Uganda Cooperative
Transport Workshop:
Transaid Transport Management Manual
and basic costing for Transport
24th November 2011
Caroline Barber – Head of Programmes
Agenda
•
09:00 – 09:15 Introducing Transaid
•
09:15 – 10:30 The Transaid TMS manual
•
10:30 – Tea Break (30 mins)
•
11:00 – 13:00 Basic costing for transport operations:
– Key concepts
– Break out groups to costs own or ‘imagined’ transport operation
•
13:00 - Lunch
•
14:00 – 15:30 Presentations back to group
•
15:30 – Tea Break (15mins)
•
15:45 - Summary – what have we learned and creation of toolkit from this workshop
•
16:00 – 3 day workshop summary and next steps
•
17:00 Close
Introducing Transaid
Transaid History
• Transaid was the idea of
HRH The Princess Royal
• Founded by Save the
Children and CILT
• Roots from the mid- 1980’s
famine crisis in Sub-Sahara
Africa
• Independent charity 1998
The Southern Africa Drought
In the early 1990s there
was a call for more
vehicles to support
drought relief activities in
Malawi. The problem, the
appraisal team realised,
was that there was more
than sufficient transport
available.
The missing element
was effective transport
management systems.
Vision, mission and goals
Our vision & mission
“We seek a world where transport
contributes fully to a better quality of life”
We aim to reduce
poverty and improve
livelihoods and quality
of life in Africa and
across the developing
world
Our goals
• To improve access to
basic services through the
development of appropriate
transport management
systems
• To increase economic
opportunities through
increasing the capacity of
the transport and logistics
sector to operate effectively,
efficiently and safely
Why we exist
• Transport is essential for life
but is unavailable or unaffordable for many people
• Lack of transport denies access to basic needs
e.g. health care.
• Little aid money is allocated to training of transport
management skills and expertise
(most is spent on infrastructure)
Some Challenges
poor infrastructure poor maintenance
overloaded trucks shortage of skilled drivers
lack of legal enforcement poor transport
management goods costly to move
Where we work
Where we work
• West Africa
– Nigeria*
– Ghana*
• East Africa
– Tanzania*
– Uganda
• Southern Africa
– Zambia*
– Zimbabwe
– Madagascar*
*Where we have major projects
Our areas of expertise
• Transport Management
• Professional Driver Training
& Road Safety
• Community Managed Transport
• Supply Chain Strengthening (drug distribution)
Our areas of expertise
• Transport Management
• Professional Driver Training
& Road Safety
• Community Managed Transport
• Supply Chain Strengthening (drug distribution)
Transport Management Nigeria
Driver Training - Zambia
Results to date
Emergency Transport Scheme
with Nigerian Taxi Union
Transaid’s Transport
Management System (TMS)
manual
Introducing the TMS
• Transaid developed a TMS manual over 10 years ago
• Over 2500 TMS manuals have been distributed to over 50
countries since publication
• The key purpose is to provide day to day assistance in the
management of transport resources, particular focus within a
public health context
• Chapters 1-4 focus on long term processes and strategies
• Chapters 5-9 – tips and tools for more immediate and regular
implementation
TMS Self Learning Guide
• In 2009 Transaid developed the TMS into a Self-Learning
Guide for Local Transport Managers of Public Health
Services
• This was based on Transaid’s extensive work in promoting
best practice in transport management throughout Africa and
elsewhere.
• This guide presents sound principles of transport
management coupled with real-life experience. It was funded
by USAID | DELIVER PROJECT (part of John Snow
International).
•
http://www.transaid.org/projects/transaid-develops-tms-self-learning-manual-with-johnsnow-international
Components of the manual
• There are 9 key components to the self learning TMS
manual:
1. Operational Management
2. Financial Management
3. Fleet Management
4. Health & Safety
5. Human Resources
6. Monitoring and Evaluation
7. Situational Analysis
8. Outsourcing
9. Policy and policy development
• TMS manual also includes tools to be used, worked
examples and templates that can be photocopied
Module 1. Operational
Management
This module focuses on:
– Describing key personnel tasks and roles involved in
operational management
– Managing transport planning, vehicle distribution and
returns, and fuel supply
– Managing key routine operational tasks
– Using the appropriate forms to collect management
information
– Implementing standard operating procedures (SOPs)
Module 2. Financial
Management
This module focuses on:
– Understanding why financial management is important
for TMS in health service delivery
– Linking financial management to other components of
TMS
– Working out the best economic point of replacement for a
vehicle
– Accurately determining budgets that will control transport
costs
– Using a trading account to pay for transport costs more
effectively
Module 3. Fleet Management
This module focuses on :
– Avoiding unnecessary vehicle breakdowns;
– Improving the use of a fleet and prolonging its working
life
– Identifying basic operational and technical specifications
to choose the best vehicles for a fleet
– Recognising the importance of regular planned vehicle
maintenance
– Using and developing key maintenance schedules
– Managing maintenance activities and the personnel
responsible for them
– Safely, effectively, and efficiently managing the
distribution and delivery of supplies
Module 4. Health and Safety
• This module focuses on :
– Identifying key health and safety concerns for transport
management
– Monitoring and improving health and safety in your own
transport management system
– Managing accidents and incidents
– Understanding appropriate insurance coverage
Module 5. Human Resources
• This module focuses on :
– Explaining the relationship between transport
management and human resource development
– Creating an organisational chart, specifications, and job
descriptions for the staff in your transport structure
– Describing the basic principles of the recruitment process
that is used to begin building an effective transport
workforce
– Describing key human resource development processes
to help develop and retain a transport workforce
– Linking essential human resource management issues to
the development of an overall transport management
policy
Module 6. Monitoring and
Evaluation
• This module focuses on:
– Recognising how to collect and use information for
improving transport management and distribution
– Explaining the importance of having a structured
transport management information system
– Using Key Performance Indicators (KPIs) for transport
management and distribution (We’ll come back to this)
– Presenting, interpreting, comparing, and using KPIs for
improving decision making
Module 7. Situational Analysis
• This module focuses on:
– Describing the purpose of a situational analysis
– Advocating the need for a situational analysis to senior
managers
– Planning and implementing a situational analysis
– Analysing data from and reporting on a situational
analysis
Module 8. Is outsourcing an
option?
• This module focuses on :
– Defining outsourcing
– Describing the reasons an organisation would consider
outsourcing supply chain activities
– Recognising the steps for determining whether
outsourcing is a viable option to address an
organization’s identified needs
– Summarising key principles related to contracting and
contract management
Module 9: Policy and Policy
Development
• This module focuses on :
– Explaining why developing and reviewing policies are
important for implementing a TMS
– Understanding the difference between policy and
procedures
– Identifying who can provide information on transportation
policy issues in need of change and recommend specific
changes and how that information is channelled up to the
higher level
Tools that can help – Core TMS
forms
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Vehicle Check Sheet
Vehicle Log Book
Vehicle Defect Report for Vehicle Operators
Trip Authority
Period Movement Plan
Period Transport Schedule
Seven-day Transport Schedule
Period Transport Report
Period and Safety Issues
Vehicle Inventory
Vehicle Information Sheet
Crash/Incident Report
Crash/Incident Follow-up Report
Vehicle Maintenance Summary
Twelve-month Planning Schedule
Assessor’s Form for Vehicle Operator Assessment
Vehicle Operator Report
Transaid’s 11 KPIs
• Quality information is needed for good decision making at all
levels of an operation
• An organisation can only determine if transport policy goals
and objectives are reached by monitoring and evaluating
performance
• 7 transport Key Performance Indicators
• 4 distribution Key Performance Indicators
KPIs continued….
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Distance travelled
Fuel consumption
Running cost per kilometre
Vehicle availability
Vehicle use
Needs satisfaction
Safety
Truck fill
On-time delivery
Damages
Nonconformity
A case study - Transport
Management South Africa
and Ghana MoH
Implementing a Transport
Management System in South
Africa’s Department of Health
PLEASE CLICK TO START
In thevehicles
first 5 years
of
the project
gains in efficiency
meant plans
that
…old
were
disposed
of,an
sustainable
procurement
By
…Transport
Senior
….drivers
2008
the
management
fleet
Officers
were
had
trained,
started
maintained
were
Planned
to
sensitized,
notice
Preventative
average
that
a
with
transport
size
better
Maintenance
of
policy
796
planning
vehicles
was
less
In 1996
the
Department
ofthe
Health
inremoved
South
Africa’s
North
By
more
In2003
the
than
first
the
800
three
fleet
PLEASE
vehicles
was
years
down
could
CLICK
fleet
to
be
less
TO
was
than
CONTINUE
reduced
40%
from
of
by
its
the
290
original
fleet
vehicles.
without
size.
werewere
developed,
monthly
transport
reports
were
developed,
vehicles
transport
systems
required
officers
were
for
toof
meet
5 implemented….
years.
received
service
job
delivery
descriptions….
demands.
Western
Province
had
a
fleet
2013
vehicles
affecting
service
delivery levels.
produced
and distributed…
Most
importantly,
“Needs
Satisfaction”,
a Transport
measure of
the ability
of
…vehicle
utilization
remained
steady as
Officers
used
Throughout
the duration
of the
project
the availability
of vehicles
the
fleet request
to meet
the needs
of END
the
Ministry,
consistently
vehicle
forms
and scheduling
toolsremained
to arrange
transport
remained high
due
to
good
maintenance
practices….
throughout
the entire
project.
and high
consolidate
activities
where
possible.
Ghana case study
•
•
•
In 2007 Transaid worked with Ghanaian women market traders
to run a pilot to manage their own transport
Iveco (truck company) donated 4 daily vans and Transaid
conducted some transport management training and helped
train female drivers and a Transport Officer
The project had some success but had many important
leanings:
–
–
–
–
–
–
The vehicle type needs to be absolutely fit for purpose – these were not for the
routes they were doing
The vehicles need to be pooled and high levels of collaboration required between
market traders
The learning curve was very steep – routing, scheduling, budgeting and even
learning to drive
Transaid did not invest enough long term support on the ground to the market
traders
The project insisted on certain provisions which made it difficult to operate in a
competitive market – such as insuring vehicles and working reasonable shifts
While we have fedback the women traders learned a significant amount from the
project which is transferable ,it became more profitable for the women to put seats
in the vans and run them as minibuses so some have now done this
Zambia case study
•
•
•
•
•
•
Transaid has more recently been working with the Zambia National
Marketeers Credit Association (‘ZANAMACA’)
In 2009 Transaid completed research to developing a transport
project that would benefit Zambian marketeers
72% of Zambian marketeers are women, many of whom are
widowed, divorced or single and have an average of five
dependents to support. Their market trade is their livelihood.
Transaid partnered with ZANAMACA to carry out an initial
assessment of the types of transport currently available to
marketeers and to determine the main transport priorities.
The central Zambian market is based in Lusaka. Many marketeers
travel long distances to buy from and sell to the central market,
some up to 1,100km, carrying large volumes of goods.
There is no transport system in place to meet this need, Under
Zambian law public transport should only convey passengers, and
not commercial goods.
Zambia case study
•
Transaid have been trying to source funds to implement a project with
ZANAMACA
•
•
Project Aim:
To improve access to markets for Zambian marketeers and their goods
through the implementation of a Transport Management System (‘TMS’).
•
•
•
Project Objectives
To introduce a tried and tested TMS suited to the market context
To introduce safe, efficient and affordable transport for marketeers and their
goods travelling a minimum of 500km
To increase the capability of ZANAMACA members (marketeers and their
management) to manage activities that support their businesses and
livelihoods
•
Results of Zambia research
• The high costs of marketeers’ transport, the problem of
security of goods and the lack of direct readily available
transport all negatively impact upon profit for marketeers
• On the long distance one way routes the research showed
that per individual marketeer;
–
–
–
–
The average time per trip was 9.5 hours
Average distance 630kms
Average cost £90.21 or 361,000 Ugandan shillings
Average weight transported per marketer - 1.17 tonnes
The research and cost analysis showed an 20% reduction in the all
inclusive cost per km for ZANAMACA to manage their own
transport fleet rather than hiring private vehicles. However, it is
important to understand the specific assumptions behind this (steady
volume all year round, 60% vehicle fill on return journeys and tax free
status for vehicles etc.)
Basic costing for Transport
Agenda – session 2
•
Basic costing for transport operations:
•
11:00 – 13:00 Basic costing for transport operations:
– 11:00 – 12:00 Key concepts, a case study from Ghana and Zambia and
a basic transport budget
– 12:00 – 13:00 Break out groups to cost own or ‘imagined’ transport
operation
•
13:00 - Lunch
•
14:00 – 14:30 Presentations back to group
•
15:30 – Tea Break (15mins)
•
15:45 - Summary – what have we learned from this exercise and creation of
toolkit from this workshop
What this session aims to do
• From your presentations this week it is clear that transport is
a challenge for Cooperatives
• Hiring transport is expensive and the vehicles often do not
meet your needs
• This session aims to increase your understanding of the key
costs to consider when looking at running your own transport
• It may be that managing your own transport is not the right
solution for your Coop/Union but hopefully it will help you to
think about how to go about a cost benefit analysis so you
can compare what you are paying now vs what it would cost
to run the transport yourself. When we have this knowledge
we can make more informed decisions.
• Hopefully it will give you more experience of the types of
costs to consider and therefore a stronger negotiating
position with transport providers
What this exercise will not do
• It will not give you all the answers….!
• There are many ways to create transport budgets, this
exercise will not give you a ‘one size fits all’ solution – rather
it is to share approaches and concepts to start thinking in a
more focused way about financial management and
transport and if you chose to, to go away and work on more
detailed business plans (which I am happy to have a look at)
• It is also important to consider all the other advantages and
disadvantages of running your own transport – cost is just
one of many factors!
Key Concepts – Costing for
Transport
• What types of costs should we consider
• Fixed and variable - what these terms mean
• What are the key elements of each and how do we start to
build up a budget
What Costs do we need to think
about for transport operations?
•
•
•
•
•
•
The cost of purchasing vehicles (i.e., the initial capital cost)
Other costs are incurred to maintain and protect vehicles after
they have been purchased. These costs include—
Depreciation, which is used to determine financing requirements
for replacing a vehicle at the end of its economically viable life
Fixed costs (which do not vary with the level of activity), including
annual vehicle licenses, taxes, and insurance.
Variable costs (which vary based on vehicle use), including—
– Running costs (costs related to the distance a vehicle travels):
fuel, maintenance, and tyres.
– Indirect costs (costs that do not affect running costs): crashes,
breakdowns, and fines.
Human resource costs, including: Fixed costs, such as salaries.
Variable costs, like per diem.
Any overheads (office costs)
Fixed or ‘standing’ costs
•
Costs which do not vary with the level of activity:
•
•
•
•
Depreciation
Insurance
Tax
Is there anything like an O’licence in Uganda?
Variable costs
• Costs which vary based on vehicle use
– Running costs: (i.e., costs related to the distance a
vehicle travels
•
•
•
•
•
Fuel
Maintenance (repairs and maintenance) older the kit higher r&m
Tyres (either outright purchase or contract)
Specialist kit - chilled vehicles – cost of gas or diesel for chiller
Specialist – cleaning (for example diary, livestock, petrochemicals)
– Indirect costs (i.e., costs that do not affect running costs)
• Crashes (can benchmark from other operations – estimate x per km
or per period but so much depends on training, urban or trunking)
• Breakdowns
• Fines
HR and Overhead costs
•
•
Fixed element – salary – drivers/transport officer?
Variable – per diems or allowances
•
Other considerations when budgeting for HR:
– Pension?
– Absence, Sickness, Holiday (ASH) – for example 5 days a week x 52
weeks = 260 days a year. How many days holiday or leave (x weeks?)
have to budget for other leaves of absence – sickness, funerals
– In UK ASH is usually 15-17% in transport industry
•
Overheads
–
–
–
–
–
Do you have an office or parking area you are hiring? Office costs and rent?
Mgt team
Training
Uniforms? Protective clothing
Mobile credit
Costing the ZANAMACA new
transport service – 1 yr
operating budget
• How did we get to these figures?
• Refer to basic costing model and discuss....(go to excel file)
Break out group exercise
• Take 1 hour to ‘cost’ your transport operation / or create an
imaginary transport operation and ‘cost’ it;
• After lunch…
– Present back to the group (10 min presentation) on:
– the key fixed and variable costs using given headings
– We will input these into the model to arrive at your all inclusive cost per
km for your transport operation
Why is it useful to know what
the cost of operating you own
transport is?
• If we know it costs us X per km to operate our vehicles then
we can answer these questions:
1. What does it cost to hire a 17ton vehicle per km? We can
now compare a trip of 200kms operated by a truck operator
to a cost of running it ourselves at XX.
2. It also helps us to understand what we should be charging
our members to cover our transport costs including vehicle
depreciation (remember this model does not build in profit
for the operator!)
3. Two notes of caution:
–
–
this cost of XX for 200kms assumes you have a return trip or
backload. If you don't the vehicle will run empty and to get from
bulking point to market and back will now cost double hence the need
to find backloads!
The budget you have created needs to be updated frequently as costs
change and key assumptions like numbers of kms and fuel price
changes!
Your presentations
Break out group exercise (2)
• What did we learn from doing the exercise ourselves?
• What did we learn from each others presentations?
Next steps – toolkit
development
• One of this workshop outputs is a toolkit, which:
– Highlights case studies of cooperatives that provide
transport services for their members
– Captures the experience of these co-operatives in
delivering such services
– Identifies common themes and lessons from these
experiences
– Develops technical guidelines for co-operatives on how
to improve transport services for their members
– Is there anything that you would like us to try and include
in the toolkit?
Thank you for your attention and
your participation Cooperators!