Written on: October 14, 2024 by Phillip J. Baratz
The Fall is an exciting time of year for fuel distribution companies. After a slow Summer, it’s time to get busy and make money. However, this excitement is often accompanied by trepidation about the uncertainties of the upcoming season.
Many companies use the end of the heating season to assess and address issues. Yet, in a mature industry like ours, it often feels repetitive: What if it’s warm again? What if there is more than the usual number of runouts in the fall? Will my seasonal drivers return? Do I even need them?
The list of concerns can be long, making it hard to prioritize. Here are a few things that can be addressed now, pre-season as it were, to sleep a little better at night.
Excess/Surprise Service Calls
The first cold snap each year is challenging, often requiring a reactive approach. However, it doesn’t have to be this way. A business operating system is full of service data. By sorting customers by call frequency, business owners might identify those with unreasonable expectations, equipment needing service or upgrades or under-performing service techs.
Creating an “Excess Calls Report” (example below) can help proactively reduce these annual issues.
Liquid Product Goals (Budgets)
Early in the season, it’s crucial to define what success looks like. Is it total gallons delivered, total margins, product mix? Setting up monthly budgets for volumes and margins by product allows for better course correction. Finding out a few months later that margins were “off” can be very difficult to recover from. Reviewing these budgets on a weekly basis early in the season (then twice a week from December onwards) can help avoid surprises later. (See example below)
Additional Concerns
Some other matters that business owners might want to take into account include:
• Accurately tracking margins, including inputting bill-of-ladings, identifying contracted vs. non-contracted supplier bills and posting inventory movements correctly.
• Delivery efficiency, such as reviewing deliveries, delivery Ks and “forecast-to-actual” delivery sizes.
• Having accurate baseline data for operations, such as miles and hours, that are often neglected but crucial for cost calculations.
While the Fall is an exciting time of year, it’s also early enough to identify and address key issues. Many companies face similar challenges, but not all share the same level of concern. Identify your firm’s biggest worries, find people to help you through the process, and you’ll sleep better at night. ICM
