Fuel Case Study

Posted on April 15th, 2016 by

Scenario

Client had an annual supply of bulk liquid fuels estimated at 1.6m litres.  Fuel delivered to 4 different sites across the country with varying quantities and inconsistent frequencies.  Currently supplied by a sole provider, with spot prices so time spent every week reviewing best prices.  There was no consistency, no agreement in place, exposing our client to a potential business risk.

Strategy

Conditioning meetings were held with potential suppliers prior to issuing an Invitation To Tender.  The ITT was issued to 7 suppliers with the aim of finding a sole supplier on a minimum of a 1 year contract.  Full 4 pillar assessment of each supplier undertaken, not just price related, but also looking at

  • health & safety records
  • performance
  • operational interface & commercial structure
  • environmental responsibility

Results

Following submission of ITT, suppliers were short-listed and site surveys undertaken by potential suppliers to ensure they are fully aware of any restrictions and therefore avoiding additional costs in the future.  One year contract issued to a proactive new sole supplier, who works with the site to not only provide transparent costs but also drives efficiency measures by helping sites to optimise load size and frequency of delivery. Payment terms were increased to 60 days.  Saving of 5% on annual fuel costs.