It has been a very busy time of year keeping the shelves stocked and delivering packages to shops and houses across the country, or even just for staff travelling to work. At the heart of these supply chains are complex logistics systems which need to cope in an interconnected world where business and social networks converge through increasingly real-time information systems. Reflecting customer satisfaction throughout the supply chain from the shop floor back to the supplier of goods and services ensures that firms are more competitive.
CONNECT WITH THE SCOTSMAN
• Subscribe to our daily newsletter (requires registration) and get the latest news, sport and business headlines delivered to your inbox every morning
One of the things that makes transport and logistics such an interesting field is that it affects the quality and competitiveness of just about everything else. Each stakeholder is managing the supply of individual products and services, but transport and logistics manages the whole system. A new book from the United States recently highlighted that we have entered a new era, what the authors call the logistics era, where the transport and distribution industries come to the fore as the organisers of economic, social and environmental change. From leisure trips, to the performance of the NHS, the quality of the experience depends on how well transport and distribution is organised.
Finding clients to pay for social and environmental benefits, however, has been harder than finding funders of economic competitiveness. Parts of the social and environmental infrastructure are struggling to grow. Taxation revenue has traditionally been used to address market failures but there is little sign of the social and environmental market failures evident today being addressed through publicly funded programmes. Mature systems in the age of logistics balance economic, social and environmental benefits to deliver sustainable solutions, but due to these resourcing problems providers find there are unable to achieve this.
In a recent report for Scottish transport think tank STSG, the analysis followed the money to look at who pays for transport and why. It found that there is no shortage of money for transport with spending increasing steadily, including from large public spending areas like health. If we follow the money we find that saving key customers money by offering better, user-focused solutions not only provides better value for purchasers, enabling them to better deliver their core function such as healthcare, but increases the ability to invest in mature transport systems.
The report suggested that new collaborative investment approaches from public authorities to secure their social and environmental goals would also help commercial organisations compete more effectively. Such partnerships are increasingly common in Scotland’s towns and, ScotRail has embraced this approach through its community station programme. Local authority policies are delivered by business helping bring trade back to the high street. The businesses benefits from more trade, and for local people some of the policies set out in community plans get funded.
Access to services action plans have proved to be one of the most successful ways to manage these connections. The US researchers show how progressively replacing public funding for roads, railways, buses, ferries and aviation with funding of better transport outcomes is helping to rebalance investment.
In the logistics era the transport experience is transformed. It will become as strange to ask people to pay separately for road, bus, rail and ferry use for their private travel as ask what transport was used in taking their groceries to the local store. The logistics processes manage simple convenient solutions for users.
The recent report from the Scottish think-tank suggested several important things which need changed for Scotland to compete effectively in this new logistics era. First, transport authorities need to set a clearer focus related to the outcomes users want, rather than narrower performance of individual modes. Transport performs well from a user perspective only if the whole system works. Secondly the mistrust and division which has damaged partnership working between public and private sectors needs to be overcome. There are many efficient and flexible contractual approaches to secure shared goals.
This year, a mature transport system for Scotland in the logistics era will reduce journey times tackling the relentless increases seen in recent years. It will make low emission travel more competitive and efficient through partnerships between public and private companies.
The air discount scheme, bus quality partnerships and road equivalent tariff are all world-leading Scottish examples of defined standards for transport users being put ahead of control the transport system and managed through partnership working. These approaches ensure purchasers, as much as providers, make the most of the transport system. Strengthening these approaches and widening such practice across Scotland will ensure that transport has fully entered the logistics era.
• Derek Halden is immediate past chair (Scotland) of the Chartered Institute of Logistics and Transport