Jeremy Hyman, The Fuel Oil Systems Alliance and managing director of JSM Technology, explains the fuel oil distribution sector
The fuel oil distribution sector in the UK – known also as ‘downstream’ distribution to distinguish it from oil exploration or refining activities which are generally called ‘upstream’ – should be viewed as a distribution business that happens to distribute oil, rather than an oil business per se.
This means that it faces challenges common to other distribution sectors handling bulk deliveries, such as chemicals, beverages, dairy and cement, and also non-liquid bulk loads such as powders and grain or feeds. There are also parallels to sectors involved in collection, rather than delivery, such as tank emptying and waste product recovery, and recycling/waste management.
This include typical distribution issues, for example optimising vehicle utilisation, delivering within physical access restrictions, monitoring drivers’ hours, the use of telematics etc. Added to this are issues peculiar to bulk liquid distribution, for example not necessarily knowing how much product will actually be delivered (as opposed to what has been ordered) until after it has been delivered, or working out stock valuations based on mingled batches of liquids.
No one system can in truth hope to tackle all these issues effectively, and although the traditional approach of providers has been to try to offer all-in-one solutions it was time in the fuel oil distribution sector for something different – and so the Fuel Oil Systems Alliance was born.
The Fuel Oil Systems Alliance
The Fuel Oil Systems Alliance was formed with the intention of marrying together a range of products, both hardware and software, from different suppliers in the sector. The intention was that this would allow customers in the sector to pick and choose best-of-breed components secure in the knowledge that buying any one component would mean that in the future, when budget and resources permitted, other components could be bought that would fully integrate with those already in use.
Each of the Alliance members agree to co-operate and maintain standards between one another, and whilst each is free to operate commercially however it pleases, and indeed integrate with other systems, preference is always given where possible to working with an Alliance partner.
The traditional approach
Traditionally, vendors have sought to provide every aspect of a solution for their customers in-house. Whilst some smaller businesses preferred the comfort of this all-in-one solution, larger and more dynamic operations felt stifled by such solutions as it prevented them selecting best-of-breed components to meet their needs. So, for example, an all-in-one solution might have offered strong order processing and stock control, but a poor on-board computing system (or none at all!).
Furthermore, any attempt by a client to integrate an alternative component to an all-in-one offering was traditionally met by resistance from the supplier of the solution, who at best might choose not to assist in the integration, or at worst charge exorbitantly for the work and later on seek to avoid support responsibilities for such a ‘non-standard’ environment.
The Fuel Oil Systems Alliance approach changed all of that. Customers were now free to mix best-of-breed solutions from within the Alliance to match their needs, timetable and budget.
Furthermore, the necessity of working together within the Alliance has also made its members more cognisant of the general need to interoperate and integrate with external companies and to support solutions comprising multiple applications.
Technologies that are much used in the wider IT world are gradually making their way into vertical sectors such as distribution. The most prevalent of these – XML (eXtensible Markup Language) – has greatly eased the task of integrating systems. Using XML, each member of the Alliance can define the data they are passing (the “schema”) along with the data itself, easing the passage of data from one system to another.
The customer experience
Two of the customers using Alliance systems illustrate how its products work together in practice.
The first is a London-based fuel oil distributor. They operate a fleet of nearly 50 vehicles, utilising Refine to take orders, manage stock and invoice customers. Unplanned orders are passed using XML to Optitool for planning and then returned to Refine as planned orders where order processing teams can immediately update customers on the schedule for their delivery. Over the course of the day, Refine pushes out – again by XML – orders to each truck over the cellular network to TouchStar on board computers, guiding drivers to collect and deliver product. As product is delivered, the volume delivered is confirmed and communicated back to Refine in real-time, which raises invoices and sends them out by e-mail – allowing an invoice to arrive the truck is leaving the site from its delivery!
The second example is a fuel oil distributor in the South West that utilises Refine and Optitool for order processing, stock control and route optimisation. In addition they use Jaama for fleet management. By referring to the Jaama data to see which vehicles are scheduled for maintenance or otherwise off-road, fleet capacity can be automatically altered to guide sales order processors when volume has “maxed out” for a particular day, facilitating adjustments to planning and delivery windows to reflect this.
The model the Alliance offers provides customer benefits in terms of choice, future-proofing and technical reliability. Future Alliance members – everything from warehouse systems to enhanced telematics to human resource and payroll systems are being considered – will extend the appeal of the model, and its future application to the wider haulage and distribution industry will allow allied sectors to reap the benefits of this modern way of suppliers working together.
The products in the Alliance
The products in the Alliance are as follows:
See also the Fuel Oil Systems Alliance website at www.fosalliance.com