Role Transport in Supply Chain - Essay Example

Literature Review on the Role Transport in Supply Chain By: Professor: Class: University: City: State: Date of submission: Literature Review on the Role Transport in Supply Chain Introduction The operations involving transportation determines the level of efficiency of the moving products. With developments in the methods and principles of management, there have been improvements in the efficiency of moving products, speed of delivery, the quality of service, operational costs, and utilization of facilities. Therefore, transport play significant role in manipulating various logistic operations. To review the current condition, there is need for a clear frame of logistics and adequate transportation techniques to connect the production procedures (Emmett, 2005, 142). The aim of this literature review is to define the role of transportation in the supply chain. Transportation and the Supply Chain Supply chain is a system, which needs recognition of the tradeoffs and interrelationships among the actions and costs. Supply chain represents a network of businesses working together for the provision of goods and services for the customers and end users. Most of the businesses operating within the supply chains relying on the outside parties including the suppliers and consumers with an aim of assisting them reach the end-user markets (Gourdin, 2006, 205). Generally, most of the businesses do not own the supply chains. In addition, the supply chain management includes planning and management of various activities involved in the logistics, procurement, sourcing, and conversion management. It coordinates and collaborates with various partners (Bag, 2016, 127). Transportation represents the physical link between the businesses involved in the supply chain. Within the supply chain network, the locations are nodes while connections are links. When businesses sell products to the others, transportation provides the means of delivery. It is important to note that an outbound delivery for the company supplying the product is the inbound delivery for the customers (Nagurney, 2006, 305). Whenever there is delay or problem in any level of the supply chain, it could have impacts on the downstream members and inability to serve the consumers. For such reason, the large the part of the economy affected by disruptions in transport, there more interference with the supply chain. Some of the disruption sources are equipment failure, disasters, inclement weather, and interventions by the government. Interrelationships between Transportation and Supply Chain Supply chain management involves managing both the upstream and downstream relationships with the suppliers and customers with an aim of delivering superior customer value at a lesser cost to the supply chain as a whole (Lawrence, Jennings & Reynolds, 2005, 162). Therefore, it not only includes the manufacturers and suppliers but also the customers, transporters, retailers, and warehouses. Some studies reveal that supply chain management involves coordination of the production, location, inventory, and transportation among various parties involved in the supply chain for achievement of the best mix of responsiveness and efficiency for the market being served in the lowest cost (Coyle et al., 2009, 119). Without proper development of the transport system, the supply chain could bring its benefits into the full play. Furthermore, a good transportation system within the supply chain activities provides improved logistical efficiency as it ensures reduction in the operational cost and promotion of service quality. However, it is important that such improvements acquire support from both the private and public sectors. If there is proper operation of the supply chain, then it is likely to improve the level of competitiveness of both business and governments. Transport Costs and Goods Features in Supply Chain Transport system plays vital role in the economic activities among various segments of business supply chain systems. Almost two-thirds of the businesses expenses on supply chain cost are spend on transportation. The National Council of Physical Distribution Management (NCPDM) undertook a study in 1992 and found that, averagely, the cost of transport represents about 6.5% of the total market revenue while 44% represented the supply chain cost (Goldsby, Iyengar & Rao, 2014). In countries like Australia, the gross value added of the transport and storage sectors stood at $34,496 million between 1999 and 2000 representing about 5.6 of the GDP. Based on the estimates from Air Transport Association, the results revealed that transportation had the highest cost at 29.4% of the supply chain cost followed by the inventory, warehousing, packaging, management, movement, and ordering costs. In the study, the cost of transport represented transportation method, time, terminals, corridors, labour, and pallets. Therefore, transportation occupies important ration in the supply chain, which makes it vital to comprehend thoroughly the operations of transport systems (Emmett, 2013, 192). Transport system ensures that goods and services can move, thus providing the needed time and regional efficacy for the promotion of value addition through least cost principle. Besides, transport affects the outcome of supply chain, production, and sale. Within the supply chain system, the cost of transport is viewed as restriction of the objective market. There is variation in the transportation value across industries (Stojanović, Gajić & Veličković, 2013, 117). The Effects of Transportation on Supply Chain Activities Transport system plays significant role in the steps involves in converting the resources into important goods in the name of the final consumer. Transportation occupies important part in the planning of various functions and sub-functions into the system of goods movement with an aim of minimizing the cost while maximizing the services offered to the customers, which comprises of business supply chain concept (Gubbins, 2003, 151). Upon putting such systems in place, there is need for effective management. From the traditional perspective, the steps involve different businesses for wholesaling, storage, transportation, retail, and production. Nonetheless, businesses involved in production, manufacturing, merchandizing, and warehousing services are involved in transportation activities. Businesses that deal in production and manufacturing need to assemble the materials, components, and supplies, in absence and presence of storage facilities, processing and handling of the materials within the company and warehouse inventory services between the companies and marketing outlets involve separate transport. Establishing the merchandizing often completes the chain through delivering the products to the customers. The manufacturers usually limit themselves to the production of goods while leaving other activities such as marketing and distribution to other businesses (Coyle, Bardi & Novack, 2011, 188). Activities such as warehousing and storage are normally viewed in term of the services for the production and distribution processes. With the closure of several single-users warehousing facilities and increased use of consolidation facilities and centers of distribution, there have been major changes in the location and number of the facilities. Such developments reflect the factors associated with improved transport services and pleasures of improving the supply chain performance. Transportation Role in Service Quality The role played by transportation system within the supply chain is very complex and goes beyond transportation of goods for the proprietors as noted in most research (Murphy & Wood, 2004, 161). The complexity could take effect whenever there are highly quality management practices. Through properly developed and handled transport system, the suppliers are able to send goods at the right place and right time in a bid to satisfy the needs of the customers. In addition, it plays significant role in bringing efficacy and building the bridge between the customers and the manufacturers (Goedhals-Gerber, 2016, 82). Hence, transportation system lays foundation for basing organizational efficiency and economy within the business supply chain and expanding other functions associated with supply chain activities. Furthermore, an effective transport system that performs supply chain activities contributes significantly the benefits and service quality including competitiveness of the business. Most research view transportation as the movement of products from one location to another. Transport is the movement of products from one place to another and represents the beginning of the supply chain while dealing with the consumers (Lawrence, Jennings, & Reynolds, 2003, 122). In the United States, the cost of shipping and transport represent about 6% of the total GDP. Most of the manufacturers and retailers are able to use the states in managing their supply chains while reducing the inventory and the cost storage with the opportunity of delivering quickly to the client. A successful supply chain is connected to the utilization of large and adequate transportation. Businesses such as the Wal-Mart have been effective in responding to the transportation system in reducing the overall cost. In the countries considered to be developing, the business seem to be running across the docking which involves the product exchange between the trucks to ensure every truck goes to the retail store while the suppliers of the products a different form. Consequently, the exponential growth associated with shipment from China is creating opportunities for the bottlenecks. That is where most of the leading business operates through purchasing large offices in places such as China and India (Kruger & Luke, 2014, 179). From such point, it is evident that there are mainly two players for the occurrence of transport to take place within the supply chain. The first is the shippers, which requires the movement of products between two points within the supply chain; the second is carrier, which is the party responsible for moving the products. Conclusions The paper covered the supply chain activities, transport systems, and attempted to determine the role played by transportation within the logistic system through the extensive review. The major contents of the review include review of the supply chain development, the features of different transport operations within the supply chain activities, application of supply chain in various areas, and its cooperation with the transport system. From the studies, supply chain and transportation have significant relevance. Supply chain play important role within the societal activities. Moreover, transportation and supply chain systems portray interdependence in their relationships considering that supply chain requires transportation to perform various activities. Any successful supply chain system has the ability to improve the traffic environment and development of transportation. Considering that transportation is the major contributor of cost among various elements in the supply chain systems, the improved transport system, on the other hand, changes the overall performance of the supply chain system. 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.). South-Western: Cenage Learning. Coyle, J., Langley, C., Gibson, B., Novack, R., & Bardi, E. (2009). Supply Chain Management (8th ed.). Mason Ohio: South-Western Cenage Learning. Emmett, S. (2005). Excellence in Warehouse Management. Chichester, England: John Wiley & Son. Emmett, S. (2013). Excellence in warehouse management: How to minimize costs and maximize value. Hoboken, NJ: Wiley. Goedhals-Gerber, L. L. (2016). The composite supply chain efficiency model: A case study of the Sishen-Saldanha supply chain. 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