in-house transport as a part of business logistics - Mihajlo Pupin

JOURNAL OF ENGINEERING MANAGEMENT AND COMPETITIVENESS (JEMC)Vol. 1, No. 1/2, 2011, 1-5IN-HOUSE TRANSPORT AS A PART OF BUSINESS LOGISTICSMiloslav SEIDL 1 , Zdeněk DVOŘÁK 21 Department of Technical Science and Informatics, Faculty of Special Engineering, University of Zilina, st. Majova 32,010 26 Zilina, Slovakia. Corresponding author. E-mail: miloslav.seidl@fsi.uniza.sk2 Research Department of Crisis Management, Faculty of Special Engineering, University of Zilina, st. Majova 32, 01026 Zilina, Slovakia.Accepted 3 October, 2011The paper deals with selected issues related to the enterprise management services. On the basis oftransport and transport logistics tool suggests possible rationalization of transport logistics. Thepaper stresses the role of in-house transport as an integrating element of internal logistics processes.The paper highlights the importance and possible elements of transport infrastructure factory.Keywords: in-house transport, logisticsINTRODUCTIONTransport as an activity due to the need forrelocation of material goods and people interested inlogistics has particularly important role. Therefore inessence, logistics processes are not feasible withoutspatial, temporal and structural changes of materialand information flows. Specialization of individualeconomic entities deployed specifically for certainactivities or products may cause the necessarychanges in place, condition, location and timechanges.Transport decisively influences the fulfillment of thebasic tasks of logistics - the supply of goods andservices in the right place at the right time, in theright amounts and administrative costs incurred. Inthe value chain adds value just moving productsfrom their site of origin to point of consumption,while also creating time contribution of fast andreliable transfer. This added value may create a rightonly in conjunction with other aspects, namely theright quality and quantity. Products damaged orsoiled during transportation do not decide any value,but rather the loss. The same applies to carriage ofexcess or insufficient quantity, (Seidl, Šimák 2007).TRANSPORT AND TRANSPORT LOGISTICSTransport ensures the movement of a products (butalso people, reports) to the place of consumption.Transport is a link between businesses and wholesectors of the economy. Compared with othersectors, transport is a number of peculiaritiesresulting from the performance of the functions.One of the characteristic features of transport is anintangible product that is not possible to produce forstock. This means that the service provided (changeof spatial object transportation) is directly consumedby transport users. Resolution processes ofmanufacturing of transport product from the processof consumption of this product reflect the followingterms:− the right to transport the product -manufacturing process is focused on internaltransport site operator, implementing andmanaging the movement of vehicles, includingtheir operational maintenance,− transportation that reflects the technological,economic and legal links with transport users, isfocused on external relations with other sectors ofnational economy, government authorities andcustomers.Optimization of material and information flows inthe logistics chain as one of the key goals oflogistics, is fully applicable to the traffic andtransport processes. Logistic approach to managingthe movement of goods on a transport network fromthe receipt of the shipment (shipper) after thetransfer (recipient) is the content of transportlogistics. Transport logistics deals with solvinglogistics tasks and measures to be implemented inthe preparation and implementation of transport. Itdeals with particular activities related to materialISSN 2217-8147©2012 University of Novi Sad, Technical faculty “Mihajlo Pupin” in Zrenjanin, Republic of SerbiaAvailable online at http://www.tfzr.uns.ac.rs/jemc

2 Seidl and Dvořákflow, the storage of finished products to sales,including examination of information relating tothese activities. (Figure 1).Transport logistics applies these rationalization tools(Gurr, 1999):− standardization of packaging and transport means,or ancillary transportation equipments (pallets,containers etc.),− increase the specific gravity of the load (moreweight and volume of transportation conditions),− reduction in of stocks through "sensitive"ordering policy given the current needs (takinginto account the expected fluctuations in demand),− adjust of production and other processes withinhigh speed,− temporal and spatial formation of all the outgoinghandling units,− handling spatial concentration (elimination oftrips),− establish the timing of linear transport(shortening waiting times),− reduce inventory by reducing the number ofexternal stores,− business or production scheduling (optimizationof material flow),− development of integrated information systems(reduction of times crossing point traffic controlprocesses in real time).Transport logisticsequalInfrastructureTraffic routes, scheduling, maintenance and management resourcesDevelopment of transport logisticsplusLogistics of transportationequalLogistics service deliveryReloading of goods, collection, factorage and storage of goods, transportation brokerageholder, communicating with customers, quality testing, labelingplusForwardingDisposition and optimal scheduling the deployment of existing transportation capacityFigure 1: Parts of transport logistics (Haase, 2002)For the distribution and transport systems are used anumber of the criteria. In logistics, traffic systemsassessed mainly from two aspects:− by a holder (land, air, water and pipelinetransport systems),− under the scope (in-house and out-plant transportsystems).IN-HOUSE TRANSPORT SYSTEMMANAGEMENTThe basic task is for in-house transport to ensureoptimum material flow occurring in the micrologisticsystem (the manufacturing enterprise,commercial enterprise, etc.). Duties in-housetransport includes the transportation of material, rawmaterials and intermediate input goods in thewarehouse, from warehouse to production(assembly) between production centers, andtransportation of finished products for shipping. Interms of the key business activities (manufacturing,service) is a factory transport ancillary activity, donefor their own use. This does not diminish itsimportance as a fundamental function in integratingthe overall logistics system business.The in–house transport position in the corporatemicro-logistic transport system is shown in figure 2.

JOURNAL OF ENGINEERING MANAGEMENT AND COMPETITIVENESS (JEMC) 3Formation, management and ongoing developmentof the factory is the main objective of trafficmanagement in-house transport system. This goalraises two basic tasks:− Optimization of logistics services for complexvariables into account to the whole value chainin-house. Creation and development of thefactory transport model must therefore define thecomprehensive logistics strategy for the companyto avoid partial optimization. Transport policyadopted by the factory based on determining thedegree of fulfillment of the requirements oforganizational component, using the services inthe factory traffic, (Lambert et al., 2000).AREAS OF BUSINESS LOGISTICSSUPPLYPRODUCTIONDISTRBUTIONSUPPLYMARKETIN-HOUSE TRANSPORTREVERSAL MATERIAL AND INFORMATION FLOWSDISTRIBUTIONMARKETMICRO-LOGISTICS SYSTEMFigure 2: Status of the in-house transport (Seidl and Šimák, 2006)− Adapting to the factory transportation thedynamic changes around. The crucial changes arelong term, which can be expected in advance(e.g., temporal and structural parameters of the ofmanufacturing company, forecasts of energysources for transport, etc.). Adequate response inhousetransport system for these changes is to beprepared in the form of scenarios. Moreover, it isnecessary to a factory transport was able toadjustment changes to the environment in shortterm(e.g. temporary changes to the plannedtransport requirements - type and quantity ofmeans of transport, place of loading andunloading time parameters), (Pernica, 2005).The basic elements of in-house transport system areshown in Figure 3.REPAIRBASISTRANSPORTTECHNOLOGYtrafficfacilitiestransportcorridorsTECHNICALBASIStransportmeansTRANSPORTLEGISLATIONFigure 3: Transport system elements (Seidl and Šimák, 2006)By location realization is possible in the factorytransport system to identify three types of transportperformances:− External, which provides material ndinformation flows outside the building business.This transport is close to the conditions and

4 Seidl and Dvořákparameters of public transport carried out byspecialized carriers;− Inter-objects which provide material andinformation flows between objects within anenterprise (warehouses, manufacturing andassembly halls, operations);− Intra-objects which provides material andformation flows within various business objects(store, workshop). These performances areassociated with a range of technology andhandling operations (measuring, weighing,counting quantity, cleaning).This divisions is to be taken into account whendeciding on the establishment of private transport(in-house), as well as the optimal distributiontransportation service between its own performanceinternal transport and external (foreign) carriers.This decision is particularly the external traffic (atypical example. in building organizations). Interobjectsand mainly intra-objects transport provideonly limited opportunities for the application ofexternal carriers (direct link to the technologicalprocesses of production, the need for specifictransport and handling means, competence in oneplace).Economic criteria are fundamental when deciding ontheir own or foreign transport. Except exact financialcosts and their expected return should be taken intoaccount of other criteria (operational performance oftransportation requirements, knowledge of theconditions by own staff, time and capacityutilization of vehicles).Draft in-house transport system based on thefollowing input parameters (Schulte, 1994):− transportation subject (structure, properties,method of packaging),− place where is the end of the movement,− transportation time and weight (volume) of thegoods.Own transport scheduling processes, the factorytransport includes:− disposition of fleet scheduling,− scheduling road networks,− information systems for transport networks,− scheduling the deployment of vehicles (transportcapacity allocation, utilization management,route planning, transport means).INFRASTRUCTURES OF IN-HOUSETRANSPORTThe factory transport infrastructure is part of theoverall enterprise infrastructure and its constructionis a crucial condition for ensuring the internalmaterial and information flows. It can be defined asa set of line and node elements strictly necessary forthe movement of vehicles, including ensuring thesecurity of this movement and also for themaintenance of vehicles and equipment in workingorder. In broadest definition includes internaltransport infrastructure themselves vehicles andequipments.It is built to ensure that these basic features:− ensure that legitimate users transportationrequirements,− guaranteeing the required transport service withina specified area,− ensure the defined quality levels traffic andtransportation processes with emphasis on thesafety of all these processes, as well as theintegrity of the subject shipment,− maximum respect for environmentalrequirements,− minimization of spatial and energy requirements.As in-house transport system normally uses multiplemodes of transport and its infrastructure is quitemultifaceted. The basic elements and devices are:− set aside areas (or land),− built transport routes (land rail, trackless,overhead rail, cable, pipe, special),− objects and equipment for crossing routes,avoiding, turning, running decommissioningvehicles (level, interchanges, rail),− spaces and buildings for operating along thetransport routes (for inspection, maintenance,repairs, etc..),− adjusted areas for loading operations (loading,unloading, transhipment means of transport),− interlocking, signals, lighting, security,information and communication devices andtraffic signs,− necessary the building service personnel andvehicles (administrative, parking, repair,inspection points, etc.),− other objects and devices that are part of theenergy infrastructure the enterprise and provide asource of energy (particularly electricity and fuel)to operate in-house transport system.Each of these elements is the operation of the systemas a whole different importance. It is thereforenecessary to distinguish those elements of

JOURNAL OF ENGINEERING MANAGEMENT AND COMPETITIVENESS (JEMC) 5infrastructure, the failure or withdrawal would resultin an extraordinary situation in the enterprise. Theseelements can be identified as critical and as a set ofcritical infrastructure. One of the challenges ofcorporate management is to assess and identify theelements of critical infrastructure, which issubsequently to be given special attention in theirconstruction, operation and protection.The process of identification and selection of criticalinfrastructure the enterprise is complicated andvirtually unique the each enterprise. In principle itcan be established only very general terms the areaof business activities that are most dependent on thecorrect functioning of traffic, and then determinewhich elements of transport infrastructure areabsolutely necessary. Criteria for selecting elementsof critical infrastructure must be based on theexpected impact of losing the functionality of aparticular element of (Law 45/2011, 2011):− health and lives of employees, possibly out ofenterprise (estimated numbers of killed andinjured),− the enterprise economy (range economic losses, asignificant decrease quality of output of goodsand services, impact on other partners in thelogistics chains),− threat to the environment,− time and severity of the possible loss ofproduction,− the possibility of temporary loss of productioncoverage using other sources.Quantification of the various the criteria must bebased on specific internal and external conditions ofeach the enterprise. Assessment the criteria must becomplex, applying appropriate methods multicriteriaanalysis.CONCLUSIONIn management and optimization of supply chains itis necessary to give permanent attention to transportissues. Share of the customer service quality andtimely delivery of consignments to undertakespecific expenditures, may constitute a significantproportion. Delimiting the scope of traffic to outplantand factory is the motive for the coordinatedsearch of reserves and savings to reducetransportation demands throughout the logisticschain. The factory quality management is achievedby optimal transport costs in other areas of tradelogistics, especially in storage and material handling.REFERENCES*** (2011). Law 45/2011 about critical infrastructure.Bratislava, SK: National Council.Gurr, R. (1999).Transportlogistik. Berlin, DE: FHTW.Haase, H. (2002). Grundlagen der Verkehrslogistik.Lambert, D.M., Stock, J.R., & Ellram, L.M. (2000).Logistika. Praha, CZ: Computer Press.Pernica, P. (2005). Logistika (Supply Chain Management)pro 21. století - 1. díl. Praha, CZ: Radix.Seidl, M., & Šimák, L. (2006). Doprava v krízovýchsituáciách. Nitra, SK: SPU.Seidl, M., & Šimák, L. (2008). Manažment rizík vdodávateľských reťazcoch. Zeszyty naukoweLogistyka i transport, 2(7), 75-84.Schulte, Ch. (1994). Logistika. Praha, CZ: VictoriaPublishing.ACKNOWLEDGEMENTThis paper was supported by the Slovak Researchand Development Agency under the contract No.APVV-0471-10