Automating fuel logistics demand and reconciliation efficiency for nationwide fuel distribution (Sanjay Kukrati)

Imagine you're the owner of a nationwide chain of gas stations, and you have to manage the entire nationwide logistics of fuel ordering and then reconciliation of the goods received. This can be a very daunting task, considering the typically low margin on fuel. To make the business profitable, you would need to automate the entire supply chain and reconcile every fuel load you have received efficiently in timely manner to reduce cost and improve your margin. You also need to meet the environmental compliance for the gas stations. The "Fuel Management System (FMS)", from FuelQuest, Inc., joins different modules for logistics and finance together in an original, comprehensive approach which addresses both the delivery logistics and order reconciliation in a single holistic package, one which can provide an example to the industry as it moves forward toward more widespread automation.

Under the technical leadership of Binod Chamoli, Manager of Software Engineering, the FMS team developed an algorithm which analyzes historical data and provides fuel managers with a view which helps in making fuel purchase decisions, determining when the next fuel load is needed, which fuel products are needed, and how much of each product is needed. The FMS provides a view which combines multiple fuel pricing data points to generate the best or the lowest-priced combination of product, supplier and the terminal. This "Strategic sourcing" method of supply chain management formalizes the way all this disparate information is gathered and interpreted, allowing an organization to leverage its purchasing power.Using the FMS ensures a significant increase in what is generally a very might profit margin for fuel – anywhere from 0.5 to, in some cases, as much 5 cents per gallon per day, depending on fuel pricing.

Mr. Chamoli and his team also developed a feature to identify the "Must Go", "Should Go" and "Can Go" loads, and the FMS visually presents those loads in an easy-to-understand “dashboard” which displays real-time inventory on the ground. "Must Go”, "Should Go" and "Can Go" refers to the time sensitivity of the loads, if not action is taken then it will have financial impact to the business as the stores will run out of fuel. The application uses multithreaded and event-based design to get the real time inventory data and uses it to identify the trends of inventory fluctuation.Event driven architecture enables the FMS application to be fully asynchronous and non-blocking. Message payload is small, and they are very specific state change. This architecture allows the solution to scale in case of high load.
Connectivity to tank gauges are maintained by VPN tunnel allowingencrypted communication. Device specific commands are sendto get diagnostics and other valuable information which are then stored in a queue.The high specialized persistent queue allows a small pool of worker threads to pull data out of the queue and process in parallel to produce actionable insight shown on dashboard.

The FMS also supports EDI (Electronic Data Interchange)from multiple vendors. EDI replaces the manual need to handle the documents by people.It also provides secure data exchange and document mapping to help automate and optimize the data transfer. Once imported these are then saved to a database table and an event is published to a queue. Each event represents the type of import and it is processed asynchronously. These transactions are then automatically reconciled. Reconciliation uses high performance message queues, messages are processed asynchronous. Depending on the reconciliation rules defined by the organizations finance department, fuel buyers are getting more than 95% of their fuel invoices automatically approved which is much higher than manually reviewing each invoice. The FMS’ complex reconciliation process performs a great many tasks in the asynchronously in background, allowing it to fulfill its function without manual intervention. The automated matching and approval of fuel invoices is saving 1-2 minutes per invoice. For nationwide fuel retailers – who import thousands of invoices – the time and money savings are significant.
By using the FMS, organizations can typically save a great deal of operational cost – both by reducing the time needed to plan fuel logistics and process transactions and by reducing the manpower needed to maintain the network of stores. For some nationwide retailers, one or two people can manage the fuel logistics involved in fuel ordering and distribution, one or two people can manage the entire financial side of the process. If implemented on a widespread, nationwide scale, systems like FMS could lead to a sea-change of increased efficiency and accurate forecasting throughout the industry

(Binod Chamoli is a Global Enterprise Architect, SaaS and Cloud Computing professional with 17 years of experience in delivering software development projects with 7+ years of end-to-end delivery management while leading cross-functional teams with multiple technologies.

Throughout his career, he has continually proven himself to be a leader in technical project leadership, lean operations, business process alignment, and cost savings/ROI. His seasoned leadership skills, coupled with his lean technical approach, allow him to bring a level of strategy to his role that magnifies results for the business.

As a Lean Systems and Technology professional, here are a few of his career highlights:
• Implemented i18n and L10n in software systems = increased revenue growth.
• Implemented metric-driven approach in development cycle to reduce time and cost of getting product to market.)
• Improved FMS system performance = increased customer satisfaction, increased stability and availability.