What are KPIs?
Key Performance Indicators are quantifiable measurements of objective performance over a set time. KPIs give companies tangible value for comparing against current performance, estimating future projections, and assisting stakeholders in achieving specific goals. The “Vital Few” KPIs in petroleum logistics can show your logistics efficiency and directly impact customer service. These apply to fuels, lubes, propane, gasses, and bulk chemical delivery.
This article discusses the three vital KPIs for bulk distributors and additional key performance indicators for logistics efficiency.
The idea behind the “Vital Few Metrics” is that a small set of metrics can show your logistics efficiency. While there are many metrics to track, these “Vital Few” are enough to effectively manage your logistics.
The “Vital Few Metrics” are:
Planned vs. Actual Route Time
Gallons/Trip
Gallons/Hour
Planned vs. Actual Route Time
Tracking the planned versus actual route time is an essential indicator for measuring labor hours and determining whether the scheduled estimated time of arrival for deliveries was met. When a trip is close to being on time, it ensures that customers are serviced in the intended order, delivery times were accurate, and drivers do not take advantage of extra time for overtime pay.
To accurately determine a trip’s planned duration, a routing system is essential. This system calculates the total time of the trip, considering the planned stop time. The planned stop time depends on the volume and quantity of the delivered products and the type of truck being used. The total stop time is typically calculated using a combination of base dwell time and quantity per minute.
Bulk distributors handling keep-full accounts often use a fixed delivery quantity, like delivering 200 gallons every Monday and Thursday. However, advanced distributors employ order forecasts and tank monitors to gather more precise information; This allows them to adjust delivery quantities based on accurate data, which is particularly significant in wholesale fuel volumes.
The Role of Routing Systems and Mobile Apps
A reliable routing system and mobile app are crucial for automatically capturing trip details. Mobile apps can easily record important delivery information, including the start and stop times of orders and the order in which deliveries are made.
Without a petroleum logistics software solution, estimating the expected duration of a trip and accurately tracking the actual stop times (ETA/ETD) becomes challenging. Implementing this software provides valuable insights into the efficiency of delivery operations.
Gallons/Trip
It is essential to consider gallons/trip to ensure efficient trip planning and optimal utilization of assets in petroleum logistics. This metric measures the efficiency of stop planning and capacity usage for trucks and trailers.
Efficiency with Route Optimization Software
Your trips may lack the most efficient order combinations without a route optimization solution; This can result in missed opportunities to maximize the usage of trucks and trailers.
Every bit of unused capacity on your vehicles represents a loss of business potential. By implementing route optimization software, customers have reported achieving significant savings in transportation costs of up to 15%, while maintaining the same number of trips. These savings alone can cover the cost of implementing a dispatch and delivery system!
Using gallons/trip as a KPI metric brings notable improvements. For example, you can achieve the same number of stops with fewer trucks (i.e., 8.5 trucks instead of 10 for 100 orders). Furthermore, you will notice enhanced truck capacity utilization. Rather than loading a 4,500-gallon truck with only 2,500 gallons, you can increase efficiency by loading it with 3,800 gallons.
A more advanced method of increasing gallons/trip is routing all current and open orders. Utilizing our virtual tank forecasting, you can identify keep-full accounts that can be topped off with products along your routes. This process has shown to increase truck utilization by over 20%. Even if a customer’s tank hasn’t reached its safety stock level, it can be topped off during the route, eliminating the need for a separate trip in the future. This approach benefits both customers and enhances operational efficiency.
The important message here is to view technology as an investment rather than an expense! It’s a tool that can eliminate unnecessary costs, increase cash flow, and improve customer satisfaction.
Efficiency Without Tank Monitors
Installing tank monitors can be costly and labor-intensive. However, with 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 by leveraging statistical modeling and Machine Learning/Artificial Intelligence. While the intelligence guiding these predictions may be artificial, the sales results are real.
BizSpeed’s goRoam uses historical delivery data to group unmonitored tanks and tanks with similar monitoring patterns. By analyzing utilization trends and reducing the risk of human error, this approach customizes the calculations based on your account’s specific usage patterns. As a result, it accurately predicts when you will reach a safety stock level, improving inventory management.
Gallons/Hour: Trip Building and Driver Compliance
Gallons/hour serves as a valuable indicator of trip efficiency, as it takes into account the “meandering factor” and any slack time drivers may take. While gallons/mile provides a basic measure, gallons/hour offers a more comprehensive evaluation. It considers instances where drivers spend additional time in the yard or take unplanned breaks during the trip. These factors can significantly impact delivery time, even if the gallons/mile ratio appears favorable.
Gallons/hour indicates the efficiency of trip planning but also highlights the drivers’ adherence to the planned route and accuracy of the order volume generation. It offers insights into how well trips are organized, ensuring optimal fuel utilization and effective allocation of resources.
Other KPIs for Logistics Efficiency
There are many key performance indicators to consider in petroleum and bulk logistics. However, by focusing on the Vital Few KPIs, you can gain immediate insights and investigate more nuanced measurements, including:
- On-time percentage
- Percentage of fleet used
- Ordered vs. delivered variance
- Total mileage
While other KPIs and metrics should also be monitored, the Vital Few offer a quick and accurate snapshot of your logistics efficiency; This allows you to identify significant areas where cost-saving opportunities exist, optimizing operations effectively.
BizSpeed’s goRoam fuel truck delivery software combines these metrics with our Driver Scorecard to improve your operational efficiency and customer service. This software lets you obtain a comprehensive view of your operation and create effective plans. Take advantage of these features to drive success in your fuel truck delivery operations today!