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Artificial Intelligence disrupting retail petroleum

Russell Dupuy 16 Apr 2018 By Russell Dupuy

Artificial Intelligence – Disrupting Retail Petroleum

When thinking about the technology and equipment space within retail petroleum, there is a lot of talk about — IoT, Cloud and big data — we note the current and emerging trends are:

Automation, the time honoured [or not] task of manually dipping fuel storage tanks are rapidly being replaced by automatic tank gauges [ATG] the sharp increase of intelligent dispensers, electronic price signs and wastewater and building management systems whilst not new in developed countries, are marching throughout developing countries at a rapid pace.

This space is dominated by about five global manufacturers, all of whom have swallowed up many smaller manufacturers in pursuit of market leadership – essentially to own the space or create a perceived ‘more’ value to the end client, with the one-stop-shop theory.

Whilst these present big numbers, especially in developing countries in terms of sales value and volume of equipment, once installed, the ride is over, it’s all about the sale, which leads to the next trend.

This trend has transitioned from major oils [networks over 500 sites], over the past fifteen years to major distributors/marketers [networks less than 250 sites], and more so in developing countries.

Integration, automation alone only goes so far by replacing what historically were human task(s) with a machine. Connecting Things [machines] has hitchhiked a ride that was largely driven by those five manufacturers knitting together the many pieces of equipment they acquired! For example, automatic tank gauges, dispensers, forecourt controllers, sensors and a few other Things, which kind of stopped there, but did afford the manufacturers to own their equipment control chain – the major drawback for the end user was always proprietary.

The challenge being ‘locked-in’ to one brand or another that seems to become increasingly problematic to manage retail networks that featured blended brands and technologies independently.

Are we heading down the: ‘It’s Microsoft or Apple’ path – possibly, however, the emerging trend is toward digital ecosystems that not only knit disparate technologies together, they also directly integrate older analogue Things into the digital realm.

Why is this relevant! The fact data that these many Things present becomes highly valuable, especially when major oils look to drive down operational costs in maintaining their retail assets, whilst simultaneously driving hose uptime for the consumer and of course finding new ways to mitigate compliance risk, which leads to the next trend.

Interestingly, this trend has been observed with major oils seeking to leverage the previously installed asset, and with smaller networks and developing countries integrating assets from installation to realise greater value from day 1.

Digital ecosystems, SAP, JD Edwards and other similar enterprise solutions go a long way in this regard, in time we can expect them to fully reach into the IoT and Cloud space. Some argue they are already there, I’d argue they are not even close!

The true digital ecosystem goes well beyond the management of enterprise financial big data, it challenges there is so much more to learn through connected Things. The rich Thing [fact] data, when merged or related to traditional financial data has the potential to transform organisational intelligence from prescriptive to predictive, that will not only drive operational performance, simultaneously cost down maintenance and proactively drive compliance that leads to the next trend.

This trend has been well observed with major oils globally seeking enterprise integration to achieve real-time data feeds in an effort to drive predictive analytics, however, very few small to mid-size marketers have made this step. A number of developing countries are seeking expressions of interest in developing digital ecosystems.

Artificial Intelligence, sounds like something for Science Fiction action movie than Retail Petroleum, or something for the academics.

In my opinion, the real value to be gained from AI is simply taking rational human logic, tempered with human critical thinking, turbocharged with some simple statistical and mathematical computations, applied to Thing data, will solve a range of real-life problems. In this context managing a retail petroleum network.

We can expect to see major growth in this space over the coming years, for those forward-thinking enterprises, knowing how to unlock their data will be central, however, the equipment asset decisions they make today, as described in the preceding trends will become critical in ensuring they do not become ‘Locked-in’..!

We have found little evidence of any major [or other size] oil company other than Viva Energy Australia moving into this space.

If you would like to learn more about Fuelsuite’s artificial intelligence capability and what it means pragmatically in managing a petroleum network, contact us via enquiries@drivingfueliq.com