Posts Tagged With: Business

Monitor and Control the Performance of the Vehicles and the Drivers

Measurement Fleet

In order to improve the performance of Fleet Management System, a system is required to monitor and control the performance of the vehicles and the drivers.

Prior of monitoring and controlling the performance of the vehicles and the drivers, there are three main areas to be considered and implemented:

1. Repair and maintenance of the vehicles. Procedures should be in place to ensure that the work is carried out at the appropriate time, to the appropriate standard and all records should be accurate and kept at vehicle level. Good repair and maintenance procedures are essential to ensure the effectiveness operational of a fleet. There are two things to be considered for this part:

  • Preventive maintenance. This to ensure that the vehicles are serviced and maintained at the correct time. Correctly maintained vehicles will be more efficient and less cost. This also will make the life of the vehicles will be extended and resale value also will be higher. Effective preventive maintenance will also enhance the safety of the drivers and passengers. It is important, therefore that the frequency of inspection of preventive maintenance is correctly established.
  • Repair situation. The procedures should be in place to deal with repairs of vehicles speedily and efficiently. The nature of repair and the reason for the repair needs to be identified. If there is an accident, all report and inspection of the vehicle to be reported in writing and copies of the report should be sent to all respective parties. All reports should be kept in the appropriate vehicle file.

2. Scheduling of the vehicles. This activity is to ensure that the right vehicles are available in the right condition, at the right place and time, to support all the planned of movement. This requires close and on-going liaison with the operational staffs. Information needs to be received from the operation staffs on the required number of vehicles and their movements and changes to activity whether planned or unplanned. Also information of non-availability of the vehicles should also be passed to all relevant parties. If non-availability of the vehicles creates shortage of resource to meet operational needs, then the fleet manager has the responsibility for securing short-term replacement vehicle to ensure operation can continue as planned.

3. Management of spare parts. The level and range of spare parts held in the garage or workshop will be influenced by factors such as the age, variety of vehicle, the usage of vehicles, etc. Procedures for spare parts will differentiate what are consumables and what are defined as spare parts. The procedures need to outline the decision rules to enable staff to decide on which parts are to be held and in what quantity. The procedures will also explain the process to be followed when identifying and requisitioning spared for service and maintenance work and who has the responsibility for re-ordering parts for stock replenishment. Parts should be ordered from authorize dealer or reputable sources that have been approved by the procurement function. The stock of spare parts needs to be accounted for and procedures need to be in place.

Once above three main areas are implemented, it is necessary to measure the performance of the vehicles and the drivers against the budgets that have been set. This monitoring and control will primarily involve measuring the availability and utilization of the vehicles and the running costs of it. The cost of operating a vehicle depends on a variety of factors, these grouped into the two costs, fixed costs – which are incurred whether the vehicle is moving or not and variable or running costs – incurred only when the vehicle is moving.

Cost

Fixed costs are easily recorded. This include wages, licenses, establishment costs for garaging of the vehicle, vehicle tax, insurance, depreciation or interest on the capital cost of the vehicle and any other fixed costs.

Running costs will be gathered from data related to the day to day activities of the vehicle. Running costs include fuel, lubricants, tires, maintenance, parking fee, toll fee etc. The level of maintenance costs is often directly attributable to the replacement policy. Fuel consumption will depends on the way that the vehicle is driven, the nature of the terrain over which it is driven and the age also fuel efficiency of the vehicle. In addition to those costs, there may be also being some capital costs and overhead costs which will complete the overall total cost figure. All information above should be completed in the vehicle logbook by the driver for every journey made. This logbook should be checked by fleet manager minimum once a week.

Vehicle Utilization and Performance

Productivity of the vehicles and the drivers are related to the utilization of those resources and the manner in which they performed.  Measuring performance of resources gives the required information that those resources are being used as effectively and efficiently as possible. In the planning stages for transportation resources, the calculations was made for required fleet size and the needs of the driver based on estimates of work to be done. Inefficient will result in unnecessary costs being occurred.

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Procurement >> Preliminary

We have seen five basic components of SCM previously, i.e. plan – source/supply – make/production – deliver – reverse.

These five components cannot be separated. A simple example is if we have a necklace. Of course that necklace has to be in good form in order for us to use it. If one part, e.g. the hooks are damaged then we need to fix so we can use it again. Maybe there will be a slight defect or the looks will not as good as before. And maybe at first we only had the money to buy a silver necklace, but after a while we’ve got enough money to buy a gold necklace. We will take care of that gold necklace properly because it is valuable goods.

Above example is same with SCM, each component is unity and should be managed properly to achieve value / profit as per the goals, it has to be sustained and improved.

Back to procurement, for most ordinary people, procurement is same with purchasing. But actually both are different. Below we can see what the difference between procurement and purchasing:

Procurement Contract

Procurement: the complete process for acquiring goods or services from external party or supplier. Procurement covers all process from the beginning until the end to obtain goods or services. It includes identifications of goods or services as per requirement, market survey or assessment, obtain sampling based on the required specifications, tender process until award for the winner, make a contract, ordering includes logistics arrangement (transport & warehouse if necessary), monitoring and make performance evaluation of the supplier. Almost same with logistics missions, procurement is acquiring goods or services in the right quantity & quality, at the right time & place and from the right source at the right price.

Purchasing: the specific activity of committing expenditure (money or equivalent) and tends to focus on the price rather than others. We can also say that purchasing is a part of procurement and more for administrative aspects. There are several companies set their own standard for purchasing, it can vary greatly between companies.

Going forward we will discuss steps in the procurement process.

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Warehouse >> Preliminary

Warehouse is one of the main components of logistics. I think we all know very well that the warehouse is a place to store goods or equipment. Maybe at home we also have a room that we called “warehouse or storage”, usually we put various unused goods or equipment/goods that are rarely used in that room.

So in general, warehouse is a place to store goods or equipment. Warehouses are used by almost all stake holders in the supply chain, such as supplier, manufacturer, distributor, transport companies etc. Even in the government offices/compound, usually they have one room or building dedicated as warehouse/storage.

Roughly speaking we can say that anyone can manage the warehouse, but in reality it is not easy being as a warehouse caretaker. Many factors must be considered and the warehouse should be run by people who understand how to manage it properly and they should responsible for that warehouse.

The simplest example is the warehouse/storage at our house. If the cleanliness of the warehouse is not properly managed then it would have a lot of mice or other termites. Also the warehouse should get enough sunlight and air to avoid moisture.

Warehouses for commercial purposes usually a large building where raw materials or manufactured goods are stored, located in industrial areas or in the port areas or in one compound with factory or in same location with business/offices areas. Sometimes this type of warehouse is designed for the loading and unloading of goods directly from airport or seaport.

Businessman or managers will decide the type of warehouse and whether it has to be built or can be rented based on their requirement.

Gudang

Important consideration includes questions:

  1. What we will store and do we need special treatment like refrigerator
  2. How much space we will need
  3. How should we handle and organize the goods / materials

Later we will discuss how to make a good warehouse management system.

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