Bobtail efficiency: a marketer’s edge

December 1, 2005 By    

The subject of bobtail efficiency is always relevant to propane marketers. Educational sessions on any aspect of this subject have no problem attracting attendees and interest.

During the NPGA Marketer’s Management Forum, where better practices are learned from peers, bobtail efficiency is one of the hottest topics.

 Randall R. Doyle
Randall R. Doyle

For the propane industry, bobtail efficiency is synonymous with operational excellence.

Thus, giving priority to bobtail efficiency makes perfect sense. A slight improvement in efficiency results in significant financial benefit. For example, if a 3 million gallon, Midwest operator increases their average gallons per-drop just 25 gallons, from 250 to 275, operating costs will be reduced by about $45,000 a year.

David W. Lowe
David W. Lowe

In today’s more competitive retail energy market, the efficient management of bobtail operations is becoming more and more imperative.

Beyond the financial benefits, efficient management of bobtail operations allows the manager to spend more time on other aspects of the business. Efficient bobtail operations means there are fewer trucks to buy, service and maintain, fewer drivers to hire, train and certify and lower capital needs.

How does the owner/manager of a retail propane operation create improved efficiency? The answer lies in answering the basic question: “Am I efficient?”

For some, this question cannot be answered because they have not defined what efficiency means in measurable terms. For others, what they consider to be efficient may not be efficient at all.

For instance, a marketer may be very content to deliver 500,000 gallons a year per bobtail, without noticing that his peer is delivering 750,000 gallons a year.

Bill Burkardt of Polo, Ill., and Burl Williamson of Clinton, NC., are among the best in the industry in bobtail performance numbers. Burkardt delivers about 900,000 gallons a year per bobtail and Williamson delivers about 1 million gallons a year per bobtail.

The businesses owned by those two men are the bobtail efficiency standard bearers in the propane industry. Both of these marketers know that their bobtail productivity numbers are better than most in the industry. More importantly, they know why they’re efficient. They understand that in order to achieve bobtail efficiency, a company must manage each day’s activities with vigilance, attentiveness and diligence.

“It’s a daily effort,” says Burkardt. “Each route and each delivery must be planned with the best information available and then we check the results at the end of day to make sure the drivers did what they were supposed to do.”

The marketer who has made bobtail efficiency their priority understands that being efficient is not a one-time event. It’s a way of life.

How is bobtail efficiency obtained? Here is a list of practices observed from several good marketers in the industry (the use of information technology is not addressed):

  • The owner/manager makes it very clear to the staff that bobtail efficiency is one of the company’s top priorities. In our opinion, this is the most critical reason bobtail efficiency is continuously improved and sustained. The business leader sets the example for the rest of the employees to follow. When the leadership is committed to efficiency, everyone else falls in line. It’s a general principle in any aspect of business.
  • The best operators manage their customers and do not allow them to dictate bobtail delivery schedules. They keep the number of will call customers to a minimum, focus on building a quality customer base as the central theme of their marketing effort and create a reliable, predictive demand system for the best customers.
  • The owner/manager evaluates each day’s performance against the company’s expectations. They manage by the critical measures, maintain current and accurate information that is organized and easily accessible, pay close attention to details, are intolerant with mediocrity and deviations from the plan, hold people accountable and, most importantly, understand that to make money in the propane business, you’ve got to make a profit on each and every delivery.
  • The right people in the right jobs get the right rewards in the right teamwork environment. The owner/manager understands that he’s in charge of the bobtail operations and is ultimately responsible for its performance, that the bobtail driver delivers gas and does not do other jobs (such as sales) and that the team of people that influence bobtail operations are rewarded for hitting their measurable goals.
  • The manager and his team are constantly looking for ways to grow, advance and improve performance. They know how to use technology to streamline work, improve information and automate tasks. They periodically evaluate the locations of customers, bobtails and storage tanks to find improvement opportunities. They are not rigidly tied to the old and comfortable way of doing business. They implement change with perseverance, drive and patience.

“It took us about five years to reach the bobtail efficiency level we’re at today,” says Williamson. “It takes a lot of focus and persistence by everyone. It’s a daily effort.”

If you want to improve your bobtail efficiency, start by taking the lead and making it a priority to you and your staff.

Chances are you will be pleasantly surprised by the improvement you, your people and your company will achieve over time and how much your bottom line will improve.

Randy Doyle is an industry consultant with over 20 years in the industry and can be reached through his web site: rdoyleconsulting.com. David Lowe is an industry consultant with over 30 years in the propane industry, primarily as an independent marketer in Michigan. He can be reached at
dwlowe@comcast.net.

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