VU Management 2: Role of Transportation in Supply Chain Management

This assignment is a literature review exploring the critical role of transportation within supply chain management (SCM). It examines the definition of SCM, its key areas including purchasing, manufacturing, and transport, and the importance of logistics management. The review provides an overview of transportation in SCM, including its processes and the various modes and their characteristics. It analyzes the impact of transportation costs, inventory requirements, and the role of transportation in improving efficiency and building bridges between consumers and producers. Furthermore, it discusses the adverse effects of not understanding transportation in SCM and suggests ways to address related problems. The report highlights the importance of a well-executed transportation system for supply chain visibility and the overall improvement of performance. The student has provided an analysis of the key aspects of transportation in SCM, offering insights into its impact and providing valuable information.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author note

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Executive Summary
The literature review has been helpful in understanding the role of transportation in the
process of supply chain management. The supply chain management is considered to be the
management of the different activities which helps in transforming the different raw materials
into final products. It is inclusive of the active streamlining of the supply side activities of the
business in such a manner which will be capable of improving the effectiveness of the
company in a successful manner.

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Table of Contents
Introduction................................................................................................................................3
Literature Review.......................................................................................................................3
Overview of Transportation in Supply Chain Management..................................................3
Process of Transportation in SCM.........................................................................................4
Role of Transportation in SCM..............................................................................................5
Impact of Transportation in SCM..........................................................................................6
Adverse Effects of Not Understanding the Transportation SCM..........................................6
Addressing Problems Related to Transportation in SCM......................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Topic- Role of Transport within the Supply Chain
Introduction
The assignment throws light in analysing the role of the transportation within the
supply chain management. SCM is mainly segregated in three major areas which include
purchasing, manufacturing along with transport. From end to end, it includes the different
kinds of decisions regarding the materials which are needed to be used, quantities of the
product, configuration of the entire distribution network along with transportation for both
input related materials along with finished type of products. Logistics management is the key
part of the SCM which mainly focuses on how and when to receive the different raw
materials, finished as well as intermediate products (Yu et al. 2018). The main aim and
purpose of the assignment is to provide a structured literature review on the role of the overall
transport within the supply chain management process.
Literature Review
Overview of Transportation in Supply Chain Management
As commented by Yildiz et al. (2016), the transportation means the proper movement
of the goods along with services from the initial stage of the process of SCM to the
customers. The transportation plays a vital role in different supply chain as the products are
rarely consumed and produced at same location. As opined by Ko, Lautala and Handler
(2018), the success of any supply chain management process is highly linked with the
appropriate usage of the transportation and the proper selection of the transportation mode or
the service which are being offered within mode of transportation mainly depends on
different kinds of service related characteristics that are as follows:
 Rate of freights

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 Time for transit
 Reliability
 Considerations related to carrier
 Damage, loss, processing and tracing of the different claims
Process of Transportation in SCM
Moreover, the transportation in the process of SCM is capable of getting influenced
by the different activities related to logistics which are inclusive of the following:
Costs of Transportation- As opined by Wan et al. (2018), it is the first and foremost
element which are mainly affected by the location of the different warehouses, location of the
manufacturing facilities of the firm, retailers, customers along with suppliers.
Mode of Transportation- As described by Sarkar, Ullah and Kim (2017), it is the
other aspect which has been capable of creating impact on the packing which is needed along
with classification rules of carrier which helps in determining the choice of the package.
Requirements Related to Inventory- According to Reu et al. (2017), it is the aspect
which is mainly influenced by the transport mode which have been selected for usage. When
there is high speed, high priced systems related to transportation, the required inventories are
necessary to be maintained in the logistics department as the less expensive transportation
systems are being used effectively.
As opined by Okyere et al. (2019), the effective kind of transportation helps in
keeping the whole supply chain of the company running in a smooth manner. With the
successful execution of the transportation, inventory can be kept lean and it will be moved in
and out of the warehouse in a quick manner. It will be capable of improving the efficiency of
the warehouse, reduces the lead time along with saves time and money in the storage.
Additionally, as described by Ko, Lautala and Handler (2018), the freight transportation is the

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subset of the logistics management and the success of the supply chain management is linked
in a close manner to the appropriate utilisation of the transportation.
Role of Transportation in SCM
As commented by Kherbach and Mocan (2016), the role that is played by
transportation is complex than carrying of the different goods as well as services for the
different proprietors. The complexity can be taking effect through high quality management
and as opined by Fartaj et al. (2019), by the means of the well-handled transport system, the
different goods can be sent to the right as well as appropriate place at the right time as to
satisfy the demands of customers. It is capable of bringing efficiency along with building the
bridge between consumers along with producers successfully. Therefore, as opined by Gurtu,
Searcy and Jaber (2019), the transportation is considered to be the base of efficiency as well
as economy in the business logistics along with expanding their functions of the system
related to logistics.
Moreover, as opined by Dessouky et al. (2017), to practice in an efficient manner, the
cost-efficient Logistics management, the different companies need to lay the proper
foundation of the respective economical network for transportation. With the responsive
economical transportation network, the companies can be able to implement the different
strategic changes which will be capable of reducing the cost along with increasing the level
of satisfaction among the different customers with little level of disruption in the supply chain
flow. Additionally, as opined by Asl-Najafi, Yaghoubi and Azaron (2018), the responsive
level of transportation network mainly begins with the network visibility from end to end.
The visibility allows the different business for centralizing the production related operations
to the areas which are lower cost related and it is being done without any kind of impact on
the customer service.

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Impact of Transportation in SCM
As opined by Dessouky et al. (2017), the costs related to transportation helps in
representing biggest slice of the supply chain cost pie. From the different kinds of surveys
and researches, more than 60% of the supply chain dollar is being spent on the transportation
and the costs of transportation is capable of representing more than 3 to 12% of the revenues
or more is dependent on the type of product and industry. In the current scenario, the
transportation plays a vital role for the involvement by driving the continuous improvement
in the decisions or processes made upstream in ensuring that the transportation helps in
delivering the excellence of the supply chain for the companies.
For instance- Walmart has been successful in using the responsive kind of
transportation system for lowering the different costs and at the different distribution centres,
Walmart has been capable of using the cross-docking, which is the process wherein the
product is being exchanged between the trucks which will be helpful in focusing on the fact
that each of the trucks are moving to the retail store has the products from various kinds of
suppliers.
As commented by Fartaj et al. (2019), the managers in different companies need to
ensure the fact that the transportation strategy helps in supporting the competitive strategy.
The firms need to evaluate the functions of transportation which will be based on the
combination of the costs related to transportation along with different other costs which are
inclusive of inventory which will be affected by the different decisions related to
transportation along with responsiveness level achieved with the different customers
successfully.

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Adverse Effects of Not Understanding the Transportation SCM
On the other hand, as commented by Fartaj et al. (2019), there are different adverse
effects of not understanding and implementing the transportation approach in the supply
chain activities in the company. When the cost related to freight is high, the small type of
oversights can be resulting in the unneeded expenses which could have been avoided
successfully. Moreover, as described by Kherbach and Mocan (2016), the undersupplied
channels of sales can have negative impacts in the form of the sales opportunities which have
been missed. The failure in order to monitor the prices of the raw materials can be resulting in
the above average costs across the different sources. Due to the same, it can be a huge
concern for the management as it is the crucial aspect of the business and the process should
be efficient in nature.
Therefore, as described by Okyere et al. (2019), there should be delicate balance
between the transportation supply chain management as usually the SCM becomes the proper
as well as balancing act of the time versus cost. It is the easiest element for transportation and
there are different ways which are available for shipping the different goods from one place
to the other. The cost of shipping is high sometimes, however, the same can be properly
balanced through various kinds of activities in comparison to the relative times of shipping of
such products. When the different producers planned ahead for making sure that the different
materials are incoming in the efficient manner in the proper time. It will be helpful for them
in achieving the lowest costs related to freight.
Addressing Problems Related to Transportation in SCM
As commented by Kherbach and Mocan (2016), there are different problems in the
transportation related supply chain that will be managed as well as addressed through proper
availability of the different types of analytics that are provided through transportation kind of

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management system. The requirement of such kind of insights will be allowing the
companies for making the smarter type of business decisions is especially true when the
supply chain becomes larger as well as operating on a large scale. The different recent
advancements in the technology is helpful in determining and promising better type of
integration among physical movement of the products along with visibility. Lastly, it can be
concluded that the different companies of various sizes must be approaching to the supply
chain through implementation of the effective systems for achieving high level of visibility
along with occurrence of the supply chain related errors.
Conclusion
The well-executed kind of system of transportation will be leading to the supply chain
visibility and the system of transportation feed in the predictive kind of analytics scheme, the
overall performance can be improved in the board. Supply chain management has ultimately
has many types of moving parts and the starting point should be transportation; however, it
will be acquiring more than 40 to 60% of the costs of the SCM.

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References
Asl-Najafi, J., Yaghoubi, S. and Azaron, A., 2018. Coordination of a bi-level closed-loop
supply chain considering economic and green transportation modes. International Journal of
Industrial Engineering & Production Research, 29(4), pp.429-441.
Dessouky, M., Ordóñez, F., Shen, Z. and Jia, H., 2017. Regional Transportation and Supply
Chain Modeling for Large-Scale Emergencies. Improving Homeland Security Decisions,
p.134.
Fartaj, S.R., Kabir, G., Eghujovbo, V., Ali, S.M. and Paul, S.K., 2019. Modeling
transportation disruptions in the supply chain of automotive parts manufacturing
company. International Journal of Production Economics, p.107511.
Gurtu, A., Searcy, C. and Jaber, M.Y., 2019. Transportation and sustainable supply chains.
In Handbook on the Sustainable Supply Chain. Edward Elgar Publishing.
Kherbach, Q. and Mocan, A., 2016. The importance of logistics and supply chain
management in the enhancement of Romanian SMEs. Procedia–Social and Behavioral
Sciences, 221, pp.405-413.
Ko, S., Lautala, P. and Handler, R.M., 2018. Securing the feedstock procurement for
bioenergy products: a literature review on the biomass transportation and logistics. Journal of
Cleaner Production, 200, pp.205-218.
Okyere, S., Yang, J.Q., Aning, K.S. and Zhan, B., 2019. Review of Sustainable Multimodal
Freight Transportation System in African Developing Countries: Evidence from Ghana.
In International Journal of Engineering Research in Africa (Vol. 41, pp. 155-174). Trans
Tech Publications.

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Reuß, M., Grube, T., Robinius, M., Preuster, P., Wasserscheid, P. and Stolten, D., 2017.
Seasonal storage and alternative carriers: A flexible hydrogen supply chain model. Applied
energy, 200, pp.290-302.
Sarkar, B., Ullah, M. and Kim, N., 2017. Environmental and economic assessment of closed-
loop supply chain with remanufacturing and returnable transport items. Computers &
Industrial Engineering, 111, pp.148-163.
Wan, C., Yang, Z., Zhang, D., Yan, X. and Fan, S., 2018. Resilience in transportation
systems: a systematic review and future directions. Transport reviews, 38(4), pp.479-498.
Yildiz, H., Yoon, J., Talluri, S. and Ho, W., 2016. Reliable supply chain network
design. Decision Sciences, 47(4), pp.661-698.
Yu, W., Chavez, R., Jacobs, M.A. and Feng, M., 2018. Data-driven supply chain capabilities
and performance: A resource-based view. Transportation Research Part E: Logistics and
Transportation Review, 114, pp.371-385.