Benefits of a Fuel Management System
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It's no secret that the use of fuel is a necessary component of running a business. Unfortunately, as gas prices increase, so do your expenses. Implementing a Fuel Management System can help you in monitoring your fuel consumption and the money you are spending on fuel! By viewing this webinar, you will have a clear understanding of Fuel Management Systems and awareness of how a Fuel Management System can benefit your company.
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Benefits of a Fuel Management System
- 1. Benefits of a Fuel Management System Presented By: Christian Mostert Chief Operating Officer Walden Associates Walden Associates
- 2. What is a Fuel Management System? • Maintain, Monitor, Measure, & Control – Gather and store data; reports for management analysis. – More accurate cost analysis, tax accounting. • Uses A Fuel Controller – Hands-free RFID data transmitter – Odometer/hour readings • Can Be Used With Any Type Of Fuel – Liquid or gas; hydrogen, natural gas, propane. Walden Associates
- 3. When Should I Consider A Fuel Management System? 1. You suspect you are losing fuel through unaccounted-for fuel loss. 2. You are having trouble tracking fuel consumption for each vehicle. 3. You are using an honor system clipboard and pen to record fuel transactions. 4. You have a fuel management system that no longer works, has never worked, is easily circumvented, or lacks helpful reporting capabilities. Walden Associates
- 4. When Should I Consider A Fuel Management System? 5. You’ve had diesel pumped into a gasoline vehicle, or vice versa. 6. Month-end fuel reporting is too time consuming and frustrating. 7. Your drivers don’t tell you when their vehicles need tending to. 8. You hate the idea of wasting money, when there is an effective way of preventing it. Walden Associates
- 5. Who Should Consider A Fuel Management System? • Any organization that maintains their own fuel tanks & fleets – Fleet Operators and Fleet Management Companies – Regional Fleets – Fixed Based Operators at Airports – Police, Fire, or Emergency Vehicle Fleets – Government Fleets; executive cars, work trucks/vans, etc. Walden Associates
- 6. Where Can I Find A Fuel Management System? • FuelMaster by Syn-Tech Systems 1. Fuel management vendor for U.S. Military 2. FMU’s are designed and built in the U.S. 3. Customer support is second to none • www.myfuelmaster.com Walden Associates
- 7. How Does a Fuel Management System Work? • Two situations encountered when implementing a FMS: 1. New Tank Systems 2. Retrofit An Existing System Walden Associates
- 9. Top 5 Reasons to Buy A Fuel Management System 1. More Control 2. Better Fuel Economy 3. More Security 4. Better Accountability 5. Better Fleet Maintenance Walden Associates
- 10. Municipal Considerations 1. Do Your Homework! 2. Meet With Your Comptroller & Municipality Chief Executive 3. Hold a Discussion With All Department Heads 4. Fund Project Through Capital Improvement Bond: – Initial implementation won’t come out of your operating budget – Repayment of cost can be spread out over several years – FMS implementation can help sustain/improve bond rating Walden Associates
- 11. Questions? Christian Mostert Chief Operating Officer Walden Associates cmostert@walden-assoc.com 16 Spring Street Oyster Bay, NY 11771 516-624-7200 www.walden-associates.com Walden Associates
Notas del editor
- What is a Fuel Management System.A fuel management system uses cutting-edge technology to allow you to electronically maintain, monitor, measure, and therefore control fuel purchases, inventories, and consumption of fuel. The system gathers and stores data and produces reports for management analysis, improved budgeting, projections and other fuel-related decision-making. You get tighter consumption control, more accurate cost analysis and tax accounting. And you’re better able to meet regulatory or other public reporting requirements. The system uses a fuel controller, or Fuel Management Unit (FMU), to authorize users and vehicles before turning the fuel dispenser on. A fuel management system can use a hands-free RFID data transmitter on the fuel nozzle to authorize a vehicle and more importantly, retrieve vital vehicle operating information from a corresponding RFID data transmitter on the vehicle’s fueling port that can be used to better monitor and maintain vehicle maintenance. The system also uses odometer/hour readings to calculate vehicle efficiency and fuel consumption, and it alerts you when maintenance needs are detected. More effective fleet maintenance helps vehicles last longer. One of the greatest assets of fuel management systems is that they can be used with any type of liquid or gaseous fuel, including alternative fuels such as hydrogen, natural gas, or propane.
- When should I consider investing in a fuel management system?You should consider investing in a fuel management system when:You suspect you are losing fuel through unaccounted for fuel loss. This could be outright theft, bad record keeping, or combining the records of multiple vehicles into one transaction.You are having trouble tracking fuel consumption for each vehicle. Perhaps odometer readings are not being reported correctly or three vehicles pull up in a line and only one vehicle is written down or entered, thereby drastically over-reporting the fuel used by that one vehicle and drastically under-reporting the other two.You are using an honor system clipboard and pen to record fuel transactions. I’m not suggesting everyone is a thief, but when gas hits $5 a gallon that loose accounting system and unregulated dispenser starts to look real tempting.You have a fuel management system, but it no longer works, never worked, is easily circumvented, or has no reporting capabilities that do anything to help you.You’ve had diesel pumped into a gasoline vehicle or gas pumped into a diesel vehicle. Very costly errors.Month end fuel reconciliation reporting and cross department charge backs are so time consuming and frustrating that you have to block a half-day to make sure it gets done correctly.You wish your drivers would tell you when something on their vehicles needs to be addressed rather than waiting for you to discover it during that next trip into the shop for an oil change.Finally, if you hate the idea of wasting money when there is an effective way of preventing it.
- When should I consider investing in a fuel management system?You should consider investing in a fuel management system when:You suspect you are losing fuel through unaccounted for fuel loss. This could be outright theft, bad record keeping, or combining the records of multiple vehicles into one transaction.You are having trouble tracking fuel consumption for each vehicle. Perhaps odometer readings are not being reported correctly or three vehicles pull up in a line and only one vehicle is written down or entered, thereby drastically over-reporting the fuel used by that one vehicle and drastically under-reporting the other two.You are using an honor system clipboard and pen to record fuel transactions. I’m not suggesting everyone is a thief, but when gas hits $5 a gallon that loose accounting system and unregulated dispenser starts to look real tempting.You have a fuel management system, but it no longer works, never worked, is easily circumvented, or has no reporting capabilities that do anything to help you.You’ve had diesel pumped into a gasoline vehicle or gas pumped into a diesel vehicle. Very costly errors.Month end fuel reconciliation reporting and cross department charge backs are so time consuming and frustrating that you have to block a half-day to make sure it gets done correctly.You wish your drivers would tell you when something on their vehicles needs to be addressed rather than waiting for you to discover it during that next trip into the shop for an oil change.Finally, if you hate the idea of wasting money when there is an effective way of preventing it.
- Who should consider a fuel management system?Well, your bottom line for one. Fuel is expensive and tends to be the second most costly expense after payroll.Seriously, Any organization that maintains their own fuel tanks and their own fleets. Fleets can be:Fleet operators and fleet management companies – fleets of any size can see a benefit. We’ve installed a Fuel Management system in a Fire Department that had 5 trucks and their own fuel tank because they saw the benefit of controlling and understanding their fueling practices.Regional fleets – cargo, service vehicles, executive fleets (normally a fleet management company), bus companies, utility companies, marinas, etc.Fixed Based Operators at airports - Whether fueling airplanes kept at that field or fly ins, mobile tankers, etc. All can see the security and accountability benefits of a fuel management system.Police, Fire or Emergency vehicle fleetsGovernment fleets – Whether executive cars, work trucks and vans, heavy equipment like payloaders, etc., can all benefits from the top five reasons for having a fuel management system. Actually, the City of Tallahassee, FL did a very detailed return on investment study and found they expected to save over $600,000 over 11 years on their fleet of 1,200 vehicles. That’s about $500 per vehicle per year.
- Where can I find a Fuel Management System?There are many fuel management systems out there and they all have their pros and cons. Here at Walden we tend to recommend FuelMaster to our clients. First, let me be clear, at the time of this recording we are not a FuelMaster distributor and have no plans to become a FuelMaster distributor. We have a working relationship with FuelMaster where we understand their products so that we can effectively manage the implementation for our clients. FuelMaster is made by Syn-Tech Systems located in Tallahassee, FL. Walden evaluated lots of fuel management systems and chose FuelMaster for the following reasons:They are the fuel management vendor for the entire United States military. That means their systems have to work in the most extreme weather conditions – extremely hot and extremely cold. That range fits our clients needs. They also have to be fully supported because the military can’t wait until it is convenient to get help when problems arise.The fuel management units or FMUs are designed and built here in the United States. They are not designed and manufactured elsewhere and then privately labeled.Finally, the customer support is second to none. They have multiple levels of support, but if you really run into a major issue they will have you speak to one of the software engineers that designed the system. FuelMaster constantly upgrades and improves their products and they stand by what they make.See www.myfuelmaster.com for more information.
- By this question I mean how is the fuel management system implemented.First, let’s describe the two situations that are encountered when implementing a fuel management system. 1. New Tank systems – If you are replacing your fueling tanks for any reason, then now is a good time to consider including a fuel management system with the tank upgrades. Conduits, electrical power, data connections and tank monitoring units connections like VeederRoot should all be considered during the design stage of the new tank system so that installation can run smoothly.2. Retrofit an existing system – In most cases retrofitting an existing system will apply. Whether replacing an old out of date, defunct fuel management unit or installing one for the first time, a fuel management unit can be retrofited to the existing tanks and dispensers in most cases. Usually the age of the dispensers is the biggest hurdle. Dispensers without pulsers may have to be replaced or additional retrofits may be needed, but it can work. The take away here is that a fuel management system can be made to fit your particular situation without taking away any of its benefits.Let’s briefly talk about how a fuel management system like FuelMaster works...
- First, there is a Fuel Management Unit or FMU that gets installed on or near the fuel island. This unit is tied into the dispensers. It is the brains of the fuel management operation. It controls all of the hoses and turns the pumps on and off. It’s the gate keeper. A user must interact with the FMU in some way, and there are lots of options for interacting with an FMU. The most basic is a keypad, like that on an ATM. A user enters their user ID, their vehicle ID and the vehicle odometer reading. When the FMU recognizes the user and vehicle ID it authorizes the pump for the vehicles correct fuel. This prohibits diesel from finding its way into the tank of a gasoline vehicle, or vice versa. A user could also insert a fleet card like a credit card that was issued to a particular user or vehicle, or a computer chip key, called a PROKEY, into a socket on the FMU. The FMU will read the key and will ask that the odometer reading be entered and then the FMU will authorize the correct pump and hose.The final way a user interacts with an FMU is through a hands free RFID device like FuelMaster’s Automotive Information Unit or AIM. This device looks like a black plastic ring that sits around the fuel neck of a vehicle. There is a long wire that runs from the AIM ring and is connected to the vehicles on board diagnostic computer or OBD. There is a corresponding ring on the filler nozzle on the gas pump. When the gas pumps ring comes in proximity to the ring on the vehicle, the FMU sends a request for identification to the vehicle. The vehicle’s computer responds and the correct pump is authorized. Again, the wrong fuel cannot be put into the wrong vehicle. While the vehicle is being fueled the AIM units are transmitting odometer readings, engine run time, engine idle time, trouble codes, max vehicle speed, oil levels and temperature, coolant temperature, battery voltage, and on and on. The AIM is the easiest and most hands free method of completing a fueling transaction while maximizing the benefits of a fuel management system.All of this data is stored in the FMU until the supervisor of the fuel management system downloads the transactions to their computer. Once downloaded the information can be tabulated, sorted, and reported in a meaningful manner. These reports allow for easy fuel reconciliation, cross departmental charge backs, maintenance logs such as trouble codes or check engine light reminders that may not have otherwise been communicated. Acknowledge, Authorize, Capture and Report. That’s the process of fuel management in a five word summary. Four words?
- Let’s cover this one more time…You will simply have more control over your fuel assets. You will be more confident that the fuel you purchased to work FOR you will only be working FOR YOU!Better fuel economy. This seems kind of strange since a fuel management system is monitoring the fuel being pumped, but our clients have noticed significant increases in fuel economy in their vehicles. For example, vehicles that were getting 6 to 7 miles per gallon jumped to 12 to 16 miles per gallon after Fuel Master with AIMs were installed. The system doesn’t improve the efficiency in the vehicle, but it does make sure that the fuel being pumped doesn’t wind up in another vehicle. We suspect that the people driving these vehicles started to use them appropriately and fuel them appropriately. No more pulling the personal vehicle behind the work truck when no one is looking or making unnecessarily long out of the way trips for lunch or personal errands. The vehicles and fuel were once again being used for their intended purpose. AIM RFID devices and managerial reporting are the main components that brought this about.More Security. A working fuel management system, especially one using a hands-free RFID AIM device, eliminates unauthorized vehicles from receiving fuel. Syn-Tech and the City of Tallahassee did a return on investment study and as part of their study they calculated unaccounted for fuel. Before implementing fuelmaster the city was losing track of about 10% of their fuel. They initally rolled out FuelMaster with ProKeys for each vehicle and that cut the fuel loss down to 2.5%. Then they implemented the AIM technology and that reduced the loss to 0%. 10% of their fuel purchase budget was more than $400,000.Better Accountability. How many times have you tried to complete a month or year end fuel reconciliation report only to find out that the data you have is bad, has holes, or is completely non-existent? That can make audits pretty uncomfortable as regulatory agencies do not tend to take a good sense of humor with answers like, I don’t have it or I don’t know. A well implemented fuel management system solves these problems quickly with a few mouse clicks and with a high degree of accuracy.Better Fleet Maintenance. The AIM technology is so powerful because it passively records accurate information directly from the vehicles on board computer. Accurate odometer readings, run time, idle time, trouble codes, etc lead to detailed managerial reports that help the maintenance staff take action immediately. This is exactly equal to the ounce of prevention equals a pound of cure metaphor. One great story to illustrate this point is how one department was able to address an engine problem. There is a work truck at this one facility that never leaves the facility. It might put 3000 miles on the odometer in a year. It doesn’t refuel that often either. However, it had been outfitted with an AIM device and check engine lights have primacy in the system, so when this truck drove by the fuel station (not stopping to fuel), the AIM antennas attached to the FMU received a signal that this truck had a check engine light on. The next morning the maintenance supervisor was reviewing the reports and noticed this trouble code. He walked over to the driver and asked him to bring his truck in to address the engine light. The guy was dumbfounded. He hadn’t even noticed the light and couldn’t believe that the supervisor knew before he did when he drives the truck every day. Little actions like that add up to huge savings over the course of the year.
- One final point before we close and take some questions….If you work for a municipal government, I strongly recommend taking the following four steps during the very early stages of considering a fuel management system:Do your homework. Find out how many vehicles you have, how much fuel you use every year, and what the cost of that fuel is. Then multiply the cost of that fuel by 5% to 10%. That range of 5 to 10% is approximately the range of unaccounted for fuel loss at municipalities with antiquated fuel management systems (clipboards and pens) or broken or easily circumvented fuel management systems. That 5 to 10% number gives you a great starting point for calculating return on investment. Even though a fuel management system can save you vehicle maintenance headaches, staff time, and other cost saving measures, the 5 to 10% of fuel lost each year will have the biggest impact on the bottom line and the most obvious number to point to when discussing implementing a fuel management system.Meet with your comptroller and your municipality’s chief executive. Buy in to this idea from the top and the money manager is key to a successful implementation.Hold an open round table discussion with the heads of every department within the municipality who may be impacted by a municipal wide implementation. These would be the people with fueling tanks on their department’s facilities and have fleet vehicles requiring fuel. Everyone at the top levels of management has to be in support of the idea for it to go smoothly. You may not get 100% buy-in, but a majority is certainly needed. In my experience, if the chief executive says “We’re doing this.” The idea will go forward, but you need buy-in from the top managers in order for it to go smoothly.Finally, ask your comptroller if this project can be done through a capital improvement bond. I have several reasons for this suggestion. The initial implementation won’t have to come out of your operating budget.Paying back the cost of implementation can be spread out over several years.Implementing a fuel management system could help sustain or improve your municipality’s bond rating. Your Comptroller will be most interested in this. Showing a bond council that the municipality is requesting funding to directly control costs, better manage its assets, and have a positive impact on the environment for many years beyond the payback of the initial investment is sweet music to money management ears.