The Role of Transport within the Supply Chain - Literature review Example

Name: Tutor: Title: The role of Transport within the Supply Chain Course: Institution: The role of Transport within the Supply Chain Introduction A supply chain refers to a stream of procedures of moving products or goods from customer order through production, supply raw materials stage and distribution of goods to the consumer. All companies have supply chains of different degrees, depending on the size of the company and the form of goods manufactured. These networks acquire components and supplies, transform the materials into finished product and distribute them to customers. Transportation acts as the key function is supply chain because it acts as a physical link amid suppliers and customers, enhancing the movement resources and materials. Modes of transportation include air, rail, trucking and road. These modes act as links between manufacturers, distributors, consumers, retail stores and suppliers. The operation of transportation within the supply chain determines the effectiveness of moving products. Role of transport within the supply chain Transportation as a link between suppliers, distributors and customers Transportation acts as a link between different players in the supply chain such as suppliers, distributors and customers. Transportation is a vital connection in the entire supply chain and has become a significant concept for companies in the twenty first century. Transportation might be envisaged as glue that aims at holding supply chain together. According to Coyle and Novack (2010), the dynamics of the shifting business environment are being propelled by a series of exterior factors that entail supply chain integration, technology, consumer empowerment and government policy and regulation. Globalization is often connected to be a key external factor influencing organizations and the way in which they compete, along with their connected supply chains. Technology has transformed how companies market their goods and services. In addition, technology has had a key influence the organization of supply chains and distances over which these supply chains operate in linking the international points within the supply chain. In modern days, consumers have been enlightened and empowered through education and access of information from internet and other forms of social media. This empowerment and power enhances them to access sources of supply chain on a huge market base and pressurize supply chains to offer value price relations that they anticipate (Coyle, & Novack, 2010). The most efficient supply chains are one that have effectively responded to the empowered consumers through use of transport systems that deliver goods in a manner that achieves the particular needs of consumers. Transportation is a pervasive and significant element in the economy and it influences almost every individual indirectly or directly. Transportation bridges several activities involved in supply chain through enhancing movement of raw materials and finished product from one location to another and from one person to another. Transportation service is a very fundamental aspect for selection of a certain mode that operates amid the point of origin of a product and the point of consumption of the product(Hugos, 2006). The dimension of mode of transportation that is selected entails reliability, security and accessibility. These factors are considered on the basis of their cost along with the actual cost of transportation itself in choosing a certain model Brewer et al (2001) note that products and goods are transported amid diverse stages in the supply chain. Transportation greatly influences both efficiency and responsiveness of the supply chain. Faster transportation permits the supply chain to be highly responsive. Transportation is an important point within logistic chain since it connects diverse activities. Transportation joins different stages of supply chain through moving products from the manufacturer to final consumers and vice versa. Transportation, as a process, joins all the schemes of offering raw materials to, from the organizations and to the suppliers of transmission products. It highly depends upon the provision of logistics from the raw materials to networks such as transfer process, handling of material from the start to the ending of sale and production (Hugos, M, 2006). Transportation as a key element of supply chain and logistics Transportation system is a major element logistics chain, which joins separated activities of the logistics chain. According to Naim et al, (2006), logistics is a portion of the supply chain procedure that plans, controls and implements the effective, efficient reverse and forward storage and flow of services, goods along with related information amid origin point to consumption point so as to meet the requirements of customers. Transportation occupies approximately a third of the quantity of logistics cost and transportation schemes hugely influence the performance and operation of logistics system. Transport is needed in the entire production processes, from manufacturing to distribution and delivery to final consumers. Without a well developed transport scheme, logistics can’t bring its benefits into full play (Naim et al, 2006). According to Liu (2009), well developed transportation systems leads offers better logistics efficiency, promote service quality and minimize operation cost. Transport systems makes products and gods movable and offers regional and timely efficiency to promote value addition under the principle of least cost. Transport influences the outcomes of logistics activities and also influences sale and production Value of transportation differs with diverse industries. For products with low value, high value and small volume, transportation cost occupies a minute portion of sale and in thus less regarded, while for low valued, big and heavy products, transportation occupies a big portion of sale and highly influences profits, and this is highly regarded. Transportation has a connection function among the numerous steps that lead in conversion of resources or raw materials into useful finished products (Liu, 2009). Decisions connected with management of supply chain include both short term and long term decisions. Stank and Goldsby (2000) argue that market demands, transport considerations, pricing constraints and customer service are considered so as to structure an effective supply chain. Strategic transportation decisions are connected to inventory decisions and achievement of customer demands. Organizations choose transportation models that timely deliver products to customers without delays. However, costs are also considered. For instance, air transport gets goods to the customer quickly and expediently by costs are greater compared to rail or boat (Stank, & Goldsby, 2000). Function of transportation in supply chain service quality According to Chopra and Meindl, (2004), the function of transportation in supply chain and logistics system is more intricate than conveying products for proprietors and its complexity takes effect via excellent quality management. Through the use of a well handled and managed transport scheme, products are moved to their right location at appropriate time so as to satisfy the demands of customers. Through effective and timely delivery of goods to customers, an organization is able to meet customer satisfaction and to maintain a competitive edge in the marketplace. Transportation results to efficacy and creates a bridge amid consumers and producers. Thus, transportation is the foundation of economy and efficiency in business logistics additionally, a superior transport scheme functioning in logistics activities leads to benefits in creation of service quality and also in the creation of a company competitiveness (Hines, 2004). Different models of transportation and their role in supply chain Maritime transportation Maritime industry plays a very significant role in global freight. It provides a high and cheap carrying capacity transportation for consumers. Thus, maritime logistics has a crucial position in transportation of certain goods like grains and crude oil. Hazen and Lynch (2008) argue that the key disadvantages of maritime transport are that it requires longer transport duration and its timetable is greatly influenced by weather conditions. In order to enhance competiveness and save costs, present maritime logistics organizations are using big scaled ships along with cooperative operation systems. In addition, current maritime clients are more concerned with service quality than delivery price. Therefore, organizations have developed novel logistics concepts such as real time information, goods tracking schemes and accurate time windows, so as to expand service satisfaction (Hazen & Lynch, 2008). Land transportation Land logistics is a significant link within supply chain and logistics activities. Liu (2009) notes that land logistics extends delivery services for maritime and air transport from seaports and airports. The key advantage of land transport is the great levels of accessibility in land regions. The major modes of transport in land logistics include road freight transport, pipeline transport and railway transport. Railway transport is advantageous in that it has a high carrying capacity, is minimally influenced by weather factors and has lower consumption of energy. The main disadvantages of rail transport is its great cost of fundamental facilities, expensive and difficult maintenance, consumption of time in arranging railway carriages and inflexibility of urgent demands. Road freight transport is advantageous in that it has less costly investment funds, high availability, mobility and accessibility. Its major disadvantages are slow speed, lower safety and lower capacity. Pipeline transport has high capacity, is less influenced by weather factors, continuous conveyance and inexpensive operation fee. However, pipeline transport requires expensive infrastructures, goods specialization, harder supervision and frequent maintenance needs (Stroh, 2005). Air freight transportation Air freight logistics is fundamental for completion of supply chains by several industries. Coyle and Novack (2010) note that air freight transportation is essential useful in the movement of perishable goods which require speedy delivery to consumers Air freight transport offers speedy delivery, security flexibility, reduced hazard of damage, good frequency and accessibility for regular delivery. The key disadvantage of air freight transportation is high delivery cost. Conclusion Transportation plays a very significant role in supply chains. It enhances the movement of raw materials between producers and consumers. Transportation is a glue that assists to hold the supply chain together through linking different activities within the supply chain. A well developed transportation system results to timely and effective movement and delivery of goods to consumers, which subsequently results to achievement of consumer demands. Transportation also leads to logistics efficiency, promotes service quality and minimizes operations costs of the supply chain. Bibliography Hazen, J., & Lynch, C., 2008, The role of transportation in the supply chain, Routledge, London. Coyle, J., & Novack R, 2010, Transportation: A supply chain perspective, Cengage Learning, New York. Stank, T., & Goldsby, T., 2000, A framework for transportation decision making in an integrated supply chain, Supply chain management: An International Journal, 5(2), 71-78. Naim, M., Potter, A., Mason, R., & Bateman, N, 2006, The role of transport flexibility in logistics provision The International Journal of Logistics Management, 17 (3), 297-311 Brewer, A, Button, K, & Hensher, D, 2001, Handbook of logistics and supply chain management, Elsevier Science Ltd, UK. Stroh, M, 2005, A practical guide to transportation and logistics, Prentice Hall, New Jersey. Liu, J, 2009, Supply chain management and transport logistics, Routledge, London. Hines, T, 2004, Supply chain strategies: Customer driven and customer focused, Elsevier, Oxford. Chopra, S. & P. Meindl, (2004), Supply Chain Management: Strategy, Planning, and Operation, Prentice Hall, New Jersey. Hugos, M, 2006, Essentials of supply chain management, 2nd Edition, Wiley & Sons, New York. Read More