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A logistical approach to transport management
Page 37
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FIFTH ANNUAL CONFERENCE OF INSTITUTE OF MATERIALS HANDLING REPORTED BY JOHN DARKER, AMBIM
• A transport-oriented management structure was urged by Professor Harold Lindahl in London last week when he pre sented a paper, "Inter-plant handling and transport systems" to the Institute of Materials Handling. Prof. Lirtdahl, of the Institute for Transport and Materials Handling Engineering at Chalmers University of Technology, Gothenburg, said that in most factories materials handling, fork-lift truck operation, road, rail and sea traffic organization were split up in a lot of different sections within the company's structure. With this type of de-centralized set-up it was almost impossible to control total material flow costs, yet in many industries this amounted to 50 per cent or more of the total price of the products of the factory.
Transport and handling costs could be studied in combination with the organization and some changes could be made, but it was important to understand that no substantial change could be made without making changes in the departmental structure. He considered that all the functional departments in any way concerned with materials movement—purchasing, production scheduling, order processing, packaging, transport and warehousing—should be responsible to a logistics manager who would be directly responsible to the chief executive.
In a wide-ranging paper Prof. Linclahl quoted a recent study of the European Productivity Agency dealing with relative distribution costs. In Southern Europe production cost as a percentage of product price was 70 per cent compared with 50 per cent in Northern Europe and 40 per cent in USA. Hence distribution costs which were only 30 per cent of product prices in Southern Europe were no less than 60 per cent in North America. The trend in Europe was in the same direction, focusing attention on all possible distribution economies.
Transport wages had doubled in the last 10 years and transport machinery costs had increased by 50 per cent in the same period.
Constantly increasing labour costs would provide the incentive for a rationalization of distribution and apart from this there would be increasing difficulty in recruiting labour. Studies suggested that external transport links by road and rail were less efficient than the movement of unit loads within factories. This, he thought, was because there had not been the same hard competition in road and rail traffic as in other sections of industry. Much more attention must be paid to the time taken to load and off load lorries and railway wagons. The standard lorry was on the road for less than a third of the time. Twothirds of its time were spent in different terminals loading and unloading or waiting for instructions and papers, etc.
With palletization and fork-lift truck loading the annual mileage of lorries could be increased from 50,000 to 150,000 a year enabling two or three times more cargo to be carried than the average figures today. Internal and external transport problems should be studied together, not only the technical methods of goods handling but also the economical aspects of calculating the largest units on the road and the most economical quantities to be delivered from the supplier.
In his paper, "Basic economics of containerization and its significance for freight transport", Dr. Rodney Leach, joint author of the well-known report "Containerization: the key to low-cost transport" (published last year by the British Transport Docks Board), said developments in containerization were proceeding so fast that in the next decade we would probably see the establishment of a few large organizations—the "General Motors" of freight transport-controlling throughout movements across the world. Road trunk movements of goods would increasingly be out-priced by Freightliners, he believed.
Dr. Leach said that on a conservative basis the annual productivity of a general cargo berth could increase from the present average of about 100,000 tons per year to at least 2m tons—or roughly 200,000 loaded containers a year. This was equivalent to about 350 loaded containers each way per day, six days a week.
If this throughput seemed high, it was rather less than British Railways should achieve from their new services from Harwich, once they became established. The low rates that could be offered by the operators of large container ships .carrying 1,200 or more containers would make the services of the smaller capacity ships uneconomic on ocean voyages even if the small ships operated at 100 per cent capacity.
Discussing the rapidly developing Freightliner services, the speaker said that despite suggestions that the low freight charges were being subsidized by the taxpayers, this was not so. The rail costs included a generous allowance for indirect system costs. "There are no hidden subsi
dies concealed in the figures", he declared. The average cost of road pick-up or delivery in the UK for the majority of containers was about E7. Even including this cost there was no wonder that the London/Glasgow Freightliner service had been so conspicuously successful.
Dr. Leach said that it was paradoxical that in the US, with a high-volume coast to coast freight flow, railroads had been impeded in attempts to provide a low-cost trans-Continental service by legislation designed to protect the many small road hauliers.
He believed present Scottish container services to North America would be more economically served by a more central British port, despite the added rail haulage costs; moreover the weekly service from Scotland would compare poorly with a daily service from a central British port.
In his paper, "Goods movement and storage in warehouses", Mr. I. V. Idelson, M.E.L. Equipment Co., described typical operational problems arising with large warehouses. Although the present pallet of 40in. x 48in. was convenient for minimizing movement costs by fork-lift truck he felt it was far from ideal for slowmoving goods.
In one consumer goods warehouse the bottom 50 per cent of throughput arose from over 2,000 lines and if these were laid out straightforwardly over 8,000ft of picking space would be needed. Added to that the average occupancy of a picking pallet must be under 50 per cent of its nominal capacity, so that at least half of 40,000 valuable square feet would be wasted on the basis of 20 sq.ft. as the effective area allocated to a pallet. He recommended the use of 40in. x 24in. pallets for slow-moving goods—the considerable advantages in space utilization outweighed the objection to non-standardization.
Mr. Idelson criticized the use of excessively thin shrink wrapping on palletized loads into warehouses. The process was cheap and satisfactory but ultra-flimsy shrink wrapping had led to many complaints and returned goods. The problem of handling simultaneously Cellophane or cardboard, paper or cardboard and polythene or other films presented a vast range of co-efficients of friction to mechanical handling equipment but unless there was a special reason to exclude this requirement it must be included in any plant expected to last for many years.
An exhaustive analysis of the many uses of unit load containers for liquids, powders or granular products was given by Mr. A. Cooke, founder and managing director of continued overleaf