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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

Chart1

Road Road Road
Water Water Water
Rail Rail Rail
Pipelines Pipelines Pipelines
0.81
0.07
0.07
0.05

Sheet1

Road Water Rail Pipelines
81% 7% 7% 5%

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