Road Transpou pets Record Demands
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IN September the share values of Dimplex Ltd., heating and appliance manufacturers of Mil!brook, Southampton, hit the headlines by reaching new peaks. This followed the announcement of record profits, a near-double dividend and another scrip issue. Moreover, total Dimplex throughput is now running at many times the corresponding quantity in 1955. Yet the company itself still operates only 10 commercial vehicles of its own.
The chairman, •Mr. E. J. Wake, insists that this satisfactory achievement is due to the combined efforts of the Dimplex family. Behind this heartening news for the fortunate shareholders there must obviously have been substantial distribution problems to be met and successfully resolved. Just how this has been achieved was explained to me during a recent visit to Southampton.
Originally the basic Dimplex products were electric and water radiators. The bulk of sales and deliveries of electric radiators took place between September and February, whilst distribution of water radiators was more evenly spread out throughout the year, with the emphasis on the period of building construction. As a result both production and distribution tended to be unbalanced throughout the year, .
To alleviate this position, a change in production policy was made three years ago. The range of products was expanded whilst summer stock discounts were introduced to encourage wholesalers to purchase heating appliances earlier in June, July and August.
With the development of the range of products a further distribution problem arose in addition to sales peaks. Several of the new lines have totally different loadability factors to the traditional Dimplex radiators. In contrast to these which are heavy and compact, the latest coal and log infra-red fires are light and bulky.
During periods of such rapid expansion as has been enjoyed by Dimplex it is virtually impossible to determine an economic size of ancillary fleet to operate over any reasonable period Additionally the ideal type of vehicle could not be determined. Even if the need to transport both heavy, and bulky . products had been known beforehand, the proportion could only be determined by current developments.
Dimplex has found a satisfactory solution to the problem by the employment of selected hauliers providing B38
vehicles on contract A or open A licence to move the major portion of the company's traffic, supplemented by nine of its own vehicles running on C-licence. It is considered that no matter how carefully Dimplex might choose a vehicle and body to match the products which were then being handled, it is extremely 'doubtful whether it would remain a suitable and economic vehicle during a lifetime of at least five years.
A detailed analysis of comparative distribution costs has shown that Dimplex can have exclusive use of a vehicle supplied on contract for around a minimum of £1,300 a year, increasing with usage. The corresponding minimum cost to operate Dimplex's own vehicle is around £2,000 per annum. Moreover the company has no labour or breakdown problems when vehicles are hired. This is particularly important to Dimplex which, throughout this period of rapid expansion, has had absorbing manufacturing and sales problems of its own to resolve.
Mr. W. Farthing, transport and traffic manager,tells me that the possible variations in specification of the company's products prevents the extensive use of warehousing facilities strategically placed throughout ' the country.. Thus a relatively simple appliance might be available in two voltages, have three alternative bracket attachments and be finished in 10 alternative colours, giving over 30 possible variations from one single product.
As a result wholesalers are only able to maintain a limited stock and the demand for immediate delivery from the factory is therefore more intense. Virtually 100 per cent of deliveries from Southampton are in fact to wholesalers.
Three of the 10 commercial vehicles in the Dimplex fleet are based at Southampton. There are five Commer vans ith capacities ranging up to eight tons. A further four zhicles are based at the London depot at Wandsworth ansisting of two Comrners, one Thames Trader and one tandard Atlas, whilst at Manchester there are two Thames raders and one Cornmer. All have van bodies which re considered essential for Dimplex products.
Supplementing this nucleus fleet, there are seven hicles supplied on contract A, with a further 11 vehicles ri call as required. The contract vehicles are painted in implex colours. There are approximately 60 vehicle )ads a week to be moved with an average of two trips er vehicle per week. Long distance vehicles average 750 1,000 miles a week and small vans 300 to 400 miles a week. Due to the variation in type of product, mechanical handling is not considered an economic proposition.
Because wholesalers tend to replace individual sales of their stocks, the number of drops per trip is relatively high, around 50 to 80. But this procedure has had to be somewhat modified due to the fact that Dimplex has been in the fortunate position of being oversold in recent years. Consequently, the timing of deliveries has been dictated by availability of supply deliveries being made in rota tion. Normally, however, it is sales policy to effect a weekly delivery to all parts of the country and twice a week in the more populated areas. Drivers of contract vehicles wear Dimplex overalls and are on equal footing with the company's own drivers as regards allocation of duties. But because wholesalers order to replace individual items of their own stocks, there is no regular pattern of journeys. Moreover, collections and deliveries which were recently adequately covered in 25 cwt. vans, now require 8-tonners due to the rapid expansion.
In the highly competitive electrical industry the results obtained by Dimplex Ltd., are obviously no accident. Mr. Wade considers it imperative to the success of the company that sales, production and distribution are a combined effort, Every modern means of advertising is brought into use to expand sales and extend the area covered. Having succeeded in successive sales drives, the entire exercise could be frustrated if distribution policy and methods are not sufficiently flexible to cope with all variations in both quantity and type of output.
Understandably, this modern company (which became a public venture as recently as 1959) employs budgetar financial control 'throughout the organization. Distribt tion is allocated a budget for the year and a progres3 repot is prepared by the accountancy department every fou weeks. In this, budgeted and actual expenditure are show alongside, segregated into vehicle costs, route costs, an comparisons between the company's own and hire vehicles. By the employment of both these types of opera don, Dimplex considers itself in a more advantageou position to prepare and evaluate costings than otherwist The alternative of C-hire has been considered but rejecte because estimates showed operating costs would b increased by £1,000 per vehicle.
Although the domestic market in the U.K. represent the major portion of Dimplex's business, exports ar increasing and its products have been shipped to mo! countries. ' Unlike home traffic, containers are used fc delivery to Europe by the Anglo-Continental Ferr Services. '