Diesel theft confirmed by newly installed fuel management system
Worth Farms of Lincolnshire sees an immediate return on its implementation of Merridale fuel management software.
Diesel fuel is one of the single largest production costs for modern farmers. Many farms have bulk storage facilities, which to some degree will present various challenges in terms of security and stock management. Worth Farms Limited of Holbeach, Lincolnshire has two fuelling points, each with around 40K litres storage capacity. One of these is at a remote location and the second is at its main site which it shares with other sister companies. These include a bio-gas production plant and QV Foods which provides packing and distribution services.
“Overall, the group’s fuel consumption amounts to around 230,000 litres a year, which is worth in the order of ￡150,000 at today’s prices says production manager, Simon Day.
When Simon joined Worth Farms four years ago, the onus was on the internal ‘users’ to record fuel drawn from the storage tanks. There were no systems in place to monitor fuel drawn against different user categories or contract accounts.
“Whilst tractors today are equipped with on-board computers which do provide a detailed analysis of fuel consumption against specific tasks, we needed a more effective method for reconciling our usage across the board.”
Simon continues: “This situation came to a head two years ago after a particularly wet Autumn. The wet soil meant that we had to plough and combination drill half our wheat acreage, by using four metre equipment rather than cultivate and drill with six metre equipment. Effectively we were using twice as much diesel to achieve half as much output per day.”
“When it came to doing the accounts, we could see that we had used a lot more diesel. But we had to use manual calculations to reconcile the output against the fuel used by the tractors. As well as being time consuming and laborious, we could see that there were possibilities for discrepancies which could potentially expose our business to the risk of theft and unauthorised drawing of fuel.
“Clearly we needed more effective record keeping. The only security measures in place at the time were physical locks on the dispensing equipment, adds Simon.
“Manual records were not trustworthy. Any mistakes will throw out the entire accounting process and we would have to resort then to a month by month analysis trying to match usage, deliveries and the monthly stock takes. It was costly in terms of office administration and credibility would always be in doubt.”
Simon learnt about fuel storage monitoring systems from an article in a trade magazine. After making some enquiries Worth Farms went ahead with the installation of Merridale Auditor units at both its fuelling points.
The Merridale system works with proximity data tags which are allocated to every vehicle. The tag identifies the vehicle (or account) and this then activates the pump dispenser. As an additional security measure, the operator must enter the machine hours, which enables the system to cross check against the previous fuelling. A complete record of the transaction is then recorded automatically and uploaded to the Merridale FuelWorks (web based) fuel management service.
“Effectively any machine with an engine is issued with a data tag. Hire units and contractors are also allocated data tags against designated accounts. In this way we can track what each tractor is doing for the hours since its last fill. And from this, we can allocate fuel costs against the work undertaken.
“Typical examples would be where we outsource work such as lifting sugar beet or harvesting maize. Previously we had no means of validating the amount of fuel drawn apart from our own estimates based on tractor performance data. This year we know that the maize contractor used precisely 14, 220 litres of fuel.
“A big advantage is the ability to fine tune our costing and use this better quality information for the assessment of future tenders for this work.”
Other advantages include a significant reduction in office administration. The software provides an accurate fuel status – which can be viewed from any web browser as and whenever necessary. This shows the timings for every fuelling transaction as well as the machine/account it was allocated to.
The Merridale software also maintains an accurate stock record so there is no need to dip the tanks. Fuel prices are recorded for each delivery which enables the Accounts department to track costs accurately.
Simon Day concludes by saying: “Perhaps the most significant pay back was the ability to account for a theft of fuel stock from the remote tank. After discovering evidence of the break in we found a large difference between tank contents and our stock records.
“Without the evidence provided by the Merridale system, it is unlikely that the insurance company would have accepted – without question – whether or not there was 30,000Litres of stock in the tank before the theft.
“The Merridale stock management record gave us the evidence we needed to validate our claim. And the value of fuel stolen on this occasion was more than the ￡8K investment we made to upgrade the security of our fuel supplies.
“And it is a small price to pay compared to the value of diesel we are using every year. “