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Why Do I Need a Fuel Management System?

Posted on July 1st, 2016 by Reza Tavassoli

I keep my money in a bank. Beyond cash, I have a credit card and different financial products contributing to my savings and retirement fund. I also have access to details, regarding that money and those products, on a per transaction basis. At any time, using any web connected PC, I can view a list of transactions for a particular account, for a time period of my choice, and view the details of any of those transactions. My money is protected by various security measures, such as access credentials and PINs. I have absolute control over who has access to my financial assets.

Anything less than the basic features described above would be unacceptable. This seems pretty obvious for anyone with a bank account. Yet, this mindset is absent in some fleet operations when it comes to what can be viewed as money in liquid form: fuel.

Why Do I Need a Fuel Management System? Fuel prices being what they are (expensive!), I always find it strange whenever I come across a fleet operation where there is no fuel management system in place. After labor, fuel is the largest operating cost of a fleet. So why should management and control of such a valuable commodity be based on some combination of manual log entries (done by the very people taking the fuel!), and the “honor system”? The beauty of a good fuel management system is that it not only controls and keeps track of fuel distribution and consumption, but it also adds to your bottom line by decreasing fuel and labor related expenditures. Here are some of the ways this is accomplished:

Reducing Fuel Consumption

For each fueling transaction, a fuel management system will make sure that the operator and the vehicle are identified, and will keep track of how much fuel is taken. It will also eliminate spillage and make it virtually impossible to take fuel unless authorized. Finally, it will allow for tight fuel inventory management through reconciliation of fueling transactions, totalizer readings, and tank levels. Through these benefits, fuel consumption is reduced by ten to twenty percent.

Reducing Labor

There are several ways a fuel management system can reduce labor (remember, our #1 operating cost?). Firstly, by eliminating the paper transaction tickets, administrative labor is reduced, as the need to manually enter fueling transactions into some accounting or ERP system is eliminated. Furthermore, any fuel management system worthy of the name will feature automatic data transfers from its software to any other third party system. Finally, all useful reports pertaining to fuel distribution, consumptions, and inventories can be produced and sent automatically, based on your requirements.

Minimizing Downtimes, Damages, and Breakdowns

A good fuel management system can interface with an electronic tank gauging system, allowing it to automatically manage level alarms, and send tank level notifications to relevant recipients, such as procurement and suppliers. In this scenario, orders are placed in a timely manner, and emergencies such as tank leaks are addressed swiftly. Any situation where undetected leaks are a possibility should be rectified immediately, as soil decontamination can be extremely costly.

Also, a fuel management system can be used to capture vehicle data pertinent to preventive maintenance. So not only is data pertaining to each fueling transaction captured, but vehicle mileage, engine hours, fault codes, etc. are also provided. High caliber systems will even automatically capture data as vehicles simply drive by. This set up will provide the maintenance department with timely and accurate data, allowing it to recall vehicles based on appropriate preventive maintenance plans. Costly breakdowns and downtimes are reduced, and everyone is happy.

Taking Some Money Back

If fuel consuming assets operate both on and off the road, chances are that some kind of road tax is paid on the fuel, and the tax paid on the off road usage is claimed at the end of fiscal. A fuel management system can automatically track exactly how much fuel is consumed by those assets, and spit out the relevant reports within seconds. So on top of decreasing fuel consumption by 10%-20%, reducing labor, and extending the life of equipment and vehicles, we also get to take some money back from the tax man. Isn’t technology grand?

The advantages described above are only the tip of the iceberg. There are several other reasons to implement an automated fuel management system, and the importance of each of them varies, not only from one industry to another, but also from one firm to another. I hope to have provided a good starting point in your quest to improve fleet operations. I’d be more than happy to discuss this stuff further, so please do not hesitate to get in touch, and remember: account for every drop of fuel spent.

Reza Tavassoli, MBA
(866) 263-6267 ext. 205

After labor, fuel is the largest operating cost of a fleet.

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