Role of transportation within the supply chain.
We use transportation in our everyday activities be it going to school or receiving a delivering of an item we ordered through the internet, an efficient and reliable transportation is important. The role of transportation in a supply chain can also not be underestimated because it joints the various stages involved in the conversion of raw materials into an end product that can be sold to the consumer. Transportation in a supply chain can be described as the process of moving raw materials from suppliers to the manufacturing plant, the movement of goods from different areas and stages of the production process or the moving of finished products from the manufacturing plant to the intended consumers. Transportation is vital within the supply chain because it determines the overall efficiency of the system. This essay starts by describing the various modes of transport available to a supply chain manager and then goes on to outline the role an effective transportation system plays in a supply chain system.
The process of transportation has become increasingly vital to most companies due to the effects of internationalized markets. Globalization has brought about new dimensions to doing business in that production is being done mostly in the emerging markets while part of the customer base is located in the developed countries. This means that efficient transport systems are needed to deliver goods that are of high quality and also for the goods be delivered in time (Fernie and Sparks, 2004). To be able to compete effectively with other multinationals, a firm has to adopt the most efficient transportation system.
Transportation accounts for up to a third of total costs in logistics. This makes it very important for supply chain manager to pick the best suited mode of transportation for their companies’ logistics needs. The most common mode of transportation is land logistics. This involves road, rail and pipeline modes of transport. Rail transport is favorable for moving goods, which do not have a tight delivery schedule, in bulk. It has the added advantage of not being affected by bad weather conditions and consuming low amounts of energy. Its disadvantages however, include its slowness, high maintenance costs of railway system and a need for expansive storage facilities (Welsh, Boyd and Howes, 2006). Road transport on the other hand requires low investments, is easily available and ensures access to many regions. Its demerits include an inability to handle goods in large volumes, prone to accidents and being slow. Lastly pipeline transportation is advantageous in that it is less likely to be affected by adverse weather conditions, ensures constant supply of the product, is cheaper in terms of operation and can handle large volumes of a product. It however has disadvantages in having an expensive infrastructure, needing constant maintenance and limited to handling certain products.
Air freight logistics and maritime logistics are the other modes of transportation. Air freight logistics is mostly preferred when speed is of the essence and the goods being delivered are not very heavy (Thompson et al., 2001). It has advantages in its speed, goods are less likely to be damaged, and for destinations which are popular the frequency of deliveries can be high. Its main disadvantage is the costs involved in using it (Reynolds-Feighan, 2001). Maritime logistics is best option for managers looking to transport large volumes of goods at cheap rates. Its disadvantage however is the long periods it takes to get a delivery and its vulnerability to changes in the weather.in addition it may require extra investment in specialized storage facilities for certain products, for instance, pressurized containers for safe movement of natural gas (Recommendations on the transport of dangerous goods, 2007).
Transportation is important in ensuring the efficiency of the production process. This entails timely delivery of raw materials when they are needed in the manufacturing plant. This is an important in determining the supply chain design in that when goods are delivered on time, there will be no need for a firm to spend in storage infrastructure and these resources are utilized elsewhere. After delivery of raw materials, transportation continues to play a vital role in linking subsequent steps of the manufacturing process. It is required when moving unfinished goods from one part of the industry to next until they are fully manufactured goods ready for consumption by the consumers.
Effective transportation ensures efficacy. This is achieved when no delays are experienced in the delivery of raw materials and finished products are also delivered to retailers on time. In between the production process, transportation ensures efficiency when inventory levels are maintained at the appropriate levels by use of reliable transportation means. In food manufacturing industries, timely deliveries are an important factor in that the raw material do not go bad before they are turned into the final product (Zanjirani Farahani, Rezapour and Kardar, 2012). An additional way in which transportation brings efficacy is by ensuring good customer relations. This is achieved through on time delivery of goods when they are ordered by the consumers. An efficient transportation system guarantees that the goods will be of high quality and not be damaged during the transportation process. This not only improve the quality of service to consumers but also makes the company more competitive.