ERP Software a Necessity in the UCO Collection Business
Logic would dictate that the best way for a delivery driver to hit the most drop-offs in a day would be to take the shortest route, but UPS drivers don’t do this. They famously avoid left turns, even if it makes their routes longer. That’s because in the 1970s data showed drivers lost more time waiting to turn into oncoming traffic than they did by taking slightly longer routes. But that’s not all the company gained when drivers started favoring rights. UPS claims that since its routing software began minimizing left turns, the company has used 10 million gallons less fuel and delivers 350,000 more packages each year, even with the longer routes.
UPS doesn’t plan its delivery routes using a folding map. And it doesn’t use Google Maps or “free” routing websites. It uses an enterprise resource planning (ERP) software called ORION designed specifically to optimize the operations of companies transporting tens of millions of packages daily.
ERP software has transformed nearly every industry—it’s even the entire basis of some new industries like rideshare companies—but used cooking oil (UCO) collectors have long been left out of the revolution, forcing them to adapt various programs like Excel and Google Maps that aren’t designed for their business to suit their needs. Luckily, that’s no longer the case. Now, ERP software specific to UCO collectors does exist, and companies using it are gaining a massive advantage over their competitors.
Route Creation, Scheduling, Optimization
There are countless options for route-optimization software. These programs can help plan the fastest route covering the most stops. It’s a good first step, but it’s not enough.
Generic route-planning software won’t do the job for UCO collectors. Delivery drivers don’t have to worry about losing time dropping off small packages when they could be dropping off large ones. All packages are valued the same since they all have to be delivered immediately.
That’s not the case with UCO. To truly help a UCO company increase efficiency and profits, route-planning software would have to do more than plot the shortest route between all the points listed. It would have to make predictions about where to get the most oil as well as how long a location can go without requiring service. Routes would change daily, weekly or even seasonally, based on which clients have full tanks and which can wait a little longer so a driver would pick up not just the most oil, but also the oil most in need of being picked up.
Optimization of delivery routes doesn’t end with giving the driver a manifest and a GPS system. Management can track every driver, every route and every pickup as they happen. As emergencies arise, an operations manager can dynamically alter a driver’s route, reoptimizing the remaining route around the change.
But it’s not just about better routing—it’s also about scalability. Hiring and onboarding drivers is an issue for all UCO collectors. Electronic turn-by-turn routing, standardized and digital data acquisition, and compartmentalization of sensitive data allow managers to onboard new drivers quickly and effectively, saving both time, money and stress.
Customer Relationship Management
A customer relationship management (CRM) system aggregates customer interactions, ranging from sales calls to regular service visits, across all channels. Designed originally as a separate system for use by marketing, sales and customer-service teams, CRMs are now fully integrated components of top ERP systems.
From the moment a prospective client’s name is entered into the system, every interaction with that client is recorded and made available to everyone in the organization. Every contact with that client during the sales cycle, every grease pickup, invoice, payment, rebate, grease-trap cleaning and customer complaint is recorded. The net benefit is improved client acquisition, retention and relationships. For the client, it means being able to easily access needed information for audits, the last grease-trap cleaning date, status of invoices, contracts, rebates and payments. Having all that customer data in one place helps streamline processes from sales to collections. Streamlined processes result in big cost savings, better customer service and an improved bottom line.
Compliance and Records
With or without ERP software, the UCO industry is changing. Federal and state governments are incentivizing the use and production of renewable energies, including biodiesel and renewable diesel, as a way to help reduce the human impact on climate change.
But for a producer’s fuel to be eligible for a tax credit or subsidy, the company must produce “cradle to grave” tracking to document the sources of all components used to create the biofuel. These requirements first appeared as Low Carbon Fuel Standard rules written by the California Air Resources Board with the intent of reducing carbon intensity in transportation fuels coming into California. Much of the nation’s biodiesel and renewable diesel is shipped to, sold and distributed in California, making these rules applicable to vendors all over the country. And other states are starting to enact similar requirements of their own.
If UCO collectors hope to get the highest price for their refined UCO, they must maintain auditable records of their UCO collections. This means documenting the date, time, address, business name and amount collected for every pickup made. Doing this with an Excel spreadsheet, while on the road, is next to impossible. Not doing it at all leaves a collector open to failed audits, punitive fines and exclusion from the market by major buyers.
A well-implemented ERP is fast becoming a differentiator, weeding out companies that fall behind while leading early technology adopters to great success.
ERP/CRM System Benefits
Predicting the amount of oil in each tank, combined with algorithms to minimize miles driven while maximizing oil collected, dramatically increases the overall capacity of a UCO firm. Collecting more oil in less time with fewer drivers and trucks is the most effective way to get into a growth trajectory.
Capturing data at the point of pickup begins “cradle to grave” tracking of carbon intensity, which not only protects the collector, but enhances the value of the product to buyers. That same data feeds accounting to produce invoices and rebate checks to the restaurant. Streamlining these internal processes improves productivity and lowers costs. The data is quickly available to phone operators and can also be provided electronically to a customer who wants to check their status with accounting or gather information for an audit.
Drivers can provide sales leads as they’re encountered and enter them into CRM. Leads are there for salespeople to follow-up on, and for management to review. Management can track prospects through the sales cycle to predict future volume so as to have the necessary staff and equipment to handle it. Salespeople visiting a customer in person can create and modify a service contract on their tablet and email it to the customer on the spot. Both salespeople and drivers can enter specific customer requirements into the system so all staff has instant access to essential knowledge about the customer and their service.
In sum, an ERP/CRM provides increased capacity, lower costs, increased productivity across the entire organization, as well as higher customer satisfaction. The combination of ERP and CRM is an incredibly powerful tool that is transforming entire industries, creating clear winners and losers.
An East Coast regional UCO collector was growing rapidly, acquiring new customers every day thanks to a revamped marketing plan, additional investments in advertising, and a tight focus on customer service and delivering on commitments. The company was paper-based, using spreadsheets to load its information during off hours.
The founders were beginning to feel the strain, working 14- hour days, seven days a week. They were facing the dilemma of hiring new drivers and acquiring new trucks just to keep up with current and projected growth. The capital expense they faced was daunting, and they began spending more time with bankers than with their business.
The owners made the decision to implement Reiter Software’s COST system, an ERP/CRM built specifically for UCO collectors. Implementing an ERP/CRM is a significant undertaking and management was aware of the size of the task. Stacks of paper full of customer information littered the office and warehouse. This data was loaded into the system over a period of weeks.
Drivers were outfitted with tablets to record each pickup with required information. Information about each customer’s operations was loaded to feed the predictive fill-rate module. Routes were developed and dynamically built or altered each day depending on the fill rates predicted by the COST system.
Gradually, invoicing and rebates were implemented to drive the writing of checks, rebates and payments. Drivers were trained not only to input current customer information but also to take note of prospects they encountered while collecting grease. Without hiring a single new driver or truck, the company doubled its sales and customer base during the pandemic. The CRM/ERP had unleashed additional operations capacity through the creation of efficiencies in routing and back-office work.
Collection volumes doubled and profits tripled. Today the company continues to expand, hiring drivers and onboarding them easily with tablets equipped with routing, client and financial software.
Much like their clients, Reiter Software’s COST system—the ERP that helped this company grow beyond its vision—is scalable for collectors large and small and has proven its value in the field.
Author: Kristof Reiter
Founder, Reiter Software