Professional Documents
Culture Documents
Transport Operation Management - ASEAN Disclaimer
Transport Operation Management - ASEAN Disclaimer
Project Sustainable Human Resource Development in Logistic Services for ASEAN Member
States with the support from Japan-ASEAN Integration Fund (JAIF). Copyright Association of
Southeast Asian Nations (ASEAN) 2014. All rights reserved.
1
Sustainable Human Resource Development in logistics services
for ASEAN Member States
TRANSPORT OPERATIONS
MANAGEMENT
AFFA
Bangkok
September 19, 2014
By Abe Asuncion@PISFA, Philippines
SYNOPSIS
The transport operations management module deals
with the principles, systems, processes, and best-
practice methodologies, and tools that will help equip
the practitioner or operator with the needed skills and
know how to better perform in this highly competitive
logistics industry.
TRAINING OBJECTIVES
• To understand the principles of transport operations
management and its impact on the supply chain.
OUTLINE
Chapter 1: Operations Management in Transportation
Chapter 2: Management Principles Applicable in
Transport Operations
Chapter 3: Role of Transport Operations in Logistics
Chapter 4: Some Practical Methodologies, Tools, and
Techniques
Chapter 5: Introducing Transport Management Systems
OUTLINE
CHAPTER 1
OPERATIONS MANAGEMENT IN
TRANSPORTATION
Infrastructure
Vehicle
Operations
TRANSPORT OPERATIONS
• Changes in technology
Operations Management
Products versus Services
OM Processes in Transport
• Forecasting
• Capacity planning
• Scheduling
• Managing inventory assuring quality
• Motivating and training employees
CONCLUSION
The management of transport operations
encompasses aspects of the logistics chain and is at
the heart of the entire service enterprise. The
practice may be viewed as a science in itself focused
on the process inputs resulting to outputs thereby
satisfying customer requirements.
HISTORICAL BACKGROUND OF
OPERATIONS MANAGEMENT
Continued...
In Latin America, some governments have
recently agreed on a regional legislation for
multimodal transport, taking basic elements from
the MT Convention and from the UNCTAD/ICC
Rules. Other governments (e.g. India) have
designed their own law on MT.
AND MORE …
• Human factor
• Fuel & related costs
• Process automation
• Clean Air Act- GO GREEN!
• Port congestion
• Safety & security issues
• QMS initiatives
Philippine Scenario
FAQs
1. How do I decide which transport mode to use?
2. Which service provider can best fulfil our
requirements?
3. What type of packaging is best for what mode of
shipping?
4. How do we measure performance?
5. Who are responsible in operations management?
6. Do we purchase equipment or outsource?
CONCLUSION
Operations Management is the forebearer of transport
operations. The principles used in the manufacturing
industry are still relevant and useful in the successful
management of transport operations. The growing
complexity and scope of transport in logistics pose
dynamic challenges to the transport manager.
CHAPTER 2
MANAGEMENT PRINCIPLES APPLICABLE IN
TRANSPORT OPERATIONS
SIX SIGMA
SIX SIGMA is a set of techniques and tools for
process improvement. It was developed by Motorola
in 1986, coinciding with the Japanese asset price
bubble which is reflected in its terminology. Jack
Welch made it central to his business strategy at
General Electric in 1995. Today, it is used in many
industrial sectors.
SIX SIGMA
SIX SIGMA seeks to improve the quality of process
outputs by identifying and removing the causes of
defects (errors) and minimizing variability in
manufacturing and business processes. It uses a set
of quality management methods, including statistical
methods, and creates a special infrastructure of
people within the organization ("Champions", "Black
Belts", "Green Belts", "Yellow Belts", etc.) who are
experts in these methods.
ISO 9000
ISO 9000 is a series of standards, developed and
published by the International Organization for
Standardization (ISO), that define, establish, and
maintain a quality assurance system for
manufacturing and service industries.[1][2] The
standards are available through national standards
bodies. ISO 9000 deals with the fundamentals of
quality management systems,[3] including the eight
management principles upon which the family of
standards is based.
Transport Operations Management Management Principles Applied 50
Sustainable Human Resource Development in logistics services
for ASEAN Member States
8 Principles of ISO
8 Principles of ISO
• Customer focus
Since the organizations depend on their
customers, they should understand current and
future customer needs, should meet customer
requirements and should try to exceed the
expectations of customers. An organization
attains customer focus when all people in the
organization know both the internal and external
customers and also what customer requirements
must be met to ensure that both the internal and
external customers are satisfied.
Transport Operations Management Management Principles Applied 52
Sustainable Human Resource Development in logistics services
for ASEAN Member States
8 Principles of ISO
• Leadership
Leaders of an organization establish unity of
purpose and direction. They should go for
creation and maintenance of such an internal
environment, in which people can become fully
involved in achieving the organization's quality
objective.
8 Principles of ISO
• Involvement of people
People at all levels of an organization are the
essence of it. Their complete involvement enables
their abilities to be used for the benefit of the
organization.
• Process approach
The desired result can be achieved when
activities and related resources are managed in
an organization as a process.
Transport Operations Management Management Principles Applied 54
Sustainable Human Resource Development in logistics services
for ASEAN Member States
8 Principles of ISO
• System approach to management
An organization's effectiveness and efficiency in
achieving its quality objectives are contributed by
identifying, understanding and managing all
interrelated processes as a system. Quality
Control involves checking transforming resources
in all stages of production process.
8 Principles of ISO
• Continual improvement
One of the permanent quality objectives of an
organization should be the continual
improvement of its overall performance,
leveraging clear and concise PPMs (Process
Performance Measures).
• Factual approach to decision making
Effective decisions are always based on the data
analysis and information
8 Principles of ISO
• Mutually beneficial supplier relationships
Since an organization and its suppliers are
interdependent, therefore a mutually beneficial
relationship between them increases the ability of
both to add value.
Advantages of ISO
• Creates a more efficient, effective operation
• Increases customer satisfaction and retention
• Reduces audits
• Enhances marketing
• Improves employee motivation, awareness, and morale
• Promotes international trade
• Increases profit
• Reduces waste and increases productivity
• Common tool for standardization
Transport Operations Management Management Principles Applied 58
Sustainable Human Resource Development in logistics services
for ASEAN Member States
5S
5S is the name of a workplace organization method
that uses a list of five Japanese words: seiri, seiton,
seiso, seiketsu, and shitsuke. Transliterated or
translated into English, they all start with the letter
"S".
5S
1. Seiri (整理?, sort)
Remove unnecessary items and dispose of them
properly
Make work easier by eliminating obstacles
Reduce chance of being disturbed with
unnecessary items
Prevent accumulation of unnecessary items
Evaluate necessary items with regard to
dept/cost/other factors.
Transport Operations Management Management Principles Applied 60
Sustainable Human Resource Development in logistics services
for ASEAN Member States
5S
2. Seiton (整頓?, straighten or streamline)
Arrange all necessary items in order so they can
be easily picked for use
Prevent loss and waste of time
Make it easy to find and pick up necessary items
Ensure first-come-first-serve basis
Make work flow smooth and easy
Can also be translated as "set in order"
Transport Operations Management Management Principles Applied 61
Sustainable Human Resource Development in logistics services
for ASEAN Member States
5S
3. Seiso (清掃?, shine)[edit]
Clean your workplace completely
5S
5. Shitsuke (躾?, sustain)[edit]
To keep in working order
Also translates to "Self-Discipline" meaning to do
without being told
5S Additional S’s
Other phases are sometimes included e.g. safety,
security, and satisfaction. These however do not
form a traditional set of "phases" as the additions of
these extra steps are simply to clarify the benefits of
5S and not a different or more inclusive
methodology.
5S Additional S’s
Safety[edit]
The phase, "Safety", is sometimes added.[3] There is
debate over whether including this sixth "S"
promotes safety by stating this value explicitly, or if
a comprehensive safety program is undermined
when it is relegated to a single item in an efficiency-
focused business methodology.
5S Additional S’s
Security
The phase, "Security", can also be added. To
leverage security as an investment rather than an
expense, the seventh "S" identifies and addresses
risks to key business categories including fixed
assets (PP&E), material, human capital, brand equity,
intellectual property, information technology, assets-
in-transit and the extended supply chain.
ERGONOMICS IN T.O.M.
The International Ergonomics Association defines
ergonomics or human factors as follows:[5]
“Ergonomics (or human factors) is the scientific
discipline concerned with the understanding of
interactions among humans and other elements
of a system, and the profession that applies
theory, principles, data and methods to design in
order to optimize human well-being and overall
system performance.”
—International Ergonomics Association
ERGONOMICS
Work system
Environment
Man
Equipment
CONCLUSION
CHAPTER 3
ROLE OF TRANSPORT OPERATIONS IN
LOGISTICS
LOGISTICS
• According to the Council of Logistics Management,[3]
Logistics includes the integrated planning, control,
realization, and monitoring of all internal and
network-wide material, part, and product flow,
including the necessary information flow, industrial
and trading companies along the complete value-
added chain (and product life cycle) for the purpose
of conforming to customer requirements.
LOGISTICS
• Logistics is the process of planning, implementing,
and controlling the effective and efficient flow of
goods and services from the point of origin to the
point of consumption.
Inbound logistics
Outbound logistics
FUNCTIONS OF T.O.M.
MULTIMODAL TRANSPORT IN
PERSPECTIVE
speed
reliability
Conclusion
CHAPTER 4
SOME PRACTICAL METHODOLOGIES, TOOLS,
AND TECHNIQUES
SIX SIGMA
SIX SIGMA
The DMAIC project methodology has five phases:
1. DEFINE the system, the voice of the customer and
their requirements, and the project goals,
specifically.
2. MEASURE key aspects of the current process and
collect relevant data.
3. ANALYZE the data to investigate and verify cause-
and-effect relationships. Seek out root cause of
the defect under investigation.
Transport Operations Management Practical Methodologies, Tools, and Techniques 100
Sustainable Human Resource Development in logistics services
for ASEAN Member States
SIX SIGMA
The DMAIC project methodology has five phases:
4. IMPROVE or optimize the current process based
upon data analysis using techniques such as
design of experiments, poka yoke or mistake
proofing, and standard work to create a new,
future state process. Set up pilot runs to establish
process capability.
SIX SIGMA
The DMAIC project methodology has five phases:
5. CONTROL the future state process to ensure that
any deviations from the target are corrected
before they result in defects. Implement control
systems such as statistical process control,
production boards, visual workplaces, and
continuously monitor the process.
Surroundings
Suppliers
Systems
Skills
Safety
KEY POINTS
Continued ...
• Work out the major factors involved.
• Identify possible causes.
• Analyze your diagram.
• Try using Cause and Effect Analysis – you'll
find that they are particularly useful when
you're trying to solve complicated problems.
EXERCISES
Iterative Design
MEASURING
EFFICIENCY AND EFFECTIVENESS
Management Effectiveness
Management Efficiency
EFFICIENCY FORMULA
FREIGHT COST
TRANSPORT MODE
Simple
Flowchart
Process step
Decision
JOB KNOWLEDGE
PERFORMANCE: SKILLS
SKILLS NEEDED:
• Leadership
• Communication (written/ oral...meetings, conference,
etc.)
• Decision-making
• Political & cultural awareness
• Negotiation
• Conflict management
• Problem solving
• Budgeting
• Other organizational skills....
Transport Operations Management Practical Methodologies, Tools, and Techniques 130
Sustainable Human Resource Development in logistics services
for ASEAN Member States
LEADERSHIP SKILLS
• Goal setting: vision, goals, and objectives
• Analytical skills
• Establishing limits and priorities
• Guiding, directing, teaching, delegating
• Motivating and encouraging
• Bringing out the best in others
• Getting people to work together
– Dwight Eisenhower:
PROBLEM-SOLVING SKILLS
DECISION-MAKING
1. Never decide under extreme emotions
COMMUNICATION
BUDGETING SKILLS
• Know your budget
• Find the right suppliers in the right quantities and
right qualities
• DO NOT SPEND WHAT YOU DONT HAVE!
• Speed
• Complexity ( Technical Skills)
• Creativity
• Organizational Learning
• Single Point of Contact To Promote Order and Follow
Through
FOCUS ON PEOPLE
CONCLUSION
FEDEX once embraced the slogan: People, Service, Profit.
We cannot overemphasize the critical role of people in any
business or activity even in view of overwhelming
developments in automation and industry. On the other
hand, work processes have to be improved internally and
aligned to customer expectations.
CHAPTER 5
INTRODUCING TRANSPORT MANAGEMENT
SYSTEMS
TMS Defined
• A transportation management system (TMS) is a subset
of supply chain management concerning transportation
operations and may be part of an enterprise resource
planning system.
• A TMS usually "sits" between an ERP or legacy order
processing and warehouse/distribution module. A typical
scenario would include both inbound (procurement) and
outbound (shipping) orders to be evaluated by the TMS
Planning Module offering the user various suggested
routing solutions.
FLEET MANAGEMENT
Fleet Management is a function which allows companies
which rely on transportation in business to remove or
minimize the risks associated with vehicle investment,
improving efficiency, productivity and reducing their overall
transportation and staff costs, providing 100% compliance
with government legislation and many more. These
functions can be dealt with by either an in-house fleet-
management department or an outsourced provider.
FLEET MANAGEMENT
Fleet management includes commercial motor vehicles such
as cars, aircraft , ships, vans and trucks, as well as rail cars.
Fleet or vehicle management can include a range of
functions, such as vehicle financing, maintenance, telematics
(tracking and diagnostics), driver management, speed
management, fuel management and health and safety
management.
Activity / Plan
Daily and weekly inspections by drivers / operators
Reporting and documenting defects to Fleet Services
Prioritisation of works
Functionalities of TMS
1. PLANNING AND DECISION- MAKING
-prevention, control, fall back or
contingencies, proactive,....
2. TRANSPORT EXECUTION
3. FOLLOW-UP
4. MEASUREMENT AND FOLLOW
THROUGH
5. COORDINATION AND
COMMUNICATION: external and
internal
Transport Operations Management Introducing TM Systems 148
Sustainable Human Resource Development in logistics services
for ASEAN Member States
Continued…
Key functional objectives are:
Develop safety conscious, cost effective management
strategies for the long term
Provide a defined level of service and monitor
performance
Effectively manage risks associated with fleet assets
and possible asset failures and
Continuous improvement in fleet asset management
practices
Route Planning
The number of calls to a particular delivery point in any single
day is limited.
The total vehicle travel in any day is limited and the driver's time
is limited.
Vehicles have a fixed carrying capacity.
Volume of goods for each delivery point is known and each
drop has a location for which there is an established driving time
to and from the warehouse or to the next delivery point.
The quantity of goods delivered to any drop is smaller than the
vehicle’s carrying capacity and there is an established time to
deliver/collect at the drop point.
Transport Operations Management Introducing TMS 157
Sustainable Human Resource Development in logistics services
for ASEAN Member States
EXPAND…….
• Distance (mls) / Volume (in gallons) consumption (mpg)
• Cost (£ x 100) / Volume (in litres) pump price (p/l)
• Cost (£ x 100) / Distance (mls) cost per mile (ppm)
• Driver education.
• Ensuring that the vehicles are fuel efficient, suitable for their
intended task, have the lowest acceptable emissions are all key
elements. However driver behaviour is also fundamental to
attaining high levels of fleet efficiency.
• The fourth ingredient is the management will to bring and keep
the costs under control. At heart, the calculations are simple:
• Distance (mls) / Volume (in gallons) consumption (mpg)
• Cost (£ x 100) / Volume (in litres) pump price (p/l)
• Cost (£ x 100) / Distance (mls) cost per mile (ppm)
CONCLUSION
CHAPTER 6
SUSTAINABLE TRANSPORTATION
THE “GREEN” ALTERNATIVE
Transport Sustainability
Sustainable transport refers to the broad subject of
transport that is or approaches being sustainable. It
includes vehicles, energy, infrastructure, roads, railways,
airways, waterways, canals, pipelines, and terminals.
Transport operations and logistics as well as transit-oriented
development are involved. Transportation sustainability is
largely being measured by transportation system
effectiveness and efficiency as well as the environmental
impacts of the system.
Transport Operations Management Sustainable Transportation 161
Sustainable Human Resource Development in logistics services
for ASEAN Member States
Finally, a green fleet will also be a safe fleet; its drivers will
be trained, encouraged to drive safely and efficiently and
not put under pressure to do excessive hours behind the
wheel. It will choose vehicles with safety in mind – not just
that of the occupant but also of other road users.
STAKEHOLDERS IN T.O.M.
• Company and its shareholders
• Shippers and consignees
• Third party service providers
• Government agencies
• Environment
• Community or society in general
• Port authorities and handlers
Ports,
Infrastructure
, Government
Entities
ICT-
Process Customer
Automation
Transport
Operations
Internal
Units: Third
Trucking,
CSSV, Parties
Sales, Admin
CONCLUSION
There was no need to worry about the environment
before the introduction of machines running on
different types of fuel. And yet population explosion
and the detrimental effect of human behavior not to
mention harmful emissions from mobile and
stationary industry sources have constrained us to
do something decisive and fast for the next
generations.
CHAPTER 7
GUIDELINES ON OUTSOURCING
OUTSOURCING DEFINED
Advantages
CHAPTER 8
SOME POINTERS
• Process management
“If you don’t have your process controlled, its output is a
matter of luck.”
• Change management
“Handling change is the biggest problem that most
organizations face.”
• Knowledge management
“When a person dies, a library is lost. Knowledge takes us
from chance to choice.”
• Resource management
“Even the best ideas need resources to transform them
into profit.”
Transport Operations Management Some Pointers 186
Sustainable Human Resource Development in logistics services
for ASEAN Member States
CONCLUSION
CHAPTER 9
SUMMARY
SUMMARY
CHAPTER 10
CASE STUDIES
Case Studies
Case Studies