Delivery Systems
Questions we need to consider.
Why is a good transport and Delivery System important?
The Factors to consider in choosing a Delivery System
Advantages and Disadvantages of Delivery Systems
Recent trends and developments in delivery systems
Calculating Delivery Times
Key Notes for today’s class
A good transport and delivery system ensures:
- Safe and timely delivery of raw materials to manufacturers.
- Safe and timely delivery of finished goods to wholesalers, retailers and manufacturers.
- Safe and planned transport of goods to and from a country.
- Easy access for people to and from work.
Factors to consider when choosing a delivery system:
COST
RELIABILITY
CONVENIENCE
SPEED
TYPE OF GOOD
DESTINATION
Factors to consider when choosing a delivery system:
Remember: Many Factors need to be considered when choosing an appropriate delivery system. Some systems may be fast, but expensive, cheap but unreliable. And some systems that are expensive may be the only way to transport goods.
The following are some of the important factors we need to consider when choosing a delivery system:
COST:Anything that increases costs will reduce a product’s competitiveness. Therefore, it is important to select a method of transport that does not greatly add to costs. The cheapest system will keep the cost of the channel of distribution down which may keep the cost of the selling price of the good down.
However, the cheapest system may not be the most effective system as it could affect the quality or reputation of the product.E.G. Delivering letters overseas using a train.
SPEED:Producers usually operate with strict deadlines, so they need fast systems that will allow them to meet delivery dates.
The cost of the transport may not be the deciding factor when the product is required urgently. If it is something like a part of a car or plans for a big project, it may be more cost effective to have the part delivered immediately rather than loose a day’s production waiting for the part.
TYPE OF GOOD:Some goods can be delivered through the use of systems that are specifically designed for the product. This will limit the choice of transport system. E.G. Cuisine de France uses trucks with freezers on board to deliver goods to shops.
DESTINATION:Some goods may require various different forms of transport to deliver a good depending on the location of the buyer in relation to the seller. Because air transport is expensive, the goods transported usually have high value.
RELIABILITY: The firm’s reputation can be destroyed if it doesn’t deliver goods as promised. Therefore the firm must use a transport system that guarantee the delivery of goods when required. E.G. Domino’s Pizza, FedEx.
CONVENIENCE: A lot of transport systems such as ships, planes and trains operate under set time tables. Therefore firms will need to choose transport providers that operate at suitable times.
Some Key Terms in Delivering Goods
Common Carrier- Company that transports goods for another company for a fee. Trucking companies, public airlines, railways and bus services are also examples of common carriers.
Freight- Refers to the load being carried.
Carriage- This is the charge for transporting
Courier- Person or company used to deliver documents and packages by hand, example DHL or Fed Ex.
Common Delivery Systems
Road Rail Sea Air Pipelines
Road
Advantages / DisadvantagesFast over short distances / Traffic congestion
Relatively cheap / Bad weather can disrupt
Not subject to timetables / Slow over long distances
Rail
Advantages / DisadvantagesFast over long distances / Fixed routes
Reliable and safe / Usually subject to timetables
Not subject to traffic congestion / Expensive over short distances
Sea
Advantages / DisadvantagesSuitable for bulky goods / Usually subject to timetable
Relatively cheap over long distances / Bad weather can disrupt
Suitable for containers / Slow over long distances
Air
Advantages / DisadvantagesFast over long distances / Timetable
Safe / Bad weather can disrupt
Suitable for small expensive goods / Expensive, especially over short distances
Pipelines
Advantages / DisadvantagesVery good safety record / Expensive to set up
Relatively cheap / Suitable for only gases and liquids
Task
In pairs, discuss what would be the most effective method of delivery system you think should be used for the following and why:
- A DELIVERY OF HB ICE CREAM TO SPAR.
- AN URGENT MACHINE PART FROM DUBLIN TO LONDON.
- DELIVERY OF CARS IN CONTAINERS FROM LIVERPOOL TO DUBLIN PORT.
- DELIVERY OF CHEAP AND BULKY GOODS TO GALWAY.
- DELIVERY OF BREAD TO THE LOCAL SHOPS.
- DELIVERY OF EXPENSIVE JEWLERY TO AMERICA.
- DELIVERY OF KEGS OF GUINESS FROM JAMES’S GATE IN DUBLIN TO THE O2.
- DELIVERY OF CHEAP BULKY GOODS IN CONTAINERS TO WALES.
- DELIVERY OFAIRPORT FULE FROM DUBLIN PORT TO DUBLIN AIRPORT.
- DELIVERY OF DOMINO’S PIZZA TO A CUSTOMER
Modern Developments
Motorways- Large motorways with three or more lanes have been built- think of the M50 or M3 to Dublin from Navan.
Toll Roads- Modern technology (example toll tags) allows the driver to go through the toll without stopping or holding up traffic.
Luas- Light rail system for transportation around Dublin.
Calculating Delivery Times
Formula = Distance/Speed per hour + Time allowed for stoppages
Example 1
- A delivery company delivers goods to a destination 200 km away at an aver speed of 50km per hour
- The car driver takes a 15 minute break for every 2 hours of driving
- Calculate the amount of time it takes for the delivery to be made
Example 2
- A delivery company delivers goods to a destination 600 km away at an aver speed of 100km per hour
- The car driver takes a 30 minute break for every 3 hours of driving
- Calculate the amount of time it takes for the delivery to be made
Example 3
- A delivery company delivers goods to a destination 300km away at an average speed of 60km per hour
- The van driver takes a 30 minute break for every 4 hours of driving
- The delivery must be in for 9.00 am the following morning.
- Calculate the latest time the delivery driver can leave the base
Distance Tables
Cost of Delivery
Example
Calculate the total of a journey from Dublin to Cork from the following data:
- Distance from Dublin to Cork is 260km
- Diesel van will do 10km per litre
- Cost of Diesel is €1 per litre
- Van Drivers wages are €100 per day
- Annual van tax is €250
- Annual van insurance is €750
- Annual Repairs is €500
- The company operates 250 days in a year
Solution
Distance- 260 km
Number of Litres used = 260/10km per litre = 26 litres used
Cost = €1 per litre= 26 x 1 = €26
Drivers Wages= €100
Motor Tax = 250 per year, we want each day so 250/250 days = €1
Insurance= 750 per year, we want each day so 750/250 = €3
Annual Repairs = 500 per year, we want each day so 500/250= €2
26+100+1+3+2 = €132
Example 2
Calculate the total of a journey from Rosslare to Dundalk from the following data:
- Distance from Rosslare to Dundalk is 250km
- Diesel van will do 10km per litre
- Cost of Diesel is €2 per litre
- Van Drivers wages are €120 per day
- Annual van tax is €300
- Annual van insurance is €900
- Annual Repairs is €600
- The company operates 300 days in a year
Example 3
Calculate the total of a journey from Dublin to Galway from the following data:
- Distance from Dublin to Cork is 220km
- Diesel van will do 15km per litre
- Cost of Diesel is €1.20 per litre
- Van Drivers wages are €200 per day
- Annual van tax is €400
- Annual van insurance is €800
- Annual Repairs is €400
- The company operates 200 days in a year