Level Two Supply Chain Management Lecture 6: Fleet & Transport Management

Learning Objectives To recognise the various modes of transport To understand what criteria should be used when selecting a mode of transport To appreciate suitable modes of transport for differing products.

Question……. What are the different transportation methods discussed in previous lectures?

Transport Modes Road Rail Sea / Inland Waterway Air Pipeline

Characteristics - Road Door to door collection and delivery Fast, regular service Reduces double handling and packaging Can be used in combination with other modes (roll-on /roll-off) Limited only by the road network – international implications Options for full loads or consolidation of smaller consignments.

Characteristics - Rail Ideal for bulky or heavy consignments Railhead & track infrastructure can be limiting Cheap, but often slow & inflexible service Double handling & damage when shunting Last mile has to be delivered by road

Characteristics - Water Cost economies – ideal for bulk or low value goods Flexibility – many liner services & ships Availability – regular services & routes Speed – slow journey time & turnaround at ports Double handling is unavoidable & costly Damage – caused by double handling Delay problems – the weather can be a factor Must have a port infrastructure to load & unload

Characteristics - Air Ideal for small, valuable & light consignments Fast service over international distances Delays can occur at airports – less packaging Not door to door, last mile must be by road ‘Lead time economy’ due to speed, do not need buffer stocks Uses empty cargo space in passenger aircrafts Can be expensive, attracts a premium price

Characteristics - Pipe Slow transit times Constant flow of goods Set up costs and time are high Only suitable for small number of products Single product use

Comparisons 12 ton road vehicle offers the highest useful load over short distances Cargo vessel offers the highest density but is slow Freight train has high capacity & high overheads Cargo aircraft has highest productivity but low capacity

Considerations for Selection Customer Environmental Product Company

Customer Considerations Geographical location Delivery point features Time restrictions Size of order

Customer Considerations Cont. Product knowledge MHE (manual handling equipment) used Service level requirements Type of sale After-sales service requirements

Environmental Considerations Other road users Infrastructure Technology (vehicle and equipment) Climate Legal considerations Political considerations Road patterns

Product Characteristics Weight Size and shape Fragile nature Obsolescence Danger Risk

Company Characteristics Service level policy Sales territories Warehouse locations Manufacturing locations Financial policies Performance of competition Choice of own service and/or 3PL and 4PLs

Considerations for Selection Speed Reliability Cost

Dominant Transportation Modes

Fleet Vehicle Selection Fit for purpose Nature of use, ie annual mileage, climate Characteristics of the goods to be carried Specification of the vehicle

Routing and Scheduling Demand – forecast of sales Distance Factors Vehicle Restrictions Driver Restrictions

Transport Fleet Costs Economic primarily relating to cost Acquisition method – Lease or Buy? Fixed costs such as depreciation Variable costs such as fuel and maintenance

Summary The transportation mode is highly dependent on various internal and external factors Customers, products, business, local environment and regulations all have to be considered

To Do Reading Refer to weekly reading list Online activity Watch NHS logistics video Discussions on the specific forum.

Reading List & Further Reading CILT (2005) Careers in Logistics Management [online] available from http://www.ciltuk.org.uk/Careers/SupportforMembers/CareerPathways/LogisticsManagement.aspx [2 February 2014] Rushton, R., Croucher, P., Baker, P. (2010) The Handbook of Logistics and Distribution Management. London: Kogan Page Waters, D. (2009) Supply Chain Management: An Introduction to Logistics. London: Palgrave Waters, D. (2010) Global Logistics. 6th edn. London: Kogan Page