Chapter 14

Topics: Mode of transport, Transport network, Transportation Pages: 5 (1153 words) Published: February 27, 2013

Transportation in Supply Chain

Transportation refers to the movement of product from one location to another as it makes it way form the beginning of a supply chain driver because products are rarely produced and consumed in the same location. Transportation is a significant component of the costs incurred by most supply chains. The role of transportation is even more significant in global supply chains.

Modes of transportation

• Air transportation. : Although 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. • Railroad Transportation : 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. • Package Carriers : Motor 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. • Water Transportation : Although 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. • Pipeline Transportation : This 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. • Intermodal : The movements of passengers or freight from one mode of transport to another, commonly taking place at a terminal specifically designed for such a purpose.

Transportation infrastructure and policies

Transportation infrastructure investment can have a very positive and immediate impact on trade growth and economic and social development, particularly in emerging market areas. Deficiency in transport and communications infrastructure is one of several supply chain barriers that act as obstacles for speeding up global economic growth. The declining performance of the surface transportation network—as a result of both inadequate capacity and inefficient management—will choke economic progress, preventing the economy from growing to its full potential. It is not an overstatement to say that the Nation’s potential for the creation of wealth will depend in great part on the success of its freight efficiency. Without changes, countries such as China and India, with more dynamic policies for transportation and economic growth, will challenge the U.S. in economic power and world influence.

Design Options For transportation network

Transportation is one of the major items of cost in a supply chain. As a firm's ability to serve the customers depends on how efficiently and quickly the orders are delivered, transportation management becomes one of the important operations in a supply chain. There are two important functions performed by transportation: product movement and product storage. While product movement is the primary function of transportation, temporary product storage becomes its secondary function

Direct shipment network

From shipper directly to retailers.
1. Warehouses are eliminated.
2. Long route, hence low cost.
3. Simplicity of operation.
4. Time of transportation is short.

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