Automated Terminal Solutions Turn Challenges into Opportunities

Today’s biodiesel market is full of unprecedented challenges, ranging from price sensitivity and fluctuations to regulatory uncertainty. Governments are moving subsidies to food markets, but with crude prices rising, the market is more competitive. The industry faces tight margins, margin erosion and a complex manual billing process, with heavy reliance on paper workflow and long day sales outstanding (DSO) followed by long day payable outstanding (DPO), resulting in a long conversion cycle.

The need has never been greater to turn these challenges into opportunities. Improving DSO and DPO by one to three days helps create a stronger cash position within the organization. Companies need a system dedicated to providing the solid foundation and technological advancements that equip buyers and sellers to communicate effectively, manage inventory, credit and lifting, while also automating the buying and selling process. Automated lifting and credit controls, fully integrated with the terminal automation system to enable an efficient, out-of-the-box solution, generates significant time and cost savings for terminal operators and distributors. Automated lifting and credit controls also have the flexibility to customize a solution that specifically meets unique operational requirements.

Improving the ability to manage bill of lading (BOL) transactions, credit limits and product allocations with the efficiency, cost-effectiveness and the real-time intelligence required by today’s market is crucial to turning challenges into opportunities. The industry is responsible for the efficient downstream distribution of fuels and other refined products through a network of equity- and third-party-owned terminals throughout North America. The biodiesel industry needs real-time data of when and where product is available throughout the entire developing network to manage position and exposure, while also controlling opportunistic buying and arbitration of product.

While terminal automation and supply management solutions have been in production for more than 20 years, the above characteristics establish the standard for management and communication of terminal credit and product allocations. Top solutions interface with all major terminal automation systems and many proprietary systems, and integrate with your ERP applications, including JDE, SAP and others, to automate processes and provide real-time intelligence. This functionality also helps the supplier improve its cash position through real-time invoicing.

Integration provides an end-to-end solution for the management of carriers, drivers and the ever-changing recipes to meet seasonal and legislative pressures on today’s operations. Top automation solutions provide security in the entry process: validating the facility access to a vetted list, and once inside, the driver just needs to enter his order number to ensure the correct load and blend is delivered to the compartment being loaded. This gives the operator the ability to manage and view the amounts of blends, components, neats and additives that were loaded, along with the products’ temperature and gravity.

The solution must be capable of providing a cost-effective, standardized credit limit control and allocations management system; centralized, global control across proprietary and nonproprietary terminals with integration to back-office applications to increase efficiencies and streamline and improve reporting accuracy; real-time intelligence on transactions with the data visibility and accuracy needed for making smart, timely business decisions; enable highly flexible allocation controls that can be scheduled in advance and implemented on the fly to manage position and exposure, while controlling opportunistic buying and arbitration of product (the result is maximized, ratable, wet-barrel availability to preferred customers); consistent, reliable, responsive and professional customer support with a cost-effective model throughout the downstream delivery chain; partner with a service provider who has the sustainability, global capabilities and projected longevity to achieve a cost-advantaged, well-managed and successful implementation; track all customer, shipper, carrier, driver, station and load dates and times; view the amounts of blends, components, neats and additives that were loaded, along with product temperature and gravity, and view the total amount of product loaded on the BOL.

Partnering with a solution provider capable of developing a comprehensive, flexible, scalable credit limit and allocation management system is important for any automation implementation. These systems provide centralized, consistent control across proprietary and nonproprietary terminals that will facilitate the reduction in DPO by eliminating the paper-to-paper process with an automated electronic transaction-based solution. Providing an integrated, end-to-end solution simplifies operation, reduces risk and improves competitive advantage.

Author: Al Rivero
Vice President of Sales and Supplier Solutions, Telvent DTN
(281) 755-6185