TRANSPORT MANAGEMENT

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TRANSPORT MANAGEMENT

• by Joseph Abio Nartey
• Former transport manager of Guinness Ghana
  Breweries Limited
• Author of
• A Handbook on driving
• Questions and answers for passing your driving
  test
• Holds MBA Marketing (University of Leicester,
  UK.)

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LEARNING OBJECTIVES

• Understand basic management principles
  applying to individuals, small and large
  organizations transport.
• Grasp the basics of transport management
  functions
• Recognize professional skills required of managers

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CONTENTS

• PART 1 OVERVIEW OF TRANSPORT MANAGEMENT
• PART 2 TRANSPORT PLANNING, OPERATIONS CONTROL
• PART3 COSTING IN TRANSPORT OPERATIONS

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PART 1 OVERVIEW OF TRANSPORT MANAGEMENT

• Chapter 1Transport modes
• Chapter 2 Overview of the road transport system
  
• Chapter 3 4E concepts of road safety
• Chapter 4 Key stakeholders of road transport

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PART 1 OVERVIEW OF TRANSPORT MANAGEMENT

• Transport
• Functions
• Moving
• Supporting
• Motivating

• Management
• Functions
• Controlling
• Directing
• Organizing
• Planning
• Staffing

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PART 1 OVERVIEW OF TRANSPORT MANAGEMENT
What is transport management?

• TM is defined as the managing of the
  coordinating of movements of people, products,
  services, information from one destination to
  another point to support economic activities and
  to motivate people.

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Levels/structures of management

• Top Level managers consists of board of
  directors. They take strategic decisions.
• Middle Level managers consists of general,
  branch and dept. managers. They take tactical
  decisions in conformance.
• First Level managers consists of supervisors,
  section leaders, foremen, transport mgr. etc.
• Structure depends on size, age, culture,
  resources, etc.

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Chapter 1 Transport modes

• Road,
• Air,
• Rail,
• Water (sea lake),
• Pipelines,
• Space

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Chapter 2 Overview of the road transport system

• Major players of the road transport
• The drivers
• The vehicles
• The road networks
• The transport operators VIPs, AO, STC,
  Metromass, GPRTUs, etc.
• The other road users
• The weather environment (day, night, rain, wind,
  etc.)

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Chapter 3 4Es concept of road safety

• Engineering Urban roads, highways
• Education NRSC, Media
• Enforcement DVLA, MTTD
• Emergency Ambulance, Fire service
• Road safety triangle environment, vehicle and
  the driver

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Chapter 4 Key stakeholders of road transport

• Motor traffic and transport unit (MTTD) of the
  police service- Law enforcement
• The driver and vehicle licensing authority
  (DVLA)-Vehicle roadworthy licensing
• The national road safety commission
  (NRSC)-Supports driver education
• Ghana Police Service (Ghana Police) Enforcement
  of the road traffic act- 2008 2012
• The national insurance commission (NIC)- Motor
  insurance
• The internal revenue services (IRS)-Vehicle tax
• The district and metropolitan assemblies (DMAs) -
  District/metro taxation
• Repair Workshops/Garages-

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Discussion

• State and explain four reasons, why should you
  maintain a cordial relationships with your key
  stakeholders as a transport manager/officer?
• Please use 15 minutes to reflect over the
  question and then send your answer to email
  joseph_at_ghanadrivingtest.com

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PART 2 TRANSPORT PLANNING, OPERATIONS
CONTROL2hrs

• Chapter 5 Operational management
• Chapter 6 Fleet management
• Chapter 7 Human resources management
• Chapter 8 Policy and policy development

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Chapter 5 Operational management

• Tasks and Responsibilities comprises the
  day-to-day management of the physical, technical
  and human resources required to operate vehicle
  fleet (Operators Management)
• Vehicle Operators the key people responsible for
  the effective, safe, and economic operation of a
  vehicle. In this guide, VOs refer to both
  professional drivers and drivers who use vehicles
  to carry out official duties. Refer eg to next
  page.

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• Task
  Responsibility
• Level
  Frequency Post
• Create, update, and publish the Vehicle Inventory
  All As needed TA
• Create, update, and publish the Vehicle
  Information Sheet All As needed
  TA
• Day-to-day operational management
  All Daily
  TO
• Receive Period Movement Plans
  All Every period TO
• Prepare Period Transport Schedules
  All Every period TO

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Chapter 5 Operational management

• The VO is responsible for
• The Vehicle
• Health and Safety
• Vehicle Checks
• Policy Support using correct forms and
  documents ? being legally fit to drive and
  possessing a valid license ? keeping within the
  regulations of the trip authority ? not changing
  the authorized route and ? not carrying
  unauthorized passengers.

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Chapter 5 Operational management

• 2. Management Roles It shows and list the roles
  and responsibilities in a TMS and thus helps
  determine an appropriate personnel structure for
  an operational management system. This table has
  two main columns
• Task main operational management tasks.
• Responsibilities how tasks are assigned to the
  staff.

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Chapter 5 Operational management

• Vehicle Planning the Main Steps Planning
  mechanisms and technical procedures for all
  vehicle use are necessary to ensure that vehicles
  are used in an efficient and cost-effective
  manner.
• key responsibilities including
• ? analyzing trip authorities forms in for
  authorization and correct recording of all trips
  
• ? allocating vehicles to authorized personnel
• ? negotiating with other managers who sign trip
  authorities for joint trips and
• ? ensuring that procedures for the emergency use
  of vehicles are followed.

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Chapter 5 Operational management

• Vehicle planning follows a three-step process
• Period Movement Plan
• Period Transport Schedule
• Seven-day Transport Schedule

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Chapter 5 Operational management

• Step 1 Period Movement Plan Reporting periods
  are often monthly or quarterly
• Step 2 Period Transport Schedule it is used to
  allocate planned trips to specific vehicles. The
  Transport Officer uses data from the movement
  plans to prepare a period transport schedule
• Step 3 Seven-day Transport Schedule On the last
  day of the working week, the Transport Officer
  prepares the seven-day transport schedule

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Vehicle Planning Other Procedures

• Issue and Return of Vehicles The vehicle check
  sheet is an important management tool that shows
  responsibility for the vehicle, and all
  documentation and equipment as it passes from one
  authorized user to another
• Monitoring Results At the end of each week and
  period, the TO compares actual transport
  movements with what was planned, noting
  everything that affected the schedule. They
  record successes and achievements as well as
  problems

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Chapter 6 Fleet management

• Operational controls Operational controls link
  staff management activities and vehicle
  management planning through Standard Operating
  Procedures (SOPs)
• Standard Operating Procedures (SOPs) An SOP is
  simply a document that states how specific
  activities should be carried out. All SOPs should
  be kept in a file wherever vehicles are located
  and made accessible to all staff members.
• The next page is a summary list of the specific
  types of SOPs. The size and complexity of an
  organization will determine exactly which SOPs
  are appropriate.

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Standard Operating Procedures/Practices (SOPs)

1. Transport HR File The transport HR policy
   establishes the personnel structure for all
   aspects of the transport management.
2. Vehicle Usage Planning Policy The vehicle usage
   planning policy defines clear guidelines for the
   procedures and responsibilities involved in
   vehicle planning and use

• 3. Vehicle Allocation Form The vehicle
  allocation policy should comprise procedures for
  vehicle assignment, including specific guidelines
  for new vehicles
• 4. Issuing Vehicle Form The vehicle issuing
  policy comprises clear statements about issuing
  and handling over vehicles, including the
  mandatory use of the vehicle checklist sheet, and
  responsibilities for log sheets, keys, warning
  triangles, etc.

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Standard Operating Procedures/ Practices (SOPs)

• 5. Fueling Coupons/ Fuel Cards The vehicle
  fueling policy covers fuel suppliers, documents
  to be used for fuel requisition and issue, and
  responsibilities for fuel vouchers and cards (if
  applicable)
• 6. Accident/Theft safety report form This
  details about the safe operation of vehicles and
  crash/incident reporting

• 7. Vehicle Log Book (or Log Sheet) It should
  detail responsibilities for the analysis of log
  sheet data and subsequent reporting, and
  highlight the importance of having a working
  vehicle odometer
• 8.Vehicle Fleet Audit Sheet
• 9. Valuation/disposals form
• 10. Vehicle maintenance requisition form/sheet

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Standard Operating Procedures/ Practices (SOPs)

• 11.Car Hiring request form
• 12.Vehicle purchasing/ replacement form
• 13.Driver training request form
• 14.Vehicle database report

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Standard Operating Procedures/ Practices (SOPs)

• Other SOPs are
• Vehicle roadworthiness
• Vehicle insurance
• Planned preventive vehicle maintenance schedule
• Vehicle running budget
• Vehicle running quarterly report
• Development of approved workshops/garages
• Vehicle policy development

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Chapter 6 Fleet management

• Good management means making the best use of
  vehicles to meet a departments priorities.
• Specification, Selection, and Procurement of
  Vehicles are important from time to time
• Maintenance and Repair of Vehicles eg,
• Schedule routine maintenance
• Routine daily checks

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Planned Preventive Maintenance

• Regardless of the age and quality of a fleet, PPM
  reduces overall running costs
• Daily Checks
• Defect Identification report/ fleet audit report
• Regular Servicing
• Planning Service Schedules and Intervals
• Managing the Maintenance Schedule

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VEHICLE RUNNING COST

• Veh.Insurance GH44,107.52 (5.70)
• RepairmaintenanceGH176,835.51 (22.86)
• Fuel GH481,367.62
  (62.22)
• Tyres GH15,110.57
  (1.95)
• Veh. Hire GH41,646.40
  (5.38)
• Other exp. GH14,589.31 (1.89)
• F08 TOTAL GH773,656.93
• FLEET SIZE 163
• AVE. RUNNING COST GH4746.36
• AVE.RM RATIO GH1084.88

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VEHICLE RUNNING COST

• SUMMARY
• Insurance 5.70
• Rm 22.86
• Fuel 62.22
• Tyres 1.95
• Hire 5.38
• Others1.89

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VEHICLE RUNNING COST F06-F08
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Managing the Maintenance Schedule

• Four information sources are used to manage
  vehicle maintenance and repair
• The vehicle defect report
• The vehicle maintenance summary
• The twelve-month planning schedule
• The seven-day transport schedule

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Maintenance Options

• There are three possible maintenance options
• In-house maintenance.
• Outsourced maintenance.
• Maintenance by a private contractor through a
  vehicle contract agreement

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Warranty on New Vehicles

• All new vehicles will have a manufacturers
  warranty built into the purchase agreetment. This
  may include cost-free servicing (excluding
  consumables) for a defined period
• Find out

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Chapter 7 Human resources management

• Organizational Structure
• Staff Management and Capacity
• Organizational Charts
• Person Specifications
• Job Descriptions
• Recruitment Processes
• A Competent, Committed Workforce
• Incentive Schemes
• Staff Reviews Vehicle Operator Assessment
• Staff Development and Training
• Locally Applied Guidelines

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Chapter 8 Policy and policy development

• Policies vs. Procedures Policies are principles
  that direct actions for achieving long-term
  goals. SOPs provide the instructions needed to
  implement and translate policy into action
• Policy Structure for TMS
• TMS Stakeholder Role In Policy Development and
  Review

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PART3 COSTING IN TRANSPORT OPERATIONS

• Chapter 9 Financial management
• Chapter 10 SHE Issues
• Chapter 11 Monitoring and Evaluation feedback
  system
• Chapter 12 Third Party services providers Is
  outsourcing an option? (make or buy options).

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Chapter 9 Financial management

• Transport Costing
• The initial capital cost- vehicle purchasing cost
• Depreciation- used to determine financing
  requirements at end of vehicle effective
  life-span
• Fixed costs- including annual vehicle licenses,
  taxes, and insurance.
• Variable costs- Running costs and Indirect costs
• Human resource costs- Fixed costs, such as
  salaries and variable costs, like per diem

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Calculating Depreciation Cost

• Formula Vehicle replacement cost economically
  viable life (km traveled) depreciation cost
  (per km)
• Example For a vehicle whose replacement cost is
  Ghc20,000, planned to travel between 100,000 to
  250,000km
• 20,000 100,000 km Ghc0.20
• 20,000 150,000 km Ghc0.13
• 20,000 200,000 km Ghc0.10
• 20,000 250,000 km Ghc0.08

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All-inclusive/km Costs Over Time
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Annual Budget and Core Financial Management

• What to Include in the Budget
• A trading account- an account dedicated to
  transport
• Main Budget items
• Depreciation
• Fuel
• Repair maintenance
• Insurance
• Tyres
• Batteries
• Other expenses

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Chapter 10 SHE Issues

• SHE Issues are Safety, health and environmental
  issues- this is to avoid death and injury from
  traffic accidents as well as damage to the
  environment and property
• Crash and Incident Procedures for Vehicles-
  theft, hijacking, vehicle losses, and damage
  Report on the SOP forms immediately
• Fuel and Other Storage
• Asset Security and Transport Insurance
• Workshops/ Garages

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Chapter 11 Monitoring and Evaluation

• M E is a feedback system, comparing the actual
  with the target plans and taking corrective
  actions to get back on track
• Key Performance Indicators (KPIs)
• KPI 1Distance Travelled current odometer
  reading prior odometer reading
• KPI 2Fuel Consumption total distance travelled
  total fuel used
• KPI 3 - Running Cost per Kilometre ( quantity
  of fuel used x fuel price maintenance cost
  cost of tires ) (total kilometres travelled)
• KPI 4 Availability ( total days in the
  period - total days in the garage total days
  in the period ) x 100 availability ()
• KPI 5 Use (total days used total days
  available) x 100
• KPI 6 - Needs Satisfaction (number of trips
  made number of trip requests for official work
  received) x 100
• KPI 7 Safety number of crashes, incidents, or
  critical safety defects per vehicle

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KPI 2Fuel Consumption
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Chapter 12 Third Party services providers Is
outsourcing an option? (make or buy options

• Outsourcing is when an organization contracts
  with an outside service provider to carry out
  tasks (usually non-core tasks) that were
  previously performed in-house.
• Cost-benefit Analysis
• Situational Analysis
• Implementing Outsourcing Financing, service
  provider reputation and availability, spare
  parts, etc.

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Transportation Management Cost Items

• Transportation Management Cost Items Costs to
  Outsource Current Internal Costs Internal
  Costs to Achieve Desired Improvements
• ? Tendering ? Contract management ? Services ?
  Contingency for poor performance ? Capital
  Potential others ? Infrastructure (i.e.,
  furnishing vehicles or storage facilities to the
  service provider) ? Severance pay and other costs
  related to staff lay-offs ? Employee and
  administrative ? Equipment, including maintenance
  ? Buildings, including running costs ? Fuel ? Per
  diem and lodging for drivers and other traveling
  personnel Potential others ? Inventory (when
  outsourcing inventory management

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Answer all questions

• Explain the three steps involved in vehicle
  planning (Step 1) Period movement plan, (Step 2)
  Period transport schedule, and (Step 3) Seven-day
  transport schedule
• What are the two components of the all-inclusive
  cost per km?. Briefly explain them.
• Calculate the depreciation cost per km for a
  USD40,000 vehicle expected to travel 150,000km.
  (Show your calculation method and the answer.)
• What does PPM mean and what are its three
  components?
• State the FIVE main functions of management

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Answer all questions

• 6. Name four of the safety equipment that a
  vehicle should have.
• 7. What type of insurance generally meets
  minimum coverage requirements?
• 8. Name and explain the seven transport key
  performance indicators (KPIs)
• 9. State and explain the three main functions
  of transportation
• 10. State and explain the three levels of
  management

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ANSWERS

• Send your answers to email joseph.ghanadrivingtes
  t.com
• OR
• write to JOSEPH ABIO NARTEY
• P.O.BOXNT 67, NEWTOWN ACCRA
• TEL [phone]
• Fb josephabio.nartey

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Answers

• Period movement plan a plan that details
  proposed dates, the number of people travelling,
  and the places to be visited.
• Period transport schedule a schedule used to
  allocate planned trips to specific vehicles.
• Seven-day transport schedule a schedule used to
  give the most up-to-date information possible
  about planned trips and the vehicles to be used
  on them, including updates (as often as daily)
  that reflect changes to the period transport
  schedule.
• 2. Depreciation and Running cost
• 3. 40,000 (Vehicle replacement cost) 150,000
  (economically viable life/km travelled) USD
  0.27 (depreciation cost per km)
• 4. Planned Preventive Maintenance

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Answers

• 5. Directing, Controlling, Organising,
  Planning and Staffing
• 6. Warning triangle, fire extinguisher, spare
  tyre, and a jack
• 7. Third party insurance
• 8. Transport KPIs Distance travelled, Fuel
  consumption, Running cost/km, Availability,
  Use, Needs satisfaction, and Safety report.
• 9. Movement, supporting and motivation
• 10.Top level- strategic decisions, Middle
  level-tactical decisions and Frontline
  level-operational decisions