Supplying bunkers is traditionally a low margin and high volume business. In today’s volatile environment where fuel prices rise and fall quickly managing profitability is challenging. To compete effectively bunker suppliers need the ability to both respond quickly to fluctuating fuel prices and to manage all aspects of their supply chain from trading, risk management and procurement to operations, inventory and sales.
For many suppliers who tend to rely on outdated processes to manage bunker supply operations a fast and effective solution to improving efficiency, managing margins and streamlining operations is the deployment of a Bunker Management System.
But what is a Bunker Management System? What are the benefits it offers users? And what should you consider when looking at the different Bunker Management Systems on the market?
What is a Bunker Management System?
A Bunker Management System is a software application that is used by bunker suppliers to automate business processes involved in the trading, sale, distribution and delivery of crude oil and refined products.
Why would you need a Bunker Management System?
There a still a wide number of bunker suppliers that trade, sell and distribute petroleum products using manual processes or outdated computer systems. A Bunker Management System will automate these processes increasing efficiency, saving money and streamlining a whole range of bunkering operations ranging from trading, hedging and risk management, to inventory and financial accounting.
What are the benefits of implementing a Bunker Management System?
A Bunker Management System will help solve many of the challenges facing today’s bunker suppliers including:
- Matching supply and demand.
- Effectively monitoring credit and liquidity.
- Handling fuel price volatility.
- Quoting competitive prices.
- Managing operational complexities.
- Accurately managing inventory and associated costs.
- Managing financial instruments.
From our own experience of working with a wide range of global bunker suppliers, who have deployed Bunkertech ETRM, Inatech’s own cloud-based end-to-end Bunker Management System bunker, suppliers have also benefitted from:
- An increase in the speed of trades.
- Being able to monitor the profit and loss of trades.
- Gaining better operations insight and improving profitability.
- Monitoring inventory in real-time.
- Avoiding costly credit mishaps.
- Making faster, better informed decisions.
- Streamlining operations.
- Optimizing operational costs.
An on-premise or Cloud-based Bunker Management Systems?
There is a wide choice of Bunker Management Systems on the market some available on-premise and others via the cloud.
As bunker suppliers tend to operate on low margins the lack of available capital to pay upfront for an on-premise system may be limited and agreeing funding within an organization could prove time consuming.
A cloud-based system usually works on a subscription based model. This means there is no need to access capital, so avoiding internal capex negotiations, which in turn saves time in getting a project approved.
Cloud-based software is also easily scalable so it grows as your business grows. It can be accessed from anywhere with internet connectivity, making it an ideal solution for employees working from home. It is also fast to implement and as everyone is accessing the application in the cloud everyone will always be using the very latest software available.
What should you consider when choosing a Bunker Management System?
Not an exhaustive list but when looking at different product offerings we suggest considering some of these questions.
- Does the System manage inventory, trading, P&L and operations in real-time?
- How does the System handle deals, credit control, invoicing and contract management?
- How extensive is the functionality around inventory management?
- What about inventory control, valuations and reporting?
- How critical is risk management to your operations? If the answer is yes, can you hedge, monitor, forecast and report using the System?
- Are there reconciliation and financial accounting applications?
- Do you have the flexibility to optimize operations across the supply chain?
- Does the System handle multiple modes of transport/multiple storage locations?
- Can you monitor regulatory compliance?
- How intuitive are the interfaces? Is the System easy to use?
- What kind of reporting functionality is provided? Can you report on inventory levels, get cash flow forecasts, manage finance and track and analyze claims, for example?
- Does the System integrate with your other software products?
As this blog highlights there are clear advantages to implementing a Bunker Management System. However when faced with a number of different software solutions expert advice can prove invaluable.
Here to help you choose the right Bunker Management System
Inatech works with some of the world’s largest bunkering companies. That means we have a good understanding of the business challenges bunker suppliers face. Combine that with the expertise we have gained by working alongside our parent company, Glencore and you have access to a team of people who bring unique knowledge and experience to the marketplace.