Nstribution is a Team Job
Page 57
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WE reckon to keep the transport thinking closely linked with the marketing thinking, and as a suit we participate actively in prootional schemes, product launches and e supporting administration, as well being consulted in the early stages when imething new is contemplated." This as stated by Mr. Medwyn Ormerod, airman, S.P.D., Ltd., when presenting a mer on consumer goods distribution on londay to the Institute of Transport at righton.
Distribution was part of a wider picture, fr. Ormerod claimed, and not a private mid of its own. If transport people cognized this and accepted their potion as members of a team, they must aim a share in that team's collective xision-making. This was of particular gnificance at the present time when the wortance of transport was being more idely recognized, and when the expenditre involved was a high proportion of the )tat cost of production.
Must Accept Responsibility
If the transport manager emerged from is shell and presented himself as part I the management team he then accepted allective, as well as specialist, responsiility and so staked a claim to be listened ) more widely, It was then up to him ) be worthy of his opportunities.
A transport department should not be ttisfied to allow marketing to decide the attern of outlets in isolation. Whilst such ecisions were undoubtedly the prime !sponsibility of marketing. transport men ad a continuous responsibility to advise teir colleagues—they should not come in fter everything had been decided.
In selecting classes of outlet, regard had ) be paid to the possible addition to sales, ariations in margins and comparative disibution costs. These considerations hould be reviewed jointly, and the transort department should not be satisfied i merely carrying out the physical job.
Some Ideas
In addition to the problem of delivery osts, marketing plans could create an Tterest in how goods were displayed in hops. Simpler forms of display work ould be coupled with the job of delivery. he local transport depot could provide natural focal point for orders to be eceived, customers' invoices pcepared, nd possibly for their accounts to be laintained also. It could also provide base for representatives.
If the economics of physical distribuion had led to the creation of a private lepot system, Mr. Ormerod said, conideration should be given to what other ervices this system might usefully orovide. At the same time the basic arrying service must also be constantly eshaped and developed in response to hanging Circumstances and future tossibilities. A revolution was now taking place in the organization of our retail trades and the wholesale and supply machine behind them. The practice and relative significance of independent shops, multiples, co-operatives and supermarkets were subject to speedy changes. Wholesaling was becoming group-operational, and buyers were more commonly combining. All this had a considerable bearing on distribution practice and would substantially influence the long term physical pattern of distribution services.
Relative to the trend towards large industrial and marketing units, Mr. Ormerod suggested that the full implementation of this trend had not yet been worked out fully and he suspected that the time lag was often a relatively long one,, as it concerned distributive transport. He anticipated greater fundamental rationalization of local road services provided by the railways, for both parcels and small goods traffic, and by British Road Services. In addition there may be more joint workings between the services provided by the British Transport Commission and free enterprise road haulage.
Two Points
In that event, Mr. Ormerod claimed, two points would have to be borne in mind. The more sophisticated services which could be provided privately would attract firms increasingly to C licence operation for local distribution. Public services had the ativantage of putting separate streams of traffic together to form a heavier flow but service often counted as much, if not more, than cost. Additionally, provision of local C licence distribution services was by no means inconsistent with the employment of rail and other public services for movement between factory and local centre. It could be, he suggested, that relief from the problems and cost of local cartage might even prove beneficial to the B.T.C., always assuming that their remaining services could be rationalized.
Although the service aspect of distribution was important, it must not, be considered in exclusion to other factors, such as cost. it was significant that the proportion of wages and salaries in total transport costs could amount to 50 per cent, whilst in production this proportion was much smaller. There was a natural urge to offset higher wage costs by higher productivity, but employers must nevertheless maintain parity of treatment for their transport staff.
Operators who had already mechanized their handling and loading were now Lip against worsening road conditions and increasing unloading restrictions. When looking for further productivity only minor possibilities of mechanizing unloading operations may now remain. As a result they may turn to refining their service, making it more flexible and sophisticated to sustain and advance its value. The comparison between transport and other industrial employments in terms of earning and hours of work was currently an important subject, and not one to dismiss without thought.
Joint Planning There was a need for the industrial transport operator to think and plan jointly with sales departments. His distribution responsibilities now predominated to such a degree as to justify a reappraisal as to his position in the whole structure. Mr. Ormerod suggested that such operators were often associated with production, commercial or administrative groups, but rarely with marketing and sales.
Employment of the S.P.D. organization was in no way compulsory on, or even universal by, Unilever companies. A situation was thus created in which public carriers could compete for attractive regular business, moving traffic in bulk between a limited number of major points.
Means to an End Depots were a means to an end, Mr. Ormerod claimed, and they represented only one method amongst several from which a choice had to be made. He then instanced some of the considerations affecting such a choice. In addition to the cost, there was now often substantial difficulty in obtaining suitable depot sites or premises. Capital tied up in stock was an important feature and a depot system may add to this, though not necessarily if manufacturing considerations had previously necessitated similar stocks being held centrally.