aside, we can’t underscore the importance of data in a complex, regulated industry like ours. Arguably more valuable than the data itself is what you do with it. Analyzing fuel inventory management data influences your business decisions far beyond the tool itself.
Today’s sophisticated analytics are scalable, so you can build and run reports at micro and macro levels. At the micro level, you learn granular details like neighborhood holiday spikes or which farms saw increases by adding greenhouses. Getting more precise allows you to tailor your promotions and offers to customers as their needs change. At the macro level, you can analyze industry-wide trends (weather’s impact on overall demand, the use of propane in the manufacturing sector, etc.) to shape your long-term strategy.
Now put the micro and macro together. For example, by analyzing past winter consumption patterns against weather data, you can forecast future demand surges. Data and reports built on historical results enable you to predict and plan for demand surges or lulls. Then you can confidently automate volume buying when there’s advantageous bulk pricing or use hedging to ensure you have enough fuel for contracts and special pricing plans, among other strategies. You’re not just crossing your fingers or going with your gut instincts. You’re armed with critical insights to anticipate what’s next instead of simply reacting to what happens.
4. Educate Your Entire Team
It’s your business, and you’re ultimately responsible for every decision (add that to the start of my story where I list what’s keeping you awake). But that doesn’t mean you shouldn’t build a team that’s knowledgeable.
Make sure your team is trained in your fuel inventory management solution at implementation and on an ongoing basis. Training can be provided for any level of employee, from drivers to office staff, for all the players who impact your profit and success. Keep current with training as updates are made to the technology and look at what types of training your vendor offers. Both virtual and in-person training options can be effective.
Once they know how to use the tools, let your employees know why you’ve made the investment and how that impacts your business goals. Show them real examples of how it will improve the business. Having this understanding can increase their engagement, especially if there’s something in it for them. Consider offering incentives for your team around achieving certain business goals. When the business wins, everyone wins.
Not only does investing in training and education help your current business, but it also supports career and succession planning. Retaining employees is key with today’s competitive workforce, and research from leading learning platforms reveals that employees will stay at organizations where they feel there’s greater potential to learn and grow.
In the propane industry, it often seems like there’s a lot of outside factors that can make or break your business. By optimizing technologies like fuel inventory management, you can regain control of your assets, leverage insights and engage your employees to ignite a data-driven strategy for success.
