Hempy: As Supplies Tighten, Make a Plan to Keep Your Tanks Full

In a predictable market, keeping inventory lean makes sense. Today, carrying additional inventory of your highest volume, most exposed products may be worth the investment.

Quick Takeaways

  • Understand your current inventory levels and how long they can support operations to avoid service interruptions.
  • Build a buffer stock of high-volume lubricants, especially when supply chains are unpredictable, to ensure consistent service.
  • Identify and establish relationships with secondary suppliers, verifying product specifications and delivery reliability before switching sources.
  • Verify that alternative lubricants meet OEM and API standards to prevent performance issues and maintain guest trust.
  • Regularly review costs, pricing strategies, and communicate transparently with customers about potential price increases.

Most of us have spent this year opening supplier notices we would rather not receive. Another price increase. A longer lead time or a limit on how much oil we can order. Higher costs are difficult enough. Having to tell a guest we cannot service their vehicle because we do not have the right oil is a different problem entirely.

The disruption in the Middle East has brought both challenges into our industry. The Strait of Hormuz is a critical shipping route, but the impact on lubricants goes beyond tankers getting through. In April, the Independent Lubricant Manufacturers Association reported that approximately 44% of U.S. Group III base-oil demand was normally supplied from the Persian Gulf. Those base stocks are important ingredients in many synthetic motor oils.

Damaged production facilities, depleted inventories, and limited alternative supply mean recovery will take time, even as shipping improves. For operators, that makes planning around products such as 0W-20 especially important.

Start by knowing what is actually in your tanks. How many days of service does that inventory represent? How long is your supplier taking to deliver? What happens if the next truck misses its delivery?

In a predictable market, keeping inventory lean makes sense. Today, carrying additional inventory of your highest volume, most exposed products may be worth the investment. If qualified oil is available, consider building a larger buffer within your storage and cash limits. Tie the decision to actual usage. Adding two weeks of supply is a much more useful objective than simply telling managers to order more.

For operators with multiple locations, visibility across stores matters too. One store may be getting close to empty while another has enough inventory to help. Know that before the first store starts turning guests away.

The next step is finding secondary supply. Regional lubricant marketers and jobbers are a good place to start. Manufacturer distributor locators can help identify companies serving your area. Give them your actual requirements: specific products, monthly volume, and delivery needs. Ask what they have available, whether they are accepting new customers and how dependable replenishment will be.

Then do the work to make that relationship usable. Establish credit, understand delivery minimums and place a small order. Ask where their product comes from. A second distributor using the same upstream source may offer less protection than you expect. Drums or packaged oil may also provide a workable bridge if bulk supply gets interrupted.

Be careful with alternatives. A different brand may be suitable, but matching viscosity alone is not enough. Verify the exact product’s required performance specifications and approvals, using API and applicable OEM licensing directories, and get technical guidance before changing products in a bulk tank. Our responsibility to the guest does not change because supply is tight.

Finally, keep up with your economics. A hypothetical $4-per-gallon increase adds $5 to the oil cost of a five-quart service. Review replacement costs, pricing, and promotions regularly. Give your team a straightforward explanation they can share with guests.

We cannot control when global supply settles down. We can make the calls, check the tanks and prepare our teams. That work helps us keep our promise to serve each guest with excellence.

About the Author

Scott Hempy

Scott Hempy

Scott Hempy leads the team at Oilstop Drive-Thru Oil Change and Happy's Drive-Thru Car Wash. Oilstop and Happy's are rapidly growing their footprint of oil change and express car wash locations across the West Coast, combining convenience with an outstanding emphasis on guest experience. Prior to Oilstop & Happy's, Scott was the founder and CEO at Filld, a SaaS-based software solution for last-mile oil and gas delivery companies. He was recognized as a member of the Forbes 30 Under 30 class of 2016 for starting Filld. 

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