What Is the Role of Transport within the Supply Chain - Essay Example

The Role of Transport in Supply Chain By: Professor: Class: University: City: State: Date of submission: The Role of Transport in Supply Chain Introduction Transportation involves the physical transfer of products and services between the points of origin to the destination. With increased competition across the markets and changes in the needs of the consumers, businesses are keen on improving their levels of efficiency and effectiveness of operations through various transport systems (Lawrence, Jennings & Reynolds, 2005, 152). Transportation systems are important in linking geographically separated facilities between the business’ supply chains, facilitates the creation of both place and time utilities, and act as a major economic impact on business financial performance. Within the supply chain, for transportation to be effective, there is need for inclusion of supply chain strategy development, total cost management, and network design. Transportation offers critical connection between the supply chain partners and permits smooth flow of products and services between their businesses (Emmett, 2005, 188). There is need for the availability of transportation services due to demand in fulfilling the needs of the supply chain due to its ability to improve the efficiency and effectiveness of the same. However, there are challenges involved while undertaking the transportation role in supply chain. These challenges include the supply chain complexities, competing objectives of the partners involved in the supply chain, the changing needs of the customers, and challenges associated with synchronizing transportation with the other supply chain. Other challenges are limited availability of information, increasing transportation capacity constraints, and increasing safety and environment regulations. Contribution of Transportation in the Supply Chain Transportation plays an important role in ensuring proper economic development. In addition, transportation is the major contributor to the competitive force within the business since it connects physically the businesses and the supply chain partners including the customers and the suppliers (Jacoby & Economist, 2014, 122). It influences the level of satisfaction among the customers with transportation industry among the major players in the economic development. Through moving the products and services from location to where they are needed, transportation provides essential service of connecting the business to the suppliers and customers. It is important activity within the logistic functions as it supports both the economic utilities of the place and time (Coyle, Bardi & Novack, 2011, 108). Places utility means availing the products to the customers whenever they demand it while time utility implies that customers can access the products and services whenever there is demand. Through working closely and in collaboration with the inventory planners, the professions within the transportation industry seek to ensure that businesses avail the produces where and when the customers demand them. Efficiency and reliability are important in ensuring the achievement of customers’ needs and organizational objectives. In some cases, transportation is to blame for inability of the businesses to serve properly the customers (Murphy& Wood, 2004, 125). Efficiency depends on the time the products reach the customers. Last delivery of the products could the source of organizational problems and complaints. While in transit, the products could also incur damages or the inventories used in the warehousing might load the wrong item at the shipping location (Goldsby, Iyengar & Rao, 2014). These problems are referred to as over, short, or damaged (OS&D) shipment and can contribute significantly to the frustration of the customers leading to dissatisfaction and decision of purchasing the alternative products from the competitors in the futures. These problems reflect the significance of effective transportation in ensuring better organizational supply chain. Nonetheless, when the business undertakes it activities on time with complete and undamaged deliveries consistently, there could be instilling of confidences among the customers and gain for the business (Koster & Delfmann, 2005, 175). Without proper strategies, transportation could prove costly for the business. In some cases, the cost of transportation determine whether the transaction of the customers would result in a profit or loss for the business depending on the amount of expenses incurred while transportation for the orders of the customers. Generally, the faster transportation modes are costly compared to the slower modes. Therefore, even though transportation of the products overseas using the airplane is much faster compared to a ship, the cost is almost 20 times or more (Emmett, 2013, 117). These differences might not justify the utilization of faster transportation method. It is important that the supply chain managers carefully consider the cost involved in the transportation of goods when determining whether to move the product and ways of moving the product in an economical manner. Transportation process role in supply chain Assimilation Changes in technology associated with transportation and information technology sectors are greatly contributing to an era of low cost-high value transportation services. Certainly, the effects of the changes are only visible in offering the traditional transportation services with high speed, reliability, and reduced cost levels, but also in the introduction of the new transportation services (Lawrence, Jennings & Reynolds, 2003, 106). Transportation industry greatly depends on technology in the modern business environment since it allows the customers to maintain the levels of inventories low to ensure reduction in cost. In the freight management services, electronic data interchange (EDI) is used in improving the delivery times and ensure adequate reduction in the costs. The success of integrating information technology depends on standardization of the data, shippers, and the carriers. Therefore, the information needs to go beyond tracking the shipment, proof of delivery, and timely delivery of the reports since the shippers need to track the trends within such data (Bag, 2016, 141). Companies that have been able to integrate information technology including the satellites, computerized tracking systems, and bar coding are in a position of responding to the needs and schedule changes very fast. With increased level of competition within the transport industry, compute programmes and electronic communication are becoming vital in tracking the condition of the load. This also ensures efficient and effective competition. The main objective of transportation logistics, which is the major component in the integrated supply chain management, is to compress the time factor within the entire supply chain (Liu, 2012, 132). This involves the reduction in the delivery time while shipping the raw materials from the suppliers, intermediate products to the factories, and distribution of the manufactured products from the businesses to the wholesalers, retailers, and consumers (Goedhals-Gerber, 2016, 86). Transport in efficiency improvement in the supply chain There are various service improvements offered by the providers of the transport logistics including a reduction in the order cycles and conferring the productivity gains on the industrial shippers and producers. Reduction in the cycle times is usually based on the cost tradeoffs that occur between stockholding, production, transportation, and marketing to minimize the overall cost. In regards to transportation, supply chain information usually substitutes the inventory (Morana, 2013, 181). IT has been on the forefront fueling the revolution of the supply chain through connecting the customers and shippers by the information analyses and flows. With advancement in the supply chain practices, businesses are able to reduce overstocking, eliminate the costly shipments associated with bottlenecks, and delays in the delivery schedules. Moreover, such improvements offer time and cost saving mechanism to the supply chain. Even though transportation is one of the components of integrated supply chain management, the current trend has been increasing its contribution towards the business and critical importance on business performance (Tiffin & Kissling, 2007, 129). Within an economy, transportation is not limited to the movement of products across locations. It no longer performs the role of moving the inputs and delivering the outputs but has become a value added component integrated within organizational strategic management and operational decisions of the business through transportation of various logistic components. Transport plays a very complex role within the supply chain that goes beyond transporting the products for the proprietors. These complexities are likely to change depending on the quality management practices used by the organization. Through adequately developing and handling the transport systems, businesses are able to send goods at the right place and time to satisfy the ever-changing needs of the customers (Nagurney, 2006, 301). Moreover, it plays an important to bridge the efficacy and building a great connection between the business and customers. As a result, transportation is important for business while basing organizational efficacy and economy within the supply chain and expanding various operations associated with the activities of the supply chain. Conclusion Transportation involves the physical transfer of products and services between the points of origin to the destination. Transportation systems are important in linking geographically separated facilities between the business’ supply chains, facilitates the creation of both place and time utilities, and act as a major economic impact on business financial performance. The challenges in supply chain include the supply chain complexities, competing objectives of the partners involved in the supply chain, the changing needs of the customers, and challenges associated with synchronizing transportation with the other supply chain. Through moving the products and services from location to where they are needed, transportation provides essential service of connecting the business to the suppliers and customers. It is important activity within the logistic functions as it supports both the economic utilities of the place and time. With advancement in the supply chain practices, businesses are able to reduce overstocking, eliminate the costly shipments associated with bottlenecks, and delays in the delivery schedules. References Bag, S. (2016). Flexible procurement systems is key to supply chain sustainability. Journal of Transport and Supply Chain Management, 10(1), 122-142. Coyle, J., Bardi, E., & Novack, R. (2011). Transportation (7th ed.). 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