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Time to take a fresh look at the key movers in 21st Century Supply Chains

Article from Roger Miles, MD Mole Solutions Ltd.

In the UK there are many examples of ‘World Class’ supply chains.  They include the complexity of supplying large supermarkets with thousands of different globally sourced products at low cost and with excellent service, lean stock systems in manufacturing organisations and efficient support supply chains to a wide range of essential services required by the modern consumer.  Unfortunately, the essential element that moves goods through nearly all supply chains, and frequently fails to do so,  is road haulage and in particular, the 44t heavy goods vehicle.  In this age of ‘Just in Time’ (JIT) deliveries, the latest DfT figures for journeys completed on time show that they ranged from a low of 68% to a high of 87.5%.  These figures reflect a situation where at best, one in eight deliveries is late and at worst, one in three is late.

 

Economic and environmental imperatives

The economic consequences of unreliable delivery timeliness are the need to provide extra stock, storage space, trucks and drivers to ensure the required service level is maintained.  It would be nice if delivery systems really could be JIT and not JIC, ‘Just in Case’.  The statistics do not present the reasons for the delays but every road user knows the effects of road works, accidents and the sheer volume of traffic on journey times.  The Eddington Study of 2006 estimated that congestion costs the UK economy in excess of £22bn and that “…the performance of the UK’s transport networks will be a crucial enabler of sustained productivity and competitiveness: a 5% reduction in travel time for all business travel on the road could generate around £2.5 billion of cost savings – some 0.2% of GDP”.  Significant numbers at any time but, particularly so in these difficult economic times!

 

Transportation systems imperatives

With the benefit of hindsight it is easy to understand the way in which road haulage came to dominate freight movements. But is it the best transportation system for the 21st century?  Given the customers to be served, the sources to be collected from and the nodal points needed to combine loads into economic delivery sizes, would planners really have designed the main transport unit of a complex, ‘World Class’ supply chain as one that used the same transport infrastructure as passenger vehicles, is limited to a speed of  80% of that of the passenger carrying unit, is 15m long, weighs 16 – 18t when empty, is powered by an engine burning a fuel that gives off harmful emissions and is controlled by someone that must stop every few hours for a break?  In the 21st century there must surely be a better way!

 

Supply chain handling

The basic components of the supply chain have changed dramatically in the last sixty years.  Shopping has moved from small outlets to large and very large hypermarkets and from just the centre of towns to central and out of town locations. Sources of product have moved from local, regional and national with a limited amount of imports to a dramatic increase in the level of imports and thus, less local, regional or national production.  This is particularly the case with regard to manufactured goods.  Of perhaps more importance is the fact that the handling unit has changed from a multitude of cartons, packages, and sacks to a modular system of cartons, tote bins and trays that fit as effectively as possible into roll cages and onto pallets.  Not forgetting the shipping container – the box that changed the world!

 

Distribution Centres provide a fantastic opportunity 

The growth of National Distribution Centres in the UK’s ‘Golden Triangle’, Regional Distribution Centres and National Strategic Corridors has resulted in a very structured network that optimises the supply chain cost.  This concentration of product flows inevitably results in congestion at peak times.  It does however, also provide an opportunity for an innovative, cost effective and low social and environmental impact form of freight transport that would help to relieve the pressure on the road network.

 

Breakthrough innovation

The opportunity uses the three dimensional land of the infrastructure footprint with a freight transport system designed only for unitised freight.  The normal maximum size of a unit of freight transport is a 1000 by 1200mm pallet loaded to a height of 1800mm.  Pallets of this size can be carried in capsules that will operate in pipelines with an internal diameter of 2.3m.  These pipelines can be buried in the ‘sterile land’ within the total corridor of the motorway/trunk road/railway line and integrate with the existing National and Regional Distribution Centres that are typically strategically located close to the trunk road network intersections.

 

Freight pipelines 

The automated capsules would carry two pallets, be electrically powered, ideally from renewable sources, and have very low maintenance costs.  The design would incorporate less than a hundred parts rather than the 40 000 parts of a 44t truck.  A recent feasibility study undertaken for DEFRA showed that in the aggregate sector the variable operating costs of a capsule pipeline system were approximately 15% of the road operating costs.  The cost of constructing a network of pipelines was also shown to be excellent value for money even at low levels of utilisation (10% Internal Rate of return at less than 10% utilisation).  In addition, the potential social and environmental benefits are considerable.  In the study, the widespread use of freight pipelines generated savings equivalent to half of the operating cost savings.

There is therefore, a 21st century solution to the freight transportation system that is economically viable, uses proven technologies combined in an innovative manner and with the same extremely low social and environmental impact that existing water pipelines have exhibited for many years.

Strategic alliances would give the UK a world-leading supply chain solution

From concept to reality is at first glance an insurmountable task.  But, on closer examination there is a potential strategic alliance that could realise the financial, social and environmental benefits that in addition would give the UK a world leading technological solution to what is after all, a global problem.  The DfT freight transport statistics show that nearly a third of all tonne kilometres on the UK roads are made by the food and drink sector.  That sector is dominated by a few major players.  An industry initiative could see the feasibility, design, construction and operation of an expanding network of freight pipelines.  Impossible!  It would never be possible to get the major supermarket players to work together the sceptics would suggest.  They said the same about the bank transfer system before it was established in the early 1970s; and major oil companies have been sharing pipelines for the last fifty years.

 

The time to act is NOW

The time has come for action.  The thinking has been done and studies undertaken to prove the viability of the concept.  Leadership from key players is needed to bring the concept to fruition and for the UK to continue to lead the world in supply chain excellence.

 

If you are interested in Roger's article and Mole Solutions Ltd, and you would like to learn more or discuss things in more detail, in the first instance, please contact John Ingram at the Transport ktn on john.ingram@transportktn.org.

 

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