2. Give examples of storage units.

3. What does the selection of a storage unit depend on?

Reading 2

1. Read the text and take notes of key ideas. Answer the following questions:

1. How are primary and secondary transports distinguished?

2. What is the purpose of primary transport?

3. What is the key factor for secondary transport? Why?

4. What are the methods to assess freight transport resources?

5. What are the main challenges with transport planning?

6. What is the aim of vehicle routing?

Main types of road freight transport⁵⁷

Road freight transport operations can be broken down into two main types. These are primary transport and secondary transport. It is important to be aware of the major difference between these two, because they should be considered quite separately for both planning and operational purposes. The key difference can best be viewed within the context of the supply chain as a whole. The primary transport element is the movement of full loads on large vehicles with a single delivery point. These are sometimes called line-haul operations. The secondary transport element is the movement of loads on smaller delivery vehicles. Deliveries are typically made to several drop points during one vehicle journey. Orders are pre-selected for each delivery point on to some type of unit load. These are often known as multi-drop or local deliveries.

Primary transport

The focus on primary transport is often one of cost reduction. It is seldom regarded as an activity that 'adds value' to an operation because there is no direct link to the final customer. Primary transport is all about moving the product at minimum cost, which generally involves using as large a vehicle as possible and making sure that the vehicle is filled to capacity.

These movements usually consist of delivery to a single drop point. Other key aspects include:

Vehicles are operated for as long as possible, sometimes on a 24-hour, three shift basis, to maximize vehicle time utilization.

Return loads for the vehicle are important so as to fulfil the criteria for maximum utilization. The lack of return loads or 'backloads' often drives the decision to outsource the activity to general hauliers.

Additional vehicle specification, for example special on-vehicle handling equipment, is less important than for delivery operations.

Secondary transport

Secondary transport and delivery usually involves direct contact with the customer or end user (or, as with retail operations, the key end user interface). These are, therefore, what are known as 'customer-facing' logistics operations, and they can be an important part of the customer service element of logistics strategy. Because of this, cost reduction is not the main operational criterion as it is with primary transport (although it is important). Customer service is the major criterion. Important related factors include:

• Many customers have very restricted delivery windows (the time in which a delivery may be made). This makes the accurate scheduling of secondary vehicles very important.

• Service is usually critical. In particular, inventory reduction in retail stores and the increase of store selling space and elimination of stockrooms makes timely delivery essential. This is to ensure that the store does not run out of stock.

• Specialist vehicles have been developed for secondary delivery, eg grocery multi-temperature compartmentalized trailers. These are used to maximize the opportunity to make frequent and full deliveries of essential stock to the stores.

It is important to understand the difference between the two to ensure that the proper balance between cost and service is achieved. The methods used for the planning and management of these types of operation and the selection of appropriate vehicles can be very different.

Transport resource requirement

The basic method of assessing the road freight transport resources required for a given operation necessitates some very detailed and time-consuming analysis.

This is the case whether the method adopted is a manual one or whether one of the many computer routing and scheduling packages is used. Basically, it is necessary to identify specific delivery route requirements (routing) and then calculate from these how many vehicles and drivers are required to undertake the operation (scheduling). Computerized systems for fleet planning and operations are used to help determine basic transport resource requirements but are also used to maximize the utilization and effectiveness of a given set of resources (e.g. an existing fleet of vehicles).

In summary, there are two key areas: 1) determining initial fleet resource requirements; an 2) identifying effective vehicle schedules using an existing fleet. These may have different implications according to the type of road transport operation that is being considered. The major use of these packages is for secondary delivery or local delivery. Here, vehicle routing and scheduling are concerned with the efficient organization of road transport delivery to the final customer or retail outlet. Many large manufacturing, retailing and distribution companies have logistics structures with many depots spread across large geographic areas. Each depot will be responsible for supplying customers within a given region, that is, within the depot boundary.

This supply of products from a depot is often undertaken by a fleet of delivery vehicles that vary in size and capacity. Equally important, the particular demand for products from the depot may vary day by day and week by week.

The two main problems are, therefore, to try to minimize the number of vehicles that are needed to achieve this, and to deliver this variable amount of goods and products as efficiently as possible. 'Efficiency' in this instance can be to maximize the amount of product moved on the vehicles and minimize vehicle mileage. It is principally about providing a balance between supplying an adequate service to customers on the one hand and doing so at an acceptable cost on the other.

Other types of transport operation may also benefit from a similar approach to resource utilization, but the means of achieving this may require additional or different requirements. Two examples are primary or trucking (line-haul) operations, which generally involve just one point of delivery for each vehicle, and stockless depot or demountable operations, which require a single stock-holding base plus additional stockless distribution points.

From the viewpoint of a depot manager or transport operator, objectives for local delivery can be stated quite simply as follows: to plan journeys for vehicles operating from a single depot, delivering known loads to specific customers and returning to the depot after completing the journey.

A fairly general definition of the aim of vehicle routing and scheduling has already been outlined. For an existing fleet, this can be summarized as the 'best' use of vehicles when providing a particular delivery service (known as the 'optimization' of vehicle usage). There are, however, a number of different ways in which this can be achieved, and any or all of these maybe acceptable objectives for vehicle routing and scheduling, depending on the particular transport operation concerned.

b. Explain the following terms in English:

drop point	unit load
local delivery	full load
delivery point	cost reduction
backload	to outsource
final customer	handling
delivery window	stockroom
routing	fleet
depot	mileage

c. Find synonyms to the following words in the paragraph “Secondary transport”:

embrace	shop
market	rise
key	discharging
significant	basic
limited	guarantee
essential	comprehend
correct	correlation

d. Match the following words to make word combinations:

supply	load
full	routing
delivery	outlet
vehicle	operator
retail	window
transport	service
to provide	chain

e. Fill in the gaps with prepositions consulting the text and make your own sentences with the phrases.

1. to be broken __ 2 types

2. to view __ the context of supply chain

3. to be filled __ capacity

4. to provide a balance __ supply and cost

5. to benefit __ a similar approach

f. Complete the table with correct word forms:

Verb	Noun	Adjective
	difference
deliver
		reduced
	customer
	utilization
		necessary

Translation

Translate the sentences focusing on the underlined terms.

Flow

1. Flow in goods flow reporting is a quantity of goods, a single lot of goods or the accumulation of quantities of goods passing at a moment of time.

2. The flow of materials and components goes to and through the factory for the production process.

3. Flow diagram is graphical representation that uses symbols connected by lines, for the definition, analysis, or step by-step solution of a problem.

4. Goods flow control of the various flows of goods ensures the correct relationship between all the elements of these flows.

5. The aggregate of organizational regulations, procedu­res, systems and resources for use by the various business sections is entrusted with the commercial and/or technical management aimed at optimum management of the goods flow.

Load

1. Load is quantity or nature of that is being carried by truck.

2. Load factor utilization is the quotient of the actual load of a production resource or a department (i.e. store/warehouse) and the available capacity during a particular period.

3. Load leveling means spreading orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable.

4. Load planning is planning of distribution of the required capacity over the available capacity of the individual employees, production resources, and departments.

5. Load profile is a display of future capacity requirements based on planned and released orders over a given span of time.

Case Study⁵⁸

Read the case and discuss the following questions in groups. Come up with a solution to the problem.

1. Point out which changes are occurring in the business that affect HRM.

2. What are some considerations the company and HR should be aware of when making changes related to this case study?

3. What would the initial steps be to start planning for these changes?

4. What would your role be in implementing these changes? What would Jennifer’s role be?

Jennifer, the owner and manager of a transportation company with ten employees, has hired you to take over the HRM function so that she can focus on other areas of her business. During your first two weeks, you find out that the company has been greatly affected by the up economy and is expected to experience overall revenue growth by 10 percent over the next three years, with some quarters seeing growth as high as 30 percent. However, five of the ten workers are expected to retire within three years. These workers have been with the organization since the beginning and provide a unique historical perspective of the company. The other five workers are of diverse ages.

In addition to these changes, Jennifer believes they may be able to save costs by allowing employees to telecommute one to two days per week. She has some concerns about productivity if she allows employees to work from home. Despite these concerns, Jennifer has even considered closing down the physical office and making her company a virtual organization, but she wonders how such a major change will affect the ability to communicate and worker motivation.

Jennifer shares with you her thoughts about the costs of health care on the organization. She has considered cutting benefits entirely and having her employees work for her on a contract basis, instead of being full-time employees. She isn’t sure if this would be a good choice.

Jennifer schedules a meeting with you to discuss some of her thoughts. To prepare for the meeting, you perform research so you can impress your new boss with some recommendations.

Writing

1. Write an email apologizing for a postponement of a shipment due to the act of God. Include all necessary details. Write at least 100 words.

2. Write about the following topic: Strategic planning is one area that businesses large and small should pursue to ensure that all employees are involved, especially in activities designed to achieve the company’s mission, vision, values and core strategies. Do you agree or disagree? Why? Give reasons for your opinion and include any relevant examples. Write at least 250 words.

Culture

Before reading the text, discuss in pairs or groups what you know about US and Japanese business traditions.