Fuel Management Monitors Fleets

Sept. 28, 2010


Fuel-management software integrated with preventative maintenance software leads to more accurate billing, says Marilyn Rawlings, CEM (left). All of a machine's costs, including fuel, can be combined into an internal billing rate. And, if the fuel component changes radically, that machine can be flagged for potential problems.
Dale Warner, CEM (right), tracks fuel in order to stay on top of his severity-based maintenance program. Fuel usage, he says, helps him decide when to rebuild or replace machines.
Fuel-Management Systems Can Impact Decision Making


Although different fleets use fuel-management systems for different purposes (tracking fuel consumption, keeping up with cost-per-mile, or gaining advanced alerts on when to replace equipment), there is one common denominator among the fleets contacted for this article. They all agree that such systems have an impact on procedures and decision-making.

"The decisions that we make have been affected," says Marilyn Rawlings, "but probably in different ways than in a lot of other areas of the country. That's because of natural disasters, such as hurricanes — and we've had a lot of that lately."

By implementing a state-of-the-art fuel-management system, Lee County now has the latest technology to help avoid the most critical element of all: fuel scarcity in times of emergency. "If a hurricane closes the port in Tampa or Fort Lauderdale, our job is still to ensure that the county does not run out of fuel and also, make sure we don't get gouged price-wise," Rawlings says.

Management has decided, therefore, to implement "a lot of emergency-response-type things," she says. "We have put additional fuel tanks into our yard that we fill before hurricane season arrives. We have an on-going agreement based on OPIS (Oil Price Information System). That's a number, an industry standard, by which most fuel remarketers price their products. For me, it was more important that I have fuel, rather than deal through brokers to try and get a locked-in price. I can't tell somebody, 'sorry about your heart attack, but I don't have enough fuel to send out an ambulance.'"

For Dale Warner, fuel-management systems provide him with accurate data that enables him to extend drain intervals, for instance. "The only thing we don't compromise on is basic lubrication," he says. "Everything else is extended. The power train goes right along with the engine. The equipment manufacturer may say change oil every 250 hours. The transmission manufacturer says you need to change fluid every 1,000 hours. Since everything is looked at by oil analysis and tracked by our fuel-management system, we have tripled those suggested drain intervals. I started this in 1981, and I'm very comfortable with it."

Bill Vanden Brook has also been using fuel-management for a time. "Our fuel-management system has lasted 19 years, so I think that was a good decision to make," he says. "Obviously, procedures have changed dramatically during that time. Before we installed the system, the pumps were live. We depended on the operator to fill out a paper card, put down the date, unit number, number of gallons, and pump number. Those paper cards were collected and then the data key-punched into a computer system. Between an operator transposing a number and someone key-punching that information into a maintenance computer, we were running — and this is sad — a 20 percent-plus error rate."

By making the decision to go to a fuel-management system, in this particular example, management at the municipal fleet cut that error margin down to almost nothing. "This morning, we had 182 transactions and only one error, which we were able to correct immediately," Vanden Brook says.

Here are a couple of general tips from these fleet professionals that might prove useful: Select a vendor that can provide local support when it comes to servicing the system. And, when integrating a fuel-maintenance system and a preventive-maintenance program to extend engine-oil drain intervals, have a first-rate oil-analysis program in place with a qualified laboratory that knows how to read the results.

Whether you're figuring vehicle cost per mile, predicting equipment life cycles, or tracking fuel consumption, fuel-management systems make a fleet manager's job a little easier.

When integrated with a preventive-maintenance program, such systems enable fleet professionals to also make better business decisions. For example, knowing ahead of time when a unit needs to be rebuilt or replaced allows for better budgeting.

Fuel-management systems can be either active or passive. To understand the difference, there's no better example, perhaps, than the systems used by the City of Madison, Wis. The municipality has operated an active fuel-management system for 19 years. Now it's in the process of updating and converting to a passive system, a project that will be completed this year. Motor equipment superintendent Bill Vanden Brook, CEM, expects to have the specifications written and a vendor selected by early summer.

Vanden Brook's current, active system uses two cards with a card reader. An operator pulls into the fuel area, slides one credit card in that has his name and other information on it. Then he slides in a second card that contains vehicle information.

"At this point, I know who and I know what vehicle," he says. "The operator punches in the odometer or hour-meter reading and the pump number where he wants to dispense the fuel. When that happens, then I know who, what and where."

The coded information on the vehicle card authorizes the transaction and activates the pump. "If it's a dump truck, the operator punches, say, hose No. 1," he says. "If hose No. 1 happens to be unleaded gasoline, the pump tells the operator, 'You can't do that. You can't put unleaded gasoline in a diesel vehicle.' It won't let that happen."

If hose No. 1 is for diesel fuel and the odometer or meter reading is correct, the pump will dispense the fuel, Vanden Brook says. "Incorrect meter readings are rejected at this point."

By comparison, the passive fuel-management system that Vanden Brook expects to install this year is a much more convenient and easier system. The driver pulls up to the fuel island, removes the hose from the dispenser, and puts the fuel in. The passive system automatically reads the odometer or hour-meter reading, determines that is a valid vehicle for the fuel, and dispenses the fuel when the driver squeezes the nozzle.

"What I've lost in this system, however, is the who," he says. "I know what the fuel went into, the location where it was done, what pump was used, what site the pump was located on, and how many gallons of fuel were dispensed," he says. "I just don't know the who."

Giving up the capability of identifying the driver or operator is "a good trade off," he says. "Most of the time, we know who's operating that piece of equipment on any given day."

Other information provided by some passive systems that Vanden Brook has looked at includes on-board diagnostic equipment that gives you engine and operating information from one fueling to the other. The data includes maximum vehicle speed, idle time, and PTO time, among other statistics.

The passive system under consideration can also be integrated with the city's existing preventive-maintenance program. "It's not as difficult as it sounds," Vanden Brook says. "On a daily basis, we create a file of the fuel transactions from the previous day from our fuel computer. The information is downloaded into our maintenance system, which updates the meter readings on the equipment that has been fueled. After that's done, we can run our preventive-maintenance-due report.

"It's not rocket science. It's just a file transfer."

Ryan, Inc. Central is in the process of designing a fuel-management system for its fleet of 700 pieces of heavy iron. Joe Fell, assistant equipment operations manager, says Ryan is developing a system that will track productivity per gallon per piece of equipment operating in different types of soil. The project has been underway for about a year and a half, and Fell expects it to be completed this spring.

Fell called the fuel-management system a "hybrid system that will utilize the partnering of our fuel vendor along with information that can be caught from our equipment."

The obstacle for a fleet the size of Ryan's has been reliable data, Fell says. "It's very difficult to be able to collect that data without a tremendous cost. We're trying to look for ways to automate to get reliable information such as burn rates of the equipment, what the equipment is burning, and different types of soils in different areas of the market.

"As we push further west," Fell used as an example, "does the burn rate go up in different types of soil and moisture conditions?"

Years ago, he says, big companies would simply rely on the low price of fuel. "At 25 or 30 cents a gallon, fuel was almost an afterthought," he says. "In today's world, fuel has become a much higher percentage of a company's operation, so it needs to be managed."

There are three different components of a fuel's price, Fell says. One is the market rate or "rack price," another is taxes, and the third is delivery charges.

"We call our fuel vendors partners," Fell says. "We want them to make money and do well, but we also want to know what they are charging us, what their margin is, and what they take home at the end of the day. I want the delivery charges to be consistent on a daily basis."

Fell knows the system will more than likely make a difference in decision making once it's functioning. But what that difference is remains to be seen. "We're excited about some of the changes we're going to be able to make," he says. "We're trying to get a good pulse on our equipment and we need an accurate device to measure that."

In Fort Myers, Fla., Marilyn Rawlings, CEM, fleet manager for Lee County Fleet Management keeps tabs on 1,800 vehicles ranging from cars and trucks to graders. The county uses a passive fuel-management system that operates similarly to the ones being considered by Vanden Brook.

"There should be an interface between fuel-management software and fleet-management software if, indeed, they are two separate entities," she says. "That allows you to download your fuel information into your management software, which lets you track cost per mile, fluids dispensed, fluids received, and tank-monitoring systems."

Lee County's fuel-management system "is actually set up with a ring situation so that you cannot put diesel fuel into an unleaded gasoline truck," Rawlings says. "There is a ring around the tank neck of the vehicle and a computer chip in the pump nozzle. When these two meet and everything matches up, it will turn the pump on and you automatically dispense the fuel."

The automated fueling system is "more on the cutting edge of technology" than typical key or card systems, she says. "When somebody pulls in, they take the nozzle out, place it into the neck of the vehicle tank and, if the computers match up, it automatically comes on. It also tells you other data, such as the vehicle number and odometer readings."

One advantage of integrating the fuel-management system with preventative-maintenance software, Rawlings says, is the accuracy of billing.

"We still do our PMs by mileage," she says. "We've found that even if a vehicle isn't used very much, you still need to conduct PM on it. Oil breaks down, tires begin to rot, so you still need to do the PM. We have the ability within our software system to set up a PM schedule by class of vehicle or by individual vehicles."

At billing time, Lee County bills by cost-per-mile by class code. "Medium-duty trucks get billed per mile, so I have to make sure my cost-per-mile accurately reflects all the costs that go with it," Rawling illustrates. "Per gallon price is critical to me. On the heavier equipment and bigger trucks, I am billing straight fuel. We also monitor how things are running. If equipment is running, for instance, at 36 cents per mile or 36 cents per hour and suddenly I see a big spike, then it may identify a problem with that piece of equipment."

Another plus of the automated fuel-management system used by Rawlings is that it has cut down dramatically on incidents where operators drive away with the fuel hose still stuck in the vehicle tank. If someone forgets to remove the hose, she says, "you can't start your vehicle. Or, if you try to fill the vehicle with the engine running, the fuel won't dispense."

That might happen only once a month or so, she says, "but when it does happen, it costs about $300 or $400, plus the downtime on the nozzle."

But one of the most compelling reasons for integrating fuel-management and preventive-maintenance software is that it gives you not only a way to schedule your PMs better, but also a way of predicting when a piece of equipment will fail based on how much fuel it consumes.

Vanden Brook calls it "the true measure of work. If you take off-road equipment like loaders and graders, the hour meter is a fine way to do business," he says. "But what is the true measure of work? It is the gallons of fuel that the machine consumed. That loader could idle all day for eight hours on four gallons of fuel. But, if it's working during that same eight-hour day, actually moving dirt and loading trucks, it might burn 50 gallons of fuel in that same eight-hour period. One loader or grader is working, one is not, but the hour-meter reading is the same."

That same measurement is being used by C. J. Miller, LLC, a Hampstead, Md., fleet that handles all phases of construction except building. The company concentrates on excavating, site preparation, utility, paving, logging and clearing. Dale Warner, CEM, corporate equipment manager responsible for the company's 1,000 units, uses a different term. He calls it, severity based maintenance.

"Severity-based maintenance looks at job conditions and work load of equipment as opposed to hours," Warner says. "A 3406 Caterpillar engine is a 1,099-cubic-inch engine. When you run 135,000 gallons of fuel through that engine, it basically has reached the point where you will have to rebuild it or replace it. I do this with my whole fleet, including leased vehicles. Keeping track of the gallons of fuel that the engine has used tells me if I want to turn it in, renew the lease, or buy it out. It all depends on where it is in the rebuild cycle."

All fleet service is done on severity-based maintenance, Warner says. "I've been doing this for 30 years, and I'm very comfortable with it. The only thing hours are good for is to look at costing reports and utilization."

Rawlings says her management team is considering the fuel-consumption approach to maintenance. "We might first try it, test it on some vehicles," she says. "The people I've talked to who do use it have had good success with it."

The most valuable reports produced by a fuel-management system often depend on what's important to the individual fleet. Rawlings bills by cost per mile by class codes. That cost-per-mile must accurately reflect all the costs that go with it.

Warner tracks gallons of fuel used. "Last year we saved $360,000 in direct relation to the severity-based maintenance program," he says.

Vanden Brook summed it up this way: "It's like anything else in the software world. There is more data collected than you can possibly analyze. You have to decide what it is you need on a daily basis. I need to know what happened during the previous time period: the who, what, where and when. I need to know how much fuel went to a specific vehicle in the department that I'm billing.

"I've got a number of clients and customers: the streets division, the park division, the police and fire departments and so on," he added. "Each has a fleet of vehicles. I want to know, in that particular fleet, how much fuel they used during that month for each individual vehicle. Then I get a total at the end of that particular month."

In short, he says, much of it is like any other business decision. Ask yourself why you're putting the system in. "There are numerous fleet fueling systems out there today," Vanden Brook says. "Selecting the one that is cost-effective for your operation is the key factor. It's just economy of scale sometimes."