For more than 70 years, Americans have relied on Ferrellgas for their home, business, and agricultural propane needs.  To meet its customers’ needs, Ferrellgas relies on a fleet of approximately 2,600 delivery vehicles, including 1,950 Bobtail trucks, and 650 Cylinder trucks, each making on average 20 to 25 stops per day serving approximately 1 million customers nationwide In an effort to reduce operating expenses and improve customer satisfaction, the organization turned to technology to improve the routing and scheduling of propane deliveries, customer administration, and operational workflow.

Selecting a Best of Breed Logistics Solution

By implementing a routing and scheduling solution the organization knew they could accommodate ad-hoc, unplanned stops to handle urgent calls for same-day deliveries. Delivery managers can view delivery schedules for the week ahead, and pre-plan routes as required. The dispatch solution enables delivery activity to be managed on a daily basis.

While Ferrellgas began with 500 retail locations at the start of exercise, they were able to consolidate these locations into just 150 Service Centers. The integrated routing solution enabled them to manage larger geographic areas with fewer people. Today, all customer information is stored in a centralized database in the company’s data center, and a centralized call center takes all overflow and after hours call handling.  Delivery managers can view delivery schedules for the week ahead, and do pre-planning of routes as required. The dispatch solution enables activity to be managed on a daily basis.

Revamped Business Model Yields Tremendous Payback

Ferrellgas’ new business model showcases an unprecedented level of integration for the propane industry. The company has experienced improved bottom line results through reduced delivery and administration expenses, more accurate prediction of customer demand and the ability to provide 24/7/365 customer service through centralized service center operations.

Industry observers are also touting Ferrellgas as the competitive model of the future. Among other achievements, Ferrellgas is the first major propane retailer to fully apply technology used by leading delivery logistics companies to link bobtail routing, customer data management, inventory management, forecasting, billing and accounts receivable to reduce operating costs and boost shareholder value.

As a result of this, customer service staffing needs were reduced significantly. All delivery vehicles have been set up with new wireless handheld computers to enable real-time adjustments, monitoring and management of daily routes; and balance priorities with delivery costs. Better forecasting, tighter control and more efficient routing have allowed the company to reduce driver hours and the number of trucks required. To date, this initiative has resulted in sizeable reduction in fleet requirements. In addition, over two years following implementation, the company skipped its annual purchase of new bobtails, which normally accounts for 10 percent of the fleet.

Companies that supply bulk or cylinder propane gas must balance the pressure to reduce costs with accurate and efficient service delivery to ensure residential and commercial customers always have an available gas supply. 

Using logistics technology streamlines the process of planning fixed and dynamic routes and managing fleets in the field. With a route planning and scheduling solution, operators can optimize their routes, centralize route planning, improve delivery execution, and synchronize operations to more effectively drive costs down while improving service efficiency.

Written by Gary Sewell

IT Applications Manager at Ferrellgas and Descartes Global User Group Chairman