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Transportation in Sales and Distribution Management

Transportation in Sales and Distribution Management. Modes of Transportation, Advantages & Disadvantages

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Transportation in Sales and Distribution Management

  1. 1. TRANSPORTATION • Very important in the Logistics function: • Movement across space or distance adds value to products • Transportation provides time and place utility • Role of transportation includes: • Provides opportunity for growth under competitive conditions • Deeper penetration into markets • Wider distribution means greater demand • Can influence product prices favourably 1
  2. 2. TRANSPORTATION PRINCIPLES • Continuous flow • Optimise unit of cargo – stackability • Maximum vehicle unit – capacity utilization • Adaptation of vehicle unit to volume and nature of traffic • Standardisation • Compatibility of unit load equipment • Minimum of dead weight to total weight • Maximum utilization of capital, equipment and personnel 2
  3. 3. THE SELECTION CRITERIA • Environmental analysis: shipper, carrier, government regulations, public influence • Deciding objectives • Selecting mode • Select transport type within the mode • Define functions of transport • Evaluation and control – customer perception / satisfaction, best practice benchmarking 3
  4. 4. COST FACTORS • Can be product related or market related. • Product related: density, stowability, ease or difficulty of handling and liability • Market related: competition, location of markets, Government regulations, traffic in and out of the market, seasonality of movements and impact on customer service • Five prominent modes: • Road, rail, air, water and pipeline. • Sixth one is use of Ropeways 4
  5. 5. CUSTOMER SERVICE FACTORS • Consistency, dependability • Transit time • Coverage – door-to-door for example • Flexibility in handling a range of products • Loss and damage performance • Additional services provided 5
  6. 6. REVERSE LOGISTICS • Movement of goods from the market or customer back to the company • The need: • Increased awareness of the environment • Stringent legislation • For some it is part of the business • Profitability of dealing with scrap, surplus • Surplus, obsolescence can result due to: • Over optimistic sales forecasts, change in product specs, errors in estimating material usage, losses in processing or overbuying based on incentives 6
  7. 7. ADVANTAGES OF RAIL • Economy – more so for goods over long distances • Efficiency of energy • Reliability – not affected by weather conditions • High speed • Cheaper transportation • Safety and large capacity 8
  8. 8. DISADVANTAGES • Uneconomical for small shipments and short distances • Not suitable for remote stations • Costly terminal handling facilities • Inflexible time schedules • Lack of door to door service 9
  9. 9. ROAD FREIGHT ADVANTAGES • Through movement – direct from consignor to consignee, no transshipment • Flexibility – routes and loading routines can be easily altered, operate day and night • Less capital costs – for own fleet + immunity from industrial action • Fast turn-around – if articulated units like tractors and trailers are used • Minimum delays 11
  10. 10. DISADVANTAGES • Susceptibility to weather and road conditions – in spite of the best protection • Unsuitability for heavy loads – rail transport more economical for bulk loads • Unsuitability for long distances – again the rail telescopic rates are more favourable 12
  11. 11. AIR TRANSPORT ADVANTAGES • Faster mode • Reduction in cost particularly inventory • Broad service range • Increasing capabilities • Disadvantages: • High cost • Weather affects flight conditions • Limitations on heavy consignments 14
  12. 12. WATER TRANSPORT • Advantages: • Mass movement of bulk • Lowest freight cost • Preferred for long haul of low value commodities • Disadvantages: • Not for quick transit 16
  13. 13. PIPELINE MOVEMENT • Advantages: • Reliable, continuous, all weather transport • Low energy consumption – hence low cost • Low maintenance and operating costs • Underground, no space problem • Can traverse difficult terrain • Minimal transit losses • Operation round the clock, safe • Economies of scale – double the throughput for only 30% additional cost • Disadvantage is in the investment cost 18
  14. 14. ROPEWAYS • Advantages: • In hilly or inaccessible areas • Long and circuitous routes with streams / deep valleys • For commodities capable of movement in ropeway buckets • Short haulages of less than 50 kms • Areas where other carriers are uneconomical • Disadvantages: • Heavy investments • Limitations on size and quantity of haul 20
  15. 15. • Prepared by: • Darshana Chauhan • Heeral Brijlani • Datt Dubal • Lakshman Dangar • Sanjay Vadher • Atman Dave • Guided by: • Prof. Archana Gadhavi
  16. 16. 22 THANK YOU

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  • RomeshSomani1

    Mar. 18, 2018
  • GayathriSuresh11

    Nov. 25, 2019

Transportation in Sales and Distribution Management. Modes of Transportation, Advantages & Disadvantages

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