Thursday, 7 June 2012

Just in Time fuel supply - is it worth it?

In a BBC report we learn that Manchester (UK) airport ran out of jet fuel. They hold between 12 and 24 hours supply, relying on a single 30 mile pipeline from a refinery to provide replenishment. Considering planes can't fly without fuel I'd call the fuel storage and supply an essential asset. Without the fuel the airport would have to close or operate on a considerably reduced  traffic. Not keeping several day's supply in buffer tanks on site seems like a false economy to me.

The same problem can exist for the fuel supply of standby generators . Some organisations depend on fuel tankers arriving within a few hours of a major outage. If there is a regional power outage it is likely the demand for fuel will exceed the logistics capacity of the tanker firms to deliver fuel. Standby fuel storage capacity is a risk which must be formally assessed and the decision signed off by business management. The danger is that some bright accountant will think money can be saved by reducing fuel stocks and utilising a Just-In-Time delivery.

No comments:

Post a Comment