Role of Transport in Supply Chain

Running Head: TRANSPORT IN SUPPLY CHAIN 1
Role of Transport in Supply Chain

TRANSPORT IN SUPPLY CHAIN 2
Table of Contents
Introduction......................................................................................................................................3
Literature Review............................................................................................................................3
Conclusion.......................................................................................................................................6
References........................................................................................................................................8

TRANSPORT IN SUPPLY CHAIN 3
Introduction
Transport is one of the biggest components of the cost structure of logistics and supply chain of a
company. In today’s competitive business world, supply chain managers who are outperforming
their competition have done largely by the acknowledgement of transportation as a prepared
vehicle. Through this organizations are leading to save the costs and create value within its
supply chain and logistics process. The operation of transportation determines the effectiveness
and efficiency of moving products and materials. The objective of this paper is to review a
literature on role of transportation in supply chain process. It includes different types of
transportation which assist the companies in their supply chain and logistics.
Literature Review
Transportation plays a significant role in the process of supply chain management. According to
Bhattacharya and Guiffrida (2014) transportation has become one of the major elements of the
supply chain valuation for several companies. The author defines that transportation is the
movement of goods and products from one location to another location (Bhattacharyya and
Guiffrida, 2014). According to Lu (2011), supply chain is the network of organizations,
individuals, processes, technology and activities which are involved in the manufacturing and
sale of products. It includes all the processes from the delivery of raw materials from supplier to
manufacturer and to the final customer (Lu, 2011). Moreover, supply chain management
includes the logistics which covers the information and material flow, buying and selling in
terms of operative contexts like ordering, transportation, packaging and competition as well.
In this context, Christopher (2016) stated that supply chain professionals consider all the
procedures which are from source materials to production, wholesaling and retailing. By the use
of different software, these people can examine how an organization can save the money and
work more efficiently. This process includes the selection of transport also. From total
distribution cost, a business spends 36% of total on transportation while another 64% is spent on
other components of supply chain (Christopher, 2016). This transportation cost includes the
modes of transportation, containers, corridors, pallets, labors, terminals and time.