Fuel flow logistics: an empirical analysis of performance in a network of gas stations using principal component analysis and data envelopment analysis

Abstract

Purpose

The aim of this study was to evaluate the performance of fuel flow processes in a network of eight gas stations, located in the mesoregion of Alto Paranaíba and Triângulo Mineiro.

Design/methodology/approach

Two multi-criteria decision support methods were applied, respectively, of a statistical and mathematical nature, namely, Principal Component Analysis (PCA) and Data Envelopment Analysis (DEA). The research method used was quantitative, with a brief complement of qualitative research, and descriptive in purpose, supported by the inductive method. The data collection stage took place with the support of interviews, with the application of a structured questionnaire, and non-probabilistic sampling, for convenience.

Findings

It was possible to verify that the gas station that stood out the most was station 2 (GS2), which achieved maximum efficiency, a fact that can be justified by the analysis resulting from the application of PCA, as for the product purchase variable (PP), the GS2 is the one that buys the most fuel, and is also the one with the largest storage capacity (C), and the highest volume of product sales (PS), which suggests signs of balance between supply and demand for this station, justifying its prominence.

Research limitations/implications

The limitations of the study were related to the DEA technique, which requires a number of variables/indicators three times smaller than the number of DMUs considered, and the difficulty in obtaining financial data on the DMUs analyzed. Considering the security and anonymity of the gas station network, it was not possible to use this data.

Practical implications

The performance assessment of fuel flow processes carried out in this study promotes the efficient use of available resources as well as identifying efficient DMUs that represent benchmarks for improving management processes and performance of inefficient DMUs.

Social implications

From a social perspective, this study promotes the improvement of the quality of flow processes and effective management of the fuel supply chain, ensuring the safe storage and transportation of fuels to customer supply. Performance management in this sector moves other sectors of the economy, since an efficient unit represents a balance between supply and demand, and consequently, boosts the regional economy, promoting economic growth of the population. Hiring qualified labor for this purpose also represents one of the implications of the study. From an environmental perspective, optimizing flow processes generates a reduction in greenhouse gas emissions and encourages the formulation of public policies aimed at consolidating sustainable practices.

Originality/value

Performance management applied to the context of the fuel supply chain is a relevant topic that has been little explored in scientific research, with a low level of information detail. This study using the inductive method allows the generalization and replication of this management pattern in other organizations in the sector in order to increase the efficiency of the fuel distribution system, with the perspective of maximizing outputs and reducing input consumption. In this aspect, the study introduces possibilities for advancement in social and environmental perspectives based on the effective management of fuel logistics.

Citation

de Melo, G.A., Peixoto, M.G.M., Barbosa, S.B., Mendonça, M.C.A., Nogueira, T.H., Guerra, J.B.S.O.d.A., de Castro Júnior, L.G., Serrano, A.L.M. and Ferreira, L.O.G. (2024), "Fuel flow logistics: an empirical analysis of performance in a network of gas stations using principal component analysis and data envelopment analysis", Journal of Advances in Management Research, Vol. 21 No. 4, pp. 605-626. https://doi.org/10.1108/JAMR-11-2023-0322