A Norwegian perspective on supply chain disruptions in sparse transportation networksHow Norwegian freight carriers handle...
  Jan Husdal<br />Has been a Research Geographer with the transport economics research group at MøreforskingMolde, Norway,...
Møreforsking Molde<br />Logistics<br />Transport Economics<br />Industrial Economics<br />Molde University College<br />Sp...
Background<br />In 2005, the Norwegian Ministry of Transport made vulnerability reduction an explicit target in their tran...
Introduction<br />Supply Chain Management often neglects the mundane side of physical distribution and transportation, and...
The importantroleofsparsetransportationnetworks in supplychains<br />Bergen – Trondheim = 660km<br />May be closed in wint...
  Vulnerable communities– nosuitable alternatives to or from locations</li></li></ul><li>Available transport networks= sup...
Framework for survey<br />Perspective: Transportationinfrastructure and/or transportationmeans/mode as a contributingfacto...
Risk managementframework<br />Adapted from:<br />Jütner et al. (2003) <br />and <br />Asbjørnslett (2008)<br />What risk m...
Reducingtheimpactofsupplychaindisruptions<br />The impact of supply chain disruptions depends on thea) structure how well ...
Summaryofresults<br />Freight owners do not appear to be overly concerned about transportation disruptions, because both m...
Carriers’ contingency and mitigationmeasures (I)<br />Contingency contracts with companies offering maintenance, repair, r...
Carriers’ contingency and mitigationmeasures (I)<br />Regular dissemination of information to drivers where to find which ...
Conclusions<br />Transportation networks (roads) are an integral part of supply chains and transportation disruptions can ...
Futureresearch?<br />How do different manufacturing processes (make to stock, make to order, engineer to order) reflect on...
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A norwegian perspective on supply chain disruptions in sparse transportation networks

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A study commissioned by the Norwegian Public Roads Administration in
2008 investigated how companies located in sparse road networks are affected by and
relate to supply chain disruptions.

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A norwegian perspective on supply chain disruptions in sparse transportation networks

  1. 1. A Norwegian perspective on supply chain disruptions in sparse transportation networksHow Norwegian freight carriers handle transportation disruptions<br />Jan Husdal (and Svein Bråthen)<br />ISCRIM 2010<br />07 September 2010<br />
  2. 2. Jan Husdal<br />Has been a Research Geographer with the transport economics research group at MøreforskingMolde, Norway, since 2005. <br />Has been working with issues related to risk assessment, vulnerability analysis and crisis management since 1989, working for several regional government agencies, advising local authorities in their civil contingencies planning.<br />Holds a BSc in Civil Engineering and an MSc in GIS from the University of Leicester, UK, focusing on least cost paths and network analysis.<br />Current work is centered on<br />cost-benefit analysis of infrastructure projects<br />transportation network reliability and vulnerability<br />supply chain risk management<br />
  3. 3. Møreforsking Molde<br />Logistics<br />Transport Economics<br />Industrial Economics<br />Molde University College<br />Specialized University in Logistics<br />Møreforsking Molde<br />
  4. 4. Background<br />In 2005, the Norwegian Ministry of Transport made vulnerability reduction an explicit target in their transportation research strategy.<br />This presentation is based on a case study analysis done for theNorwegian Public Roads Administration in 2008<br />Initially: Interviews of 15 road transportation-dependent businesses <br />Finally: Interviews of 3 transportation-dependent businesses 14 road freight carriers<br />
  5. 5. Introduction<br />Supply Chain Management often neglects the mundane side of physical distribution and transportation, and forgets that these activities form the backbone of SCM (Peck, 2006).<br />A supply chain disruption often starts with a transportation disruption...that may lead to impacts across the whole supply chain.<br />
  6. 6. The importantroleofsparsetransportationnetworks in supplychains<br />Bergen – Trondheim = 660km<br />May be closed in winter<br />Closed in winter<br />Ferry<br />Molde<br /><ul><li>Sparsetransportationnetworks– few mode options and/or few link options
  7. 7. Vulnerable communities– nosuitable alternatives to or from locations</li></li></ul><li>Available transport networks= supplychain types<br />Freesupplychain – many mode options, many link modes<br />Directedsupplychain – many link options, butonly (a) certain mode(s)<br />Limitedsupplychain – many mode options, butonlyfew links<br />Constrainedsupplychain – few/one mode, few/one link<br />
  8. 8. Framework for survey<br />Perspective: Transportationinfrastructure and/or transportationmeans/mode as a contributingfactor in supplychaindisruptions.<br />
  9. 9. Risk managementframework<br />Adapted from:<br />Jütner et al. (2003) <br />and <br />Asbjørnslett (2008)<br />What risk managementstrategies - contingency or mitigation - areemployed by businesses (freightowners) and transport operators (freight carriers)?<br />
  10. 10. Reducingtheimpactofsupplychaindisruptions<br />The impact of supply chain disruptions depends on thea) structure how well located?b) organization how well prepared?of the supply chain (adapted from: Craighead et al., 2007)<br />These two sides are complementary – a deficiency in a) can be compensated by b) or vice versa. <br />In constrained supply chains, the structure (a) is fixed, and the organization (b) is (perhaps) the only possible point of improvement: badly located, but well prepared.<br />
  11. 11. Summaryofresults<br />Freight owners do not appear to be overly concerned about transportation disruptions, because both mitigative and contingent measures are handled by the freight carrier.<br />Freight carriers are acutely aware of their important role in the overall supply chain.<br />Freightownersseek vertical integration of one or several selected freight carriers into their supply chain, and are willing to pay a “risk premium” for securing on-time delivery.<br />Freight carriers establish asset-specific and flexible solutions to meet the contingent needs of different freight owners.<br />
  12. 12. Carriers’ contingency and mitigationmeasures (I)<br />Contingency contracts with companies offering maintenance, repair, rescue or towing services along the most frequently used road links.<br />Cooperation agreements with other carriers to secure replacement drivers or replacement vehicles for transferring goods from the broken vehicle to the replacement vehicle.<br />Structural and/or technical modifications of vehicles and equipment to improve operations, particular under winter conditions.<br />
  13. 13. Carriers’ contingency and mitigationmeasures (I)<br />Regular dissemination of information to drivers where to find which roadside assistance.<br />Neutral and non-descript packaging to avoid theft of valuable goods.<br />Sufficient slack in lead time of scheduled routes in order to account for possible delays.<br />Depending on the external circumstances, no guaranteed lead time or arrival time.<br />
  14. 14. Conclusions<br />Transportation networks (roads) are an integral part of supply chains and transportation disruptions can turn into supply chain disruptions. Preparing for transportation disruptions ought to be an integral part of supply chain risk management.<br />In practice, risk sharing: the freight carrier bears risks associated with equipment, vehicles or infrastructure-related events, while the freight owner (sender or receiver) handles risks associated with overall delivery failure related to the sender or receiverof the goods transported.<br />
  15. 15. Futureresearch?<br />How do different manufacturing processes (make to stock, make to order, engineer to order) reflect on the risks and consequences? <br />Which risk sources can cause transportation disruptions in ingoing or outgoing flows in supply and demand and flows internal to the company, and what are the consequences related to supplier, customer and the company itself? <br />What risks lead to which consequences and how are they handled and/or mitigated? <br />3<br />2<br />2<br />2<br />1<br />1<br />1<br />3<br />

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