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