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A large international company has a small but effective transport department the operation of which is based upon simplicity

by lain Sherriff, ACIT, MITA, AIRTE

IF THE industrial transport manager is regarded by his directors and colleagues as the Cinderella of the organization it is more than likely that he only has himself to blame. This is the opinion of Bob South, himself an industrial transport manager, and I hasten to add it is an opinion which I share.

Mr South is the transport manager of Aerosol Research and Development Ltd, a company in the Cope Allman International Group. He is a relative newcomer to the transport scene, with only three years experience in transport management. But his relatively brief experience does not reduce• the weight of his opinions — he came into transport just as the 1968 Act was turning the old order of things upside Jown and therefore sees the industry with an unjaundiced eye and an open mind.

He considers that many industrial J'ansport managers are struggling with nadequate equipment because over the rears they and their directors have been playing a cat and mouse game with the ran sport budgets. He points out that many )oards of directors set out to trim back the :ransport budget and the transport manager, snowing this, adds something in — a nargin which he can afford to lose. "In ime", says Bob, "the directors come to .ecognize this, the transport manager is liscredited, they put in an over-correction

and he's worse off than when he started".

As he sees it, one of the great dangers in asking for too much' is that the manager has to use strong argument to justify his demands. Before the argument is finished the transport manager firmly believes he needs the margin and is aggrieved when it is refused. "It doesn't take many years of operating like that before the transport department is regarded as a necessary evil by the organization".

Bob South firmly believes that budget requirements should be factual, and that the case for purchasing. vehicles should be so strong that it brooks no argument.

His is a small fleet, he operates only seven vehicles — but not one of them has any idle time. His department serves 63 outlets in the United Kingdom and at the moment six in the rest of Europe.

When you buy an aerosol spray . the strong probability is that the component parts of its valve were brought here from Germany by Bob South's transport and after assembly were taken to a spray manufacturer for fitting to cans. His company has 43 per cent of the British market and this means four million valves a week coming into the country in components, being assembled and redistributed. Of the seven vehicles, two Ford Transits are used on internal deliveries between Aerosol's plant and stores in the industrial complex around Fitzherbert Spur at Havant. One operates constantly in Europe, returning to Havant on a Saturday morning and leaving again on a Monday morning. The other four vehicles are used on UK delivery work.

Convincing the board Bob South supports his argument for not overstating his case by instancing board reaction to his request for a new AEC Mercury 2+ years ago. "Until then", he said, "the company had been purchasing cheaper and less robust vehicles and my request for £3000 met with blank amazement". He was, however, able to answer the question "why?" to the comple6 satisfaction of the board so that subsequent requests for a Leyland Lynx at £3600 and a Volvo F88 with drawbar trailer at £14,000 met with no opposition. Nor does he anticipate any opposition in future. He believes he has established a relationship of trust between the transport department and the Aerosol board.

The selection of a left-hand-drive Volvo is a good illustration of thinking the job through. From Havant to Southampton where it boards the ferry is only 18 miles so that on a return trip of a thousand miles and more only 36 are over British roads.

There are two collection points each week and normally two dropping .points, one at Nuremberg and the other at Bielefeld. To avoid delays the drawbar trailer is dropped at the rust point and discharged while the truck carries on with the second part of the consignment. It returns, and picks up the empty trailer for reloading. Four million valve caps weigh 19 tons.

The Volvo, its drawbar trailer and the AEC Mercury have been fitted with demountable bodies at a cost of £870 per body. Bob South reckoned that he could avoid terminal delays by packing the demounts during the week ready for uplifting on the Saturday morning when the Continental vehicle returns, or in the evening when the Mercury has completed a domestic delivery. The demountable equipment was designed in conjunction with Southern Vehicles Ltd, Southampton, a subsidiary of Ailsa Trucks, the Volvo concessionaire. It is a hand-operated system but the original crank handle has been replaced with a ratchet device designed by the works director and built in the company's workshop. Operating within the law inside the UK is simple compared with the situation on the Continent, where drivers crossing borders are constantly meeting different legal requirements. This poses problems, particularly in relation to drivers' hours. Bob South sends two drivers on the Continental runs, where a rest period in the cab, while the vehicle is moving, is quite legal. In this way he gets maximum use of the outfit while working within the legal limits.

While Continental vehicles are loaded in both directions he has steadfastly refused to back toad his UK vehicles. Although able to engage in hire and reward work, he has to meet critical time schedules not only for Aerosol's production department but also for its customers. In such a keen market, price as well as quality is vitally important but most of the competing companies are almost inseparable on these aspects — so service becomes a prime factor. Bob South fears that if he became engaged in hire and reward work Aerosol's service to its customers would suffer; consequently he leaves well alone.

A five-day return trip to Europe costs £200. Half the journey time is spent in bringing to the UK the components for 4m valves, so the transport cost per valve is 0.0025p. Mr South thinks too many of his contemporaries pay too little attention to the unit costs of transport and are quite happy to see the transport cost buried in the price of the finished product. As he sees it, transport depends on an operator, an engineer and an accountant but in a small fleet the transport manager has largely to fill these three functions himself. In this, Bob South leans heavily on his professional associations and is also quite ready to follow the good examples of others. His cost system is built on the CM series Costing for Maximum Profit, and he compares his operating costs with CM'S Tables of Operating Costs at regular intervals. To this unsolicited testimonial he added that he is an avid reader of CM, passes it round the transport departmen each week, "and we learn a great deal frorr it."

Already Aerosol Products and its wen. company are looking at their distributior pattern in Europe. They are considering tin establishment of an integrated transpor system. It could be that the demountabl; bodies will be demounted on the ferry ant collected at the cross-Channel port by ; sister company using a similar system This will further reduce costs.

Bob South's approach to transport i attracting attention. He is already wel known as a speaker at ITA and IoT.6 meetings in the south of England. Thi Central Office of Information recent!: released a film on British industry and th, transport section of the film was devoted t■ Aerosol's activities.

It might just be that some long-senrin; industrial transport managers shout' swallow their pride, go back to square on and start all over again without an: preconceived ideas. After all, as Bob Sout says: "Running an industrial transpoi department should not be a complicate, business; it is simply a matter of providin an efficient service at the lowest possibl cost"!

AMONG the papers presented at the 14th international congress of FISITA — the International Federation of Automotive Engineers — held in the Royal Festival Hall, London, last week, were several on fleet management. These displayed an extraordinarily high degree of professionalism and. if their recommendations are followed, could lead to the achievement of considerable economies.

Saving E3in on a large fleet In a paper entitled "Whole-life cost prediction — a purchasing strategy," H. C. Bradfield (assistant director vehicle engineering, MVEE) revealed that the whole-life cost differential between two makes of similar vehicles, for a fleet of 600, is £3 million! He pointed out that the existence of so many small operators hinders manufacturers in rationalization of output; moreover, this type of operator is unable to reap the advantages and safeguards of large-scale purchasing. This leads one to ponder on the practicability of operators — even friendly competitors — with similar requirements co-operating on both purchase of vehicles and the holding of spares.

Although the paper was based on the military requirements, the principles applied are relevant also in the commercial field. Translated from military into commercial terms, the stages are: Clearly define corporate objectives; formulate an equipment policy; prepare a comprehensive specification of vehicle requirement; obtain tenders from manufacturers; select the best buy, on the basis of whole-life costs; and obtain certain safeguards from the manufacturer. These aspects were dealt with in some detail.

Mr E. H. Robinson (deputy chairman, Leslie Hartridge Ltd) asked if automatic condition and fault diagnosis equipment of the type recently introduced by VW, would become more widespread in view of the time saving it gave. Brigadier W. D. H. Blackman (Ministry of Defence) who had given a paper entitled "Maintenance and repair of military vehicles" in this session, said that he was a vociferous contender for automatic diagnostic equipment. Electronic equipment had, by its very nature, to have test circuits built into it and it should not be too difficult to extend these techniques to mechanical items.

The design of fully integrated test gear, though not easy, he said, had the advantage, when properly done, of solving the same problem many times over in different locations, and thus saving much mechanic time. At the moment many mechanics resented the use of test gear as they felt it was a reflection of their own inability to diagnose faults. However, in spite of this Brig Blackman was convinced that the use of all types of test gear would inevitably increase.

Overhaul frequency

Maintenance costs on a fleet of 3,800 buses have been drastically cut by the Regie Autonome des Transports Parisiens; (RATP) according to Y. Savary (chief engineer, RATP) in his paper "The reduction of maintenance costs in a vehicle". Of the three factors determining servicing costs, operating conditions and quality of materials can be taken as fixed, so it is possible to economize on only the maintenance costs. Considerable savings have in fact been made by RATP, by reducing systematically the amount of preventive maintenance, without increasing failures and consequent rectifications in service.

They have defined three distinct categories of maintenance operations: the first comprises garage functions such as refuelling, cleaning, replenishment of oil, water and air in tyres, checks — especially those concerning safety — and adjustments; in the second group are the replacement of components or assemblies and repair of defective parts; and, thirdly, come major overhauls and modifications.

The RATP determines the intervals between the garage checks by experience and tests in actual operation. However, the intervals between both the second and third types of operation are now based on viability studies as well as experience.

A new maintenance cycle has been adopted. It is on a time instead of mileage basis, thus enabling optimum use to be made of personnel. The cycle is completed, in a series of fortnightly operations, over a period of 48 weeks. There are three categories of operation: category A, every 48 weeks, is the equivalent of the former major overhaul: B, every two months, the minor overhaul; and C, every fortnight, the routine garage check.

Category A comprises 40 operations and 45 checks, compared with the former 80 operations, while B, which. has an average of 30 operations and 40 checks, compares with the former 80 operations. On the basis of mileage, A replaces two major overhauls, while five of category B replace six •minor overhauls, and 18 of category C replace 24 intermediate checks and attentions for greasing. In consequence, skilled maintenance staff have been reduced by 20 per cent.

Remedial operations and breakdowns, have remained sensibly constant, at 0.7 per 10,000km (4125 miles). Moreover, a number of parts and assemblies are no longer replaced on routine basis, while others are exchanged less frequently, the intervals being determined by viability studies combined with experience.

The viability theory is founded on two basic conceptions: the rate of deterioration r(t) and a survival function V(t), which is the probability that the component or assembly will remain fit for its purpose at a time t. These two conceptions are related by the formula: It happens to be convenient to express t in terms of km, but of course translation into units of time is easy. The interval dt chosen is 5000km (3125 miles).

For those who are not at home with mathematics, the method was explained graphically in the paper. By superimposing one graph on another, objective comparisons can be made between performances of similar components. The method also obviates erroneous subjective judgments owing to failures happening to occur simultaneously on several different buses.

In conclusion, the speaker emphasized the iterative nature of the method. First, an aim that is reasonable, and which can be achieved with reasonable certainty is set; then tests are carried out over a period sufficient to ensure that the short-term advantages, such as economies in material and labour, are not outweighed by the longer-term considerations such as wear and corrosion. Then the process is repeated, increasing the service interval step-by-step, until the optimum result is obtained.

Mr J. G. Bisiker (Shell-Mex and BP Ltd) wanted to know if having done away with fixed mileage replacements had any adverse effects. The author replied that because of detailed study of 1300 buses, forecasts of service life were almost completely accurate and that set mileage changes had been abolished; injectors for example were not now normally touched for 100,000km (62,000) miles.

Mr Jacobson thought engineers would do well to pursue the total replacement concept — as now accepted for such things as fan belts, filters and tyres. Replacement was accepted for these smaller items and in the same way larger items could be designed for finite or guaranteed life. Brig Blackman agreed that the industry was moving in that direction, but at the same time thought the practice could not be applied to more complex items which had perhaps several failure modes. Mr M. F. Russell (CAV) Ltd agreeing, said that they had found too many failure modes in an alternator to be able to guarantee a realistic life. Mr Jacobson was not convinced that the problems involved in finite the design could not be solved; it was really a matter of whether engineers chose to design for rectification or replacement.

Least-cost life In his paper entitled "Vehicle fleet provision — the overall policy decision", B. Forsdick. (National Freight Corporation) first made a painstaking and detailed mathematical analysis of the factors influencing whole-life cost. Those who are weak in mathematics can still gain a great deal from the subsequent comment. It was shown, for example, that the penalty for small departures from the least-cost life (LCL) is small, but that it is better to err on the long side.

Downtime is the most important factor affecting the cost of longer life. Indeed, to reduce downtime, it may pay to incur additional costs on maintenance — for example, keeping better stocks of spares or doing maintenance outside normal hours of operation. On the other hand, the rate of decline of resale price has a rapidly diminishing effect. The ratio of increase of annual costs to initial capital cost is important, though. Obviously, a quality vehicle with high capital cost but low operating costs will have a longer LC L than a mass-produced vehicle at a lower capital cost.

In the UK, company tax currently affects neither LCL nor choice of vehicle. The higher the prevailing interest rates, though, the longer is the LCL and the more attractive the cheaper vehicle, despite its higher operating costs. Inflation per se has no effect, but relative movements, such as inflation at 11 per cent and vehicle costs rising at 8 per cent may be important.

The author goes on to explain how to calculate the effects of relative movements in cost levels. One of his closing comments is that if a policy of life-shortening is followed, costs must be reduced to offset increased capital cost: for example, maintenance staff may have to be cut.

Brig Blackman thought the point that Mr Forsdick's paper made was that the best buy in vehicles was not necessarily the one with the lowest initial cost. Engineers had always known this to be true, he said, but financial controllers were often much harder to convince.

The 500,000-mile chassis

With typical American enthusiasm, J. C. Paterson (vice-president, Ryder System Inc) entitled his paper "The American Trucking Association — an industry break-through". He said that the ATA system may well be the catalyst to bring about the true 500,000-mile, minimum maintenance chassis. Standardizing nomenclature, definitions and methods of gathering maintenance data, the system certainly is a great advance provided it becomes widely used by operators. It will help managers to analyse their own operations and compare them with those of othei fleets. Moreover, it will give manufacturers detailed information covering the whole life of the models they produce, so that deficiencies can be remedied in future production.

All this is achieved from a record comprising three documents: Vehicle Master Record, containing data on the new vehicle; Driver's Vehicle-condition Report: and Repair Order. The last-mentioned document is divided into four sections: of these, the first covers identification of vehicle and maintenance facility, authorization, mileage, and repair order number; in the second, the parts are listed and coded; the third defines the work to be performed; and the fourth specifies the time required for each mechanic to perform each operation, and has space for mechanics comments. The coding method is shown in the accompanying Table.

Management by exception is one of the objectives. Analyses that can be compiled from the data include vehicle maintenance cost and frequency trends. A vehicle maintenance history summary will show cost per mile, repair frequency per vehicle, reason for repair, incidence of company repair and outside repair. Costs per vehicle and per mile will indicate where improvements are needed, while costs and repair frequency will indicate where maintenance costs might be reduced and vehicle utilization increased. The speaker claimed that, when widely adopted, the system will enable safer vehicles to be produced whose maintenance expenses will be minimal, while productivity and resale values will exceed anything now known.

Brig Blackman stressed the need for accuracy when recording the details of vehicle repair and maintenance, etc. A computer, he said, was only as good as the information it was given. Brig Blackman asked the author who was responsible for the coding of material for the computer, and if there were any cross-checks in the system designed to detect errors and reduce redundant data. Mr Paterson agreed that the coding of the information was indeed a most fundamental and important part of the system. Generally, he found that mechanics were better at working with their hands than their heads and it was vitally necressary to build in cross-checks wherever possible.

Parts used in a repair, for example, were recorded in the repair data and could be cross-checked from the spares inventory. In small shops the mechanic was trained to do the coding and was made responsible for the job, but in large shops clerks were employed especially to look after the coding. Overall accuracy, Mr Paterson claimed, was 92 per cent, which though not perfect was probably as good as one could hope for and certainly as good as the efficiencies of other factors involved.

[The next FISITA Congress will be held in Paris in June 1974.1