[white paper] credit and product controls - today’s most cost-effective and efficient way to grow...

Make the most of your energy SM

Credit and Product Controls Today’s most cost-effective and efficient way to grow your business

2011 / White paper

by Lisa Rotunno

Summary

Executive summary .................................................................................... p 1

Introduction ................................................................................................ p 2

Customer service, customer service, customer service ............................... p 4

The power of electronic BOLs ..................................................................... p 6

The new way of doing business .................................................................. p 6

Centrally managed product moves help protect supply efficiently ................ p 7

Grow your business with the industry-leading DTN TABS solution ............... p 8

Conclusion ................................................................................................. p 9

Executive summary

White paper on improving credit and product controls | 01

Grow Your Business Through Credit and Product Controls

Fuel suppliers and marketers are putting advanced technology, centralized

credit and product control systems to work to benefit both sides of the supplier-

customer relationship. These information systems make it possible for the supplier

to make current allocation and lifting status readily available to its customer, so

both can best manage their processes, avoid supply issues and lengthy telephone

resolution, and dispatch and lift more efficiently. With exceptional service and

attention, the customer does not need to, nor is inclined to, pull from another

supplier or go to another terminal.

The electronic Bill of Lading (eBOL) generated automatically by such a system

and transmitted immediately to a customer who is re-selling the product lets that

customer invoice faster. Allocation viewing provides customers with secure, up-

to-the-minute credit availability, product forecasts and current month allocations.

Again, the customer recognizes streamlined business as enhanced service.

In addition to improved customer relations and loyalty, the supplier applying a

robust credit and product controls solution helps its own cause. It can accurately

factor all elements affecting a customer’s limits. It can relay in real time vital

communications regarding product availability at any specific terminal and

customer credit across all terminals, all to optimize enterprise efficiency. Advanced

allocations capability helps automate and streamline the adjustments necessary to

manage supply disruptions efficiently.

DTN TABS from Schneider Electric was developed by industry specialists to

provide these capabilities and benefits. Further, it reflects industry standards that

enable seamless interoperability with enterprise resource planning (ERP) systems,

making information available to all business processes. Designed with functional

modules, this solution is easy to update and keep pace with industry requirements

and customer needs – and, therefore, retains its initial investment value.

Making permanent savings through accurate, automated billing

Introduction



Many successful fuel suppliers and marketers are utilizing credit and product

allocation management systems that help them manage risk and control the

credit line of their customers at the terminal. After all, suppliers are in the business

of selling fuel, not giving it away. Naturally, it’s beneficial to sell to the best, most

reliable customers. Making sure you do just that is sometimes the hardest part of

the sale.

These allocation management technologies are used to reserve or allocate

product across both proprietary and third-party terminals in an enterprise and

protect volume for customers with branded or contractual agreements at the

terminal. In some cases, the supplier might also use this technology to reserve

product for its own business use.

While at first this approach might sound like it is intended to limit the oil company’s

business, it actually proves to achieve just the opposite. A centralized credit and

product allocation controls solution creates a safety net that empowers sellers to

enter new markets with potentially tighter margins and do business successfully

with customers who had posed a greater risk in the past.

In this paper, we discuss the features of credit and product control systems that

can help a savvy supplier differentiate its brand in a commoditized marketplace –

and grow its fuel supply business.

Making permanentsavings through accurate, automated billing



It’s The Golden Rule: Treat the customer as you would like to be treated.

Providing exceptional customer service – by assuring customers have product

when they need it, in a way that minimizes their costs – will gain and maintain

preferred status for the supplier. Suppliers using credit and product control

systems make sure their customers are informed, happy – and retained as

customers.

Keeping the customer informed. The smartest suppliers are improving

customer relations and enhancing their trusted supplier status by providing on-

demand Web access to product and credit availability information.

Customers who don’t know their allocation status or contract ratability are

more likely to dispatch trucks with inadequate credit or product allocation. Only

when they arrive at the rack do they discover they are unable to load and then

incur costly demurrage charges or higher delivery costs due to lack of timely

information.

The supplier with an advanced controls system can eliminate this scenario. It can

make simple lifting information available, such as which products are available

and at what terminals. Or, it can provide even more detailed information, showing

specifics on how many gallons are available of each product; when allocation will

refresh; the refresh amount, and more.

It’s even possible to feature contract ratability so customers know when they need

to lift, to remain ratable against their contract commitment. This approach gives

the customer a greater sense of control and minimizes a need on the supplier’s

part to enforce a “take or pay” contract clause. Providing real-time ratability status

ends the guesswork on the customer’s part and provides the supplier with a tool

to manage contracts easily.

Customer service, customer service, customer service



Customer service, customer service, customer service (continued)

Proactive communications help customers:

• Better manage contract compliance

• Identity supply issues faster

• Dispatch more effectively

• Reduce truck downtime.

Keeping the customer happy. When customers are out of allocation, the

phones are ringing off the wall. Account reps and management are spending more

time soothing unhappy customers than selling. Worse, they are calling customers

after the fact to reprimand them for either over- or under-pulling – not the best way

to build a relationship or future sales.

Using a reliable allocation management system helps the supplier create a group

of premier customers – assuring them they always have product available at the

terminals in which they regularly lift, regardless of tight supply. The most robust

systems also allow those best customers to extend allocation controls to their

best customers.

Keeping the customer a customer. There are only two options when the

customer arrives at a terminal to discover allocation problems: pull from another

supplier or go to another terminal. This is lose-lose for all parties involved:

the supplier, the customer and the terminal. The result: lower margins, costly

reconciliation and greater difficulty in benchmarking the performance of carriers

and other business partners.

Online allocation visibility lets the customer know allocation status before there is a

problem. Alerting customers to their allocation and credit levels often encourages

them to lift more. And when these communications are branded to reflect a

supplier’s unique company image, a powerful new customer touch is generated

that supports future business.



With automated product controls, the Bill of Lading (BOL) is electronically

generated as soon as gallons are lifted at the rack, and it is transmitted

immediately to both the supplier and the customer. From there, electronic copies

of the BOL with the driver’s signature can be placed on the supplier’s Web portal

for customers to view securely at any time.

The power of an electronic BOL doesn’t stop there. The supplier who uses an

automated controls system usually can take advantage of electronic integration

with a customer’s accounting package. This service enables the marketer

customer who is re-selling the product to invoice faster. Alternatively, with a

hard copy BOL, the marketer customer often doesn’t have load information for

days; when the paper BOL finally does show up, the marketer’s account has

already been debited before there is enough information to invoice the second-

generation customer. It is a paperwork headache and an expensive cost-of-money

proposition for the marketer customer. Once again, the supplier is providing much-

appreciated customer service with eBOLs.

The new way of doing business

Managing credit. The robust credit and product controls solution gives the

supplier an accurate credit limit for each customer that should factor in load

prices, taxes, non-invoiced BOLs and receivables balances. In volatile markets

with increased prices, this is an invaluable functionality for the supplier who needs

to closely monitor and control customer liftings against up-to-date credit limits.

Real-time communications. The supplier can provide customers direct

feedback about remaining product available at their preferred terminal and their

remaining credit available across all terminals. Information can be provided through

an e-mailed alert and to a mobile device. Real-time communication imparts details

of loading problems quickly and clearly, to help resolve issues and authorize load

releases in real time – and improve business efficiency for the customer and the

supplier’s enterprise.

With the ability to solve daily challenges efficiently and effectively, the supplier is

doing business in a new way: converting those challenges into opportunities to go

“above and beyond” for its customers.

The power of electronic BOLs

Extend the customer service A robust controls system module

such as the DTN TABS Rack Marketer

extends its best features of allocation

management and real-time bill-

of-lading (BOL) delivery, one level

further. The supplier can empower its

customers to leverage DTN TABS in

their own businesses, offering them

the same advantages: reduced risk

and strengthened customer business;

inherently, fortifying the original

supplier-customer relationship. It’s all

about customer service!



It could be that the most stressful part of being a supplier is dealing with business

disruptions. It is challenging to grow your brand and your bottom line during times

of supply interruption, such as hurricane season or pipeline disturbances.

An advanced allocations solution allows the supplier to move volumes of selected

allocations from the primary terminal to a backup terminal, while keeping the

allocations intact at the source terminal. Once the supply constraint is resolved,

the moved allocations would be set back to normal lifting conditions, taking into

account the extra volume lifted at the backup terminal during the disruption.

The ideal solution also would let the supplier move products in a scaled manner,

for a scheduled period of time – automating what would otherwise be an

extremely labor intensive manual process. Here are some examples:

• Short Outage of zero to three days that occurs within an allocation week

(such as Sunday through Saturday): the supplier only wants to move a few

days of supply to the backup terminal

• Short Outage of zero to three days that overlaps an allocation week refresh

(such as Tuesday – Wednesday – Thursday): the supplier needs to add a few

days of supply to the backup terminal after the period refreshes

• Long Outage that lasts more than an allocation week: the supplier might

need to move the full allocation volume for the period to the backup terminal

Further, the supplier needs to inform its customers which terminals and products

are affected during these times, to assure them they have access to product

and where the product is available. A centralized solution enables lightning-fast

adjustments, forward and backward, of all allocations for every customer at

all terminals, or a specific terminal or terminal group, with just a few clicks of a

mouse. This approach eliminates calling terminals to shut off product. The supplier

can allocate all customers equally or save the remaining product for premier or

contract customers. Best of all, the supplier can apprise its customers of the

situation in real time – good customer service.

Centrally-managed product moves help protect supply efficiently



Grow your business with the industry-leading DTN TABS solutionDesigned and developed by a consortium of industry leaders, DTN TABS from

Schneider Electric reliably delivers robust and flexible credit and product control. It is

the leading third-party terminal allocation and credit control service – interfacing with

all major terminal automation systems and many proprietary systems and supporting

more suppliers and rack marketers than any other service.

Enterprise performance. DTN TABS has shown to be easy to implement and pro-

vide business efficiency and risk management that is unparalleled by any other tech-

nology provider. Schneider Electric is an active participant in PIDX and fully supports

industry standards to ensure interoperability that will optimize the downstream supply

chain. Suppliers interface it with SAP and other ERP systems to share real-time lifting

information with other business processes accurately and efficiently – which ultimately

minimizes cost of ownership.

Keeping current. While it has been in production for more than 25 years, DTN TABS

is continuously enhanced and extended by Schneider Electric to keep pace with

industry requirements and customer needs. This ongoing investment ensures that

DTN TABS will evolve to meet suppliers’ future business needs while they minimize

capital expenditures on proprietary internal systems. Recent DTN TABS enhance-

ments include:

• Enhanced Credit Module – enables suppliers to consider receivables balances,

fuel prices, taxes and non-invoiced BOLs, to more tightly align customer credit

controls

• Move Product Allocations Module – gives suppliers the ability to quickly respond

to supply situations by quickly and efficiently move allocations from a primary

terminal to a backup supply terminal

Conclusion



In today’s fast-moving downstream environment, supplier organizations must

be responsive and accurate to gain complete rack control over credit and

product across all proprietary and third-party terminals – and stay competitive.

The implementation of a robust, single platform that provides real-time lifting

information and dynamic, granular credit control reduces supplier risk and

strengthens customer service.

See for yourself how credit and product controls can enhance customer service

and grow your business, with a live demonstration of the industry-leading DTN

TABS solution. Schedule a live demonstration of DTN TABS by calling us at

1-866-460-1030.

Meeting suppliers’ future business needs while reducing capital expenditures on proprietary internal systems

August 2012

©20

12 S

chne

ider

Ele

ctric

. All

right

s re

serv

ed.

Schneider Electric USA

9110 West Dodge Road Omaha, NE 68114 Phone: 1-800-391-1175Fax: 1-402-255-8125http://www.schneider-electric.com