Fuel is a significant cost driver in many industrial sectors in the South African economy. Within the logistics sector, fuel contributes more than 50% of the share of daily road transport costs.
A survey of mining companies in 2023 showed fuel and power costs as the areas of greatest increases in operating costs. These rising energy expenses have a cascading effect on mining economics. More capital is allocated to cover the increasing fuel costs, leaving less capital available for exploration, equipment upgrades and new mining developments.
An automated fuel management system is a powerful tool to combat these challenges, contributing to increased efficiency and cost savings in fleet management.
What is an automated fuel management system?
An automated fuel management system, comprising both hardware and software components, tracks, monitors, and controls fuel usage within an operational framework.
These data-driven systems serve as indispensable tools for businesses tasked with overseeing fleets of vehicles or maintaining extensive fuel storage facilities.
They seamlessly integrate features such as consumption analysis, fuel reconciliation from fuel purchased to fuel consumed, and the comparison of expected versus actual usage – enabling precise management and optimisation of fuel resources.
An automated fuel management system usually has these elements:
Hardware Integration
Bulk to end-use monitoring: Sensors measure tank levels and dispensed volumes to track fuel inventory and usage.
Fuel dispensing control: Based on facial recognition of the operator and wireless recognition of the vehicle.
Telemetry-enabled tank level gauging: Tank level gauges give accurate readings of tank levels to help manage fuel reserves.
Vehicle dispensing: Based on the wireless recognition of the vehicle by the system. This is enabled by vehicle telemetry units or beacons.
Software Integration
Software integration for comprehensive analysis: Software gathers data from sensors and dispensers and provides insights into fuel usage, burn rates, and equipment run hours or distance travelled. This helps to monitor and optimise fuel consumption across the production cycle and reduce costs.
Using these elements in an automated fuel management system helps businesses to better monitor, control, and optimise fuel usage in their operations, thereby increasing productivity, sustainability, and cost-effectiveness.
Benefits of automated fuel management systems
Cost savings
- Identify unauthorised usage and provide the access control and reporting mechanisms to alert instances of fuel usage outside of acceptable limits
- Streamline fuel purchasing and optimise inventory management
- Substantiate transactions and standard reporting for fuel rebate claims that meet South African legislative requirements
Improved efficiency
- Automate manual tasks like fuel level checks and reporting
- Gain real-time insights into fuel usage and identify areas for improvement
- Reduce administrative burden and free up valuable resources
- Map fuel consumption to activity
Enhanced control and visibility
- Track fuel levels
- Receive alerts for unexpected fuel usage outside of acceptable limits
- Gain valuable data for informed decision-making, including inventory control, mitigating human error
Insights into
- Fuel Management
- Detailed overview of fuelling operations
- Tracks fuel consumption across equipment
- Maps refuelling process from bay to equipment tanks
- Identifies primary fuel consumers and tracks engine hours
- Inventory Management
- Comprehensive tracking of fuel bulk tank levels and trends
- Fuel reconciliation using the bulk tank movement, fuel deliveries and fuel dispensed
- Fuel System Monitoring
- Highlights flagged transactions and fuel discrepancies
- Monitors burn rates, tank capacities, and refuelling frequency
- SARS Reporting
- Provides eligibility information for SARS refunds
- Compare the fuel consumption with the burn rates
- Gain insights from the Solution Health Report for alerts on data capture or equipment anomalies, ensuring maintenance excellence
What are the concerns about implementing a fuel management system?
Implementing a fuel management system can be costly, and addressing concerns about these expenses is essential when considering such a capital outlay. Here are some potential concerns:
User adoption: Before making the initial investment in an automated fuel management system, it is crucial to assess user adoption and system use considerations. Ensuring that the system will be effectively utilised is essential for maximising the return on investment.
Initial investment: While the upfront costs of purchasing and installing a fuel management system may be high, consider the long-term savings and benefits, such as those outlined above. Improved efficiency, reduced fuel theft, and accurate tracking can outweigh the initial expenses.
Integration costs: Integrating a fuel management system with existing infrastructure might require additional expenses. However, while integration costs can vary, many systems are designed for compatibility with common fleet management tools and can be customised to minimise integration challenges.
Training expenses: Training employees to use the new system may result in additional costs. However, training costs are part of any system implementation. Moreover, many fuel management systems are designed to be user-friendly, and training requirements can often be minimised through intuitive interfaces and clear documentation.
Maintenance costs: While there are ongoing maintenance costs, these are typically outweighed by the benefits of reduced fuel losses, improved maintenance scheduling, and overall operational efficiency. Regular maintenance can also prevent costly issues in the long run.
Compatibility issues: Before implementation, thorough compatibility assessments should be conducted. Choosing a system that aligns with existing infrastructure and technology can help mitigate compatibility concerns and reduce additional costs.
Return on Investment (ROI): While the timeline for ROI can vary, the long-term benefits such as fuel savings, enhanced operational efficiency, and reduced unauthorised fuel usage often result in a positive ROI over time.
Upgrading technology: Rapid advancements in technology may lead to the need for frequent upgrades. That is why choosing a system from a reputable provider that offers scalable solutions and regular updates is so important. Assessing the system’s flexibility and upgrade options before implementation is crucial.
Why an automated fuel management system has a high ROI potential
The ROI potential of implementing a fuel management system is significant, and can positively impact various aspects of an organisation’s operations. Here are key areas where ROI can be realised:
Fuel Savings: The system enables real-time monitoring of fuel consumption and identifies inefficiencies. By optimising routes, reducing idle time, and curbing unauthorised fuel usage, companies can achieve substantial fuel savings, contributing directly to ROI.
Prevention of unauthorised fuel usage: Fuel management systems help combat unauthorised use by limiting unauthorised access to the systems and by providing accurate data on fuel transactions and consumption. The ability to detect and prevent unauthorised fuelling activities translates into direct cost savings, enhancing the overall ROI.
Enhanced operational efficiency: The system’s ability to provide actionable insights and data-driven decision-making contributes to increased efficiency and, consequently, a faster ROI.
Preventive maintenance: Timely alerts and equipment health insights prevent expensive breakdowns. Proactive maintenance cuts repair costs and downtime, enhancing fleet efficiency and speeding up ROI realisation.
Accurate billing and cost control: Automated tracking and reporting features enable precise billing for fuel usage, reducing the risk of errors and disputes. Additionally, cost controls can be implemented based on data-driven insights, preventing overspending and optimising resource allocation.
Compliance and accountability: Fuel management systems often include features that enhance compliance with regulations and industry standards. The system’s ability to enforce accountability and ensure adherence to best practices contributes to risk mitigation and long-term financial gains.
Data-driven decision-making: Access to comprehensive data on fuel consumption, vehicle performance, and driver behaviour empowers companies to make informed decisions. Data-driven strategies lead to more effective resource allocation, cost reduction, and improved overall financial performance.
Long-term cost reduction: While there are initial implementation costs, the long-term benefits contribute to sustained cost reduction. The cumulative effect over time enhances the overall ROI of the fuel management system.
Environmental Impact: Companies may benefit from positive public relations and potential incentives associated with environmentally friendly practices. Reduced fuel consumption and emissions contribute to a greener image, aligning with corporate social responsibility goals and potentially attracting environmentally conscious customers.
Careful consideration, proper planning, and selecting the right system can help address concerns and optimise the Return on Investment.
- Learn more about SmartFEMS™, our automated fuel management system
