Alex Salazar, Vice President of Operations at Houston-based 3L Energy Solutions, looked back on one of his most ambitious projects yet. “We turned three fuel distributors that were previously five- to 10-trucks big into one giant 50-, 60-truck operation,” he said.
Two years before, Salazar worked in dispatch. He was an MBA grad eager to bring data analytics to the petroleum industry. But all around him was paper, paper, and more paper—how was we supposed to get useful data out of that?
So Salazar decided he’d modernize fuel operations for the data-driven world. He invested in technology such as logistics platform FleetPanda. With the right software, he created automated workflows that brought dispatch, drivers, and billing together.
Faster order-to-cash times followed. So did a 20% reduction in operational costs—and way less paper to shuffle.
Those results got the attention of Spec Oil, a global above-the-rack commodity trading firm, who chose Salazar to lead the three-distributor merger that would become 3L Energy Solutions.
“Spec Oil wanted to enter the downstream last-mile distribution part of the oil and gas business. They recognized the higher profit margins by having greater control over the logistic operations,” Salazar said.
Salazar not only delivered those margins, but he also positioned 3L Energy Solutions to grow in Houston and nationally. His achievements show how much opportunity operations managers have right now to lead through technology.
“I feel data is an underutilized tool in the downstream sector of the oil and gas industry, and if leveraged correctly can help companies grow tenfold,” he said. “That’s why technology and data are at the forefront of everything we do.”
Automation maximizes 3L Energy Solutions’ margins
For 3L Energy Solutions to capture the last-mile margins Spec Oil wanted, Salazar had to integrate three companies—all with different cultures, workflows, and operations—into one seamless unit. Salazar saw he had to start on the logistics side.
“All these fuel distributors are trucking entities at heart, and so we had to find a way to integrate all the dispatching and the trucking into one function and one process,” he said.
That focused Salazar’s attention on unified dispatch software. He chose FleetPanda, integrating each distributor into the same processes on the same system. “It would be impossible to integrate everything at strictly a people level. We needed a unified software experience so everyone operates in a consistent manner,” he said.
Now, 3L’s distributors run more efficiently together than they ever did apart:
- automated workflows save hours of work by eliminating paperwork and errors;
- a logistics portal gives drivers and dispatch one place to send and receive orders;
- faster order-to-cash timeline means higher operating cash flow margins.
Salazar chose FleetPanda because of its flexible, modular design. He could meet most of 3L USA’s needs out of the box. At the same time, he could partner with FleetPanda to develop new modules such as tank monitoring, best buy, and routing.
Future acquisitions have a fast track to ROI
Salazar has set up 3L Energy Solutions to scale like a fuel franchise. Future acquisitions will plug right into 3L’s platform, instantly modernizing its operations. That does more than ensure operational discipline. It also increases the return on investment (ROI) of every acquisition.
That’s because a low-efficiency distributor stands to double its efficiency once it joins 3L Energy Solutions. Take a small, unmodernized distributor making $5 million in profit from $100 million in sales. That 5% profit margin could double to 10% or higher as pen-and-paper processes are replaced by automated workflows.
This kind of plug-and-play, rinse-and-repeat growth will help Salazar reach his goal of growing 3L Energy Solutions tenfold.
“I’m very excited that we finally have a foundation in place to leverage our operations and our strengths to further grow the company,” he said. “Spec Oil is looking to acquire more companies and we’re intending to explore future growth opportunities across not only Texas but across the United States as well.”
3L Energy Solutions has data its competition doesn’t
Salazar knows the right technology captures the right data. “The more information you have at your fingertips, the better decisions you’ll be able to make,” he said.
He doesn’t mean just workflow data, either. In a complex industry like downstream petroleum, technology also needs to capture institutional knowledge—the unique data inside employees’ heads—to support cross-training and organizational flexibility.
Take a driver who knows Customer X’s complicated delivery process. A smartphone app could capture that knowledge, integrate it into the workflow, and make it standard operating procedure. Now other drivers save time and prevent mistakes when delivering to Customer X.
Now that Salazar has built the system to capture all this data, he expects to see increasing opportunities to use technology as a differentiator.
Logistics
“We’re looking at data that probably other distributors don’t really look at when analyzing drivers,” Salazar said. This is an example of data showing Salazar where he can increase 3L’s margins. His team uses that data to plan better routes, identify its best drivers, and even uncover areas to grow market share.
Customer service
Automation supports deepening trust from 3L Energy Solutions’ customers. Fewer errors, faster response times, and more on-time deliveries benefit customers’ bottom lines as much as they do 3L’s. “If we’re able to utilize technology to not only make our lives a lot better, but also improve our customers’ lives, it’s gonna be invaluable to everyone,” Salazar said.
Employee development
Salazar believes the right technology changes employees’ lives. It democratizes decision-making and unleashes their creativity. “People don’t grow as leaders if they’re not given an opportunity to take a chance and execute a decision,” Salazar said.
For instance, instead of drivers having to hurry-up-and-wait for dispatch to call back, they can log into a shared dispatch platform from their smartphones and see the same real-time data. Drivers then have the power to make decisions that drive efficiency, like scheduling a well-timed refuel.
Take a deeper look at 3L Energy Solutions’ plan for tenfold growth
When Salazar modernized 3L Energy Solutions’ fuel operations, he did more than widen margins. He also did more than vertically integrate Spec Oil into last-mile distribution.
Salazar’s crowning achievement was enabling 3L to run like a modern enterprise, one where leaders rely on data for objective decision-making. In an industry where many still rely on their gut or who they know best, leaders like Salazar are pioneers.
But Salazar understands why other distributors hesitate to use new technologies. Legacy software has left many suspicious of technology’s promises.
Salazar thinks the bigger problem though is a lack of education on dispatching software’s value. “[Distributors] might not be able to see the savings at the service level, but if you dig and you do your research, there’s immense savings in utilizing technology to drive efficiencies,” he said.
Fortunately, leaders like Salazar are happy to share what they know. Dive into 3L Energy Solutions’ case study to see how unified dispatch software can make your operations more efficient and profitable.