News | Dec. 21, 2015

Energy Americas at Houston banks on commercial practices

By DLA Energy Americas at Houston DLA Energy Public Affairs

Total conversion from JP8 military specification jet fuel to commercial jet fuel in the continental United States during 2014 drove the adoption of further commercial practices for some fuel terminals.

Defense fuel support points operating under a Transportation Service Provider tender presented an opportunity for process improvement for Defense Logistics Agency Energy Americas at Houston.

“We received notice from Magellan Pipeline in early 2015 indicating they had initiated the process of ‘mixing’ our batches with the commercial product being delivered to our intermediate DFSPs,” said Maria Rodriguez, DLA Energy Americas at Houston Central Team supervisor. “We viewed this action as an opportunity to revise our own business processes to be in concert with current commercial practices.”  

The process began this summer with information gathering meetings between Energy headquarters, Americas at Houston and Magellan Pipeline personnel at the Americas office the Magellan headquarters in Tulsa, Oklahoma.

“We walked through the DLA Energy requirements for receiving/shipping documents, invoicing, maintaining visibility of inventories in accordance with the Inventory Management Plan levels, allocations to meet the war reserve needs and the availability of our product when required under other than normal operations and priorities,” Rodriguez said.  

The Americas at Houston team went to work on a process that would accommodate the transporter and at the same time meet the Energy accountability requirements in accordance with published guidance and without disruption of services to the partners.  Once the process was developed, a short briefing was forwarded to the DLA Energy accountable officer for review and approval to move forward.

“The final product was the creation of a new (Department of Defense Activity Address Code) for DFSP Magellan that will hold the (virtual/bank) inventory, and we accepted Magellan’s inventory system as the system of record for monthly reconciliation of jet fuel and additives,” Rodriguez said.

Based on these inventories, the Americas at Houston Supply Planner will re-order and maintain inventories at the virtual DODAAC and re-allocate from there to two intermediate DFSPs in support of the organization’s partners, she added.  

“We successfully transferred all Jet A fuel inventory held at Magellan Pipeline under one DODAAC,” she said.

In addition to adopting these commercial practices, the need to conduct monthly, quarterly or bi-annual reviews for inventory claim reconciliation between Energy and the transporter is eliminated.