Road to nowhere

Notwithstanding the fallout from nearby volcanoes, we're pretty fortunate in the UK that we don't have to contend with apocalyptic natural disasters. Agreed, there have been some desperate situations following flooding, but those aside, our experience pales into insignificance when compared with those nations that endure earthquakes, hurricanes and the like. For most manufacturers - particularly those who have embraced true just-in-time production - any disruption to the supply chain can cost them dear. At the time of writing, for example, flights have now returned to the skies following the volcanic ash disruption, yet Nissan has been forced to suspend production - not in Sunderland, but at two of its factories in Japan, which are waiting for sensors to arrive from Ireland. Closer to home, the British weather does its best to wreak havoc on the best laid plans. Last winter was the severest for decades, with many parts of the UK cut off for several days at a time, with roads impassable. Even without bad weather, Britain's road infrastructure is often stretched to the limit - and sometimes beyond. The ability to guarantee a delivery slot is a critical part of any logistics company's offering. Failing to meet these deadines can be disastrous, both for the logistics firm and the customer, as Gary Phillips, commercial manager for Rhys Davies Freight Logistics, explains: "When the bad weather caused havoc on the roads, we were hit as hard as other logistics companies, with several vehicles unable to leave the depot to make deliveries." One day, he recalls, the police prevented any vehicles leaving the Rhys Davies Haydock depot as the roads were so treacherous. "It cost us a lot of money," he admits. There are several ways in which the 3PL can combat ever increasing difficulties with making reliably timed deliveries. Regional stocking, for example, proved a successful option during the bad weather. Having product stored closer to the end user minimises the risk of disruption. Night-time deliveries, too, allow hauliers to deliver when roads are at their quietest. "Night-time deliveries allow us to use vehicles across a 24-hour period, making us more cost effective," says Phillips. Similarly, regional consolidation, he says, enables continuity of service. Rhys Davies takes deliveries at its depots from other hauliers and distribution firms, then delivers the product to some of the more remote locations in that area with other similar consignments. "Many hauliers will run from Cardiff to Pembroke, for example, to deliver just one pallet - a distance of almost 100 miles each way," says Phillips. "With regional consolidation, they can drop it into our Cardiff depot and we deliver for a small fee." This has additional environmental benefits in terms of one full load on the road instead of several part loads, though this can have limitations if time-critical deliveries are required. Using fleet management technology is another way to boost delivery reliability - both for manufacturers running their own vehicles and for logistics businesses. TDG, for example, is using software from Paragon to optimise vehicle routing and scheduling for glass maker Pilkington's European building products division, delivering glass to window and door manufacturers, as well as to building sites. The centralised distribution planning system runs five of the TDG/Pilkington sites and is proving beneficial. "Paragon has brought new levels of planning and routing accuracy to optimise our routes, fleet and driver resources for the Pilkington contract," says TDG's Nick Mancz. TDG is also using the system for other operations and he says it has replaced a "time-consuming, complex and inflexible manual 'bus route' system". TDG can now generate plans from its Oldbury site for the rest of the UK. It optimises routes, loads and even vehicle selection based on access constraints, allowing TDG to decide what type of truck or van to use for the delivery. "Accuracy has replaced guesswork," says Mancz. No matter how sophisticated the technology, extreme weather can and will disrupt operations. Norbert Dentressangle Transport Services (NDTS) did cope during the winter snow, but only thanks to meticulous planning and co-ordination. The company is the transport arm of the Norbert Dentressangle Group and counts many UK manufacturers among its customer base, including domestic appliance manufacturer SEB Group (which makes Tefal, Moulinex and Rowenta products), tile adhesive maker Building Adhesives, and tissue and toilet paper manufacturer SCA Hygiene Products UK. Mike Bridges is NDTS's operations director for the northern half of the UK and is responsible for transport operations across the UK together with his southern counterpart, Sebastien Desreumaux. "As soon as we knew we'd have problems with the snow - which was on more than one occasion this winter - Sebastien and I set up the equivalent of a war room," says Bridges. "We had Met Office forecasts displayed around the wall so we could see where bands of snow were predicted to move over the following 24 hours." The weather predictions were coupled with four-hourly conference calls to all contract managers and site managers: "This enabled us to develop an understanding of the conditions at each depot and get a feel for the likely conditions over the next four hours." NDTS has ten depots across the UK. During the worst weather, the company was able to switch areas and re-route freight to those locations which were less affected. Bridges cites one example: "We had one depot that was snowbound, although part of its delivery area was not. So we switched freight for that delivery area to another depot and were able to distribute it from there." Communication was vital throughout the process, not only within NDTS but also with the customers. "Following the four-hourly conference call, the contract managers kept customers informed of the challenges and any specific issues they might face in the next four-hour window." As the weather conditions changed, priorities were continually reassessed. As soon as the disruption eased, the backlog could be addressed: "We spoke to all affected clients to find out their requirements so we could make sure the most critical deliveries got through first." It was undeniably a challenging period, says Bridges, but hour-by-hour planning, fast response times and continual communication helped the business to steer through it. NDTS's UK operation works as a pallet network during the day - not the traditional pallet network model, this one is soley for Norbert Dentressangle vehicles - and primarily an automotive network through the night. It also delivers packed chemicals, raw materials and finished goods. Arguably, it's the size and scope of businesses like NDTS that enables them to respond dynamically to situations like those experienced last winter. Smaller local hauliers would struggle to react and respond quickly and effectively because they just don't have the necessary infrastructure. Bridges agrees: "Small transport firms are constrained by their operating centres - the traditional local haulier probably only has one operating centre. So if they are hit by bad weather, they are restricted in terms of how they can cope. We have the ability to switch from site to site so we're much better able to adapt in that situation." Manufacturers operating their own fleets face similar challenges. They are unable to use scale to their advantage so may have to face the shutdown of either their own plant or that of their customer if inbound or outbound deliveries are prevented, whether for traffic reasons, weather or any other unexpected situation. Own fleet or not, if the thought of responding to a delivery emergency fills you with dread, spare a thought for Evolution Time Critical. Its business model centres on just that - emergency logistics. The firm was established 10 years ago when the founders realised there was an opportunity to provide back-up logistics services for the automotive sector: it's now a £10m business which responds to pleas for help from automotive OEMs and their supply chain, though increasingly the calls come from manufacturers from other sectors, too, and logistics firms. Its promise? It will pull out all the stops to arrange delivery of parts or materials, often chartering helicopters and aircraft as well as road vehicles. It's not an easy business to run in terms of forecasting demand. As Brennan says, "nobody plans to have an emergency." During the most recent cold snaps, there was an upsurge in demand for Evolution's services. The company arranged multiple urgent deliveries across Europe as manufacturers strove to keep production lines running amid serious traffic difficulties caused by the heaviest snow for decades. "Many manufacturers were counting on emergency logistics providers to help keep production lines running as the traffic chaos increased the strain on already stretched supply chains," says Brennan. In one instance, he says, the company saved a UK-based manufacturer £270,000 by helping to prevent a 30-minute delay to its production line. The parts were being transported from a supplier in Coventry to a tier one plant in the north east. "The driver got as far as the M1 but had to turn back because of the snow. The company called us and we arranged for two helicopters. The van returned to base, we unloaded the vehicle and flew the parts to the customer at ten-minute intervals. All parts arrived in around an hour and production continued uninterrupted." In fact, the total time from original request to arrival of parts was just three hours. This is a typical example of what Evolution does, says Brennan. During the floods of 2007, the company was called upon to find a way to get some components from Sheffield to Birmingham. The journey usually took less than two hours by road, but this was not possible because of flooding around the factory in the Don Valley and there was serious traffic congestion on the roads which were still open in the area. Evolution decided the most effective delivery method was to avoid the roads completely: less than 40 minutes after receiving the call, a helicopter had landed in the component supplier's car park and collected the parts. Delivery took place 105 minutes after the first call, even faster than the normal road journey. Clearly this level of service comes at a price but, as Brennan points out, "the cost of instructing us is always less than the cost of not receiving the parts". Pricing is complex: "Everything is bespoke and it depends on the availability of helicopters, fixed wing aircraft or road vehicles. The receiving factory may have a suitable landing site for a helicopter; if not, we may use a fixed wing aircraft and allow for a short delivery time from a local airport." Short runs, such as from Sheffield to Birmingham, would cost from £2,000; longer trips, for example from the London area to Newcastle, would be double that. Not insignificant sums, but small compared with the potential consequences of non-delivery. More non-automotive firms are using emergency logistics, as lean manufacturing and reduced inventory becomes increasingly commonplace in other sectors. "The leaner the supply chain, the more need for support in case it falls over," says Brennan. Aside from a hotline to the Met Office or the Highways Agency, is there anything that manufacturers could do to minimise their exposure to traffic congestion or severe weather disruption? NDTS's Mike Bridges advises strategic planning: "Those manufacturers running their own fleets should ask themselves whether they really have the critical mass of customer base and of product to be able to distribute goods as efficiently and competitively as a transport specialist. With scale comes efficiency and cost reduction, and their competitors may be tapping into that by using someone like us." And Evolution Time Critical's Brad Brennan urges all manufacturers to have a 'what-if' plan: "Most manufacturers have smart supply chains these days, but one area where they fall down is contingency. All manufacturers should have somewhere to turn if a critical situation arises."