.

1. TPT250
FUNDAMENTAL OF
TRANSPORT
CHAPTER 7:
SYSTEM CONCEPT

2. TOPIC OUTLINE – SYSTEM CONCEPT
7.1 System Concept
7.2 System Concept for Passengers
7.3 System Concept for Goods/Freight and
Commodities
7.4 Intermodal Transport
7.5 Transport and Logistics
7.6 Just-In-Time (JIT) Concept
7.7 Third-Parties Logistics (3PL)
7.8 Transport and Tourism

3. 7.1 SYSTEM CONCEPT
System concept is part of a transport
system whereby the traffic (goods &
passenger) is moved or transferred from
one mode of transport to another
without actually having to unload them
(especially goods), until its final
destination through system integration,
balanced transport, intermodal
transport.

4. Basic Features of System Concept:
1) All modes are expected to
work towards enabling
movement of people & goods
from one mode to another
without creating any
expensive breakage or injury.
2) Helps speed up
movement.
3) Integration of
infrastructure 4) Avoid unnecessary costs.
5) Mainly involves the use of
materials handling.
Main Objectives of System Concept:
To have continuity in flow/movement of traffic from one mode
of transport to another.
To cut down competition & uneconomic use of resources
while coordinating and integrating transport operations
and services.
Comprised the combined use of several transport
mode to provide the most economic and effective
transport from origin to destination.
Considers all modes of transport as together – as one
unit and not isolated – a total system
Complements with one another in the act to provide the most
efficient and reliable services.

5. 7.2 SYSTEM CONCEPT FOR PASSENGER
Requirement for Passengers:
Interchange / Station
/ Terminal
Other amenities
(Pedestrian
walkways, crossing
bridges, bus stop
design and lighting)
Ease of fare
collection/integrated
ticketing scheme
Parking Bays
Application of Kiss
and Ride & Park and
Ride

6.  Essential feature of Park and Ride:
Park and Ride
 P&R concept is a simple ‘at grade’
car park with good connectivity
with bus/rail public transport.
 Basically the idea is that drivers will
travel by car to the P&R area, park
the car and then complete the
journey by public transport, usually
rail transport.
 Hence travellers are dropped off in
the morning and potentially picked
up again later in the day.
1) Location Criteria
2) Should be close to
a major urban
corridor.
3) Should be adjacent
to an existing public
transport line.
4) Sufficient all day
parking spaces for
genuine P&R
travellers.
5) Dropping off and
waiting space for Kiss
and Ride users.
6) Away from road
bottleneck
7) Should be readily
visible from the road
in the urban corridor.
8) Access to the site
by road should be
good.
9) Not too close to
any existing P&R
facilities.
10) Parking Security
11) Ensure no on-
street parking is P&R
parking capacity is
exceeded.
10) Site Expansion
Potential
11) Adequate lighting
for personal safety.

7. KISS AND RIDE (DROP OFF AND PICK UP)
 Many train stations and airports feature an
area in which cars can discharge and pick up
passengers (dropping off and waiting space).
 These "kiss and ride" facilities allow drivers
to stop and park temporarily, instead of the
longer term parking associated with "park
and ride" facilities.
 Some high speed railway stations in Taiwan
have signs outside stations reading Kiss and
Ride in English, with Chinese characters
above the words that read "temporary pick
up and drop off zone".

8. 7.3 SYSTEM CONCEPT FOR GOODS/FREIGHT AND
COMMODITIES
• Requirement for freight
• Minimize loading and unloading time.
• Reduce the turnaround time (sea transport).
• Promote safe arrival by reducing goods loss, damage or delay
especially at the transshipment points.
• Application for :
a) RORO b) LASH

9. RORO (Roll-on/ Roll-off):
Such ferry is a specialized vessel,
designed for freight traffic &
motorists and one of its principle
features is its fast turnaround time,
can be driven on board at 2 levels
simultaneously and doors at both
ends for entry & exit.

10. LASH (Lighter Aboard Ship):
• The concept where barge and lighter carrying ships
that could load/unload loaded craft (boat) direct to an
inland waterway.
• Lighters barges are loaded with cargo and cannot be
operate on their own.
• They are typically towed or pushed around harbours,
canals or rivers and cannot be relocated under their
own power.
• The carrier ships are known variously as LASH carriers,
barge carriers, kangaroo ships or lighter transport
ships.
• A BACAT (Barge Aboard Catamaran) vessel is very
similar to a LASH vessel; BACAT vessels transport
standardised barges too.
• The big difference however, is the way in which the
barges are loaded and unloaded. Whereas the barges
are loaded on or unloaded from an LASH vessel by
means of a crane, they are loaded on and unloaded
from a BACAT vessel whilst floating.

11. 7.4 INTERMODAL TRANSPORT
Intermodal Freight Transport
• It involves the transportation of
freight in an intermodal container or
vehicle, using multiple modes of
transportation (rail, ship, and truck),
without any handling of the freight
itself when changing modes.
• The method reduces cargo handling,
and so improves security, reduces
damages and losses, and allows
freight to be transported faster.
• Reduced costs versus over road
trucking (transportation between
cities or states) is the key benefit for
intracontinental (occurring between
countries of the same continent)
use.
Intermodal Passenger Transport
• It involves more than one mode of
transport of passengers.
• Example, most major airports have
extensive facilities for automobile parking
and have good rail or bus connections to
the cities nearby. Urban bus systems
generally serve train and subway stations
and often extends to the local airport.
• A major goal of modern intermodal
passenger transport, at least in developed
countries, is to reduce dependence on the
automobile as the major mode of ground
transportation and increase use of public
transport.
• To encourage them to do this, Intermodal
Journey planners are used to make users
aware of possible services and to facilitate
their use.

12. 7.5 TRANSPORT AND LOGISTICS
• Logistics is defined as “the process of
planning, implementing and
controlling the efficient, effective flow
and storage of goods, services, and
related information from point of
origin to point of consumption for the
purpose of conforming to customer
requirement”. (The Council of
Logistics Management)
• The logistics of supplying products to
highly populated cities such as Hong
Kong is difficult and complex. Highly
efficient and effectively logistics
system provide consumers with goods
and services that improve their
standard of living.
• Objectives of logistics :
Set the standard for, and control, customer
service performance
Minimize distraction to planned operations
to eliminate inessential costs.
Strive for a minimum total cost of operations
and in the procurement function.
Set standards for product and distribution
quality control.

13. Four Logistics Sub-Division
BUSINESS LOGISTICS
That part of the supply chain process that plans, implements, and controls the efficient,
effective flow and storage of goods, service, and related information from point of use or
consumption in order to meet customer requirements.
MILITARY LOGISTICS
The design and integration of all aspects of support for the operational capability of the
military forces (deployed or in garrison) and their equipment to ensure readiness, reliability,
and efficiency.
EVENT LOGISTICS
The network of activities, facilities, and personnel required to organize, schedule, and deploy
the resources for an event to take place and to efficiently withdraw after the event.
SERVICES LOGISTICS
Service logistics is defined as the management of activities which respond to customers on an
individual basis. The acquisition, scheduling, and management of the facilities/assets,
personnel, and materials to support and sustain a service operation or business.

14. Logistics in Economy
• Economic utility – the value or usefulness of a product in fulfilling
customer needs or wants.
• four general types of economic utility:
FORM UTILITY
• Results when raw
materials are
combined in the
production process to
make a finished
product. Logistics
activities, such as bulk
breaking and product
mixing, change a
product form by
altering its packaging
characteristics.
PLACE UTILITY
• Moving goods and
services from surplus
points to points
where demand exists.
TIME UTILITY
• Having a goods or
services at a demand
point at a specific
time through
inventory
maintenance and
strategically locating
goods and services.
POSSESSION UTILITY
• is created by logistics
primarily through the
basic marketing
activities related to
the promotion of
products or services.

15. Element of Logistics
1) Transportation:
• Is the operational area of logistics that
geographically moves and positions
inventory. Provides movement for materials
in the system.
• Can be evaluated on six service dimensions:
COST – charges for
transportation
services
TIME – speed of
transit
CAPABILITY – what
can be carried with
the mode
DEPENDABILITY –
reliability in terms
of time, loss and
damages
ACCESIBILITY –
Nearness to the
mode’s routes
FREQUENCY –
scheduled
2) Storage and Warehousing
• A part of a firm’s logistics system that stores
products (raw material, parts, goods-in
process, finished goods) at and between
point of origin and point of consumption, and
provides information to management on the
status condition and disposition of items
being stored.
• Good warehouse layout and design often
involve the use of automated equipment such
as conveyor system to handle large numbers
of products packaged in cartons.
• Three function of warehousing :
Movement Storage
Information
Transfer

16. Element of Logistics
3) Inventory Management :
• Inventories represent the large single
investment in assets for many
manufacturers, wholesalers, and retailers; it
represents over 20% of total assets of
manufacturer, more 50% of wholesalers and
retailers. Good inventories management
can improve cash flow and return on
investment.
4) Packaging :
• An important warehousing and material
management concern, on that is closely tied
to warehouse efficiency and effectiveness.
The best packaging increase service, decrease
cost, and improves handling.
• Function of packaging :
Marketing Logistics Containment
Protection Sharing Unitization
Communication Convenience

17. Element of Logistics
5) Material Handling :
• It is the hardware or software used to move
store, control, contain and unitize materials
in factory or warehouse.
• It often represent a major capital outlay for
an organization, and this may affect many
aspect of the firm’s operation.
• Mechanical handling equipment such as
Conveyor system, Crane and Hoists,
Industrial trucks.
6) Information System :
• The complexities of the distribution system
make the provision of up-to-date, reliable
information.
• The order processing system is the nerve
centre of the logistics system.
• Examples: Bar Code & Electronic Data
Interchange

18. 7.6 JUST-IN-TIME (JIT) CONCEPT
• Definition: ‘A philosophy based on the principle
of getting the right materials to the right place
and at the right time’.
• As an inventory strategy, it is a strategy
companies employ to increase efficiency and
decrease waste by receiving goods only as they
are needed in the production process, thereby
reducing inventory costs. This method requires
that producers are able to accurately forecast
demand.
• As a production strategy, it is a production
model in which items are created to meet
demand, not created in surplus or in advance
of need. JIT (just in time) works to reduce
manufacturing cost and to improve quality
markedly by waste elimination and more
effective use of existing company resources.
• Organization that adopt JIT concept are Toyota,
Dell, Fast Food Restaurants and GrabCar.

19. • The Benefits of JIT:
Dramatically
improved
inventory
turnover.
Productivity
improvements
and greater
control
between
various stages.
Diminished raw
materials, work
in process and
finished goods
inventory.
A reduction in
manufacturing
cycle time.
• The Objectives of JIT:
To produce high-quality products
To achieve high productivity levels
To reduce waste (lower levels of
inventory etc.)
To develop long-term relationships
with channel members.

20. • The Problem of JIT:
a) NOT SO SUITABLE FOR
ALL FIRMS.
• It has some inherent
problems, which can be
categorized into:
a) Production
scheduling (plant).
b) Fluctuating schedule
require higher level of
inventory management.
• This is because stockout
costs are great due to
slowdowns or
shutdowns operation.
b) SUPPLIER
PRODUCTION
SCHEDULE.
• Success of JIT system
depends on supplier’s
ability to provide parts
in accordance with the
production schedules.
• Smaller and more
frequent orders can
result in higher ordering
costs.
• Generally, supplier will
incur higher costs,
unless they are able to
achieve benefits in
adopting similar
system.
c) SUPPLIER LOCATIONS
• As distance between
the firm and its
suppliers increase,
delivery times may
become more erratic
and less predictable.
• Shipping cost will
increase as more
movement are made.
• Example: Clustering of
suppliers near
manufacturer
d) OTHER PROBLEMS
• Organizational
resistance
• Lack of system support
• A lack of planning
• A shift of inventory to
suppliers
• Inability to define
service levels

21. 7.7 THIRD-PARTIES LOGISTICS (3PL)
• Outsourcing of logistics management to the third party.
• Hand over the job and pay the experts in the areas of warehousing,
distribution and etc.
• Can gain the benefits by getting efficient jobs & cheaper in the shipping
rates
• Examples are Kontena Nasional, Tiong Nam, TLS etc.
• Services offer by third-parties logistics :
STANDARD
• Warehouse management
• Transportation
• Dispatching
• Delivery documentation
• Customs documentation
ADVANCED
• Assembly
• Packaging
• Returns
• Labeling
• Stock accounting
COMPLETE
• Order planning and processing
• IT management
• Invoicing
• Payment collection

22. 7.8 TRANSPORT AND TOURISM
• Transport is the cause and the effect of the growth of tourism. The
improved facilities have stimulated tourism, and the expansion of tourism
has stimulated transport.
• Accessibility is the main function behind the basics of tourism transport. In
order to access the areas that are mainly aimed, tourists will use any
transportation mode i.e land, air transport.
• This require appropriate infrastructure to facilitate the movement of tourist
entering, leaving and also assessing to the tourist attraction areas.
• "Holiday spenders" usually make enough contribution to the local economy
that governments are more than willing to invest in efficient road networks
or airport facilities, especially in locations that have limited economic
opportunities other than tourism.
• Categories of transport:
Independent means of travel - controlled by individual tourists Mass travel - tourists travel in groups.

23. • Roles of Transport towards tourism industry:
a) Contribution to GDP
• Through money spend on tourist places such as chalet, hotel, shopping,
transport and souvenir.
• Import and export of product from in and outside of the country.
b) Employment
• Wide area of job opportunities provision especially hotel, transport,
terminal,food and beverages, SME.
c) Develop Depressed
Area
• With transport depressed areas that serve as a tourist attraction centre
could be reach and thus more infrastructures could be install to
accommodate the needs of the tourist.
d) Increase business
activities
• More business activities could take place due to high accessibilities
towards the raw material and act as bridge towards the consumer gaps.
e) Better accessibilities to
tourist attraction places.
• Transport creates access to many places. Especially road, it can perform a
door to door function. With these criteria, more interesting places could be
reach at the comfort of the tourist and thus increase the spending pattern
that towards the end bring some income increment among the locals.

24. • Types of Tourist Transport :
1) CAR TRAVELLING
Is usually an independent mean of transport. The driver decides where, when and
how he is going to get to a destination. It is usually cheaper since roads as
compared to the other modes of transport. It is the only transportation mode that
does not require transfers, in the sense that the whole journey, from door to door
can be achieve without even stopping. The only drawback would be the speed; the
travelled distance in a car cannot be compared to the efficiency of mass travel
modes.
2) COACH TRAVELLING
Buses use the same road network as cars. Coaches are perfect for local mass
tourism but can be perceived as a nuisance if in too large numbers.

25. 3) RAIL TRAVEL
Even if trains are very fast, the network is not too flexible, pre-established routes have tobe followed.
The railway network usually reflects more the commercial needs of the national economy then the
holiday tourist flow which can make it a second choice as a traveling mode.
The railway systems of several countries, notably in Europe, have seen massive investments for long-
distance routes and high speed engines.
4) AIR TRANSPORT
Is the most effective transport mode. It is also the main mode for international tourism. It allows the
most remote areas can now be attained, any journey around the world can be measured in terms of
hours of traveling. With jet that can reach up to 1,950 km/hrs, international tourism is no longer an on-
going adventure.
5) CRUISES
Cruising has become a significant tourist industry and is mainly concentrated towards short sea
journeys of about a week. Big cruisers are like floating resorts where guests can enjoy luxury and
entertainment while moving towards their multiple destination. The international market for cruising
was about 10 million tourists in 2000, more than doubling its market size since 1990. The principal
geographic location of the main cruise lines are the Caribbean, the Mediterranean and South China /
Pacific Ocean. Alaska and Northern Europe are also popular during the summer season.