Fleet Management & Fleet Planning

okay now we’re going to talk about fleetmanagement and this is a really easy spot to to clear some improvement howmany companies represented here would have their own transport sails in-houseokay yep or you have a dedicated contractor may be doing deliveryservices for you yep but few of those okay so this will give you some gratuities onwhat to look at those people so why is poor fleet management an issue but youend up with high-cost poor service mostly you end up with locked incontractors you have a lack of flexibility so what happens particularlywhere you’ve got a distribution fleet that’s been in place for a number ofyears it dissolves up operating to meet the fleetstructure or sail owned rather than the needs of the business so let’s have alook at some of that and you know inefficient sails comearound for a number of reasons nothing beings don’t have inefficient supplychains because they’ve you know woken up and had a bad day and decided to screwthings up it generally happens because a business changes over time and it mightbe you know two years five years twenty years and no one’s bothered to actuallyrestructure the storehouse system or the give fleet or whatever and so veryoften you’ll inherit something which is really wasteful it is therefore might behistorical you know it was never designed I intend how many companiesactually design their distribution that were with a rationing fleetfrontstretch you normally acquire something and you’re just trying toimprove it maybe they’ve acquired occupations that the rest of businessesmaybe the assortment has changed patrons have modify maybe something in theregulatory environment we did a lot of work up in Southeast Asia and some timeago for example the government in Bangkok decided to restrict largevehicles coming into the city area there’s a basically a curve wherebythrough certain hours of the day merely small-minded trucks can go inside that circle6 00 francs that would really turn you adistribution on my TV and things like that happen so they have to come inthrough transshipment centers on the outskirts of the city and then deliverwith smaller motor vehicles and maybe you’ve converted your sourcing so all sorts ofthings can impact how you’re doing the distributionso again let’s just talk through a couple of case studies and then a littlebit of conjecture so here is one on Thailand Polyana we have a project going on therenext week on dispensation so this particular company was distributingindustrial makes all over Thailand and the instance I’m talking about wastheir chapter exactly down here in Chonburi there’s very interesting talking to thebranch manager about how though doing their spread and the fib wentsomething like this on Monday we deliver north into Bangkok all the outskirts ofon Tuesday we deliver up now on Wednesday we go down here on Thursday wedo the long-distance ones down to chart and on Friday we do disaster dictates have an emergency on a Monday so thatworried me but also it was the copulation rels you are familiar with so what if I’m here and Iwant to delivery on a Tuesday night those those your dough unusually rigid or notsort of old-fashioned so they had no concept of let’s get all the customerorders together and day by day II will show you one you know and you don’t needfancy methods for jiggling you can do it on a white committee if therearen’t too many transmissions I’ll actually remember wielding 20 years ago with oneof their large-hearted grocery retailers that is no more and they were scheduling about ahundred vehicles travelling along a lily-white council with maybe magnetized slacks you know here’sall the gives right it on the slap shuttle around through the day thesystem time does that faster and so all these people did they had about1 2 vehicles in this branch was just lump all of that in together and make alittle bit more sense of when they’re doing the bringings this is far moreefficient and this one yeah this is going to besome of the hardest distribution ever so ready mix concrete and the degrees comein maybe a few eras in advance depending on the forecast we might adjustthe tells depending on the brave this morning we might be planning to pour at6 o’ clock but now we’re not can we knock it back what do you do with a remixtruck that’s already mixing and it’s on the way to apparently they try to sellit to another purchaser or they take it to a prey which is very expensive andpour it before it vanishes hard-boiled I’m so mesmerized with this I’m talking to cement and we’re going to go out and doa area trip taking the Academy representatives out in July to do the site visit fortheir customer service and see how they treat all of that because it just blowsmy intellect I don’t know how they do that so this is a little bit of theory thatwe’re talking about and what you need to understand in a transmission running is hegoing to have a bit of science around how you use the vehicles and if youunderstand these concepts you can do this on white board basically whathappens is the delivery from the storehouse has a stem distance this isbasically the interval that I have to drive to get into my area ofdistribution and this is used to be known as the traveling salesmenalgorithm so it was invented decades ago in the u.s.How can I acquire my travelingsalesman more efficient so this guy’s going to go to Canberrathat’s it stem distance and then I wanting to call on 20 potentialcustomers which string should be used do them in and then drive back bearing inmind you can only visit “the consumers ” between nine and two or whatever it isexactly the same when we’re delivering product so we’ve got we need tounderstand the stanch business for the customer we’ve got some fixed cost andvariable costs related to running the fleet we’ve got our inter sag interval and basically what we need to do is tostart grouping these customers together and be taken into consideration of the time anddistance and the various rates so what you’re trying to achieve is a very highdensity of declines within the drop zone so that we’re not move too muchbetween customers and you know what happens in a lot of companies andparticularly when delivery routes have grown up over era I did give it onsilent otherwise not what happens when delivery street graphover epoch these people say oh look we’re over here anyway we can add thatcustomer here and it’s only a slight incremental cost and we can add that onein here and mailing it slightly phonetic across because we go pass them anywayand all of the street terminates up being built around small incremental costs and yourcost of distribution is just going up and up more all the time so this thiscan be a key component of understanding your customer they would want to knowwhat’s the sterilized and variable cost of doing each bringing as an example I’veprobably done this with most of the milk business the meat corporations thechicken companies and spent a lot of time sitting with motorists you knowdelivering bread and so on I symbolize a dough delivery driver might do 50 or 60 lowers when he’s delivering doughs are small storages and so on the difficultythey have is the time window of when they’re doing their transmissions so wemight stop start at 4:00 in the morning and they’ve got to finish it in what doyou surmise is the one thing that you can do with your patrons negotiating withyour customers to compile that whole thing far more efficient we thoughts the biggestconstraint is yes open the closing time dot ages yeahso traffic you’re right we don’t want to be delivering in peak hour but the onething that they are able to induce the biggest difference is this person who says I’vegot to have my transmission between 6:30 and 7:00 in the morning could you make it6: 30 to 7:30 you do that with all your customers andjust open those windows a little bit and then use a route method to do thisbingo you’re going to save 10 or 15% in dissemination expense that is the biggestconstraint and in some industries of course what happens is everybody wantstheir delivery between 6 and 10 well that becomes a little bit more difficultand then you’ve got to negotiate and say well if we could drop in in theafternoon with the reduce the cost a bit there are useless information when arethe peak periods for selling food what time before and after school 1 ourwindows that’s when all the bread departs flying off the shelves nightmare forbread transmissions from Mexico I formerly did some work with the food deliverycompany where we looked at a Kaos distribution system so basically we hadfull truckloads of bread out on wall street and then you know come 3:30 4o’ clock as shots were running out and if you exactly call it in hundred cakes toCole’s north batons so consequences of having inappropriatefleets you know you’re going to end up with a lot of excess costlack of flexible excess sources you know if if nothing has looked at this inyour business it’s well worth having a look whether you’re managing that fleetitself or if you’ve got you know carriers doing it for you I’ll be sayinghow you how you’re planning all these scatters show me how that you know thesequences effort our Wilfred ever both partners go in there not doesn’t worklike that andif you were to sort of say how do you go about this you know looking at yourdistribution like this the three main elements the customer where are they theorder profile and their age windows that’s the big one the vehicles what’stheir capacity what’s their defined and variable costs what are the accessconstraints and the network what’s your serviced offer collectionversus delivery and your fatality by orientations that’s pretty much what you’vegot to look at when you’re looking at dispensation and readily 15 percentopportunity there if you’ve never looked at it some key things to look at is theservice offer right keep coming back to this you know what’s the service of yourcustomer wishing but you want to give to them if that changes it changeseverything so are you able to differentiate serviceum bunch of different types of customers the lowering immensity and the frequency drivesthat overhead let’s come up time and time again this morning and we’ll continue tothis afternoon and think about capacity and time utilization so that deliverywindow is the key if we can open up that delivery window or can you use largertrucks and again I’m going to keep reminding you the goal here is to doless frequent larger deliveries know be patrons don’t want that once you knowwhat the trade-offs are in your own business you can give them incentives toget them to do that you

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