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Commercial Motor F leet Management

Conference report

by lain Sherriff, John Darker and David Lowe SOME 450 DELEGATES attended the seventh Commercial Motor Fleet Management Conference at the London Hilton last week and heard speakers present papers on fleet engineering, urban transport, and new techniques in transport management; there was also a debate on operational changes occasioned by the 1968 Transport Act.

Introducing Mr W. 0. Campbell Adamson. the CBI director-general who opened the conference, the chairman, Lord Chesham, said he felt it was appropriate that at the beginning of a decade the industry should pause and take a look at its future needs. Planning for the Seventies was the principal theme of the conference.

Mr Campbell Adamson (whose opening speech was published in CM last week) emphasized that industrial relations formed perhaps the most urgent and serious problem facing all sectors of industry today. Contrary to some impressions, the rate of inflation in Britain today was little if any higher than that of other advanced nations, but the real crux was that productivity was not keeping pace. Management would have to spend more time on industrial relations problems; trade unions had full-time officers, whereas most managers could only spare part of their working time on labour subjects. Managers must become more expert and professional at negotiating and many outmoded agreements required re-negotiation, he thought. The lines of the DonOvan Report were a sensible guide in devising these, said Mr Adamson.

Mr Derrick Hill, chief engineer, National Carriers Ltd, and Mr John Greenhalgh, chief engineer, BRS Parcels Ltd, presented a joint paper on aspects of fleet engineering.

Mr Hill, talking of maintenance productivity, said that all businessmen were subject to economic pressures and the engineer, whose object was to keep his fleet in adequate mechanical condition with an appearance of an appropriate standard at the least possible cost, was no exception. Mr Hill emphasized the importance of holding the required standard of maintenance throughout the year; if vehicles were prepared for the test and neglected between times, it was not only wasteful but placed the 0 licence in jeopardy,

Turning to the subject of maintenance supervision, Mr Hill said too much time and money in the past 20 years had been spent by everyone on systems, documentation and the like, but not enough on establishing adequate supervision. Supervisors were usually fitters who had been promoted and he wondered how many had had training in supervisory duties. To do their job properly, supervisors needed training and proper job specifications; their supervisory performance should be monitored. They must be seen and felt to be in command by all responsible to them and they should be incorporated in the management team, not "isolated at the end of the yard."

The importance of adequate supervision should be realized by top management, which only got its rewards in direct proportion to the effort made by its subordinates, said Mr Hill.

New techniques had got on top of the average fitter, in his opinion. A new strain of artificer, half engineer, half boffin, was needed.

Vehicle examiners who decided the scope of repairs to be carried out by workshops after their examinations would become the quality controllers of fleet maintenance.

Productivity pitfalls Mr Hill thought the time had come to remove the last differential between the craftsman and the office worker, namely the conditions of employment. He went on to talk about productivity and incentive schemes. Bonus schemes introduced to maximize productivity had been fashionable in recent years, he said, but were full of pitfalls for the unwary. Anybody contemplating the introduction of such schemes should examine what other operators had done—and learn from their experience. Also, work study and other work measurement techniques should be exploited to the full before such schemes were entered into. "I commend simple schemes to you," he said. "A backlog of unmeasured work has been the downfall of many a productivity scheme."

Turning to the subject of new vehicles, Mr Hill was outspoken in his criticism of manufacturers. Operators relied on their vehicles to make their living, he said, and when they were off the road still had to meet the standing charges and the wrath of customers. New vehicles, in his experience, suffered more downtime in the first 12 months of their life than the rest of the fleet.

The choice of vehicles to meet operators' needs was restricted but in any case almost all were, in his experience, equally bad in their early-life reliability. It was a pity the building industry's practice could not be copied, and 10 per cent of the purchase price withheld until the vehicle proved satisfactory!

Mr. Hill said he hesitated to tell manufacturers their weaknesses. However, many of the failings should have been eliminated at the drawing board stage—perhaps manufacturers no longer checked drawings!

He would not mind paying an extra £25 for each new vehicle if it was going to be reliable when he got it. And, added Mr Hill, wouldn't it be a good idea if manufacturers were to make 1971 a quality year, pledged to eliminate all the bugs from current models?

Taking the broad view Mr Greenhalgh amplified points in his paper (CM last week) about vehicle selection and replacement. The whole aspect of one's business had to be looked at before deciding what vehicles to use and from this, in general terms, an idea of the capacity required by weight or by volume could be established, he said. For the higher payloads the artic had been the automatic choice in recent years but the drawbar outfit was likely to return to popularity now that regulations had been changed. The rigid vehicle was usually less complicated mechanically, took less kerb space and often at, say, 10 tons payload had the same-power engine as an 18 ton artic.

Only in recent years had people begun to optimize their vehicle replacement. Referring delegates to the graphs produced in his paper he said it could be seen that in the example used the most acceptable replacement time would be between 4 and 34 years. It would usually be found that the time for replacement occurred immediately prior to the need for a major item of repair such as an engine change.

Despite having a replacement programme planned to get an optimum service life from the vehicle, it was essential that replacement was phased so that the whole fleet did not have to be changed at one time thereby causing an uneven demand for workshop facilities, that is minimum demand when the vehicles were new and maximum demand towards the end of their lives.

First on his feet at question time was Mr D. M. Ball, of Vauxhall Motors Ltd, who agreed in general with Mr Hill on the subject of the durability and quality of vehicles, and thought that in the present economic atmosphere, fleet operators were going to be increasingly concerned about this. Vauxhall Motors were aware of the problem and were, and had been, taking steps to tackle the problem in a new way. A new director had been appointed with this subject as his sole responsibility.

Mr W. J. Edbrooke, of Associated British Foods Ltd, quoted examples of failures of vehicles and fully supported Mr Hill's criticisms.

Mr J. R. Burrill, of J. Sainsbury Ltd, suggested that manufacturers should have libraries of their mistakes so that their new design people—they changed almost every week—could see the previous mistakes. The manufacturers' bulletins from 1947 down the years proved the need for this. Mr Burrill asked whether Mr Hill thought that Motec was making any progress towards the improvement of vehicle maintenance by staff training. Mr Hill replied that it was early days-yet and questioned whether there was ever a time when all the skilled craftsmen needed were available.

Mr B. M. Jennings, of NMU (1953) Ltd, warned against simple productivity schemes —they should be comprehensive, properly established and audited by outside experts, he said. Mr Hill replied that no bonus scheme could be truly simple, only relatively simple.

Mr F. M. Fieldhouse, of British Ropes Ltd, complained that some manufacturers painted over rusted components and covered the parts with "goo." High-pressure washing flaked the paint off.

Mr B. T. Hancock, of the Western National Omnibus Co Ltd, said there was a high rate of early failure of machines, and manufacturers who claimed to have instituted schemes to remedy these should be given an accurate and quick feedback of information. He asked Mr Hill for his thoughts on the remuneration for workshop supervision and was told that, in Mr Hill's view, supervisors should not be included in bonus schemes but should be adequately rewarded by salary.

Mr W. Hammond. of Bullens (London) Ltd, thought one of the problems of workshop bonus schemes was the lack of spare parts, and that nothing was more frustrating to a fitter on bonus than to be held up waiting for parts. Mr Hill, commenting that he believed he had made enough of an attack on manufacturers, agreed that the service on spare parts was appalling. One of the biggest complaints from his workshops was the time spent tracking spares.

Mr John W. Bryant, Vauxhall Motors Ltd, remarking that his company seemed to be the only manufacturer among those present who had the courage to stand up and speak, said Vauxhall would do its best to improve the product if operators would help improve the feedback of information. They had a very extensive development and test routine, and would be doing even more testing with operators.

Mr L.A. Richardson, of the Bradford Group of Companies, questioned the wisdom of manufacturers using skilled test drivers. He thought that they should employ "Joe Bloggswho would make a far better job of finding faults....

The spares problem he considered to be as much a fault of the agent as the manufacturer.

Public transport at home and abroad The highly emotive subject of traffic control figured largely in the presentation by Mr Leslie Smith, general manager of Leicester City Transport, of his paper on urban transport. In opening, Mr Smith apologized for presenting his paper to an audience only about 10 per cent of whom were involved with bus transport. He need not have feared; the attention of the audience was held throughout a fascinating presentation, which included slides of United States and Continental vehicle control systems, train/bus interchanges and maintenance facilities. Operators showed particular interest in slides showing, for instance, a vehicle "lift" that moved down from ground level leaving the bus supported on the fixed corner "posts".

Mr Smith believed passengers were entitled to comfortable air-conditioned buses, adequately warmed in winter. Speed of movement was also a factor in attracting commuter motorists back to public services. Despite their higher fuel consumption, he favoured more powerful engines; a 1 mph fall in average speed had resulted in £40,000 lost revenue for Leicester City Transport.

Urging the case for a new look at the operational boundaries of municipal and National Bus Company services, Mr Smith said the pattern of the Thirties would not be right for the Seventies. Substantial economies in manpower and equipment could result from rationalized services.

Of his visit to Canada and the United States last year, Mr Smith said it was not pleasant to see the erosion in city centres. The "poor" or "deprived" section of the population were confined to the run-down central areas if they had no car.

There was a great shortage of skilled labour in the USA and in the bus industry there they were investing heavily in some very well-equipped workshops. He thought the bus industry in Britain should consider this sort of investment in workshop facilities in order to economize in scarce manpower. Leicester Corporation Transport was to spend £.40,000 on improving throughput in the workshops.

Mr Smith described Leicester's use of closed-circuit TV and radio links which had begun in 1965. This had seemed initially an interesting management tool and experience had proved its worth. With every additional camera introduced—there were now eight—the rate of passenger loss had fallen. It was not conclusive proof but fairly convincing to say that these modern techniques had helped to stem passenger loss. He believed the passenger loss would otherwise have been two per cent greater. Expressed in money terms the investment in radio/TV links was equivalent to a 90 per cent rate of return on capital.

Looking to the future, Mr Smith stressed the part of public transport in moving peak-hour business. He thought the "leisure" traffic would largely disappear because people preferred to use their own cars. The public would have to pay for essential services; and necessary, but little used, services would probably need subsidies. "Would it not be better to have subsidies for some routes than to knock half a city down?"

Lord Chesham (who is executive vice-chairman of the RAC and chairman of the British Road Federation) said he agreed in the main with Mr Smith's paper, and especially that traffic congestion problems could only be solved by the balanced interplay of three elements—road network, public transport and parking policy. The Road Research Laboratory had noted the observable trend for car owners to plan use of cars outside peak hours; but some local authorities were not doing all they could to preserve mobility in the cities. In too many cities, restrictive factors were being used as an excuse for inaction in road building and modern systems of traffic control.

Mr M. J. Hilliard, Lovell and Christmas Ltd, asked Mr Smith whether he could comment on a plan calling for a complete ban on the use of private cars in the inner zone of London. Mr Smith said he was not aware of any considered plan and thought the idea quite impracticable.

Mr D. W. Glassborow, chief planning and development officer, National Bus Company, thought that Mr Smith' s ideas for comfortable buses and so on would be a palliative not a solution. People would only use park-and-ride facilities if journeys to destination were quicker than by car. The only real solution was control of land use and parking. He knew of a city where there were already too many off-street car parks for the planned road system to cope with.

Mr Smith said bus service improvements would help to maintain viability—perhaps until 1975--in Leicester. People compelled by traffic congestion to use buses were entitled to a decent ride.

To carry for others —or not?

Should own-account operators enter the hire and reward field? This question was discussed by Mr T. D. Corpe, legal adviser to the Road Haulage Association's Western area, and Mr A. W. Balne, a barrister and consultant. Mr Corpe took the view that hire and reward traffic was better left in the hands of the professional. And, to make his point, he put himself in the position of an own-account operator.

Mr Corpe argued that the transport manager in a former C-licence company would be required to change his attitude to transport if he were to be successful as a haulage contractor. "Why did we have a Clicence?" it was his belief that the C-licence holder only became involved in transport in order to provide a first-class service to his customer, to build up goodwill and to ensure that his goods were carefully handled. In Mr Corpe's opinion the cost of transport was a secondary consideration to the own-account man.

To change from own-account to hire and reward would mean a change in these priorities, he argued, and operational efficiency would give way to commercial considerations. The operator's principal business, transporting his manufactured goods, would suffer. The transport manager's allegiance would be divided between making a profit for his transport operation and providing a service to the person purchasing his company's manufac

tured goods. "The own-account operator has only one mouth to feed," he said, "whereas the transport contractor has many."

Additional capital investment was another important consideration. The own-account man would normally look for 15 per cent or 20 per cent return on capital; against this, hauliers only looked for perhaps five or seven per cent.

There was also the question of reorganizing the own-account transport department. The costing system would need to be completely changed as would the other documentation and clerical procedures.

Learning from experience could be costly One of the major obstacles, Mr Corpe contended, was that the transport contractor already had the expertise and, while it could be argued that the own-account operator would learn from experience, this could prove costly. Mr Corpe returned to his argument that, in gaining such experience, the operator's principal business would suffer.

Drivers, too, would find it difficult to adapt, he thought.

However, the speaker did not suggest that own-account men should never carry goods for hire and reward. He thought that if convenient one-lift, one-drop traffic was offered and could be carried without interfering with the principal business, then it should be accepted. He warned the delegates from the own-account sector that they should not consider traffic from clearing houses or docks nor should they become involved in short-haul or multiple-drop traffic.

His advice to the delegates was to stick to what they could do best.

Mr A. W. Balne, replying to Mr Corpe's submissions in the debate, said that he was glad that his learned friend was not going to enter the hire and reward business—and he had come to the right decision for his company.

But what the 1968 Act principally offered was a flexibility of operations for both the own-account and the professional haulier which had not been enjoyed since before 1933. It put them all in the same position of being able to use all the possible devices to secure the most economic operation of the vehicles.

"What in effect my learned friend is saying is that if the C-licensee takes on hire and reward haulage, he may have problems of organization and he may have problems of capacity," said Mr Balne. "But you don't enter into a new enterprise without difficulty."

"When considering the effects of this legislation do not look simply at what you can gain from carrying for hire and reward but look to see what flexibility you can achieve."

What was being sought was maximum intensity of vehicle utilization. High utilization could be achieved in haulage and also in some own-account operations but there were areas of uneconomic operation in

both classes which, under the new legislation, could be removed.

In 300 researches, among both haulage and own-account operators, he had found that in 60 or 70 per cent of the ownaccount cases there was no great material benefit to be obtained by large-scale entry into hire and reward. But in 60 per cent of all cases there was a good case for reappraising of operations in the light of the new legislation.

In the case of groups of companies, he had found that the left hand often did not know what the right hand was up to, or resisted changes of benefit to the whole; objective across-the-board examination of transport could be fruitful. He also found that one of the fertile fields of examination was to see what individual companies could carry for each other. Groups had to analyse their operations and examine the troughs and peaks of seasonal operation .so they could consider what opportunities there were for correlating group activity.

Britain had not to any great extent developed the owner-operator technique, as had been done in the USA. In the States most long-distance tractors were owned by owner-operators, and the trailers owned by the producers.

This sophisticated type of operation was beginning to emerge in this country because time and overtime as a basis of payment for drivers was so archaic and so destructive of the purposes being sought—the quickest movement of the traffic to get it out of the way. It had been substituted so often by time and overtime plus productivity bonuses that took so long to invent—and a lot longer to apply—and were the source of unending argument with drivers.

He was not saying there were no good productivity schemes, but the chief objection to them was that the most reliable man could not be made to go any faster but all the "flash Harrys" were working with one object in view and the unfortunate man who had been given all the extra duties was penalized.

Mr Balne's final point was that this was the the first time since 1933 that there was no impediment to any kind of ingenuity that could be devised for vehicle operation. "So you (own-account managers) can go back and ask for an increase of a thousand a year and if you don't get it you can become a haulier," he added. And, amid laughter, "if that doesn't work you can become a consultant!"

Mr D. R. Baker, of Tesco Stores Ltd, rose to remark that he did not think any right-thinking man who had a distributive fleet on his hands was going to get involved with hire and reward haulage. He reassured hauliers that he for one was not going to compete with them.

No substitute for management When Mr Kieran Fielding, head of consultancy, BRS Ltd, introduced his paper on new techniques in transport, he stressed that management science was an aid to decision-making; it was not a substitute for management but one of the tools to be used.

Increasingly, large firms now realized that they must engage in total distribution analysis so that all costs were identified. It was a singular weakness of cost-accounting systems that they were not geared to producing total system costs. Transport managers reading standard text books on cost accountancy would find many unacceptable conclusions stated. The total distribution concept called for inclusion of costs involved in warehousing, bulk transport, local delivery, inventory, administration, changes in distributive patterns, changes in levels of customer service.

The cost of turnover of commodities with a fixed shelf life was another factor. Opportunity costs—the return on investment made in other directions—was yet another consideration. Often some of these difficult questions were ignored or estimated very crudely.

Major results were becoming available as a result of integrated studies involving transport planning, industrial engineering and materials handling. On transport planning, Mr Fielding said new operational methods were being developed, some involving more "closed-circuit" working. British Road Services were studying the effect on operational methods of increased motorway speeds, and new motorways available soon, enabling faster average speeds between the south-east and north-west of the country. He thought it would enable the company to intensify the type of operation at each end of a motorway where suitable depots existed, Night deliveries, too, fast becoming necessary in congested towns because of increasing traffic, would enable two-shift working to be introduced more widely. In effect, such schemes provided extra roadway at a stroke. There would be much more use of swop bodies and bulk containers, Mr Fielding predicted.

Drawing attention to a new system of container road/rail transfer equipment now widely used in Canada, Mr Fielding said its cost was about £7000—very much cheaper than some methods in wide use in this country. It involved the use of a special trailer fitted with heavy hydraulic transfer equipment. The trailer was normally captive in the terminal, as it would not be economic to use it on public roads.

Turning to computer applications in vehicle scheduling, Mr Fielding said the package used by most computer manufacturers was based on pioneer work done on behalf of CWS Manchester some 10 years ago. He criticized computer firms who still sold this out of date package because the results, in practice, were disappointing.

Mr Fielding described and illustrated some typical problems dealt with by management scientists and operational research specialists. A frequent problem was to calculate the marshalling area allowed for vehicles in depots or terminals. Essentially, this often boiled down to a queuing problem—how large should the facility be made to avoid excessive time lost in vehicles waiting for service?

In complex examples simulation was a useful technique but it was necessary to remember, as with all computer applications, that the quality of the results obtained depended wholly on the correctness of the "input" provided. Careful and detailed data collection would repay itself many times.

With the HOCUS package developed by P-E Consultants, a layman could model tangible physical situations after no longer than three days' instruction. In essence, the technique called for the logic of the situation to be plotted on a flow chart showing all the entities, activites and queues. Forms were provided calling for simple entries to be made and the system could be tested out manually by moving counters around a chart.

With complex problems computer analysis would be necessary and this was facilitated because the forms on which activities were entered were designed for punching. The program was written in Fortran computer language and was usable by several computers.

Illustrating the economies made possible by operational research techniques, Mr Fielding said one investigation enabled four vehicles to be used instead of seven and 16 trailers were found adequate instead of 22.

Mr D. E. Booth, transport engineer, Conoco Ltd, queried the formula in the printed paper. Mr Fielding said there was a printing error: the correct formula was 2nI (n-1)! —the last sign meaning "factorial".

Another questioner described his firm's unfortunate experience with computer vehicle scheduling. With 1800-gallon tankers with compartments of 800, 600 and 400 gallons the delivery schedules had got mixed up and there were delayed deliveries. One-way streets and road repairs had also invalidated the schedules produced.

Mr Fielding said it was wrong to blame computers for this kind of experience. The people who programmed the computer, or provided the basic data, were to blame. People often blamed computers unfairly. With a small fleet, manual scheduling was often more efficient than computer scheduling but the work of a traffic operator of, say, 60 vehicles could almost certainly be bettered by computer.

The practical constraints on operations, routes, tonnages to be delivered, warehousing availability, etc, must be ' programmed in advance, and correctly, for if the input data was wrong the computer could not correct matters and would give a false answer to the problem.