So the pressure is on. You urgently need to manage and monitor your fuel procurement. Your first instinct is to use a spreadsheet. It’s convenient and appears to fit the immediate problem.
Move on a couple years. Fuel purchasing is now more complex. The business needs have changed. Regulations have increased. Monitoring is critical. Management needs more information and they need it now. Yet you’re still using the same spreadsheet and supporting manual processes. You’ve likely tweaked the spreadsheet, changed formulas and the file has grown in size and complexity. It sort of works, but you know it is no longer supporting the business requirements and is hindering you when it comes to efficiently buying bunkers.
Sound familiar? Well for many bunker buyers it is. When I meet and talk to buyers, I still regularly come across people who do all their fuel purchasing and management using spreadsheets and they rely heavily on manual processes to monitor business performance.
In many cases buyers are recording sales and transactions amounting to millions and millions of dollars on a single spreadsheet. This is a very risky business process and if anything happens to the file – it can be costly and potentially catastrophic for the business.
Relying on spreadsheets is risky
By relying heavily on manual processes and working with spreadsheets you are often trying to juggle with information from many sources (including suppliers and market data providers) while assessing inventory availability on board and handling bunker requests from ship operators along ship routes around the world.
These challenges present two risks:
The practical issues of multiple people accessing one spreadsheet, namely:
• Input errors, duplication of effort, issues of file control, potential corruption of extremely important files, audit challenges and the fact management don’t have an easy-to-access, consolidated view of the business.
The operational issues of not having information immediately at your fingertips, resulting in:
• Vessels bunkering in ports where fuel prices are high rather than alternative ports offering lower prices
• The capacity of the vessel often being underutilised
• Bunker requests to procure fuel that are not received by traders on time
• Bunkering more fuel than required for a round trip
So what are the alternatives for bunker buyers?
In order to avoid these costly errors, we are seeing buyers turn to technology and specialist fuel procurement software. This not only eliminates many of the risks, it is a way to drive improvements in operational efficiency and costs.
Such systems address the practical errors of using spreadsheets by automating many manual tasks, improving security, speeding up reporting, providing a consolidated view of the business, and so offering faster, more accurate reporting and better decision support via real-time data and analysis tools.
Such products also offer greater functionality and the opportunity to expand your fuel management capabilities and drive operational efficiency through:
• Better planning by analysing your performance with real-time data
• The automation of the entire end-to-end procurement process – from purchase order creation to confirmation once the order is placed.
• Automation of the entire claims cycle
• Easy reconciliation of inventory after purchase
• Centralised reporting to support critical decision making
• Improvements in overall fuel procurement optimisation.
With the potential risks of spreadsheets high, is fuel procurement technology a better alternative?
For small operators manual processes and the use of spreadsheets do still have a place in business. However as the size of operator grows and the complexity of fuel purchasing increases, the risk of relying on labour-intensive, outmoded processes and spreadsheets really starts to impact the business, making the cost-benefits of automation more significant and the switch to specialist technology worth it.
What are your experiences? Have you found effective ways to manage your fuel purchasing and management requirements? Let us know in the comment sections below.