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Transportation plays a very important role in Supply chain Management and my analysis is on the problem that why this department is suffering from transportation crises what are the barriers that are coming in the middle of these problems, I have noticed that the communication network is not properly establish in supply chain so the flow of information was not delivered.
The other was the technology problem, due to this there was a high chance of theft, terrorism, hijack, and accidents which impact was directly coming on the products and the raw material which use to carry out from the manufacturer to the final consumer.
I have also noticed that in supply chain the transportation also faces problem from the government side that is increase in duties impose on delivering of product, increase in tax rate on the vehicles and also increase in fuel cost.
These entire problems which have been mentioned have been giving very strong impact on the production cost of the inventories. Solutions being introduced such as RFID, DSL CAMERAS, CELL PHONES etc to protect inventory from different disasters etc . With these problems, possible solutions and recommendation can solve major issues in transportation in Supply chain.
Table of Content Pages
Transportation concept model 5
Transportation capabilities 6-10
Problems in transportation 11
List of problems exist in transportation 11
Description of the problems 12-14
Solutions of the problem 15
Explanation of the solutions 16
Transportation planning and management 17
The i2 Solution: i2 Transportation Planning and
12.) Benefits of i2 Transportation Planning and Management can include 19
13.) Benefits of i2 Transportation Planning and Management can include 20
14.) Benefits of i2 Transportation Planning and Management can include 21
The transportation and logistics are essentials in supply chain network providing right quantity stuff to the right customer at the right time and the right place and at the right condition. The increasing ability to source commodity and finish good from anywhere in the world expands the domain of the transportation to include international comparison of supply chain structure and global interactive practices. As firm strategically compete on the basis of cost service or time, transportation can play integrative role in supply chain structures. More expansively transportation may be an ideal position to integrate and coordinate flows through out supply chain. The supply chain structure is often considered to represent the organizational efforts by three or more firms to manage and integrate material and related information flows in order to get closer to the customer. This supply chain structure attempts to order cross functional activities into holistic business process both within and across firms in the supply chain. As such attention must be given to both the internal and external customer of the firms. To minimize total cost and maximize customer value, transportation integration is essential within supply chain. In general integrative transportation involves getting the right assortments to the right place in perfect condition at the right time throughout the supply chain. Specifically the supply chain structure defines and drive the transportation capabilities of time compression, reliability, standardization, just in time delivery, information system support, flexibility and customization.
Info/Return Goods Flows
Structural integration of the supply chain, such as operational coordination and information sharing can reduce transportation time and thus total supply chain costs. For example, faster transit time minimizes pipeline inventories and may allow customers to lower safety stocks held in reserve. If time compression results in more frequent deliveries, then cycle stocks also can be lower. Furthermore, time saved in delivery frees up time in other areas of the supply chain, which may further reduce total costs. Similarly, if there is a delay in another area of the supply chain, then transportation may be called upon to speed up its performance so that cycle times remain constant. Yet, speed is not necessarily of value to the customer if the old military shibboleth of "hurry up and wait" is operating. For this reason, just-in-time (JIT) delivery is important, Maximizing inventory velocity and reducing dwell-times are other time compression strategies that involve transportation. Velocity refers to how many times inventory turns per year, or the average number of days of inventory on hand. For example, carrier-run flow-through warehouses or cross-docking operations similar to less-than-truckload (LTL) motor carrier terminals - rather than storage facilities or user distribution centers - should increase inventory velocity and therefore lower total inventory costs. Actions and policies that increase transportation container velocity will also reduce inventory costs.
All of the above time-compression concepts reflect attempts to achieve operational efficiency using transportation's temporal capabilities. As such, operational planning and reengineering may allow for transportation and information to serve as substitutes for warehousing and inventory costs. In particular, time compression strategies of expedited transportation, increased inventory velocity, and minimum dwell-times can reduce pipeline inventory, safety stocks, and cycle stocks. As a result, total supply chain costs may be minimized.
Structural integration, such as technical operational planning and instrumental information sharing, also can foster transportation reliability, which can be defined as reduced variability of shipment times around the mean transit time. It is often more important that delivery times be reliable and consistent rather than solely fast. To achieve integration, supply chain members depend on reliable deliveries for their own production and sales efforts. Inconsistent supply performance can raise production costs (for example, by shutting down a production line) or engender lost sales through stockouts. "What is the value of on-time delivery if being late can shut down an entire JIT production line? Off course, in the present competitive environment, both speed and reliability are demanded of transportation.
Another dimension of transportation reliability is the absence of shipment loss and damage, which also is important to supply chain performance. Although the direct costs to supply chain members of replacing lost or damaged materials can be high, the indirect costs can be even higher. Among these indirect costs are lost sales, decreased customer loyalty, market share loss, production down-time, and reordering costs. The reliability of transportation is therefore critical for supply chain integration. Unreliable service that delivers partially filled orders and/or damaged articles can significantly increase supply chain costs.
Standardization of transportation and logistics processes, practices, and policies is an important integrative capability. Standardization makes supply chain flows and activities more predictable and less susceptible to an exceptions basis. Individual processes, organizational entities, and personnel can act more efficiently in terms of less risk, time, labor costs, equipment, or other supply chain resources.
Just-in-Time Delivery and Information Systems Support Structural integration, such as operational planning for process improvement, allows transportation to be synchronized with other supply chain activities and flows. Information systems support is also critical to facilitate such integrative performance. For example, consider transportation at a Saturn automotive plant where one third-party carrier handles 2,000 dock stops per day at five-minute intervals to exact points of demand on the production line. This eliminates warehousing and double-handling, substitutes "moving warehouses," and enables Saturn to turn inventory more than 200 times per year. In contrast, unsynchronized transportation can create congestion, confusion, and poor production sequencing at a customer's receiving docks. The results can be loss and damage, inefficient production and sales force efforts, and overtime or extra labour to handle the irregularities. For these reasons, early shipments may be even worse than late deliveries. Thus, structural integration through operational planning, coordination, and information sharing can be vital to achieving responsive JIT delivery and information systems support.
Sorting and assembly to fulfil last-minute customer demands and to ensure such structural aspects as strategic alliances or regular meetings with customers to share information and determine their needs can build in transportation flexibility for supply chain integration and total cost reduction. For example, motor carriers and automobile manufacturers have jointly developed side-loading trailers to provide flexibility in terms of delivery sequence and to specific points on the line. Furthermore, nearby carrier-operated JIT flow-through warehouses make use of kitting operations and postponed flexibility in shipment scheduling. For special nonrecurring, non-standard, or emergency situations, supply chain members may require altered shipment plans or rush shipments. These may be needed to fulfil a commitment to a key client, for special promotions, for stock outs and replacement items, or simply to keep production running. In general, lack of transportation flexibility can raise inventory carrying costs, ordering costs, the cost of lost sales, and production costs. In total, all of these transportation capabilities represent flexibility in terms of time, items, quantity, location, or delivery sequencing.
A final transportation capability involves customization of transportation offerings. Customizing transportation attributes for specific market segments or different supply chain members can further increase integration of supply chains. For example, store door-delivery systems or carrier-managed inventory reordering, labelling, and displays are innovations developed in response to specific market segments. In turn, direct delivery or cross-docking operations are innovations tailored to other market segments.
Problems in Transportations
Before we discuss the problems in detail we need to know, the ways of transportation through which the goal of just in time inventory can be achieved from Supplier, to manufacturer, to Whole seller, then to Retailer, and then to final Consumer. In supply chain there are Four ways of transportation.
List of Problem exist in these transportation system
Description of the Problems faced in These Transportation
mostly very common in road and rail transportation and its impact provide losses to the manufacturer. The supplier while using this mode of transportation must be very careful for delivery inventory just in time because you don't know when can the risk of theft occurs.
Every mode of transportation can suffer this which can upset the supply of inventory and customer relation can also become worse. So proper facilities must be provided on order bear loses and one can maintain good relationship with customers
Transportation activities mostly suffers this kind situation which impacts comes on supplier by not providing enough facilities or by not using reliable mode of transportation.
Air Transportation suffers due lack of security facilities some time plain can be hijacked by terrorist and raw material can be taken to other destination. Once the material cannot be deliver on time the impact will come on the production line and therefore the production of goods will be stopped and manufacturer cannot deliver the order to final customers.
They work for wages manufacturer needs labour for making final products or finish good while taking work from them as a manager he is responsible for giving wages and any benefits to they labour, if manufacturer taking over time work from them he should give compensation to them other wise they can go on strike and products cannot be fully prepared
All transportation mode is based on fuel weather it is airplane, train vehicle, or ship they need fuel to go from one destination to another and to purchase fuel they need money and these money take it from the supplier or customers in shape rent of vehicle or fares. If fuel price go up or there is strike going on and fuel is not available so one cannot use these transportation modes.
Mostly companies hire transporters to take their material from one destination to another and for this transporters charges fares from them. So one should go for that transportation which is more reliable and offering less rate of fares increase in fares increases production cost.
Mostly supply chain suffer problem due lack of communication. The information is not delivered properly from one end to the other. If communication system is not properly established the manufacturer cannot be communicate with its supplier and due to this the just in time inventories can suffer loss by not getting the material on time.
A very important element in supply chain management and plays a vital role in transportation system. Technology can provide a very good solution from a number of disasters which can be faced in transportation modes. If there is no technology available in transportation systems then there is no chance that this system can escape from problems.
It is very important when we are talking about transportation modes. If any one the transportation mode is not punctual for reaching the destination on time then its impact can come on just in time production line, because if material will not reach on time the finish good line would suffer a loss.
Solutions of the problems faced in Transportation
As we all know transportation faces numerous problems and technology is the best ways to provide solutions for some of the problems mentioned in this report.
Transportation Modeling and Analysis
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Explanation of Solutions
We have discussed the problems which different modes of transportation suffer, and we have also listed some of the solutions for this which includes technology and other solutions. Technology solutions basically helps these modes of transportation from being attacked by, theft, terrorism, hijacked, and accidents which can take place any time, not only this some times government its self can cause problems for the transporters like increase in price of petrol or diesel which force the transporters to raise there fares, so then transporters need to find an alternate of these, The road transportation can use C.N.G kits there vehicle which can provide little flexibility in charging the fares. Security guards and insurance of products Airplane and of course train can make life easy they can protect it from terrorism activity which can take in these transportation, and insurance can help us in getting the cost back of the lost material or transportation systems. Cell phones, internet, and tracker facilities should be provided on every mode of transportation so one can locate from satellite its area where the transportation moving. Cell phones and internet helps in communicating and delivering of information from one end to another. These solutions can help in just in time inventory to reach its destination in time and with this facility it can reduce production cost.
Transportation Planning and Management
The transportation and distribution world is a rapidly changing landscape marked by unprecedented complexity. Increased global trade makes logistics supply chains even longer and more dynamic, and customer expectations continue to rise. Whether shipping from Chicago or Shanghai, companies must be able to collaborate more effectively with their key trading partners-carriers, suppliers, or customers-to drive maximum efficiencies while delivering world-class service. Consequently, organizations must consider these business processes more strategically and look for more refined and adaptable closed-loop solutions.
i2 solutions for transportation and distribution have been designed and proven to empower transportation as a strategic enterprise by enabling industry best practices in the areas of design, procurement, planning, execution, and visibility. These solutions consistently create quantifiable value by synchronizing those critical transportation and distribution processes across multiple modes, enterprises, and borders, while driving optimal operating efficiencies and greater service performance.
The i2 Solution: i2 Transportation Planning and Management
i2 Transportation Planning and Management is a solution designed to provide planning, execution, management, and monitoring of a complex transportation life cycle.
This solution can offer the tools needed to optimize and execute shipments, proactively monitor exceptions, manage match-pay and auto-pay settlements, as well as provide analytical performance management for transport activities.
i2 Transportation Planning and Management uses configurable business rules and appropriate constraints to transform order fulfillment, procurement, and replenishment plans into cost optimized and executable transportation plans that adhere to facility inventory and transportation network constraints. By managing the entire transportation life cycle, this solution can help reduce costs, improve transport efficiency, and enhance customer satisfaction.
Capabilities of the i2 Transportation Planning and Management solution can include:
Optimized shipments and loads for minimum cost and maximum utilization
Web, EDI, fax, or email communications for orders and tenders
Support for merge-in-transit, dynamic hub selection, and cost allocation
Support for multiple languages and international deployments
Proactive monitoring for exception-based, in-transit visibility
Automated 3D load plans, carrier selection, and network-wide transport plans
Analytics and comprehensive reporting features
FreightMatrix -hosted service option
Benefits of i2 Transportation Planning and Management can include:
Achieve substantial transportation costs savings
Accelerate return on investment
Increase visibility, asset utilization, and inventory efficiencies
Improve customer satisfaction
Achieve better labor productivity
Establish transactional accountability for audit and compliance
Transportation Modeling and Analysis
In order to improve transportation performance and efficiency, it is essential to understand the complexities that businesses face today. A system capable of monitoring, analyzing, and reporting on important transport activities must be available. Unfortunately, few companies have the specialized systems needed to model and evaluate transportation network strategies, modes, carriers, and other transport variables on a periodic basis.
Benefits of i2 Transportation Planning and Management can include i2 Transportation Modeler is part of an end-to-end solution for the planning, execution, and management of the entire transportation life cycle. This solution is designed to enable an organization to better utilize and manage an entire transportation network, as well as reduce costs while improving transport performance.
i2 Transportation Modeler is designed to employ sophisticated optimization and data techniques to define and evaluate alternative transportation strategies.
Managers create "what-if" scenarios to analyze virtually any aspect of the transportation environment, including: the use of cross-docks, the comparative advantages of various transport modes, merge-in-transit, co-mingling, and multi-drop direct shipment strategies.
Since i2 Transportation Modeler can leverage the same core optimization engine of other i2 transportation solutions, solution models can be operationally executed.
i2 Transportation Modeler is designed to provide comprehensive data management, analytics, and reporting of key transportation cost and service trade-offs.
Capabilities of i2 Transportation Modeler can include:
Flexible importing/entering/editing of data from virtually any source
Modeling of complex real-world constraints and scenarios
Powerful problem-solving engine to consolidate shipments, optimize delivery routes, and accommodate service requirements, as well as evaluate carriers and modes
Sophisticated multi-leg and dynamic hub selection strategies
Intuitive user interface with flexible reporting and graphical visualization
Desktop PC and laptop enabled
Optimization engine and tariffs are shared with i2 Transportation Manager
Benefits of i2 Transportation Modeler can include:
Reduce costs through efficient consolidation of freight onto fewer trucks
Improve utilization of shipping-related assets such as warehouses, trucks, and containers
Optimize transportation strategies and modes
Improve on-time deliveries, product availability, and customer satisfaction
Evaluate changes to the network that are driven by new distribution channels, suppliers, or customers
Develop new revenue channels and increase profits
Transportation Bid Collaboration
Companies at every stage of the supply chain are looking for ways to control costs, improve service, and accelerate return on investment. By working together to negotiate transportation rates, shippers, carriers, and third-party logistics providers (3PLs) can establish fair and accurate contract rates by lane and service. But to do that, a sophisticated and reliable information system is required.
The i2 Solution: i2 Transportation Bid Collaboration
i2 Transportation Bid Collaboration provides a suite of tools for the periodic negotiation of transportation rates. It combines an optimization engine, a web-based workflow, and a bidding tool into a single solution for negotiating and awarding transportation contracts.
Using transactional shipment history and forecast data, i2 Transportation Bid Collaboration is designed to allow shippers to set up a physical network of carriers and 3PLs to participate in a rate negotiation. Shippers can then use the system to communicate to the carriers a wide variety of transport-related information, including destinations, volumes, frequency, service requirements, equipment tradeoffs, and seasonal variations.
i2 Transportation Bid Collaboration provides the tools necessary to negotiate accurate and competitive transportation rates using combined bid optimization.
Capabilities of i2 Transportation Bid Collaboration can include:
Graphical representation of historical demand, customizable by mode and carrier
Support for ocean, truckload (TL), and less-than-truckload (LTL) modes
Web-based workflow for communication with carriers
Exception management and data validation
What-if analysis of service and cost tradeoffs or carrier rationalization
Identifies lowest freight spend that can satisfy projected demand
FreightMatrix -hosted service option
Benefits of i2 Transportation Bid Collaboration can include:
Reduce overall network transportation cost
Improve carrier relations
Rationalize carrier base
I have seen that in supply chain system transportation is very important from supplier to supplier to the customer's customer and without a proper transportation network no company can increase there profit margin. There are four modes of transportation that includes Air, Road, Sea, Rail and one is the pipeline system which uses for oils.
Government must take steps for improving transportation system for the companies so they can reach to there customers, not only this the expenses which government can control like fuel prices, duties on import and export must controlled properly so the companies can come close to each other for importing and exporting there goods.
Keeping in mind about the Air transportation which is expensive if government reduce tax rate companies will more focus on air transportation system, and if proper roads or highways and tracks for rail transportation being constructed with proper technology and security it will give a good boom to the transportation system in Supply Chain Network.