Petrol bunk management

ascertain · 14th February 2010, 20:24

Hi

We live in Karnataka and have a fuel bunk in tamilnadu, Its a 4 hour commute.
Its a family owned business, and I am going to try and get to understand the basics of fuel pump management in another 2-3 months. Right from the purchase of the fuel to the security. We currently have 2 managers there who have been handling the goings for 6-7 years now. Smooth characters who of course would have made a decent buck out of being left alone in charge of everything. I plan to change all that, and bring in much more accountability and efficiency. Regular inspections and check were not possible till now because I was even farther down from that place. I do know that till now no customer has complained about anything regarding the pump, but I really don't know the kind of fuel they use, whether some golmaal might be happening or all that.

I need to know a few things , and I request the team members to help me out.

1) I am a doctor, and the only management skills I have is in bringing patients out from deaths door (ICU specialist you see

). I thought it would be a good learning process if I could get in touch with other similar individuals who have a good exposure in the field. Just to learn the basics.

2) do any of the members have any literature that I could use ? i.e on Fuel bunk management? If so could you assist me in obtaining one?

3) What are the common issues faced by a newbie?. I understand that there is a lot involved right from kickbacks to cops

4) Any ideas on how to prevent employees embezzling funds from the setup?

5) Do suggest good web based IP camera setups that are efficient and can be used.

6) last of all - ANY kind of helpful information.

Roy.S · 14th February 2010, 22:21

Quote:

Originally Posted by ascertain

Hi

We live in Karnataka and have a fuel bunk in tamilnadu, Its a 4 hour commute.
Its a family owned business, and I am going to try and get to understand the basics of fuel pump management.......

Well, I have absolutely no info that will be of any value to you, but I do wish you luck. Also, I hope you'll keep updating this thread. Would like to know what the business is like from an insider's perspective.

GTO · 15th February 2010, 13:18

Firstly, congrats on the initiative to set things right.

1. Best way to learn the disorganised segment is....well...on the job. Here, the value of experience is 10X compared to what you'll get from books.

2. I presume you aren't going to move there? Thus, you will only be visiting once ever so often. Suggestions:

- Spare a couple of weeks at the start, live there 24/7, and learn the operations inside out.

- Hire a competent manager. Preferably someone you know (relative? Friend? Existing employee but in another office?), trust and who needs a job.

- Since you will be distance-managing, plant a "spy" employee. No one knows of his affiliation to you. He will work there just as any other, but will provide you with a daily / weekly / monthly feed of actual events.

- Implement fool-proof software systems that MUST be used for input, output, inventory, accounting etc. Cross-check records to ensure they tally and let the current managers know that they will be held fully accountable.

aargee · 15th February 2010, 13:27

Quote:

Originally Posted by GTO

Spare a couple of weeks at the start, live there 24/7, and learn the operations inside out.

+1 to that
When you do this, you'll come to know most of the stuff going on over there; also never let anyone know how long are you going to stay. Walk into the pump casually most of the times & you'll get to know more. All the more, never let anyone know the purpose of your visit

sanjayc · 15th February 2010, 13:41

In addition to GTO's suggestions:

Once you are able to gain some fair degree of knowledge & control over the operations,

- try providing staff with incentives higher than competition

- Share the costs saved with the staff. For example, if the day2day running expenses are brought down, like electricity charges etc, some part of the savings will be shared with them. This way unwanted wastages can be brought under control.

- Above all Trust, But Verify.

GTO · 15th February 2010, 20:08

Just remember another one : Best way to learn, work from the ground up. Don't sit in the air-conditioned cabin giving orders. Be there on the front line when deliveries come in and go out.

Of course, once you learn the ropes, go back to that air-con cabin.

ascertain · 15th February 2010, 20:14

Thanks a lot for the encouragement and suggestions guys.
As you all say, I will be spending time there for at least 10 days trying to figure out the various levels at which things have to be done.
The main nexus between the present employees and the retail inspectors needs to be sorted out. It is going to be a WHALE of a change from what I do presently.
The pump's not doing badly, but it could be much better. As a matter of fact, hindustan petroleum (whose dealership we have) approached us for a JV for pump modernization (50-50), but somehow, am not very comfortable with that idea, because I've heard mostly downsides of JVs - any thoughts?
Now am carrying out research into the pumps abroad - security measures, construction, equipment and all that. Scant material available online, but am ploughing through all available literature.
Surprise checks will be possible of course, either me or my wife can do that. The main thing is (as GTO said) to have a 'mole' within the framework, but finding such a guy is the problem, because I understand that it is a rough business, and more often than not- those guys get scared off. Anyway - keeping my fingers crossed to build up a trustworthy net.

StarVegabond · 15th February 2010, 20:27

GTO has given you most of the important suggestions

my 2 cents

Petrol Pump is a Regulated, Supply Chain centeric, Retail business
One needs to know the following

1. Ofcourse the "customers" (profile of cusotmers who are regular consumers). They decide everything about how you should run the show

2. Suppliers ie. oil companies. this is critical that if you do not understand how the oil companies work, lead times, price dynamics etc then you might get lost. Especially considering the speculation that oil pricing would be de-regulated.

3. Regulations (Safety, Quality, Pricing, Labour etc)

to know swimming, one needs to jump into the water.
No tool would help you to become an entreprenuer. Just be yourself, follow your instincts, always do what is right for the business iin the long term.

all the best.

prateekm · 15th February 2010, 21:50

You mentioned that it's a family business. So there gotta be someone in your family who knows the functioning of the pumps inside out. Try to take him with you to the pump and both could stay there for 2 weeks where he will be your mentor and guide you with the day-to-day functioning of the pump

maddy42 · 16th February 2010, 04:29

Watching this thread with keen intent. Best of luck man.

GTO has given some really good points.

2 things which i keep hearing are
1) The fuel from the tanker should be unloaded only in the evenings or early mornings as close to 10 liters are saved that way! Numbers are hear say
2) There were reports of a mafia which pilfers fuel from the tankers with close contact with the drivers at the refinery or filling station. Have a check on that.

And last but not least if you got good honest employees and friendly staff you will have repeat customers. My family uses only 1 pump just because the staff are very friendly and are know dad well unlike people who dont love their jobs!

Again watching this thread

ascertain · 16th February 2010, 17:25

thanks a lot for all the helpful suggestions you guys are providing. Will definitely keep updating this post - I think it's be great from a person totally new and raw to this field.

What about the JV idea with the petroleum company as I had queried earlier in my previous post?.. any suggestions on that?

StarVegabond · 16th February 2010, 17:44

Quote:

Originally Posted by ascertain

What about the JV idea with the petroleum company as I had queried earlier in my previous post?.. any suggestions on that?

The history of joint ventures teach us that the JVs without right governanace structure have failed. What is the governance structure ?
it is simple...who and how the day today decisions are made and how the conflicts are managed.

50-50 JV mean that there is no way to effectively decide in case of conflicts unless the JV partners have decades of experience in running the JV. Hence JVs having majority and minority stakes (60-40, 70-30, 80-20 etc) have succeeded in long term than JVs having equal stakes.

secondly JV for the purpose of having a JV does not make sense. if the partners bring in specific skills and capabilities that provide sustainable competitive advantage to the business then it makes sense to have the JV. if purpose of the JV is just to get some money (=working capital) then try not name it as JV, but as investment.

hemanthisgreat · 16th February 2010, 17:51

Why don't you PM mmmjgm to join this thread. IIRC he has mentioned before on the forum that his family owns petrol bunks.

Bapu · 16th February 2010, 18:19

Hi Ascertain,

All the best with your endeavour.

I had once spoken to somebody and he had advised that whenever you get a fresh load of fuel. Do NOT unload it immediately. A lot of the fuel gets sloshed around and hence you wont get the full load into your bunk and a lot remains in the tanker itself.

Also, you might want to follow this thread : http://www.team-bhp.com/forum/street...-stations.html

and observe what all from here is happening at your bunk. Should give you a fair idea, i guess.

Joy · 13th August 2010, 21:33

Digging up an old thread. Ascertain, kindly share your experience regarding the petrol pump ownership and let loose some tricks of the trade so that we can benefit.

Anyway, it's better late than never. Congrats on your new venture.

14th February 2010, 20:24	#1
ascertain BHPian Join Date: Dec 2008 Location: Cannanore Posts: 155 Thanked: 41 Times	Petrol bunk management Hi We live in Karnataka and have a fuel bunk in tamilnadu, Its a 4 hour commute. Its a family owned business, and I am going to try and get to understand the basics of fuel pump management in another 2-3 months. Right from the purchase of the fuel to the security. We currently have 2 managers there who have been handling the goings for 6-7 years now. Smooth characters who of course would have made a decent buck out of being left alone in charge of everything. I plan to change all that, and bring in much more accountability and efficiency. Regular inspections and check were not possible till now because I was even farther down from that place. I do know that till now no customer has complained about anything regarding the pump, but I really don't know the kind of fuel they use, whether some golmaal might be happening or all that. I need to know a few things , and I request the team members to help me out. 1) I am a doctor, and the only management skills I have is in bringing patients out from deaths door (ICU specialist you see ). I thought it would be a good learning process if I could get in touch with other similar individuals who have a good exposure in the field. Just to learn the basics. 2) do any of the members have any literature that I could use ? i.e on Fuel bunk management? If so could you assist me in obtaining one? 3) What are the common issues faced by a newbie?. I understand that there is a lot involved right from kickbacks to cops 4) Any ideas on how to prevent employees embezzling funds from the setup? 5) Do suggest good web based IP camera setups that are efficient and can be used. 6) last of all - ANY kind of helpful information.
	() Thanks

15th February 2010, 13:18	#3
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 70,534 Thanked: 300,732 Times View My Garage	Firstly, congrats on the initiative to set things right. 1. Best way to learn the disorganised segment is....well...on the job. Here, the value of experience is 10X compared to what you'll get from books. 2. I presume you aren't going to move there? Thus, you will only be visiting once ever so often. Suggestions: - Spare a couple of weeks at the start, live there 24/7, and learn the operations inside out. - Hire a competent manager. Preferably someone you know (relative? Friend? Existing employee but in another office?), trust and who needs a job. - Since you will be distance-managing, plant a "spy" employee. No one knows of his affiliation to you. He will work there just as any other, but will provide you with a daily / weekly / monthly feed of actual events. - Implement fool-proof software systems that MUST be used for input, output, inventory, accounting etc. Cross-check records to ensure they tally and let the current managers know that they will be held fully accountable.
	() Thanks

15th February 2010, 13:41	#5
sanjayc BHPian Join Date: Nov 2009 Location: Chennai Posts: 952 Thanked: 8 Times	In addition to GTO's suggestions: Once you are able to gain some fair degree of knowledge & control over the operations, - try providing staff with incentives higher than competition - Share the costs saved with the staff. For example, if the day2day running expenses are brought down, like electricity charges etc, some part of the savings will be shared with them. This way unwanted wastages can be brought under control. - Above all Trust, But Verify.
	() Thanks

15th February 2010, 20:08	#6
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 70,534 Thanked: 300,732 Times View My Garage	Just remember another one : Best way to learn, work from the ground up. Don't sit in the air-conditioned cabin giving orders. Be there on the front line when deliveries come in and go out. Of course, once you learn the ropes, go back to that air-con cabin.
	() Thanks

15th February 2010, 20:14	#7
ascertain BHPian Join Date: Dec 2008 Location: Cannanore Posts: 155 Thanked: 41 Times	thanks guys Thanks a lot for the encouragement and suggestions guys. As you all say, I will be spending time there for at least 10 days trying to figure out the various levels at which things have to be done. The main nexus between the present employees and the retail inspectors needs to be sorted out. It is going to be a WHALE of a change from what I do presently. The pump's not doing badly, but it could be much better. As a matter of fact, hindustan petroleum (whose dealership we have) approached us for a JV for pump modernization (50-50), but somehow, am not very comfortable with that idea, because I've heard mostly downsides of JVs - any thoughts? Now am carrying out research into the pumps abroad - security measures, construction, equipment and all that. Scant material available online, but am ploughing through all available literature. Surprise checks will be possible of course, either me or my wife can do that. The main thing is (as GTO said) to have a 'mole' within the framework, but finding such a guy is the problem, because I understand that it is a rough business, and more often than not- those guys get scared off. Anyway - keeping my fingers crossed to build up a trustworthy net.
	() Thanks

15th February 2010, 20:27	#8
StarVegabond Senior - BHPian Join Date: Sep 2008 Location: Bangalore Posts: 1,891 Thanked: 42 Times	GTO has given you most of the important suggestions my 2 cents Petrol Pump is a Regulated, Supply Chain centeric, Retail business One needs to know the following 1. Ofcourse the "customers" (profile of cusotmers who are regular consumers). They decide everything about how you should run the show 2. Suppliers ie. oil companies. this is critical that if you do not understand how the oil companies work, lead times, price dynamics etc then you might get lost. Especially considering the speculation that oil pricing would be de-regulated. 3. Regulations (Safety, Quality, Pricing, Labour etc) to know swimming, one needs to jump into the water. No tool would help you to become an entreprenuer. Just be yourself, follow your instincts, always do what is right for the business iin the long term. all the best. Last edited by StarVegabond : 15th February 2010 at 20:28.
	() Thanks

15th February 2010, 21:50	#9
prateekm BHPian Join Date: Nov 2009 Location: Mumbai & BLR Posts: 790 Thanked: 553 Times	You mentioned that it's a family business. So there gotta be someone in your family who knows the functioning of the pumps inside out. Try to take him with you to the pump and both could stay there for 2 weeks where he will be your mentor and guide you with the day-to-day functioning of the pump
	() Thanks

16th February 2010, 04:29	#10
maddy42 Senior - BHPian Join Date: Aug 2007 Location: Coorg Posts: 2,131 Thanked: 1,328 Times View My Garage	Watching this thread with keen intent. Best of luck man. GTO has given some really good points. 2 things which i keep hearing are 1) The fuel from the tanker should be unloaded only in the evenings or early mornings as close to 10 liters are saved that way! Numbers are hear say 2) There were reports of a mafia which pilfers fuel from the tankers with close contact with the drivers at the refinery or filling station. Have a check on that. And last but not least if you got good honest employees and friendly staff you will have repeat customers. My family uses only 1 pump just because the staff are very friendly and are know dad well unlike people who dont love their jobs! Again watching this thread
	() Thanks

16th February 2010, 17:25	#11
ascertain BHPian Join Date: Dec 2008 Location: Cannanore Posts: 155 Thanked: 41 Times	thanks for the support thanks a lot for all the helpful suggestions you guys are providing. Will definitely keep updating this post - I think it's be great from a person totally new and raw to this field. What about the JV idea with the petroleum company as I had queried earlier in my previous post?.. any suggestions on that?
	() Thanks

16th February 2010, 17:51	#13
hemanthisgreat BHPian Join Date: Jul 2007 Location: Bangalore Posts: 594 Thanked: 50 Times View My Garage	Why don't you PM mmmjgm to join this thread. IIRC he has mentioned before on the forum that his family owns petrol bunks.
	() Thanks

16th February 2010, 18:19	#14
Bapu BHPian Join Date: Jul 2009 Location: Ahmedabad Posts: 131 Thanked: 24 Times	Hi Ascertain, All the best with your endeavour. I had once spoken to somebody and he had advised that whenever you get a fresh load of fuel. Do NOT unload it immediately. A lot of the fuel gets sloshed around and hence you wont get the full load into your bunk and a lot remains in the tanker itself. Also, you might want to follow this thread : http://www.team-bhp.com/forum/street...-stations.html and observe what all from here is happening at your bunk. Should give you a fair idea, i guess.
	() Thanks

13th August 2010, 21:33	#15
Joy BHPian Join Date: Aug 2009 Location: Kolkata Posts: 305 Thanked: 25 Times	Digging up an old thread. Ascertain, kindly share your experience regarding the petrol pump ownership and let loose some tricks of the trade so that we can benefit. Anyway, it's better late than never. Congrats on your new venture.
	() Thanks