Supply Chain Logistics Part 2: Consumption-Based Forecasting

Reading Time : 4min read
fuel tanker delivering inventory to retail gas station as part of supply chain logistics

In our first post of this series, we explored the ways in which digital innovation can help optimize fuel procurement, contracts, and allocation. Next up, we examine forecasting. 

Every day, fuel supply operators grapple with balancing supply and demand, minimizing holding costs, and reducing the risk of runouts. They cycle through the same series of fuel inventory forecasting questions: What needs to go? When does it need to go? Where does it need to go? Who’s going to take it?  

All answers point to the same goal: Strike the right balance to avoid runouts and excess inventory. 

To minimize risk and maximize outcomes, fuel retailers must base inventory management decisions on sound data and analysis. They need a clear view of accurate data, statistical models, and market insights to make the best fuel inventory forecasting decisions for their business. 

Manual Systems = Lost Revenue  

Operators using legacy systems, however, depend on dispatch experts to orchestrate these critical components; a liability, as their absence for even a day can create a significant risk to the business. When such experts are available, they utilize manual processes that take time and leave room for costly errors. Hours are spent looking at tank levels, analyzing sales history, managing carrier schedules, and trying to prioritize orders. Often, these tasks require multiple, siloed systems requiring extensive knowledge and training prior to ramp-up, adding business cost and risk. Needless to say, the margin for error is great. 

There are three main pain points fuel operators may encounter due to incorrect or inefficient forecasting. Runouts when fuel arrives too late, retains when inventory arrives too early and stays on the truck, and tank overstocking when too much fuel is delivered into lower consumption tanks, such as those holding premium gas. The risk of all three scenarios is more prevalent for fuel retailers relying on outdated methods which lack:  

  • Real-time tank readings needed to track inventory, analyze consumption rates and execute accurate forecasting  
  • Predictive analytics needed to plan out supply logistics days in advance 
  • Continuous allocation management data needed to grab best buys / spot buys with smart pricing 
  • Automated reconciliation to ensure what you get is what was ordered 

All these shortfalls lead to the same undesirable outcomes: Revenue loss. 

Innovation = Increased Profits 

Today’s leading fuel operators remain competitive while maximizing revenue by leveraging technology to enhance operational efficiency. Industry-specific supply chain logistics solutions powered by machine learning, AI, and automation can streamline operations, significantly reducing both errors and time spent on unnecessary tasks.  

As inefficiencies are minimized and resources are allocated more effectively, this translates to tangible cost savings. Put simply, fewer mistakes mean fewer runouts, money saved on excess inventory, and less time spent adjusting and readjusting supply logistics.  

Data Analysis = Accurate Forecasting 

Automated systems streamline processes by combining historical consumption data, inventory tracking, and fine grain tank chart management into a single interface. This enables fuel operators to: 

  • Quickly determine which sites to focus on based on standardized priorities assigned during forecasting (i.e. Must Go, Should Go or Could Go). No more manual calculations or best guess scenarios. 
  • View real-time predictions based on optimal delivery windows, historical patterns and current inventory, informing optimal forecast settings at a single site or multiple sites at one time 
  • Use data analytics based on algorithms that forecast at the tank level, so fuel deliveries are perfectly timed and sized 

Advanced forecasting isn’t just about predicting future demand—it’s about optimizing operations, reducing costs, and ultimately, positioning fuel supply chains for sustainable growth.  

Stay Tuned for the Next Post! 

Coming up next in this series, we’ll explore how data-driven technology can automate fuel logistics to unified dispatch. 

To speak with a Titan Cloud solutions consultant about how our supply and logistics module can help you optimize fuel planning and automate for success, visit us here

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Man and women address fuel supply chain operations.