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24th April 1970, Page 63
24th April 1970
Page 63
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Page 63, 24th April 1970 — 'management
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Which of the following most accurately describes the problem?

matters by John Darker, AMBIM

,Science in Transport (3)

Optimizing the routeing pattern

great amount of publicity directed in recent years on computerized vehicle scheduling applications has tended to divert attention from more mundane but equally valuable uses. The definition of an optimum vehicle replacement policy by computer is increasingly accepted and though the results may not differ markedly from the empirical judgments of senior engineers and managers, computer analysis does enable cost and other factors to be "juggled" so that many alternative policies can be evaluated rapidly.

In the same way a computer-oriented management can deploy techniques to examine critically its operational patterns and its marketing strategy. BRS Parcels Ltd, whose computer developments were outlined in the previous article, are deriving much profit from such studies.

Barometer of prosperity It is well known that the parcels trade is very much a barometer of industrial prosperity. Transport services must be available for peak demands, not only those occurring seasonally but for the harder to predict cyclical trade-boosts. Economists in recent years have tended to predict. pre-election booms but, as we have all seen, modern governments know how to manipulate fiscal and other machinery. It does not take much prescience to realize that whoever wins the next election will promptly devise a new version of incomes policy--with all its consequences to consumer spending, and hence the level of internal trade.

When the BRS Parcels computer development programme was being planned it was realized that an analysis of traffic flows and customer revenues would be greatly helped if marketing success could be judged against published official statistics which were frequently up-dated. Any transport business can readily assess its growth from a given "base-year" but unless it knows the total market situation it may conclude, quite wrongly, that its rising trend of turnover reflects a satisfactory result. It may well be that market possibilities are such that rapid expansion in particular areas or sectors of the business is possible. Perhaps other competitors are achieving a greater share of the growing market?

Unless a business is gifted with extraordinary luck it will not progress very fast unless it not only monitors its own results in detail but also—to the maximum extent possible--the progress of its Competitors.

By using the Standard Industrial Classification of the Central Statistical Office (HMSO 5s 6d) BRS Parcels weighs the growth of each sector of its business against published trade figures, indices of production, etc.

A Standard Industrial Classification was first issued in 1948 to promote uniformity and comparability in official statistics of the UK. The latest edition, published in 1968, follows the same general principles as the International Standard Industrial Classification of all Economic Activities, issued by the United Nations. The United Kingdom SIC is based on industries and not on occupations. The ownership of the industries is disregarded, so that manufacturing "units" owned or operated by the Central Government are classified in the same way as those privately owned. Similarly, transport services operated by local authorities are included under "Transport" and not under "Local Government Service".

Currently, there are 27 Classification "Orders" with 181 "Minimum List Headings"---gaps being provided in sequences to allow for additions. The "Orders" groups of industries—cover such activities as agriculture, forestry and fishing, mining and quarrying, food drink and tobacco, vehicles, textiles, clothing and footwar, transport and communications, professional and scientific services, miscellaneous services, etc. Such "Orders" as food, drink and tobacco, with 15 separate industrial classifications, textiles, with 13 and clothing and footwear with eight classifications are especially useful to BRS Parcels, owing to the nature of their traffic.

Where desired a small group of industries enumerated in the SIC list can be grouped together. A transport firm could group carpets (included under Order XIII-Textiles) with linoleum, plastics floor-covering, leathercloth, etc (included under Order XIX—Other Manufacturing Industries).

From the foregoing, the value of classifying customers by their SIC code may be apparent. In judging traffic trends on the basis of the latest published statistics from the Board of Trade or the Department of Employment and Productivity it may be necessary to make appropriate adjustments for inflation, if figures are given in money terms, but at least there is a recognized yardstick to work from. Indeed, as Mr Cyril Bridgen, BRS Parcels planning and development manager, stressed, many customer firms know their SIC classification and accept its use in traffic analysis as entirely natural.

In conjunction with the carefully planned sales accounting procedures the use of the SIC indices is enabling the company to analyse its activities in fascinating detail. For example, in each of the nine areas, traffic can be analysed by weight gradations and distance carried. The validity of market surveys—now increasingly accepted as an essential management tool throughout the State transport undertakings—can be checked against actual results and trends. It is possible to estimate the effect, of rate increases both "across the board" and in individual sectors of the business.

The traffic collected by a branch can be analysed to show the number of branches concerned with delivery. I would not have guessed that a high proportion of traffic collected by Gloucester branch, to quote a particular instance, would be delivered by other western area branches, but this was demonstrated to me on computer analysis sheets by Mr Bridgen.

Analysis of computer-derived figures has enabled a fairly elaborate routcing chart to be compiled at headquarters which shows optimum trunking methods between branches. Simplified versions of the routeing chart will be supplied to areas and branches.

Colour coding symbols are employed on the H.Q. routeing chart. Thus, red denotes traffic forwarded by Freightliner. black.that sent by BID Container (Condor Service), green, traffic sent by direct road service. A yellow /green. symbol signifies alternative routeing possible—on day or night services. Yellow, blue and pink signals denote normal transhipment patterns. Obviously, every effort is made to maximize the rapid delivery links; Aberdeen /Surbiton traffic, for example, involves two transhipments. The reduction of multiple transhipments with their inevitable effect on transit times is a constant aim of the management for, quite apart from the customer angle, unnecessary platform work is costly to the business. With the aim of optimizing the routeing pattern changes in the routeing of particular flows of traffic may be simulated. Before the computer was available such exercises could be attempted on paper with very much less precision than is now possible. The opening of a new direct service and the feeding-in of other traffic affects several existing services. In the past the branches intimately concerned could rapidly assess the effect of routeing changes on their own operations but the effect on the total network—possibly involving the profitability and staffing levels of far-distant branches—could not readily be estimated.

The Value of this sophisticated analytical work may not easily be quantified but I have no doubt the pay-off is considerable. Eastern and western area branches now know bow much traffic each branch picks up for delivery by the other area branch. This could not be known before the days of computer analysis because of the effect of transhipment traffic fed into the services.

In determining sites for new branches their location and their appropriate catchment areas can be determined, and the overall network effect spelled out. It should soon be possible to define parameters for depot capacity—optimum number and size make-up of customers, platform handling rates, and so on. By more closely studying the available information in the business it will be possible to judge more accurately the reasons for varying labour productivity at depots.

Much of the success of the BRS Parcels computer programme stemmed from attention to detail when the system was introduced. A re-designed 10-line customer consignment note meets the needs of most customers and dovetails with other documentation. With decimalization and metrication approaching, money values, weights and dimensions of parcels traffic will change; the design of the consignment note was planned accordingly; some customers are already showing weights in metric terms.

There is scarcely any limit to the operational permutations possible for a transport company firmly based on computer technology. The traffic of a few very large customers could be married together on particular traffic flows—though I gather this is not yet contemplated by BRS Parcels.

British Express Carriers—controlling 13RS Parcels Ltd, National Carriers Ltd and smaller entities—is notably marketingoriented. It would make life easier for BEC if the total market for parcels and smalls was rising fast. If the level of traffic likely to be made available to parcels carriers is relatively static, as it may be, scientific market research would seem to be a crucial tool of management in preventing harmful competition between State-owned transport companies. • It would make fascinating reading if the working papers of the Freight Integration Council were published. With so many fingers—not least the Post Office—in the parcels pie, who determines the most palatable mixture?


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