Having determined that bulk cryogenic convenience drops are usually a good thing for the vendor the question is “Are they good for the customer?” And, of course, comes the Millennium Answer: “It Depends.” So- what are the customer costs and benefits of convenience drops?
First- the potential negatives:
N-a) These drops are often commonly referred to as “dumps” where clients have a negative view. The biggest concern is that the liquid left in the transport is “hot” and will raise the temperature of the bulk tank receiving the product. In some cases a company is concerned that the transport has traveled from say Phoenix to Tucson to Albuquerque and back and now has 500 gallons they need to get rid of. When filling the delivery guy might blow down some of the pressure on the receiver of there might be a good deal of venting which could translate as wasted molecules. Or- the liquid did, in fact, heat the tank up a little it might cause product to boil off faster and there would be a net loss of product.
N-b) Most bulk agreements also include a “per delivery” fee and it is undesirable to be billed a delivery fee for partial drops.
N-c) There can occasionally also be logistics issues arising from getting a partial delivery on Tuesday when the regular delivery is Thursday resulting in less than a full drop on Thursday.
All these things can result higher total cost of goods.
And the potential positives:
P-a) A well placed client working closely enough with their supplier could see some significant cost savings if they are lucky enough to be strategic. This is especially true if the supplier is trying to expand into new territory and the client has a large enough tank to receive most of the excess product the transport might ever have. This could result in both good upfront pricing from the supplier and some waivers for delivery or other fees that significant reduce the total cost of liquid oxygen, nitrogen or argon.
P-b) A strong enough relationship (and big enough cryogenic bulk tank) could also almost eliminate the need for scheduling deliveries triggered by getting down to re-order levels.
P-c) And then there is the whole aspect of operating closely enough that “the right hand washes the left” where doing each other favors benefits both the supplier and client.
Jim Sherrow was one of my most influential members and he’d regularly point out that it is critical not to let the Aggravation Factor exceed the Incremental Dollar. Mostly he meant this as career counseling, but it also applies to relationships of convenience.
First- the potential negatives:
N-a) These drops are often commonly referred to as “dumps” where clients have a negative view. The biggest concern is that the liquid left in the transport is “hot” and will raise the temperature of the bulk tank receiving the product. In some cases a company is concerned that the transport has traveled from say Phoenix to Tucson to Albuquerque and back and now has 500 gallons they need to get rid of. When filling the delivery guy might blow down some of the pressure on the receiver of there might be a good deal of venting which could translate as wasted molecules. Or- the liquid did, in fact, heat the tank up a little it might cause product to boil off faster and there would be a net loss of product.
N-b) Most bulk agreements also include a “per delivery” fee and it is undesirable to be billed a delivery fee for partial drops.
N-c) There can occasionally also be logistics issues arising from getting a partial delivery on Tuesday when the regular delivery is Thursday resulting in less than a full drop on Thursday.
All these things can result higher total cost of goods.
And the potential positives:
P-a) A well placed client working closely enough with their supplier could see some significant cost savings if they are lucky enough to be strategic. This is especially true if the supplier is trying to expand into new territory and the client has a large enough tank to receive most of the excess product the transport might ever have. This could result in both good upfront pricing from the supplier and some waivers for delivery or other fees that significant reduce the total cost of liquid oxygen, nitrogen or argon.
P-b) A strong enough relationship (and big enough cryogenic bulk tank) could also almost eliminate the need for scheduling deliveries triggered by getting down to re-order levels.
P-c) And then there is the whole aspect of operating closely enough that “the right hand washes the left” where doing each other favors benefits both the supplier and client.
Jim Sherrow was one of my most influential members and he’d regularly point out that it is critical not to let the Aggravation Factor exceed the Incremental Dollar. Mostly he meant this as career counseling, but it also applies to relationships of convenience.
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