Network Capacity Impact on Modes of Transportation - Case Study Example

NETWORK CAPA AND ITS IMPACT ON EVERY MODE OF TRANSPORTATION of the of the Introduction Network capa is regardedas an important tool for measurement in context of transportation management and planning. This factor helps to determine whether a particular transportation system is capable of managing traffic congestion and economic surge. In this study, impact of network capacity on transportation modes will be critically analyzed. Links and nodes are the key points through which network capacity is measured. Nodes are associated with signalized intersections and terminals, whereas links refer to road segments, waterway, rail lines, etc. Transportation system encompasses effective utilization of infrastructures. It forms an important part of economy and is closely knitted with development. High developmental levels are directly associated with highly connected networks and transport infrastructure of high density. Efficiency of transport system results into societal and economic opportunities along with multiplier effects in terms of employment, additional investments, market accessibility, etc. Transportation system can minimize costs linked with economic sectors if it is highly efficient. Traffic congestion is a common problem in emerging economies which results into capacity or infrastructural problems. These issues are enhanced due to increasing demand trend for mobility. In this study possible solutions would also be highlighted that help in reducing impact of network on various transportation modes. Discussion Impact of network capacity Economic development is directly linked with transportation capacity. Transportation system encompasses wide array of economic factors where demand needs to be fulfilled in least time and least cost possible. Network capacity is a framework built to determine exact flow of goods throughout the system. In a transportation network, movement refers to flow of individuals and not physical commodities. This kind of flow needs to be appropriate so as to ensure that objectives of transportation system are accomplished. On the other hand, network capacity has a significant impact in terms of creating traffic congestion. Network if unplanned, results into lot of congestion within transportation system. Increasing goods flow in the transportation network causes delays and this in turn increases overall cost factor. Fixed cost element is usually consistent for all firms but traffic congestion incorporates additional cost factor. The route choice plays a critical role in context of reducing overall cost factors. Route choice should be well aligned with objectives of reducing traffic congestion (Fawcett and Magnan, 2002). This activity even helps to determine maximum flow of goods which can be encompassed within congested traffic. The impact of network capacity can be classified into three categories such as core, geographical and operational. At the core level, impact is centered towards physical capacity. This is all about mobility of goods and passengers along with its associated costs. Network capacity has a significant impact on operational factors like increased time intervals, decreased reliability and more of damaged goods or loss of goods. If the network capacity is not sufficient it might reduce accessibility of wider market segment. Economies of scale linked with production aspect cannot be achieved due to inappropriate network capacity. Productivity of a firm can only be increased when there is large input base and broader market segment (Kirby, 2003). Mobility is basically regarded as an indicator for economic development. Reduced mobility due to insufficient network capacity tends to disrupt overall development. Economic impact of network capacity can be widely observed in various forms of transportation modes. The increasing costs for transportation facilitate designing innovative transportation networks. Physical and human capital is greatly involved in qualitative and quantitative improvements. Companies often do not rely on one transportation mode and this increases intricacies of the network. Insufficient network capacity increases travel time amongst the transportation modes. Network capacity causes adverse impacts in the form of increased vehicle time, wait time, travel time and increased interchanges between wide set of transportation modes. Possible solutions Network capacity is basically associated with vessels, track networks, rail cars, etc. This capacity needs to be wide enough so as to ensure that none of the transportation modes are affected. Many new transportation networks are designed on basis of achieving time and cost efficiency. Traffic congestion which is one of the major issues related to network capacity can be reduced through expanding road space. The road space is aligned with vehicle speed and size. There needs to be sufficient road space in order to minimize overall impact of network capacity. Trucking sector in supply chain operations are greatly affected by inefficient network capacity. Drivers and trucks have to be highly efficient in terms of delivering goods on time to required destinations. Market challenges can be addressed to a great extent through design of strategic networks. There are wide ranges of small companies who are involved within the trucking sector. Truckload needs to be managed appropriately as this a key factor for increasing efficiency level. Network capacity if not capable enough causes increased costs in truckload and this leads to bankruptcies of many companies (Rodrigue and Notteboom, 2015). There are new designs structured for increased capacity of this network. It has achieved through implementing fleet concept which is capable of carrying about 70 to 80 trucks. This is an effective way of increasing capacity that helps to deliver goods on time to specific destinations. The design of fleet system can also be regarded as a way to reduce fuel costs of vehicles. Fuel costs drastically increases when it comes to 70 to 80 trucks travelling on road. This in turn also results into increased traffic congestion since road capacity is less and number of vehicles are more. Capacity utilization is done through being aligned with same volume of truckload but decreasing total travel time. Shippers and motor carriers both believe that shortage of trucking capacity is a relevant factor and causes long term impact. There are proactive measures also adopted by shippers so as to reduce impact of network capacity. Firstly strong partnerships are established with carriers. Long term capacity solutions are focused on by many shippers (Christopher, 2005). Contractual logistics can be entertained in such circumstances where different companies work in collaboration. Elevated fuel costs also need to be incorporated within contractual agreements. This factor would eventually lead to success of this new strategic development. Networks could also be regionalized that forms an effective measure for enhancing network capacity. It would be a productive solution majorly for addressing challenges associated with truck capacity. Physical distribution networks have to be reframed when it comes to increasing network capacity. Network regionalization leads to decreased transportation costs and in turn helps to minimize overall costs associated with supply chain operations. Fuel costs are directly correlated with network capacity. This aspect can be eradicated by building warehouses close to consumer market so that less transportation facilities are utilized. Intermodal transportation options can be implemented because it increases capacity and reduces cost. Rail and truck intermodal is a common approach which can be implemented (Oxley, Rushton and Croucher, 2000). Additional volume can be included in this form of intermodal system. On the other hand, rail intermodal is gaining importance because rail road have been well developed over the past few years. This has increased velocity of rail travel. However in order to implement intermodal facilities there are certain elements which shall be taken into consideration. Companies or logistic firms should firstly assess risk factors linked with intermodal transportation. There must be a contingency plan for these risks. On the contrary specific costs related to transportation firstly needs to be calculated and then new approach should be adopted. This is because major aim of these solutions is to accomplish cost efficiency standards. Farsourcing and nearsourcing activities are other measures that can be adopted by companies in context of increasing capacity of transportation modes. Sourcing activities is usually conducted with the support of low cost countries. Implementation of these activities usually requires focusing on overall transit time. This refers to total time needed during transition of goods from one place to another. Optimal service of transportation encompasses various network requirements. Outbound and inbound network of freight flows could be included in the transportation system (Waters, 2010). In this process, large data volume is collected to understand the freight flow across different regions. For successful implementation of this process, shippers need to be more cautious regarding which of the freight is most appropriate for transportation network. The best way to utilize network capacity is through optimally allocating goods amongst all transportation modes. Freight requirements need to be firstly checked since it helps to reduce empty miles concept and provide carriers with facilities as per their demand. Bottom line of transportation modes can be improved through rationalizing variable capacity. It is always observed that variable capacity tends to increase cost factors. This can be mitigated through designing network capacity which is standardized for specific volumes of goods (Voortman, 2004). Logistic activities mainly require standardization in certain scenarios. For instance good of high value can utilize similar network capacity and bulk goods can be transported through other means. This facilitates optimum utilization of network capacity. In overall context, companies are more inclined towards reducing lead time between goods manufactured and delivered. This factor can be effectively addressed through using intermodal transport facilities and standardizing volume level for specific network capacity. There are certain important factors that need to be incorporated while implementing this type of capacity design. Similar items being transported should be grouped together as it reduces travel time and increases efficiency level. Capacity shortages also result due to utilization of weak carriers in context of rail, motor and water. Technological advancements prevalent across the globe can be regarded as a measure to eliminate such issue. The enterprises dealing with such functionality can incorporate advanced technology into the system for designing strong carriers. These strong carriers are a mechanism which shall facilitate faster travel of goods and decrease cost factor. However a strong collaboration with technology based firms are needed for successful design and implementation of this solution. Conclusion This study clearly states that network capacity is an important factor when it comes to effective management of supply chain operations. Network capacity utilization is inclined towards accessing market opportunities and retaining profit margins. In current scenario there are adverse impacts caused by network capacity. Transportation modes are of various forms and they have a common objective of enhancing level of efficiency. Goods being transported from one location to other are totally dependent on transport facilities. This factor is accomplished through designing a network channel which comprises of least travel time and higher level of productivity. The negative impacts of network capacity results into high transportation costs and thus restricts level of development. It can be stated that new techniques are emerging so as to control impacts of network capacity. Intermodal transportation is given more importance as it initiates better capacity utilization. References Christopher, M. (2005). Logistics and supply chain management. USA: FT Press. Fawcett, S.E. and Magnan, G.M. (2002). The rethoric and reality of supply chain integration. International Journal of Physical Distribution & Logistics Management. 32(5), pp. 339-61. Kirby, J. (2003). Supply chain challenges: building relationships. Harvard Business Review, 91 (7), pp. 65-73. Oxley, J., Rushton, A. and Croucher, P. (2000). The handbook of logistics and distribution management. London: Kogan Page Publishers. Rodrigue, J. P. and Notteboom, T. (2015). Transport supply and demand. Retrieved from: https://people.hofstra.edu/geotrans/eng/ch7en/conc7en/ch7c4en.html . Voortman, C. (2004). Global logistics management. South Africa: Juta and Company Ltd. 2004. Print. Waters, D. (2010). Global logistics: new directions in supply chain management. Hong Kong: Kogan Page Publishers. 2010. Print. Read More