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by Laurus Nobilis
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Supply Chain

Supply Chain Management:

Transportation (E)

Supply Chain Management


What was the evolution history of supply chain management? What are the main components of supply chain? How big is the importance of supply chain integration?


Posted: Sep 2011

The supply chain process of transportation involves the management of both internal fleets ( owned by company ) and external transporters (trucking companies, railroads, shipping companies, and airlines).

Transportation cannot be considered associated with one specific component of the supply chain. Instead, it is the connection between all of them. There are five main types of transportation modes available for companies today.


Motor Transportation

Motor TransportationMotor transportation is dominant form of transportation today in most countries. Motor carriers are extremely flexible in the nature of their service, due to the huge network of roads. It enables them to deliver directly from anywhere to anywhere. This mode of transportation is used frequently because of its ability to carry almost any product, regardless of size and weight. Motor carriers transport is specialized for all types of goods, agricultural, manufactured, consumer goods...


Railroad Transportation

Railroad TransportationUsed extensively globally due to highway saturation in some countries and a lack of good highways in others. In other words, it is often the dominant form of transportation in many European countries. While rail road transport is less flexible and versatile than air and motor carriers, it is much less expensive. From the other side it has many drawbacks, loading time, additional means of transportation ( to and from rail ), etc.


Air Transportation

Air TransportationAlthough this mode of transportation is not used often, it is a good choice for two types of shipments:


  • High-value shipments. Shipment for products whose high cost can justify a more expensive mode of transportation, such as air.

  • Emergency shipments. Products that need to be sent somewhere immediately.

Still, supply chain management initiatives are finding that air service may represent a valuable part of their overall transportation network. This has been proven for many companies when high inventory carrying costs, associated with less time-sensitive forms of transportation, were reduced through the use of the air option.


Water Transportation

Supply chain management plays a very important role within the company. The supply chain generate most of the costs of the company, due to the width and complexity of the function (manufacturing, warehouse, distribution). Any inefficiency can create tremendous negative impact to the company. On the other hand, good supply chain management can bring huge benefits and competitive advantage to the company.

Water TransportationAlthough water transportation is one of the least expensive forms of transportation, it is extremely slow. Furthermore, service is limited to the origin and destination points at which port facilities are available.

Despite these restrictions, water transport is a popular mode, especially for large amounts of product coming from overseas, and bulky, low-value, high-density products.. To ship by water, companies load their products into a container and then transport it by rail or motor carrier to a port. The container is then loaded onto a container ship and sent to the destination port. Once unloaded, it is again taken by rail or motor to its final destination.


Pipeline Transportation

Pipeline TransportationThis mode of transportation is used for a very narrow range of product types, such as crude oil, natural gas, chemicals, and water.

Pipelines offer very inexpensive, but slow, transport of products.


Continue Reading:

Overview of Supply Chain Components
Historical Development of Supply Chain
Traditional and Modern View to Supply Chain
Supply Chain Activities
Order Processing
Demand and Supply Planning
Inventory Management
Customer Care
Integrated Supply Chain
Financial Resources
Integration vs. Non-Integration

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