Factors Affecting Transportation in SCM in Singapore and the US

This research explores the factors affecting transportation in supply chain management in Singapore and the United States. It discusses the importance of transportation in SCM and how it is influenced by political, socio-economic, and technological factors. The research compares the transportation aspects of the supply chains in the USA and Singapore.

Running head: SUPPLY CHAIN MANAGEMENT
Factors Affecting Transportation in SCM in Singapore and the US
Name of the Student:
Name of the University:
Author Note:

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Section B.
Abstract:
The detailed research conducted bring into light several aspects of supply chain management and
its central component, transport. Firstly, the introductory part brings into light the two aspects of
supply chain management. The first aspect is that SCM refers to coordination of different
operations in business organisations which ultimately make products available to the end
consumers. The second aspect is that supply chain consists of four parts, production, inventory,
location and transportation among transportation pervades the other three factors, thus occupying
the highest position among the components. Secondly, transportation of raw materials, WIP and
finished goods are influenced by three main external market factors namely, political conditions,
socio-economic conditions and technological conditions. Finally, it has been established that
both the USA and Singapore have favourable conditions required to have strong transportation.

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Table of Contents
Section B..........................................................................................................................................1
Abstract:...........................................................................................................................................1
1.0. Part 1. Introduction:..................................................................................................................4
1.1. Reason for choice of topic:.......................................................................................................4
1.2. Academic objectives of project:...............................................................................................6
1.3. Outline of sections:...................................................................................................................7
2.0. Part 2. Literature review:..........................................................................................................7
Rationale:.....................................................................................................................................7
2.1. Political factors affecting SCM in the US and Singapore:.......................................................8
2.2. Socio-economic factors SCM in the US and Singapore:........................................................11
2.3. Technological factors affecting SCM in the US and Singapore:............................................13
2.3.1 Greater transparency and better efficiency...........................................................................14
2.3.2. Focus on Individual Employees...........................................................................................14
2.3.3 Stronger Communication......................................................................................................15
2.3.4 Making Way for the small carriers.......................................................................................15
2.4 Advantages of SCM in US and Singapore..............................................................................15
2.5. Future trends of transport in SCM:.........................................................................................17
3.1. Review of objectives:.............................................................................................................19
3.2. Limitations:.............................................................................................................................20

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3.3. Suggestions for future research:.............................................................................................20
References:....................................................................................................................................22
4. Reflective statement:.................................................................................................................28

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1.0. Part 1. Introduction:
The topic which the research would explore would be factors affecting transportation in
supply chain management in Singapore and the United States of America. Hugos (2018) in the
work define supply chain management as the coordination of the business functions all across the
supply in order enable business organisations sell products and improve the performance of the
firms concerned. The authors then go on to define the term supply chain management as a
combination of its constituents namely, production, inventory, location and transportation.
Thus, it can be inferred from the discussion that supply chain can be defined as the coordination
of production, stock management, location and transportation. The report would stress on the
importance of transportation among the all four components in Singaporean and American
contexts.
1.1. Reason for choice of topic:
The reason for choice of the topic namely, importance of transportation in SCM of
Singapore and the USA can be justified by the flowchart showing importance of transportation in
SCM below (Christopher, 2016). The flowchart shows transportation comes to play in all the
parts of the supply chains of goods and services. As shown below, the procurement departments
of companies procure raw materials, finished goods and work-in-progress from suppliers using
transportation. Turki et al. (2017) strengthen the discussion by pointing out that the procurement
departments of the companies usually store heavy and bulky inventory in their own warehouses.
They require to transport the bulky inventory from warehouses to the manufacturing sites using
in house transportation. Similarly, the bulky finished goods stocks are once again transported to
warehouses till they are mobilized down the supply chain. Validi, Bhattacharya and Byrne
(2015) pointed out that transportation enables manufacturing firms to mobilise finished products

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to wholesalers and distributors. Retailers also use transportation to mobilise finished goods to
their own respective shop premises. Vernon (2017) point out that that consumers also use
transportation services to transport heavy consumer goods products like white goods. Thus it is
clear from this discussion that transportation plays several very significant roles throughout the
supply chains of goods and services.
Figure Flowchart showing importance of transportation
(Source: Christopher, 2016)
First of all, transportation services enables procurement of raw materials and work-in-
progress goods from suppliers to manufacturing companies. Secondly, transportation facilitates
movement of goods from warehouses of companies to the manufacturing facilities which ends
the role of transportation in upstream supply chain. Thirdly, transportation comes into play while
post production when companies transport finished products to warehouses (Schor, 2016).
Fourthly, transportation comes into play while transportation of goods down to supply chain till
they reach final consumers. Mota et al.(2015) point out in this respect that transportation impacts
the entire supply chain. Christopher (2016) can be iterated in this respect to point out that the
supply chain refers to the entire system of which enables procurement of raw materials from

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suppliers to manufacture finished goods and finally selling finished products to consumers. Thus,
it can be pointed out in this respect that supply chains of products would not function without
transportation of goods. Eskandarpour et al. (2015) point out in this respect that availability of
transport has direct impact on supply chains of goods. Oosterhaven and Knaap (2017) stress on
the importance of transportation in supply chains to point out that highly advanced transportation
facilities enables speedy transportation of goods.
1.2. Academic objectives of project:
The project under consideration would aim to explore the importance of transportation in
supply chain. Colicchia, Creazza and Dallari (2017) point out that with the increasing demand to
ensure customer satisfaction and sustainability, the companies marketing goods have to ensure
that they deliver goods to customers in appropriate conditions. This means that in case of
perishable goods like food products and bulky goods like machines, the marketing companies
have to ensure that there is minimum direct handling of goods. This means that companies
marketing goods have to depend on intermodal transportation of goods. Notteboom and
Rodrigue (2017) strengthen the opinion of the previous authors that transportation of goods are
subjected to different external market factors and internal factors. The transportation using
intermodal services are dependent on factors like political factors and technological factors.
Costantini et al. (2017) point out in respect that different countries have different macroeconomic
conditions which affect transportation of goods within those countries. Thus, it is clear that
difference in market conditions would affect the transportation sector which in turn would
impact the efficiency of the supply chains within the countries concerned. Vernon (2017) points
out in this respect that every country has different competitive advantages as far as its own
supply chain is concerned including transportation factors. Drawing comparison between

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transportation aspects of the supply chains of two different nations would render the research a
more profound base. That is why the researcher would consider the USA and Singapore to
conduct the research. Thus, the academic objectives of the research would be delving into the
factors affecting transport in supply chains by drawing comparison between the USA and
Singapore.
1.3. Outline of sections:
The research would be divided into three sections. The introductory section would
introduce the topic of the research and the justification behind conducting the research. This
would be followed by the exploring the academic objectives of the research followed by
outlining the sections. The second part namely, Literature review would be divided into five
parts, each part containing thematic analyses of the factors affecting transportation in supply
chains. The third part would consist of summarising of the findings from the thematic analysis
followed by drawing conclusion from the discussion in entirety. This would be followed by a
review of the objective followed by exploring the limitations the researcher would encounter
while conducting the research.
2.0. Part 2. Literature review:
Rationale:
Hugos (2018) mentions that role of transportation in supply chains is one of the most
heavily studied area of research. This is because the transportation aspect lies at the very crux of
the supply chain. It is also clear that the transportation comes under impacts of different
macroeconomic factors prevailing in different countries. Thus, the literature review would
conduct a thematic review of the factors impacting transportation.

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2.1. Political factors affecting SCM in the US and Singapore:
The main thing which one should note in the context of USA in terms of political factors that
could affect or do affect USA, is the fact that the country does not enjoy full political stability.
This is because of the fact that he regime under Donald Trump has suffered severe crises in the
recent years, to a point where the president might nearly be impeached. In this context, the
president has made several outrageous laws in the country regarding residence and business both,
which could be disastrous for the SCM of any company. This is because it limits various new
entries into the American market, and also puts tariffs on them for trading in the USA.
It is for this reason why the main thing which organizations could look to do in this
regard is to make sure that they capitalize on the opportunities that could come in their way from
the various economic advantages that the country provides, while mitigating the few risks that
could possibly arise from the main political instability in the country. It is for this reason that the
main thing which has to be done in order to be on track and not be affected by the US politics, is
to keep a track of all the developments that could arise in the context, and strategize accordingly.
However, one must know that suppliers in the country have minimum to no political affiliation
or influence attached to them, and new entries can choose their suppliers simply based on the
market dynamics, with zero influence from politics (Hainsworth, 2016).
Therefore, it can be said that the country, although is suffering from a fairly low political
stability, does not adversely affect the SCM of the various businesses that do business in the
country.
This brings the discussion to the next country, which involves Singapore. It is one of the
most prosperous countries in the region of South East Asia, which is the main reason why the
country has been so actively involved in the Asian business scenario. The country has a high

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political stability. It has not been observed since the independence of the country that there has
been any form of political instability or a social uprising against a political party in the country.
The country enjoys a modified version of the Westminster Parliamentary System, and has an
open gate policy to any business that has to run in the country. Bribery and corruption, which are
the major threats to any supply chain for any sort of business, have zero tolerance in the country.
This could be further validated by the fact that the country has been in a major position in the
world transparency index. The country ranks seventh in the CPI index, which is the international
index for transparency and fair trade in a country. It is for this reason why the country has been
prospering in economy since this fair trade between suppliers and businesses have attracted a lot
of new businesses in the country to flourish, coupled with the open gate policy which the country
enjoys.
This is indicative of the fact that the main thing which organizations need to consider in
the context of SCM is the fact that the main thing which has to be done in order to manage a
supply chain is to capitalize on the political stability which the country provides and be sure that
a proper structure for the supply chain is set up, without worrying about loopholes which
political factors could exploit (Tulchin, 2016).

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Figure 1.USA political stability
(Source: theglobaleconomy.com, 2019)
Figure 2.Singapore political stability

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(Source: theglobaleconomy.com, 2019)
2.2. Socio-economic factors SCM in the US and Singapore:
The current GDP per capita in the country of USA stands at approximately $5422. This is
highly reflective of the high purchasing power of the people in the country. It has a very
attractive economic growth, considering its current economy. Even in the HDI, the USA ranks
1st, meaning that socially, it is probably the most developed country in the entire world.
It is a general perception that the western culture is the most superior culture in all of the world,
after the USA virtually emerged victorious after the cold war. It is for this reason why the
country has been widely perceived to have people with modern outlooks. This means that the
country has the tendency to try out new and developed products in the market, and that too, in
good numbers, if the factor of high purchasing power is coupled up with it.
It also has to be noted .hat the United States of America is one of the most populated
countries in the entire world. Therefore, such a high population enjoying such a high purchasing
power, is gold for any business to flourish, if it is operated well. This is where the context of
SCM comes in. It is because of the fact that movements of goods would be highly frequent in
such a socio economic condition. As a result, the supply chain management in any company
would be highly facilitated by the infrastructure that is present in the sector. This is because of
the fact that the supply chain sector in the country has established itself in that manner due to the
high demand of goods pertaining to the socio economic conditions, and therefore, it would not be
a factor to worry about by any means for any company practicing SCM in the country (Reza et
al., 2019).
The next country to discuss in the topic is Singapore. The purchasing power in the
country has been fluctuating over the course of the recent times, but has a decent figure of over
$4,000. This is supported by the high economic growth in the country. The country also has a
population of over 5.6 million people, which ranks it in the 114th position in the world. This
means that although the population of the country is not humungous, it has an economic stability
which gives a large number of share of the resources to the people of the country, thereby
reflecting the country’s main social stability. This is because when people do get a fair share of
the economic resources of the society, there are least number of conflicts that arise from that

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society. This could be further cemented by the fact that the HDI ranking of the country is 9th, out
of 189 countries. Therefore, in a country with such high purchasing power, with a moderately
population, it is very much evident that the demand for various goods would be high. Therefore,
the main thing which one has to note in this regard is the fact that goods flow is also high in the
country’s market (Baharumshah, MacDonald, & Mohd, 2017).
This is also a positive for businesses in the context of SCM. With free flowing goods and
with such high demand for goods in the market, the supply chains are attracted by the high
business opportunities that arise from it. It is for this reason that suppliers for any FMCG, mainly
the technological FMCD’s are in abundance in numbers, which gives companies the chance to
choose from a lot. The socio economic factors have a positive effect on the SCM in the country.
Figure 3. GDP per capita in USA
(Source: Tradingeconomics.com, 2019)

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Figure 4.Purchase power in Singapore
(Source: Tradingeconomics.com, 2019)
2.3. Technological factors affecting SCM in the US and Singapore:
Different kinds of technologies have a positive effect upon the increasing profitability and
efficiency in the transportation market. According to Bhandari (2019), the latest technologies
that has been used in Supply Chain Management in US and Singapore, are
 Automatic Identification Technology
 Communication Technology
 Information Technology
As proposed by Auramo & Kemppainen, Automated Information technology includes
Bar Coding, Radio Frequency as well as Voice Recognition. Bar coding helps to increase the
logistics system as well as the productivity accuracy and speed. As discussed by Jin and
Chen (2015), the processing, production operation, as well as the distribution operation can
be tracked with the help of the bar code technology. The Radio Frequency Technology is also

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effective in the improvement of the ability of manufacturers, in the automated toll collection
in the transportation system on the highways.
According to Zhang & Dhaliwal, the communication technology helps in improving the
corporate trading relationships between the different business and the distributors, as well as
the supply chain. It in turn helps in allaying the competition barriers.
Also the information technology has positive effects on the supply chain management. It
helps in quicker responses to what the customer requires. It improves reduction in the
logistics cost as well as the internal and external service levels. The inventory costs are also
reduced.
Technology also helps in transforming the supply chain management. The ever-changing
aspect of the technology is a key point in the competitive market industry. The ways in which
it can help the supply chain management in United States are as follows.
2.3.1 Greater transparency and better efficiency.
Since the wireless era have begun, and the advancement in the technologies have
improved the processes. The third party logistics have helped in the improvement of accuracy
as well in the US business firms. According to Chaghooshi (2015), the customer relationship
management technologies also help in the easy-accessibility of the operators of the supply
chain management.
2.3.2. Focus on Individual Employees.
As discussed by Ping and Zakuan, the new wireless technologies that include the
smartphones, offer the distributors and the shippers the ability to link and pair the workers.
The smartphones offer the capacity to behave as a closed fleet network

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to an open carrier network. Companies can obtain the same type of status data accessible fro
m a cell phone via proprietary technology or in a worldwide unit regulated by Electronic Lo
gging Devices (ELDs).
2.3.3 Stronger Communication.
Technology innovations in Unite States help in the smooth and more frequent
communication. As discussed by Dotson and Miller, this helps in the improvement of the
business operations. Even if the managers are unavailable and are on the move, they are in
constant tuning with the daily happenings of the supply chain because of the improved
communication and the access to the live information of the business. According to Chen,
Preston & Swink (2015),
within all elements of the supply chain, flexible communication channels can increase staff p
roductivity and increase morale.
Communication aids in product monitoring and distribution, resulting in increased customer
satisfaction with the method of supply chain.
2.3.4 Making Way for the small carriers.
The smaller firms in US also try to find less investment and continue to integrate the new
invented technologies, including the automatic vehicle locations system. This opportunity may
provide the smaller firms to be more agile and flexible in the competitive market.
2.4 Advantages of SCM in US and Singapore
Since Supply Chain Management can be divided into three main parts, - purchasing,
manufacturing and transport, it includes important decisions about the use of input materials
about the production quantities, the distribution of the network configuration, as well as the

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transportation for both input and finished products. Whenever, a Nation has SCM, it possesses a
competition in the market. According to Bhallar et.al (2014), the businesses in Singapore
experience higher efficiency rate due to the incorporation of supply chains and product
innovation strategies. They are able to be more dynamic in the economy of the nation as well as
the emergency markets. As proposed by Hudnurkar, Jakhar & Rathod (2014), the supply chain
management basically is beneficial for the business firms in US as well as Singapore. Also the
supply chain management is advantageous because it decreases to cost and increases the output.
Also the transportation helps to eliminate the damage resources by the adjustment of the storage
space of the final finished products. It improves the communication which eventually helps in
effective coordination and collaboration with the transport and distribution companies. The
relationship between the vendors and the distributors also does increase. Opening the businesses
to different kind of new technologies and efficient collaboration systems, ultimately result in the
increase of the business profit level. According to Raju (2013), supply chain management leads
to the boost of cooperation level. According to Talib, & Hamid (2014), communication
technology if strong, among the different areas of business, it will any how improve the
production of the firms. There is less amount of delays in the process. Since everyone in the
business is aware of the procedures due to effective communication, the logistical errors and the
late shipments are mitigated to utmost level. Palandeng (2013) says, to manage an effective
supply chain network, it is necessary to take hold of the lean practises in the business firmly, like
the waste removal problems. The supply chain management software can also help in
automatizing the major processes, which includes the processing, the shipment tracking, and as a
result this helps to reduce the cost and save the time to do the same. The activities are
coordinated and it helps in the proper on-time delivery of the processes.

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2.5. Future trends of transport in SCM:
The transport industry in order to make supply chain stronger and adapt to the changing
macroeconomic factors is undergoing several changes. These new changes or trends aim to
enable the transport companies transport larger volume of goods in appropriate conditions and
cause minimum environmental impacts. Johansson (2018) point out in this respect that explore
one of advancements in transport industry which holds great promise for the future-block chai
technology. The block chain technology enabled ships are empowered with censors which would
enable the transporters monitor ships accurately from remote locations. Block chain technology
also enables tracking of temperature while transporting bulk goods. This enables the companies
to transport large volume of stocks at minimum prices. Thus, in short efficient transport facilities
reduces the cost of obtaining supply of goods. However, it can be pointed out that transportation
facilities to transport inventory are dependent on macroeconomic factors of the concerned
markets like countries, states and cities. van Riessen, Negenborn and Dekker (2015) point out in
this respect that in general advanced markets have more advanced transportation compared to
weaker economies. For example, the United States of America has a well-developed and
expansive transport industry compared the second country under consideration namely,
Singapore. This is because, the United States of America has more number of marine ports, a
more extensive road network and railway road network. Moreover, the country is also served by
an air and express delivery services or EDS worth over $ 87 billion which enable supply of
goods, particularly critical supplies like medical supplies (Selectusa.gov, 2019). The Maritime
and Port Authority of Singapore mentions that that there are six ports in the country. The country
has a weaker road and railway network owing to its smaller geographical area compared to the
US (Mpa.gov.sg, 2019). This upper hand of the US over Singapore in terms of transport can be

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contradicted by a report published by ArcBest IP Holdings LLC published in 2017. The report
mentions that Singapore port holds the second position in terms of container value far ahead of
the American ports. Thus, it can be pointed out that while Singapore remains ahead of the US in
terms of the marine ports, the latter holds a higher position in terms of rail, road and air transport
(Harris, 2017). Thus, it can be pointed out that the pivotal roles of transport in supply chains
have made the topic worth of study. The comparison between the economies of the US and
Singapore would make the study more analytical. The second significant trend in the
transportation industry is emergence of the emerging markets as significant players in the global
marine trade (Stats.unctad.org, 2019). Meng et al. (2018) opine in this respect that increasing
income of residents in the emerging markets enable them to purchase more goods which boost
demands. Xue, Li and Pei (2016) support this argument by mentioning that ecommerce
penetration in these markets have enabled consumers in countries to order goods available in
foreign markets. This boosts demand for goods in the emerging nations which in turn drives
growth in the transport industry.
Figure 5.Total seaborne trade by group of economies
(Source: Stats.unctad.org. 2019)

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Figure 6.Seaborne trade of developing economies
(Source: Stats.unctad.org, 2019)
3.1. Review of objectives:
It can be pointed out from the review of the two objectives that both the objectives have
been met. The first objective consisted of exploring the factors affecting transport in supply
chain. The first objective has succinctly been analysed on the first three parts of the literature
review. Firstly, it has been clearly pointed out that transport in a particular market comes heavily
under political factors like government laws. Secondly, the socio-economic factors like GDP
have strong impact on transport which has been pointed out as well. The third part of the
literature review clearly shows that technological factors impact transport as well. The first three
parts thus clearly achieve the first objective. The second objective which the research aimed to

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achieve is to explore the first objective against macroeconomic backdrop of two countries
namely, the USA and Singapore, both of which are developed markets in North America and
Asia respectively. The second objective has been achieved as well in the first three parts of
literature review in juxtaposition to the first objective.
3.2. Limitations:
The researcher suffered from several limitations while conducting the research. First of
all, the aspect of importance of transportation cannot be proved by conducting primary analysis
like surveys and interviews. Secondly, the companies do not generally reveal great detail about
their supply chains and transport partners in order to maintain their competitive advantage over
their competitors. Thus, the researcher in order to study the factors affecting transport in supply
chain management had to draw inferences from data like GDP of the USA and Singapore, the
two countries considered for the research. However, these bodies of data actually failed to
establish the real impact of macroeconomic factors directly on SCM in terms of quantity like
revenue generated. Thirdly, the topic does not mention supply chain of any specific product. The
term SCM covers a very broad aspect and thus, the research had to be kept less specific in
accordance with the topic. Fourthly, since companies do not release sensitive data like supply
chain on public data bases, the researcher had to face lack of authentic secondary data sources.
3.3. Suggestions for future research:
The research conducted above can inspire future researches. Future researches could be
conducted on the same topic but emphasise on a particular industry like automobile or
electronics. This would enable the researchers conduct a more detailed research specific to
particular industries. The second direction in which future researchers can proceed is conducting
research on the same topic by choosing a particular company. The third direction in which future

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researches can proceed could be drawing comparison between supply chain of Singapore and the
USA based on a particular industry or company present both the markets. This approach to the
research would enable the researcher to funnel down the broad topic into a more specific form.
The future researches can also be conducted by taking into account the other components of
supply chain management namely, production, warehouse and inventory management.

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4. Reflective statement:
I can reflect upon analyzing the discussion that the transportation holds crucial position in
the supply chains in all the market including the USA and Singapore. I can point out upon
reflecting on the learning from the research that transport holds the pivotal position in the supply
chains of products. I have learnt that the concept of supply chain can be discussed from two
aspects. The first aspect is that supply chain enables coordination of the business processes of
companies aimed to transfer goods to the end customers. The second approach delves into the
term from the point of view of its components namely, production, inventory, location and
transportation. I can point out that transportation comes into play at every stage of supply
chains. Firstly, it comes into play when manufacturing or marketing companies acquire raw
materials and work in progress inventory from suppliers and use transport services to move the
inventory procured from the location of the suppliers to the location of manufacture. Secondly, I
have learnt that manufacturing companies use internal transportation to transport materials,
especially bulky materials from warehouses to manufacturing sites. I can also point out that the
importance of transport in the supply chain continues downstream as well. The companies after
manufacturing finished goods use transport to once again transport finished products to the
warehouses till the finished goods are sold to distributors and wholesalers. The distributors and
wholesalers use transportation to carry the finished goods to their respective premises of business
to be sold to retailers. I have also learnt that the customers purchasing bulky finished goods also
use transportation. Thus, I can point out that transportation plays immense role in the supply
chain of goods and services both up and down the supply chain. I have learnt that the
transportation of goods and services comes under several macroeconomic factors. They are
political factors, socio-economic factors and technological factors. I can point out from the

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external market environmental factors like political stability of the concerned markets and gross
domestic product figures achieved by particular countries have direct impacts of the transport of
goods. I can mention the names of two nations to prove my point namely, the United States of
America and Singapore. The conditions of the transport in these two countries in general are
strong due to the favourable market conditions. However, the mounting pressure which the
transport sector is facing in these two countries due to data threats and environmental
sustainability cannot be undermined. I can also point out on the basis of my learning that supply
chain plays a very significant my enabling movement of goods and services in the global
economies. I have also realized that development of a strong supply chain requires immense
investment which poor countries cannot mobilise. Thus, I can suggest in this respect that the
developed and emerging nations should support chain projects in poor nations. I can end the
discussion by pointing out that conducting research on supply chain requires collection of
immense amount of data. Thus, I can point out that the research was time consuming and require
immense labour.
Section A. PPT slides (attached)
Section B. PPT slides (attached)