Farstad Oil, Inc.

Farstad Oil supplies and distributes petroleum products across a region that includes eight U.S. states and three Canadian provinces. To optimize delivery on current demand and drive continued growth, the company wanted to improve visibility into inventory volume and fleet locations. Pedigree Technologies tailored the exact tools that the company needed to improve operational efficiencies, expedite product delivery, and increase customer satisfaction.

Situation

Starting as a bulk oil business in 1938, Farstad Oil has grown to become one of the largest wholesale petroleum products distributors in the upper Midwest. With a fleet of over 50 transport vehicles, the company supplies and distributes approximately 250 million gallons of gasoline and distillates, 20 million gallons of propane, and 2.5 million gallons of lubricants annually. Its customer base is spread over an extremely wide geographical region that encompasses Montana, the Dakotas, Minnesota, Wyoming and Iowa, and reaches into southern British Columbia, Saskatchewan and Manitoba.

But keeping up with demands in a constantly fluctuating market and ensuring rapid delivery to a demanding, widespread customer base became increasingly challenging. Rising costs of operations and volatile oil prices required Farstad Oil to either find new efficiencies or risk narrowing profits.

“We were constantly at the mercy of the telephone, and waiting for customer calls,” said Eric Lawson, Transportation Manager. “We’d have to wait for customers to call and let us know when their tanks were low, then we’d have to react fast.” Too often, customers wouldn’t call until their inventories were near empty, causing Farstad Oil to “scramble” in order to get product to them before they ran short. Last-minute product deliveries were usually costly, requiring vehicles to make special trips outside of planned routes.

Relying on customer phone calls also resulted in poor planning capabilities, an operational discipline critical to petroleum suppliers. Constant fluctuations in oil prices cause a constant quest to buy as much product as possible at lower prices and reduce purchases when prices are high.

“We always have one eye on the [oil stock price] ticker,” said Jim Olson, Regional Manager. But without constant visibility into inventories across their service area at all times, Farstad Oil could only estimate near-term needs, instead of confidently purchasing at optimal times.

Solution

Pedigree Technologies came to Farstad Oil with the expertise to define and implement technologies that would improve operational efficiencies.  But it was commitment to personalized service that set up the alliance for success. Pedigree Technologies consultants took the time to understand Farstad Oil’s organizational processes, and developed the exact tools the company needed to improve them.

We were at the constant mercy of the telephone and waiting for customer calls…Now we can monitor things in amazing detail. Eric Lawson, Transportation Manager, Farstad Oil Inc.

Pedigree Technologies implemented both wireless and wired technologies to capture and integrate information from hundreds of tank controllers across customer and company sites. That information is delivered online to a single view that Farstad Oil managers can access from anywhere, at any time. This feature alone has taken the burden of inventory monitoring out of customers’ hands and provided Farstad Oil with real-time visibility into inventory levels. It’s also taken the guesswork out of ordering and fulfillment, eliminated the wastefulness of unnecessary delivery runs, and empowered dispatchers to route drivers most effectively.

Another of Lawson’s favorite features is automatic alarms. When inventory levels at any site reach a pre-determined level, the system generates an alarm that is sent not only to the web page but as e-mail and phone text messages. The instant notification lets Lawson prioritize delivery runs to customers with low inventories, avoiding emergency runs. 

Alarms can also be set up for conditions such as water height and days-in-inventory, allowing the company to proactively service issues before they become problems.

Pedigree Technologies also set up fleet and mobile-asset tracking features. Farstad Oil can now see locations of vehicles in real time using Google Maps™ functionality. In addition, the system tracks vehicle conditions and statistics including mileage, engine/idle time, stops, and speed. That helps the company ensure timely maintenance, support efficient driving habits, and conserve fuel. They can review actual routes taken to ensure drivers are driving the most efficient routes possible. “Now we can monitor things in amazing detail—even to see whether vehicles are stopping for all railroad crossings,” Lawson said.

The benefits of [Pedigree Technologies service] have been enormous. And it doesn’t just benefit us…it benefits our customers. Jim Olson, Regional Manager, Farstad Oil Inc.

In one easy-to-access view, the company can instantly see conditions across customers’ underground, above ground tanks and containers—as well as volume, location and conditions of their company’s mobile tanks and vehicles.

Benefits

Regional manager Jim Olson says that the benefits of Pedigree Technologies services have been obvious and “enormous.” And, he says “it doesn’t just benefit us, but our customers.”

Because Pedigree Technologies carefully considered organizational processes in conjunction with the technology implementation, Farstad Oil has already achieved concrete benefits.
• Real time inventory visibility to ensure timely product delivery to customers
• Improved product-needs forecasting to buy confidently at optimal times
• Customized service instead of off-the-shelf systems for tailored and scalable solution
• Ability to respond faster to spikes in demand and volatile market conditions.
• Ability to rapidly shift resources where they are most needed.

Based on the success of this project, Farstad Oil has plans to work with Pedigree Technologies on future enhancements. “It has been successful; [Pedigree Technologies] has been able to help us with the [business] improvements we were looking for,”  Lawson said.

Products and services

Businesses like Farstad Oil can benefit from the following Pedigree Technology OneView solutions:

OneView for Suppliers
OneView for Fleet Management

Related products and services
OneView for Field Services

How to get it
Contact us now to find out how you can put the power of Pedigree Technologies to work for your business:

Call: 800-470-6581 or 701-293-9949
E-mail: (JavaScript must be enabled to view this email address)
Visit: www.pedigreetechnologies.com/oneview