Manual collection of fuel data is prone to errors and inaccuracies. Automated systems allow public sector fleets to capture accurate data that improves reporting and saves budget dollars.
In many ways, asset management is central to successful fleet fuel management. One of a government fleet’s most costly assets is fuel. Shrewd management of this asset can mean the difference between ending the fiscal year in the black or in the red.
Unfortunately, some public sector fleets fall short of a balanced fuel budget because unaccounted fuel losses have degraded their bottom line. All fleets — municipal, state and federal — that manage their own fuel supplies are vulnerable to fuel losses, which may result from theft, shrinkage, fuel system leaks, short deliveries, gray loads, meter drift and other causes. Fuel inventory losses caused by unplanned circumstances such as these can wreak havoc on a fuel site’s bottom line.
Accurate and comprehensive reconciliation that accounts for all fuel being pumped into and out of fuel storage tanks is critical to a quality government fleet fuel management program. Many fleets, though, rely on manual reconciliation processes to audit their fuel inventories. These fleets are not truly in full control of their fuel assets. That’s because manual Statistical Inventory Reconciliation (SIR) data collection can be extremely inaccurate and inefficient. Automating reconciliation through a software-driven solution eliminates these challenges.
Understanding SIR’s Inherent Limitations
One of the underlying functions of the SIR process is to effectively calculate variance, which is the difference between the amount of fuel reported being delivered and the amount of fuel being dispensed. It is both a reflection of the overall fitness of a fuel system and the accuracy of the inventory data being collected. If issues stemming from a high rate of variance are not promptly identified and addressed as part of a reliable reconciliation procedure, unaccounted fuel losses can quickly add up — easily tens of thousands of dollars.
Many government fleets that manage their own fuel supplies continue to manually reconcile their inventory, which is an error-prone, laborious process. To obtain inventory data via manual reconciliation methods, site operators must record inventory measurements every day that the fuel site is in operation. They must also record measurements for every fuel product on site, the amount of water in each product’s tank, the amount of fuel sold or dispensed and the quantity of fuel supplied during fuel deliveries.
To obtain an accurate analysis of fuel inventories, these measurements need to be taken at the same time every day. Supply deliveries are especially difficult to validate through manual reconciliation; measurements need to be collected in a timeframe when no dispensing or deliveries occur between the time when the volume in the tank and the volume dispensed is measured. Once the data is collected, the operator must plug it into a worksheet (or a spreadsheet) and calculate the variance.
In addition, the data collected through manual processes is only as good as the personnel and equipment gathering it. Unfortunately, the tools used to obtain inventory measurements — wooden gauge sticks — are often significantly deteriorated due to wear and tear or are modified by the user to make “dipping the tanks” easier. Inexact gauge sticks deliver inexact measurements. Inexact measurements will lead to inaccurate variance calculations. Inaccurate variance calculations can result in false compliance failures, bookkeeping inaccuracies and poor overall inventory management.
Determining a cause for a legitimate high rate of variance is especially cumbersome with manual reconciliation. It can take 30 to 60 days to simply recognize a loss is occurring, and that’s before resources have been assigned to troubleshoot the source of the loss. Incremental fuel losses accrued over a couple of months add up to a loss that can significantly undermine a fuel budget.
Achieving Efficiency and Accuracy
Requiring daily oversight, SIR can be a drain on resources. It demands vigilance, discipline, tremendous attention to detail from the person charged with performing the task and investment in cross-training. Manual reconciliation also can be a safety issue — often requiring personnel to be in close proximity to vehicle traffic while collecting inventory data.
Automating reconciliation through a software-driven solution, such as OPW’s Phoenix SQL® Fuel Management Software, offers these benefits to fleet fueling operations:
- Creates operational efficiencies by eliminating manual data collection
- Significantly improves the accuracy of reconciliation data
- Reduces the risk of false compliance failures
- Eliminates unnecessary costs resulting from troubleshooting the cause of unacceptable variance levels and implementing solutions
- Improves a site’s ability to forecast fuel consumption through real-time data collection
- Simplifies and streamlines compliance reporting
- Improves site safety
Many fleet fuel management software programs that perform reconciliation create additional efficiencies including:
- Exporting data to third-party database, spreadsheet and fleet maintenance programs for further processing
- Centralizing inventory data management, which is especially beneficial to multi-site fleet fueling operations
- Enhanced odometer checking that reveals obvious, incorrect mileage entries such as single, sequential or repeated numbers
- Streamlining tank-strapping configuration procedures by eliminating duplicative data entry processes
Fleet fuel management software that is utilized as part of an integrated fuel management solution can capture return on investment in less than a year.
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