How a Tank Monitor Can Help You Exceed Your Business Goals

by Phil Baratz, Angus Energy

Your tank monitoring strategy can maximize deliveries, flatten the delivery curve and improve your bottom line.

The summer season is the perfect time to audit your customer data, perform equipment maintenance, set your budget for the upcoming season, and fit in a vacation.

It’s also a great time to assess how technology can help you become more efficient and a good time of year to give year-round employees, especially delivery drivers, more to do. We are in a world that values efficient use of time, and cross-training drivers to do tank-monitor installations, service work, or other tasks that create value to the company (and to the now better-skilled employees) benefits everyone.

Tank monitoring technology is one of the more popular investments companies have elected in recent years. According to a 2023 study conducted by BPN News, 70 percent of respondents reported that they are deploying or spending more on tank monitoring vs. only 56 percent last year. Companies are looking to tank monitors to improve delivery efficiency, reduce runouts, obtain more accurate usage forecasts, enhance customer satisfaction and more.

Here are a few thoughts from our team at Angus Energy on how to develop a targeted strategy for using tank monitors.

Who Gets Monitors?

1. Each new account should get a monitor. The industry rule for stabilizing a K-factor (if that is even a thing!) is that it takes two winters to do so. During those two winters, out of fear of running out, customer tanks are generally set with an artificially high K-factor which, if indeed high (as it likely is), leads to small and inefficient deliveries. In most cases, you can break even on the cost of a tank monitor within the first year and not suffer through the typical “double whammy” of having small deliveries AND low per gallon margins for new customers.

2. Every tank that has a runout should be prioritized for a monitor. Even if the runout is explainable – the customer was on credit-hold, or you messed up and didn’t get there on schedule – the customer NEEDS to see that you are doing something to make sure that it won’t happen again. A monitor accomplishes that.

3. Prioritize, prioritize, prioritize. Not every tank has the same need for a monitor. It is not as simple as looking at which customers have historically gotten small deliveries versus those who have gotten larger ones. Monitors are about predictability – KNOWING how much can be delivered to a tank even before heading out to make the delivery. An analysis of historical deliveries, under the magnifying glass of a Standard Deviation study, will give you a top-to-bottom priority list.

What Do You Do With A Monitor?

1. Eliminate as many stops as possible without letting anyone run out (while flattening the delivery curve). This will help you make the deliveries that need to be made in the dead of winter while making deliveries to smaller customers during the shoulder months of the heating season. In other words, take care of your largest customers when it’s the coldest and they need fuel and take care of the smaller stops, the customer who only needs one or two deliveries per year, when there is more time, and the need isn’t so extreme.

2. Maximize gallons at every stop. Just because a tank will hold more fuel doesn’t necessarily mean you should fill it. Allow the monitor to help you make optimal deliveries. If you have a 550-gallon tank and you are only delivering 250 gallons at a time, wait, and fill that tank when you can add another 50 to 100 gallons. You may not only save a stop, but you will also add some extra margin to the bottom line. If you deliver an extra 50 gallons per delivery, and you do that a couple thousand times per year, what is the effect on YOUR bottom line and how does that affect the ROI of a monitor?

3. Protect high value customers. All companies have customers they tend to “over-service” because they are large and pay good money. If these companies run out it gives them an opportunity to look around for a new supplier and a competitor the opportunity to cherry-pick one of your really good customers. There is nothing worse than losing a customer who pays well over a mistake in making a delivery late. Make a conscious business decision to add monitors to these customers.

Balancing these strategies will create a firm foundation to build your monitoring program. By using solid dispatching fundamentals and the steps above you will be ready to maximize your deliveries, flatten the delivery curve and improve your company’s bottom line.

Philip J. Baratz is president of Angus Energy which he co-founded in 1991 and the Managing Member of Angus Partners, LLC. Angus offers a diverse range of products and services to distributors and end users, each customized to the needs and locations of the client. Connect with Phil: pbaratz@angusenergy.com | linkedin.com/in/philjbaratz | 954.564.7500 ext. 114

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