Small firms 'will fail'
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HAULIERS with fleets of six to 10 vehicles are particularly vulnerable to business failure in the next few years, according to Dr John Westwood of Manchester Business School.
He told North-West chief executives last month that these small/medium size hauliers are vulnerable because they are neither small enough to run on very low overheads nor large enough to offer a truly national distribution service.
He also disagrees with the popular belief that contract hire companies will win a substantial share of the own account transport sector.
"The contract hire people have been promising this for 10 years. I've looked into why companies choose to run their own transport and financial reasons arc not the most important."
Instead, most think they get a better service from their own transport. Westwood acknowledges that they may well be deluding themselves. "But I don't think many will change," he added.
In research that Westwood has done, 70 per cent of the companies sampled could not produce adequate distribution statistics and costs, although they knew their production costs very accurately.
"The UK has been complacent for many years about distribution costs, whereas other countries have taken the attitude that stock levels are important and can drag the company's profits right down if allowed to remain too high."
Westwood also believes that a study of vehicle bodies, trailers and demountable systems can help achieve stockless or depot-less systems. "In Japan," says Westwood, "stocks are a sign of weak management.
He forecasts technology will grow at an ever-increasing rate in the warehouse and in the information flow in distribution. The major obstacle to any of these changes, claims Westwood, is a rigid management structure.