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The Focus of the Traffic And Transportation Management (T & TM) Job

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The focus of the traffic and transportation management (T & TM) job is a trade-off or balance between costs and service levels. It is the responsibility of the traffic and transportation manager to arrange for and coordinate the physical movement of product from point A to point B. In many companies, this responsibility includes incoming raw materials, internal movement of materials and unfinished goods and outgoing movement of finished goods.

Again, note that the description here reflects the trend of increased importance in the logistics side of business and is at the progressive end of the spectrum. Major companies have largely begun to embrace the concept of materials management as linking all parts of the physical distribution system from raw materials and supplies to finished goods. Smaller or less progressive firms may not have assigned such responsibilities. (But if you can handle a covered wagon...)

The balance of costs with service levels is the central theme of the traffic and transportation job. The issue of this balance pervades the position-everything the traffic and transportation manager does is concerned with the trade-off. The desired level of this balance is a corporate strategy element and as such is determined by the nature of the product, the requirements of customers, the structure of the market, the extent of competition, and the availability of resources.

To a large extent, the traffic and transportation manager is given an acceptable level of balance and is asked to improve that performance if possible. The task of improving performance requires an extraordinary effort of analysis, planning, and control.

Identifying and comparing transportation costs, processing paper work necessary for transport and tracking. Operations responsibility for rates, customer service levels, scheduling, some carrier selection, tracing shipments both internally and externally.

Additional planning and control responsibility. Transportation mode and carrier selection. Cost and service trade-offs. Some negotiation. Consolidation. General management and administrative duties.

Lives or dies by efficient operation of actual distribution function. Coordinates total distribution system. Analyzes information presented by other logistics segments, such as inventory control, traffic and transportation, planning/analysis, customer service, and others. Mostly concerned with long-term planning and grave distribution inefficiencies. (Most likely to lose a letter in the mail.) Walks to work.

From an analytical standpoint, the mode of transportation, whether truck, train, plane (or dog-team), is a continuing issue. Technological changes, regulatory changes, and cost structure changes require continuing information gathering and analysis efforts. The recent deregulation of trucking and air travel has added both uncertainty and opportunity to the traffic and transportation manager's job.

Similarly, the selection of a particular carrier has become more complex as a result of deregulation. Rates were at one time fixed and equal; now they are negotiable, thus adding heavily to the responsibility of the traffic and transportation manager. One manager spoke at length about the perils of buying transportation solely on price, thus the task oi negotiation has become a significant part of the job as well.

Traffic and transportation management often entails the responsibility of company-owned equipment such as fleets of corporate trucks, barges, or tankers. Decisions concerning the number and type of vehicles, evaluation of usage rates, costs, forecasted requirements, scheduling, routing, maintenance, and labor negotiations are all part of this function, as well as when and where to use public forms of transport.

Thus, major changes in the areas of computerization, deregulation, and cost analysis are and will continue to be central issues in the field of traffic and transportation.

Question - What was your focus in school?

Answer - My major was general business. As an undergraduate, I took a little bit of everything. I took more than the norm in statistics. I took finance, accounting, and everything else. I had a very well rounded background.

My major was zoology with a psychology minor, which had nothing to do with physical distribution unless you were dealing with animals or something. A friend of mine was in the transportation business, so I went to work for a trucking company as a sales representative. I spent about six years doing that, and then a company I called on wanted a traffic department organized, so I came in and became their traffic manager. Later I took on the customer service function, which includes order processing, complaints handling, and so forth. Now my responsibilities include inventory controls, warehousing, transportation, and production scheduling. So basically I acquired responsibilities through osmosis ... through the back door, so to speak. I was not formally trained, but I spent extra time on my own, and when an opportunity presented itself, I grabbed it and ran with it.

Question - Could you explain the organizational structure and where you are in the structure?

Answer - I have five functional areas reporting to me. One area is transportation operation. They are involved with all of our field and plant locations and the replenishment centers on day-to-day transportation issues. They are also involved with all of the various private fleets that we have throughout the country, the leasing of the vehicles, and labor. Furthermore, the transportation operations area deals with projects for new products and how to handle the transportation of that product. The second functional area is transportation and rates analysis. They handle all rate negotiations and carrier support classifications and represent the corporation in front of the various public commissions. Third, we have a transportation planning and control function, which handles all our budgeting and performance reports to show how we are doing as a corporation on freight. They handle miscellaneous projects, corporate traffic manuals, publication of routing guides, and things of that nature. Fourth, we have a transportation administration area, which handles all freight payment on our on-line freight-payment system. That is our entire data base for transportation, from which we get all of our costing data. Fifth, we have a traffic services function, which handles freight claims, hazardous material, and hazardous waste moves. We also have a traffic transportation purchasing area, which is responsible for all of our inbound vendor freight and works with plant shipments, whether raw materials or work in process.

The senior transportation systems analyst reports directly to me. He helps build the systems we need for budgeting and tracking our performance against plans. I also interface with sales, because we are primarily servicing our customers. I deal somewhat with marketing, because I furnish them cost input when they are formulating programs or product plans.
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