the effects of fleet management on supply chain performance at AMSS

CHAPTER ONE

INTRODUCTION

Background of the Study.

Globally, fleet management has been a challenging aspect in most supply chains performance. The demand of fleets keeps increasing in recent years even in the midst of crisis and as; one can even term it as a necessary evil especially with the growing rate of industrialization and globalization. Transport and logistics plays a major role in the world’s economy and is a significant contributor at both national and local levels in any country. This sector underpins the economy, enabling the efficient movement of goods, services and people. The increase in the concomitant management requirement vehicle fleet operations has outweighed the human mental capacity as advances in the technology of vehicular dynamics and design increase year after year. Over the past decades, firms have faced unprecedented changes such as globalization and internationalism, the rapid advancement of information technology chan and peel(1998), higher value of completion Car (2000), increased availability and flexibility of product/service Ahmad and Schoeder, (2001) as well as greater internal and external customer’s needs (Marjanovic, 2000).

       Firms are, thus, no longer able to satisfy the various demands of their customers affectively with just product and price. They must also increase the performance of the product in terms of reaction speed, delivery policy, information services and flexibility. For this reasons, firms are, in many instances, being forced to redesign their internal processes using different method. Today, information technology(IT) is recognized as one of the most prevalent facilitators of such process changes( Chan & Land, 1999:311). IT not only enable firms to redesign their internal processes but it also help to improve their competitiveness in both local and international markets(Motwani & Kumar, 1998:964). The ability to track and control the movement of vehicles every minute may translate into hundreds of dollars as regards an organization’s bottom line. Necessary cost, such as fuel and employee over time, may be closely monitored and verified to ensure that  a company is operating at optimal efficiency. For example excessive vehicle idling not only uses fuel, but also causes unnecessary engine wear and tear.                       

         With real time tracking and by accessing the appropriate reports, fuel use may be drastically reduced by as much as 20%. Some companies have even rewarded their employees for paying attention for their fuel use; that is driving with the interest of the company in mind. Overtime cost are another significant expense that may be decreased with real time monitoring, as timesheets maybe compared to a report that lists a vehicle’s location and movement throughout the day. Productivity is yet another benefit of real time tracking accrued in planning and scheduling. The best aspect of GPS use have been conducted in developed countries like Europe and America Adriansen & Nielsen (2005); Bodaner (2001); Stopher et al.,(2007). There is little information available on the use of the fleet management system in Kenya and the only readily available information is the marketing of different options of various equipment and software systems. There is, thus, little conclusive evidence of the way in which the implementation of GPS fleet management system has changed internal processes in Kenyan firms. 

          For years, managers have relied on conventional manual system using driver log sheets, services forms and other paper record-keeping system to keep track of business fleet vehicle operations. To an extent much of this process has being automated but, variably, a fleet manager is required to sort through often incomplete sheet of paper in order to reconstruct vehicle record.  However, there is GPS technology available now which is design to track and record trip details that has help to improve supply chain performance.

              In the developed world like Italy, large logistics companies have largely invested in information communication technology (ICT) and have actively developed information systems and applications. Trucks are fitted with computer software that measures its diagnostics and takes regular readings of different systems in the truck. This is primarily centered on the engine, but the on-board diagnostics-II (OBD) includes sensors for the chassis, frame and hours before reaching a critical state, This helps to prevent accidents by alerting drivers often before the driver even realizes the situation is getting dangerous, failure to install such a software on trucks may leave the fleet manager at a desperate situation where the drivers behaviors or safety is not well monitored which puts the entire supply chain at a risk.VST also includes Electronic Stability Control (ESC) which helps to avoid a crash by significantly reducing the risk of your car going into a skid during a sudden emergency maneuver such as avoiding an obstacle in front of you. ESC identifies this risk early and stabilizes the car by braking individual wheels thus preventing a car crash which would cause damage of goods in the supply chain.

 Effective transport management is an important activity in every successful organization in the logistics industry and for that matter fleet management. Businesses that have the intention of excelling in their fleet management operations in today’s competitive market have to adopt effective and robust managerial strategies to coordinate resources that will facilitate their success and enable them to gain competitive advantage. The quest to achieve
competitive advantage has therefore put pressure on management to deliver faster and cheaper vehicle utilization  fleet management resulting in lower operating cost through better  planning (Gitahi and Ogollah, 2014: Jonson, 2008; Waters, 2009).

Fleet management in Cameroon is not in any way different form the global perspective as it manifests numerous inefficiencies as well which are of significant impact in the local supply chains. A research conducted by James and Alfred (2014) revealed that there is poor fleet management in  manufacturing and transport companies where transport and logistics was viewed as an area in which cost appear out of line with the benefits and services accruing to the customers.

It was from this perspective therefore that the government of Cameroon deemed the issue of promotion of international and national trade to be the objective in the national interest, and sought to advance shipments of agricultural and wood products as the country’s key commodities. A major obstacle to these goals, however, was the lack of adequate distribution systems (Gorge, 2013) ,.From this stand point, the issue of road improvement was a critical one.

Simon (2013) reviewed that a greater number of roads continued to be flooded during the rainy season, and while the percentage of paved roads increased from 7.6% in 1982 to 12.3% in 1995, the figure remains low and the ongoing need for better road maintenance and re-habitation capacity is recognized so as to better the transport sectors and hence improve the supply chain performance of organizations in the country.

 It is important to note  that fleet management for most organizations is seen as  having short term effect and short response periods (Martinez 2010) there are varied services offered through transport and most of these     

1.2 Statement of the problem

          Despite the development in technology like the Global Positioning System(GPS), Satellite technology, smart tags or barcodes to ensure better fleets management, ALPHA MARINE SHIPPING SERVICE Ltd(AMSS) is still faced with the challenge of effectively and efficiently managing their fleets so as to ensure supply chain performance. These problems include; insufficient vehicles, poor communication, repair and maintenance, fuel management, shortage of drivers.

          There have been delays in deliveries at Alpha marine as a result of insufficient vehicles. The company owns just few vehicles that does supplies and deliveries to many different clients and customers in different places and as such the company finds it difficult to serve about three different customers at a time especially when they are located in different places say chantier naval and Bota or Douala.

       Also, inadequate knowledge on the implementation of tracking devices like the GPS, satellite technology, smart tags, has led to poor communication between the drivers and the company and as such it becomes so difficult for the company to know the exact position of a vehicle when it is on transit.

 Apparently, AMSS Limbe has witness a decrease in customer satisfaction, delays in deliveries due to longer lead times ( which is time taken in preparation of bids, making an award and placement of an order, the delivery time and the duration of time between receipting and actual payment), increase in operational costs due to the type of maintenance policy (corrective maintenance) put in place. Vehicle repair and maintenance is done only when there is breakdown hence leading to poor supply chain performance.   Repair and maintenance is another challenge that has led to longer lead times ( customer order cycle time), which is the time in which a customer is ready to wait for an order to be served. . This research seeks to find out fleet management and its effects on supply chain performance. However, as a result of the above challenges, some research questions were realized to guide the study.

1.3   Research Questions

• Main Research Question.
• What are the effects of fleet management on supply chain performance at AMSS
  • Specific Research Questions
• What are the fleet management methods used by Alpha marine to improve  supply chain performance at AMSS
• What are the effects of corrective maintenance, technology and manual record keeping on supply chain performance?
• What are the challenges in fleet management at Alpha Marine?

1.4 Research Objectives

• Main Research Objectives

• To investigate the effects of fleet management on supply chain .

1.4.2 Specific Research Objectives.

• To find out the   fleet management methods used by Alpha Marine to improve   supply chain performance
• To investigate how corrective maintenance, technology and manual record keeping affects supply chain performance at Alpha Marine?
• To proffer measures to some challenges to fleet management at Alpha Marine to improve supply chain performance.

TRANSPORT AND LOGISTICS PROJECT TOPICS WITH MATERIALS