How will products move, by air versus surface? Transportation is a key logistics function of supply chains which runs from suppliers through to customers or stores. Being able to have a transportation program with can do this provides customer satisfaction and can give your company a competitive advantage. But there is another side to this attention as to freight cannot be divided among many carriers. Firms should understand what is happening within each mode and align the strategy with carriers who will still be viable in the future—often five years since strategic plans may extend that far. Change is happening. The strategy, regardless of whether you are involved with domestic or international, should recognize—. It is not playing one carrier off against another. Carrier relationships. Each shipment does not have the same priority. Flexibility/Adaptability. New businesses. This takes two approaches. Volume creates carrier/forwarder attention. Segment. Customers demand their shipments be delivered as they require--on the date needed, by the carrier preferred, in the proper shipping packaging method and complete, both shipped complete and delivered complete and in good order. The Delicate Balance of Transportation Supply Chain Management. A great strategy with a carrier who is taken over or goes out of business is suddenly not a good strategy. A transportation strategy, to be effective in supply chain management, is fitting the movement of goods to the corporate supply chain. The carrier attention with volume creates a competitive interest in your business. This cannot be done for two reasons. A macro measure can hide a problem even if the overall measure is good. It also impacts with the other two issues of movement of information and integration within and among suppliers, customers and carriers. Transportation is an important supply chain driverbecause products are rarely produced and consumed inthe same location. New suppliers. Developing supply chain responsive programs be demands effort by both the carriers and shipper. The strategy cannot be one-dimensional. Even if there is no strategy, the number of carriers trying to get business will make firms develop one. This is an important and difficult issue. Measuring/Metrics. Identify your Challenges: Take the Supply Management Self Assessment, Logistics & Supply Chain Management Consulting. It should be segmented to reflect urgencies. It is important to know how well the strategy and carriers are performing. Customer requirements. ©2020, LTD Management, All Rights Reserved. | Website services provided by EZMarketing. Second, too many carriers hinder the ability to develop carrier relationships needed to meet supply chain requirements. Freight and fuel costs take up most of the logistics budget. Each of these can dramatically impact the strategy. Transportation is used to reduce costs. What modes will be used? What is the actual delivery to customer performance, on a macro basis, carrier and customer by customer basis? Rather it is a way to respond to the dynamics of the business, its customers, suppliers' and operation. New customers. Transportation refers to the movement of product fromone location to another as it makes its way from thebeginning of supply chain to the customer. The supply chain relies on the efficient management of assets and logistics to get raw materials, parts and finished products from one place to another. A transportation strategy, to be effective in supply chain management, is fitting the movement of goods to the corporate supply chain. Transportation is a key logistics function and is critical to supply chain performance. Infrequent shipping dictates another approach. Measuring means comparing performance versus agreed standards. Transportation ppt of suppy chain management 1. Transport performance metrics can provide a way to view the value of the spend. Products, suppliers, customers, time of the year, and other factors can affect the importance and urgency of transport movements. Rather it is a way to respond to the dynamics of the business, its customers, suppliers' and operation. The transportation in a supply chain can be used to control costs in a business operation. Carrier mergers and alliances and closings. A test of measuring costs is how well the transport spend is being managed. First, as random, fracturing of the freight impacts negotiating or leverage position. Conclusion. It must be responsive, both as to service and cost demands. And, with supply chain management, this means realizing primary customers and delivery locations. Mode selection. New products. The times they are a changing--and so will the strategy. The only question is how quickly it occurs. This is seen most easily in the transportation element. What roles do transit time play in your supply chain? How will the inventory and service impacts be measured as compared to the freight charges? The supply chain involves continuous and efficient movement of product from vendor to manufacturer to customer. One is measuring. New corporate emphasis. Below are seven uses of transportation in supply chain management: 1. The strategy should be able to change. It involves the movement of product, service/transit time, and cost which are three of five traditional key issues of effective supply chains. Transportation must responsive and needs a focus with a carrier--a relationship. There are many ways to ship goods from one place to another, but with foresight, the cost of shipping can be balanced through different practices and compared against relative … Shipments must move timely. Usually supply chain management simply becomes a balancing act of time versus cost. The time and service aspects of transportation are vital. To meet the vigorous requirements of the supply chain, the strategy should be dynamic. Therefore, the transportation program must reflect and meet customer needs. It is not a question of whether or not it happens. It is not playing one carrier off against another. That can mean mode changes and/or alternative carriers. When you’re sending goods around the world, it’s vital to use your transportation resources in the right way.
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