Wholesale energy supply is vital to the proper functioning of liquid energy distribution in North America. It provides the critical link between refiners and end users, ensuring that product is where it needs to be to fulfill demand. Wholesale energy supply is also one of the most complex sectors in our industry, working around endless variables to move propane through the supply chain from deal origination and risk management to storage and distribution. This near magic trick of logistics makes these companies the unsung heroes of the supplier community.
Complexity of Wholesale Energy Supply
The complexity does not stop at the essential mechanics of supply. Wholesale energy supply can mean pure midstream storage and distribution, but it can also mean bulk delivery direct to large volume users. Many suppliers do both. And an emerging trend is that that retailers are increasingly opening their own wholesale division to better maintain control of inventory and margins. It is easy to see that there are a lot of layers to this onion.
Regardless of where they fall in terms of profile, today’s wholesalers are facing increasing challenges due to volatility, regulatory pressures, margin erosion, and safety to name just a few. Profits are razor thin which leaves little room for error. In short, this is not a business for the faint hearted.
Yet, despite all the headwinds, wholesale suppliers have been slow to adopt technologies that can really streamline and (dare I say) simplify their processes and decision making while eliminating a lot of headaches. But why?
Digital Revolution
Well, because it is an endemic problem across the industry. Most folks are tired of hearing that energy has been slow to embrace the Digital Revolution. This fact, however unpleasant, has become a “stating the obvious” kind of moment. To defend our honor, suppliers of all sizes and profiles have responded by quickly deploying an array of tech solutions, especially in the past 5 years.
However, there are pockets where this transformation has not quite taken hold. Wholesale energy supply is one. Before we stand in judgement, let’s look at the dynamics at play that are driving the hesitation.
ERP Back Office Software
To make this assessment, it is always best to look at the epicenter of the tech stack inside a fuel supplier, the ERP system (Enterprise Resource Planning), more commonly called a “backoffice system”. This specialized application manages all facets of the operation and is the central hub around which all satellite solutions orbit. If you are a retail operator, you have nearly endless ERP options. If you make it known you are in the market for new ERP, literally a dozen vendors will be knocking on your door tomorrow.
If you’re a wholesale energy supply company, things are a little different. You will find very few ERP companies that provide software that is specific to your needs. If you’re lucky enough to be very large, you will have access to a few good systems that come paired with an often out-of-reach price tag. If you are a small to midsize operator, you are probably suffering with a barely useful wholesale module in your retail ERP system.
Neither option is particularly appealing which is why many wholesalers opt for the Mother of All Spreadsheets or MOASS Method.