{"id":1128,"date":"2022-01-10T15:38:00","date_gmt":"2022-01-10T15:38:00","guid":{"rendered":"https:\/\/pdisoftwareprd.wpengine.com\/?p=1128"},"modified":"2024-01-17T10:40:19","modified_gmt":"2024-01-17T15:40:19","slug":"fuel-margin-management-strategy","status":"publish","type":"post","link":"https:\/\/pditechnologies.com\/resources\/article\/fuel-margin-management-strategy\/","title":{"rendered":"Polish Your Fuel Margin Management Strategy With PDI"},"content":{"rendered":"\n<p>The fuel industry is anything but predictable. Yes, it\u2019s often complex and volatile, but you can\u2019t say it\u2019s ever boring. One reason it\u2019s so unpredictable and complicated is the large number of interwoven parts of the&nbsp;fuel supply chain\u2014from refiners to retailers.<\/p>\n\n\n\n<p>Part of that complexity stems from a lack of integrated platforms as well as companies that are on vastly different stages in their digital transformation. For instance, the COVID pandemic quickly revealed the fragility of these supply chain connections and dependencies.<\/p>\n\n\n\n<p>In spring 2020, gasoline demand was down nearly 50% compared to the previous year\u2014<a href=\"https:\/\/www.eia.gov\/todayinenergy\/detail.php?id=43455\" target=\"_blank\" rel=\"noreferrer noopener\">the lowest consumption in decades<\/a>. Meanwhile, convenience retailers were enjoying record-high fuel margins. In the first quarter of 2020, margins averaged 10 cents per gallon higher than the full year of 2019. Unfortunately, petroleum wholesalers weren\u2019t as fortunate as people stayed home and demand quickly plummeted. At that point fuel prices got simultaneously hit by both the lingering impacts of&nbsp;<a href=\"https:\/\/blog.opisnet.com\/fuel-prices-and-covid-19\" target=\"_blank\" rel=\"noreferrer noopener\">the pandemic and an oil price war<\/a>.<\/p>\n\n\n\n<p>When you can\u2019t easily predict what\u2019s coming next in a fluctuating market, the best strategy is to make your business as adaptable as possible. Here are three good ways to control what you can in terms of optimizing your fuel supply operations:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Control your inventory<\/li>\n\n\n\n<li>Streamline your bill-of-lading (BOL) process<\/li>\n\n\n\n<li>Automate credit management<\/li>\n<\/ol>\n\n\n\n<div class=\"mbm-spacer mbm-spacer__16 wp-block-mbm-responsive-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading has-charlie-font-size\" id=\"h-control-your-inventory\">Control Your Inventory<\/h2>\n\n\n\n<p>Maintaining inventory is probably one of the most significant contributors to&nbsp;daily operating expenses for petroleum marketers. So, try to control your inventory to avoid costly retains and runouts. A sophisticated inventory management solution can deliver accurate insight into your inventory levels, down to the smallest detail\u2014whether you\u2019re managing a bulk plant or operating a warehouse with lubricants and other petroleum-based packaged goods.<\/p>\n\n\n\n<p>Either way, it\u2019s smart to refine your process of balancing between over- and under-stocking, especially during periods of fluctuating demand. And while predicting demand isn\u2019t an exact science, basing your inventory decisions on historical data or unique factors in your area can help produce accurate forecasts to prevent inventory excesses or shortages.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-charlie-font-size\">Streamline Your BOL Process<\/h2>\n\n\n\n<p>Many businesses discover that&nbsp;automating the fuel supply chain&nbsp;tends to be a complex undertaking. In fact, the process of providing an accurate BOL and invoice used to take days or weeks, especially for fuel suppliers that relied on paper-based mail delivery. Even in the age of automation, some suppliers are still delivering bills of lading and processing invoices. And that\u2019s where the complexity and challenges lie. Here\u2019s why.<\/p>\n\n\n\n<p>The BOL is one of the most critical documents in a fuel supplier\u2019s workstream. It contains vital information about what, how much, and to whom the product was delivered. It\u2019s the foundation for the invoice that follows. If any crucial details are incorrect as a result of manual processes, that not only delays your time-to-cash but opens up the possibility of creating such a horrible service experience that your customers start considering other suppliers.<\/p>\n\n\n\n<p>The way you avoid that is to go digital and automate as much of your process as possible, making it easier for your customers to integrate with their own systems.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-charlie-font-size\">Automate Credit Management<\/h2>\n\n\n\n<p>Proper credit management and collection is critical for all fuel suppliers. However, it\u2019s even more important during periods of declining sales and low-profit margins. At that point, fractions of pennies matter. It\u2019s not unusual for large suppliers with multiple business lines and thousands of customer accounts to see multi-million-dollar fluctuations from week to week. A good management solution provides the essential tools to monitor your accounts and&nbsp;<a href=\"https:\/\/pditechnologies.com\/increase-productivity\/erp-back-office\/\" target=\"_blank\" rel=\"noreferrer noopener\">automate the credit management process<\/a>.<\/p>\n\n\n\n<p>For example, if a customer exceeds their credit limit, it typically means they\u2019re not consistently paying their invoices on time. In this case, the automated system should enact a hold on their credit that prevents them from placing an order until the matter is resolved. Many of today\u2019s solutions can support this, and they can also send rules-triggered customer communications before a bill is due or when an account is overdue by a certain number of days.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-charlie-font-size\">Go Digital to Mitigate Market Fluctuations<\/h2>\n\n\n\n<p>If you\u2019re human, you can\u2019t help but feel uncomfortable during periods of lower sales and&nbsp;tighter margins. But you now have good options for controlling what you can. The more efficient you can make your operations, the more prepared you\u2019ll be to remain profitable despite fluctuating market conditions.<\/p>\n\n\n\n<p>Stay prepared for the next big event with PDI&nbsp;<a href=\"https:\/\/pditechnologies.com\/increase-productivity\/logistics-solutions\/\" target=\"_blank\" rel=\"noreferrer noopener\">logistics management solutions<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When you can\u2019t easily predict what\u2019s coming next in a fluctuating fuel market, the best strategy is to make your business as adaptable as possible. <\/p>\n","protected":false},"author":25,"featured_media":2711,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","inline_featured_image":false,"footnotes":""},"categories":[134],"tags":[153,164,165,44],"pdi_resource_tier":[146],"class_list":["post-1128","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-article","tag-carriers-and-haulers","tag-fleet-logistics","tag-in-truck","tag-planning-dispatch"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v25.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Polish Your Fuel Margin Management Strategy | PDI<\/title>\n<meta name=\"description\" content=\"Three ways fuel suppliers can overcome tight margins using margin management analysis. 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