Transcript of "Transportation in a supply chain management"
Transportationin a supply chain PART-B UNIT-6 4/2/2013 1
The role of transportation in the supply chainFactors affecting transportation decisionsModes of transportation and their performance characteristicsDesign options for a transportation networkTrade-offs in transportation designTailored transportationRouting and scheduling in transportationMaking transportation decisions in practice 4/2/2013 2
Transportation refers to the movement of product from one location to another. Transportationplays a major role in increasing gross domestic product (GDP). Seven-Eleven Japan used transportation to achieve its strategic goals. 4/2/2013 3
Shipper (party that Carrier (party thatrequires the moves or transportsmovement of the the product)product between two • Vehicle-related costpoints in the SC) • Fixed operating• Transportation cost cost• Inventory cost • Trip-related cost• Facility cost 4/2/2013 5
AirPackage carrier Truck Rail Water Pipeline Intermodal 4/2/2013 6
Airlines have three cost components:I. Cost of infrastructure and equipment.II. Cost of labor and fuel.III. Variable cost that depends on passengers or cargo carried. Key issues:I. Identifying location and number of hubs.II. No of planes/route.III. Setting maintenance schedule for planes.IV. Scheduling crew.V. Managing prices and availability at different prices 4/2/2013 7
Companies like FedEx, UPS, USPS, that carry small packages ranging from letters to shipments of about 150 pounds. Expensive. Rapid and reliable delivery. Small and time-sensitive shipments Preferred mode for e-businesses (e.g., Amazon, Dell, McMaster-Carr) Consolidation of shipments (especially important for package carriers that use air as a primary method of transport) 4/2/2013 8
Average revenue per ton mile (1996) = 9.13 cents. Average haul = 274 miles Average Capacity = 42,000 - 50,000 lb. Low fixed and variable costs Major Issues • Utilization • Consistent service • Backhauls 4/2/2013 9
Average revenue per ton-mile (1996) = 25.08 cents Average haul = 646 miles Higher fixed costs (terminals) and low variable costs Major issues: • Location of consolidation facilities • Utilization • Vehicle routing • Customer service 4/2/2013 10
Average revenue / ton-mile (1996) = 2.5 cents Average haul = 720 miles Average load = 80 tons Key issues: • Scheduling to minimize delays / improve service • Off-track delays (at pickup and delivery end) • Yard operations • Variability of delivery times 4/2/2013 11
Major global ocean carriers include Maersk, Evergreen Group, Hanjin shipping Co. Limited to certain geographic areas. Ocean, inland waterway system, coastal waters. Very large loads at very low cost. Slowest. Dominant in global trade (autos, grain, apparel, etc.) 4/2/2013 12
High fixed cost Primarily for crude petroleum, refined petroleum products, natural gas etc. Best for large and predictable demand It has two components:1. Fixed component related to shipper’s peak usage.2. Charge related to the actual quantity transported. 4/2/2013 13
Use of more than one mode of transportation to move a shipment to its destination Most common example: rail/truck Also water/rail/truck or water/truck Grown considerably with increased use of containers Increased global trade has also increased use of intermodal transportation More convenient for shippers (one entity provides the complete service) Key issue involves the exchange of information to facilitate transfer between different transport modes 4/2/2013 14
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