Transportation in supply chain

2. TRANSPORTATIONIN SUPPLY CHAIN

3. Transportation is another key driver in the supply chain
which has significant impact on efficiency as well as
responsiveness.

4. Shippers provide movement of large
Products rarely produced and consumed in the same
location
Movement of product from one location to another
location
Carriers is the party that moves relatively smaller
volumes of products
Transportation is a significant of cost component

5. COST COMPONENT OF AIR LINES
Fixed cost Cost of labor and fuel Variable cost

6. TRUCK
Trucking is more expansive than rail but offers the advantage
of door -to -door shipment and a shorter delivery time.

7. Water transport is ideally suited for carrying large
loads at low cost.
In global trade, water transport is the dominant
mode for shipping all kinds of products.
WATER

8. Pipeline is used primarily for the transport of crude
petroleum, refined petroleum products and natural gas.
PIPELINE

9.  Package carriers are Transportation companies such as
FedEx, UPS and the U.S...
 Package carriers use air, truck and rail to transport.
PACKAGE CARRIERS

10. Intermodal transportation is the use of more than one
mode of transport to move a shipment to its destination.
INTERMODAL

11. RAILWAY
Rail carriers incure a high
fixed cost in term of track,
locomotives, cars and yards.
A major goal for railroad is
to keep locomotives and well
utilized.

12. Roads, seaports, airports, rail and
canals are some of the major
infrastructural elements that exist
along nodes and links of a
transportation network.
TRANSPORTATION INFRACTURES
AND POLICIES

13. In the 20th century, as the modes of
transport changed , there was a need
fir higher quality roads. A network of
national toll free highways was built,
largely using gasoline taxes as source
of finding.
TRANSPORTATION INFRACTURES
AND POLICIES

14. It seems reasonable that the
government has to either own or
regulate a monopolistic
transportation infrastructure asset.
TRANSPORTATION INFRACTURES
AND POLICIES

15. The direct shipment network to a single destination option, the
buyer structures the transportation network so that all shipment
come directly from each supplier to each buyer.
DIRECT SHIPMENT NETWORK TO
SINGLE DESTINATION

16. A milk run is a route on which a truck either delivers
product from a single supplier to multiple retailers or
goes from multiple supplier to a single buyer location.
DIRECT SHIPMENT WITH MILK
RUNS

17. SHIPMENT VIA DC USING MILK
RUNS
Milk runs can be used
from a DC if lot sizes to
be deliverd to each buyer
location are small.

18. Combination of above methods
Low volume products to low volume retail
outlets are consolidated to and from the DC
High volume products to high volume retail
outlets may be shipped directly
Complexity is very high
TAILORED NETWORK

19. Naim Miya
ID: BBA-15035
Mumbai Dabbawalas: A Highly
responsive distribution network

20. Mumbai Dabbawala have
Successfully run a highly
responsive distribution system
for more than a century- while
charging customer about $ 7 for
this service.
MUMBAI DABBAWALAS

21. MUMBAI DABBAWALAS
Types of service: Carring Lunch
Started time: around 9 a.m.
No of Dabbawalas: about 5000
Collect Dabbas: 30 Each
Total delivery: 1,50,000 Lunch boxes
Each dabbawala deliver: about 40 dabbas
Rail arrive at Destination: 11:30
Completed time: Before 1 p.m.
Return Empty Dabbas: By 5 p.m.

22. Bicycle
Handicarts
Railway
MODE OF TRANSPORTATION OF
MUMBAI DABBAWALA

23. Factors
Low uncertainty of demand
Temporal Aggregation of demand
Use of transportation resources when they are
underutilized
FACTORS TO FACILITATE SUCCESS

24. Transportation and inventory cost trade-off
 Choice of transportation mode
 Inventory aggregation
Transportation cost and responsiveness trade-off
TRADE-OFFS IN TRANSPORTATION
DESIGN

25. A manager must account for inventory costs when
selecting a mode of transportation
A mode with higher transportation costs can be
justified if it results in significantly lower inventories
THE COICE OF TRANSPORTATION
MODE

26. INVENTORYAGGREGATION
As a result of physical aggregation
 Inventory costs decrease
 Inbound transportation cost decreases
 Outbound transportation cost increases

27. Inventory aggregation decreases supply chain costs if
the product has a high value to weight ratio, high
demand uncertainty, or customer orders are large
Inventory aggregation may increase supply chain costs
if the product has a low value to weight ratio, low
demand uncertainty, or customer orders are small
INVENTORYAGGREGATION

28. TRADE OFF BETWEEN
TRANSPORTATION COST AND
CUSTOMER RESPONSIVENESS
Temporal aggregation
is the process of
combining orders
across time
Temporal aggregation
reduces
transportation cost
because it results in
larger shipments and
reduces variation in
shipment sizes
However, temporal
aggregation reduces
customer
responsiveness

29. .
The use of different
transportation networks and
modes based on Customer and
product characteristics.
TAILORED TRANSPORTATION

30. Factors
Size of customer
Customer density and distance
Product demand and value
FACTORS AFACTING TAILORING

31. Firms must consider customer size and
location when designing transportation
networks
Large customers can be supplied using a
TL carrier
Smaller customers will require an LTL
carrier
TAILORED TRANSPORTATION BY
SIZE OF CUSTOMER

32. The degree of inventory aggregation
and the modes of transportation used in
a supply chain network should vary
with the demand and value of a
product.
TAILORED TRANSPORTATION BY
PRODUCT DEMAND AND VALUE

33. TAILORED TRANSPORTATION BY
CUSTOMER DENSITY AND DISTANCE
Firms must consider customer density and
distance from warehouse when designing
transportation networks.

34. It determines the use of software for transportation routes
and it has been the most common in IT application in
transportation by taking the location of customer, shipment
size and desired delivery times.
DETERMINING ROUTES

35. IT also comes into play in the use of global
positioning system (GPSs) for tracking real time
location of vehicles and electronic notification
of impending arrivals.
GPS TRACKING

36. Synchronization between packing and
routing software is important because it
determines how much is packed on truck
affect the routing and the routing
obviously affects what is packed on a
truck.
PACKAGING AND ROUTING
SYNCHRONIZATION

37. The Internet has also been used by companies to help
match shipper loads with available carrier capacity in
trucking industry.
MATCHING SHIPMENT LOADS

38. MANAGEMENT IN
TRANSPORTATION RISK
The risk of hazardous material.
The risk that the shipment is delayed
The risk that the shipment does not reach its
destination be because intermediate nodes or
links are disrupted by external forces

39. In each case, it is important to identified to important the
sources of risk and their consequence and plan suitable
mitigation strategies. Delay arises either because of congestion
along links such as roads or nodes such ports and airports.
Disruption at transportation links or nodes may occur be
because of nature events such as hurricanes or human-made
events such as terrorism.
MANAGEMENT IN
TRANSPORTATION RISK

40. Hazardous material can be harmful when people and the
environment are exposed. The goal of risk mitigation here is
to minimize the probability of exposure, and in the event of
exposure to minimize the impact.
MANAGEMENT IN
TRANSPORTATION RISK

41. In automotive industry, with an annual
production of more than 3.7 million
units, as of 2010, is one the largest and
fastest growing in the world.
INDIAN AUTOMOTIVE INDUSTRY

42. MODE OF TRANSPORTATION

43. Ports
Roads
Airports
INFRASTRUCTURE IN
TRANSPORTATION

44. Transportation cost
Inventory Cost
Operating cost
CONSIDER WHEN DESIGNIMG A
TRANSPORTATION NETWORK