A “Vital Few” key metrics in petroleum logistics can show your logistics efficiency and directly impact customer service. These apply to fuels, lubes, propane, gasses, and bulk chemical delivery.
The idea behind the “Vital Few Metrics” is that a small set of metrics shows your logistics efficiency. While there are many metrics to track, these “Vital Few” are enough to effectively manage your logistics.
The Vital Few Metrics (KPIs’) are;
- Plan vs. Actual route time
- Gal/Trip
- Gal/Hour
Plan vs. Actual time is an indicator of excess hours by drivers
Plan vs. Actual time is the baseline indicator for labor hours and also tells if you hit your planned ETA for delivery times. If your trip was close to on time, you could ensure that customers were serviced in the planned sequence, order delivery times were accurate, and drivers did not steal excess time for overtime pay.
To accurately know the planned time, you need a routing system that optimizes and calculates total trip time, including planned stop time. Planned stop time depends on the volume of products delivered, the number of products, and the truck. Typically you plan a base dwell time plus a quantity per minute to determine the total stop time.
For keep-full accounts, many bulk distributors use a fixed delivery quantity – 200 gals every Mon and Thu. Advanced distributors use an order forecast and tank monitors to know that this Monday is 110 gal and Thursday is 250. For wholesale fuel volumes, this has a larger impact.
In addition to a routing system, you need a mobile app to capture trips automatically, and delivery information such as order start/stop times and sequence.
If you don’t know how long a trip is supposed to take, you don’t know if drivers are working the system. Anecdotally, one of our customers had a long-time fuel driver who always ran an 8-hr shift with occasional overtime, so nothing looked out of the ordinary. He was highly resistant to our mobile solution with fuel delivery software and kept making excuses and claiming there were technical issues. Our customer continued to restrict his trips and started assigning only day shifts, but they still had problems with him. They gave his night route to another driver who consistently made the trip in less than 4 hours – with the same stops.
Without a petroleum logistics software solution, you don’t know how long a trip should take if the driver goes in sequence and what the stop actuals are (ETA/ETD).
Gal/Trip is an indicator of whether you are fully utilizing your equipment
Gal/Trip indicates how efficiently you plan stops per trip and how much of your truck/trailer capacity you use. Gal/Trip shows how efficiently you plan trips and utilize assets.
If you are not using a solution with route optimization, you are not building trips with the most efficient order combinations and delivery capabilities. Petroleum logistics businesses must be able to plan with tools that allow better utilization of trucks and trailers so that each asset is used to its maximum capacity. Unused capacity on your trucks is a running loss of business opportunity that can never be recovered – though you never see the bill for it, it comes at a cost. We’ve seen customers do the same number of trips with 8.5 trucks vs. 10 saving more than 15% of their total transportation costs with route optimization. These savings can cover the cost of deploying a dispatch and delivery system!
You should expect Gal/Trip to improve by using fewer trucks for the same amount of stops (8.5 trucks for 100 orders versus 10 trucks for 100 orders). And you will also see this as more truck capacity is used, so a truck with 4500 gals is loaded to 3800 gallons versus 2500 gallons.
A more advanced method of increasing gal/trip is to route all current, open orders and then use our virtual tank forecasting and trigger tanks to determine which keep-full accounts you can top off with products on those routes. We see this process increase truck utilization by more than 20%. Even if a customer’s tank has not reached its safety stock, it can be topped off to avoid a separate trip just to hit that tank a couple of days in the future. That’s a win for your customer and improved operational efficiency! The important message here is that technology is not just an expense; it’s a tool that can drive out unnecessary costs, increase cash flow, and improve customer satisfaction while paying for itself.
A word about tank monitors: Installing tank monitors is expensive and labor-intensive. Knowing the level of every tank is invaluable from a customer service standpoint. When you use BizSpeed’s bulk delivery solution, you don’t have to monitor every tank to track the fuel delivery process. You can still forecast fuel deliveries without monitors with statistical modeling and Machine Learning/Artificial Intelligence. While intelligence is artificial, the sales results are real.
BizSpeed’s goRoam can use historical delivery data and put unmonitored tanks into groups and similar traditional monitored tanks to calculate utilization trends and lower human error. These calculations tailor to your account for different usage patterns to predict when you will reach a safety stock level.
Gal/Hr is a measure of how efficiently your route is
Gal/Hour is correlated to gal/mile but provides a better indicator because it captures any slack time a driver takes or the “meandering factor.” When drivers linger in the yard before/after a trip starts or take an unplanned break during a trip, their gal/mile may look good, but it took an extra 30 minutes of delivery time while the mileage did not change.
Gal/Hr indicates how efficiently you built a trip, the driver’s compliance with your planned route, and how accurately you generate order volumes.
Other KPIs
There are many other KPIs and metrics, especially for petroleum and bulk logistics, but the Vital Few give you an immediate indicator so you can investigate more nuanced KPIs, such as
- On-time %
- % of the fleet used
- Ordered vs. delivered variance
- Total mileage
These should also be tracked, but the vital few KPIs will give you an accurate snapshot of your logistics efficiency, showing you the most significant margins to save money. BizSpeed’s goRoam fuel truck delivery software combines these with our Driver Scorecard to improve your operational efficiency and customer service. You can develop a comprehensive picture and plan for your operation today. Contact us to Book a Demo today!
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