When you pull into a service station to fill up for your commute or, even better, your road-trip vacation, do you think about whether the pump is out of, or will run out of, gasoline? If you were driving in the U.S. back in the 1970s, you no doubt waited in long lines that all-too-often yielded little (or no) fuel, while in the mid-2000s your fuel costs likely spiked seemingly overnight.
While these particular energy crises are now part of history, today’s fuel retailers continue to deal with a range of global supply and demand planning issues that make it challenging for their customers (and themselves) to keep driving successfully in that proverbial, and increasingly obstacle-laden, fast lane. Road closures, weather changes, and other unforeseen factors—not to mention communication breakdowns internally or with partners and suppliers—can all take a significant toll.
Magnus Tagstrom, Senior Director of Supply Chain Optimization at Circle K—part of Canada-based Alimentation Couche-Tard, a world leader in the convenience store and road transportation fuel retail sector and a company that sells about 18 billion gallons of fuel annually—had some keen insights into this subject.
“A lot of our processes, like sales forecasts and distribution capacity, were well-functioning, but resided in silos,” said Tagstrom. This meant that things that were happening in one part of the organization weren’t actually known in the other parts. “Long-term planning was not really aligned,” said Tagstrom, “and too often, we were handling things in firefighting mode.” Tagstrom was motivated to find a solution that could connect the planning process from end to end.
Fast ramp-up to a familiar, integrated, and scalable solution
Circle K started with a three-week pilot of Anaplan, with models designed to mimic existing Excel spreadsheets while integrating and automating them. Users immediately felt comfortable with the familiar approach, and at the same time, they gained an enormous array of additional benefits provided by an integrated, scalable platform. “For me it was like Excel on steroids,” said Tagstrom.
Fully connected S&OP and S&OE processes
By implementing Anaplan, Circle K has eliminated silos and fully connected S&OP (sales and operations planning) and S&OE (sales and operations execution) processes. (Click to tweet.) Along with previous spreadsheet layout tools being replicated, replaced, and fully integrated, the company gained key benefits, such as:
- Scientific, self-learning statistical forecasting
- Scenario planning input for various campaigns and site closures
- Capacity requirement recommendations per distribution area based on demand
- Lifting forecasts based on hauler schedules
- Current and future stock levels as input to shipping plan
- Tank maintenance plan
- Dynamic bills of materials to convert demand to supply products
Driving value through the supply chain
Tagstrom noted that having an advanced S&OP process drives value through the entire supply chain, lowering distribution, product, and terminal costs while reducing inventory levels and increasing sales.
“We don’t have a lot of inventory—about three days in stock at a station,” says Tagstrom. “But that, at any given point, is US$100 million. So anything we can do to improve and lower that stock would cause my CEO to say, ‘We can buy a lot of coffee machines for that.’” Which would, of course, provide even more fuel (of the caffeinated kind) for customers on the move—and even more value for Circle K.
To learn more about how Anaplan can help your fuel retail business or other similar businesses implement best practices in driving value through the supply chain, watch the video, “Demand and supply planning and execution in fuel retail.”