It is estimated that fuel runouts and retains cost an average c-store $3,000 per year in profit. The majority of the margin lost during a fuel runout is on in-store purchases as customers drive off when fuel is unavailable. Mismanagement of fuel inventory levels is extremely costly, so it is important to correctly forecast your fuel usage. Three methods for managing fuel inventories include:
- Manual Tank Dips
- Spreadsheet calculations with ATG readings
- Inventory Forecasting Software
Manual Tank Dipping is very cheap and does not require a power source, however, it is also very inaccurate due to sticks fading, tanks tilting, or poor tank charts. This method is fully manual and does not provide any information on projected sales or forecasts.
Managing fuel inventory through a tracking spreadsheet involves taking a scheduled ATG reading and entering it into a spreadsheet for variance calculation and sales history. With this method, scheduled readings are always available and more accurate via the ATG. Daily SIR and ordering can also be recorded, but the information must be manually entered into the spreadsheet every day. Normally only one reading is used for the daily calculations, making predictive forecasting limited and also less accurate.
Another method is to implement software for fuel inventory management such as Insite360 Inventory Forecasting. This is an automated software tool for predicting sales, preventing runouts and retains, and sending notifications when thresholds are violated. By connecting a network of ATGs to a cloud based solution, customers receive full access to up-to-date site information through a single portal. With this method, Fuel Operations Managers receive a specific runout time for each site, helping to eliminate all runouts and retains. It is important to consider that management software does require connectivity to an ATG.
The financial consequences of running out of fuel make correctly managing fuel inventory an important component of maintaining c-store profitability. The Insite360 FuelQuest suite of solutions are available to provide you with all the information you need to make better fuel management decisions for your business.
Watch the Insite360 Inventory Forecasting product demo from our recent Fuel Management Basics Webinar.