1. The following document outline the possible threats and
opportunities associated with the introduction of a freight outsource
model at Nylex Water Solutions.
Nylex Water Solution’s national fleet of delivery vehicles requires
urgent replacement, as the potential for mechanical failure and
expensive repairs increase. The fleet is also being serviced by an
increasing mature group of individuals who have retained a culture
of complacency and resistance to change.
While initial implementation will be confined to the Pakenham site,
it is our intention to roll out the new model at both Ingleburn and
Crestmead in due course. Given geographical constraints,
Bundaberg will continue to be service by NWS owned vehicles.
Potential Threats
1. Loss of ‘knowledge’
a. Potential reduction in completed deliveries.
b. Potential reduction in overall service levels to the customer.
c. Potential increase in reported ‘near miss’ and ‘road
traffic‘incidents.
2. Risk Exposure
a. Potential product damage
b. Potential public risk
c. Potential brand impact
3. Financial Risk
a. Potential cost blow-out
b. Locked-in contract
c. Redundency payments
4. Internal Impact
a. Information protection
b. Cultural shift
c. Potential disharmony

2. Potential Opportunities
1. Knowledge Retention, Documentation and Improvement
a. Make them an offer they can’t refuse. (Nylex Staff)
b. Document and refine procedure.
b. Develop improvement strategies.
2. Risk Control
a. Product damage insurance.
b. Public liability insurance.
c. Disaster management plan.
d. Monitor compliance rather than achieve it.
3. Financial Benefit
a. Cap on vehicle charges
b Sophisticated controls and measures.
c. Buy-out clause.
d. Trade-in recoveries to offset redundancy
e. Free access to operational facilities.
4. Operational Improvement
a. New fleet, New drivers, New image
b. Free up internal resources
c. Flexible fleet options
1. No missed deliveries due to mechanical or personel issues
2. Increase in ‘large tank’ carrying capacity
3. Improved resouce redistribution within the group
4. Large pool of ‘qualified’ drivers
Performance Measurement
Tank Delivery Rate (TDR)
As with the existing ‘overflow’ freight contract, a tank delivery rate will be used
to monitor the ‘actual’ cost of deliveries. This measurement will represent a
targeted ‘percentage cost’ of the tank’s wholesale value.

3. Daily Load Value (DLV)
There will be a minimum DLV for each load each day. The scheduling
software has been modified to generate load value updates and flag any
undervalue loads. The schedulers will be instructed to ensure all loads are
reconfigured until maximum dollar value is reached.
Weekly Load Value (WLV)
There will also be a WLV for each truck each week. The scheduling software
has been designed to load each truck a week at a time, therefore we can also
have a flag on minimum weekly values.
Completed Delivery Ratio (CDR)
There will be a weekly measurement of all completed deliveries in relation to
set targets. Non-compliance due to carrrier fault will result in missed delivery
penalties, equal to tank rate charge measurement.