Essay: Transportation Is A Critical Link In The Overall Supply Chain

Essay
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ESSAY
Title: Transportation is a critical link in the overall supply chain
The term transportation is referred to as the movement of product from one to other
location as it makes it way from the starting of the supply chain to the customers. In other words
transportation is regarded as an essential supply chain driver as products are rarely being
manufactured as well as consumed within the similar location. Management of supply chain can
be categorized into three major parts. This is comprised of purchasing, manufacturing as well as
transpor (Simatupang, Togar and Ramaswami Sridharan, 2005). From the end to end this is
comprised of decisions regarding input material that can be used, production quantities, levels of
inventory, distribution configuration as well as transportation related to input and finished
products(Wilson and Martha C,2007). Logistics management is regarded as the component of
SCM that lay emphasis on how as well as when the raw material, immediate products as well as
finished goods can be obtained from the origin to the destination. At present international trade is
regarded as the common place as well as enhancement in the market share within emerging
market place is desirable. Thus it can be stated that goods are rarely being consumed where they
are being produced. Further transportation services are important among all the elements related
with supply chain.
In order to practice effective, cost efficient logistic management, a firm is required to lay
foundation for a responsive, economical network of transportation. With the responsive,
economical network of transportation the firm is able to make implementation of major strategic
alterations for the sake of reducing the costs sand enhancing the level of service of customers
with little disruption to the entire supply chain. A responsive transportation network starts with
end to end network visibility. Visibility is effective in allowing the firm to centralize the
production operations for lowering cost area without affecting the service levels of the customers
as any uncertainty in the network can be viewed and suitably managed for the sake of keeping
the level of inventory low as possible. An economical transportation network starts with shift
within the attitude. The organisation are being trapped within the traditional view that reflects
that transportation is important evil that is inevitable source of the cost as well as risk. Transport
is regarded as the largest component associated with the cost structure of the firm's logistics. It
has been determined that transport accounts for 30% of the total cost of logistics operations.
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It has been examined that global economies are carrying out operations within the
environment that is complex and competitive. The condition is exacerbated through the rate of
rapid change that is being driven by the external forces which has altered the economic
landscape(Meixell, Mary and Vidyaranya Gargeya,2005)Businesses and other firms are striving
towards becoming more efficient and effective for the sake of surviving in the new environmet
(Beske, Philip, Anna Land, and Stefan Seuring,2014). The critical element that assist in
attainment of the two objectives is related with supply chain management of firm as well as
transportation that is crucial ingredient that assist in overall supply chain performance. This has
been argued that transportation is considered as the glue that is holding the supply chain together.
The external forces that is driving the change is comprised of globalization, technology, supply
chain integration as well as consolidation, government regulation, consumer empowerment as
well as policy.
At present the focus of the transportation executives is on driving efficiences in their
supply chain. The cost of transportation is accounted for 4.7 percent of the sales in the year 2008.
Further the total logistics costs is comprised of carrying costs, warehousing, administration that
was 9.3 percent of the sales. One of the most effective measure that assist in reduction of the cost
as well as exposure of the supply chain inefficiencies is utilization of the transportation
management system (TMS). The process and technology of transportation management system
needs to be the foundation for the success of supply chain. Such are being devised on long term
saving instead immediate cost avoidance. This kind of inherit features are adding to the stability,
reliability as well as transportation process cost controls. The key component that is related with
the success of TMS solution is comprised of connectivity, optimization, transparency as well as
collaboration. A successful TMS solution is one that is accounting for all the supply chain
stakeholders and it makes the decisions on the basis of particular constraints or the desired level
of results.
The technological changes within the transportation and information technology segment
is ushering within the period of low cost and higher value of transportation services. However
the combined influence of the alteration within the transportation and complementary
information technologies are not visible in offering the transportation services that is traditional
one with greater speed, reliability as well as lower cost, but also within introduction of the new
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