This document discusses the importance of transportation in supply chains. It outlines different modes of transportation including water, rail, truck, air, and pipeline. It also covers the characteristics of different transportation modes such as price, transit time and variability, risk of loss and damage, and costs which include factors like labor, fuel, and maintenance. Transportation is a major cost for companies, accounting for 29% of total logistics costs on average. The choice of transportation mode depends on volume, distance, and demand, which determine the applicable rate structure and costs.

1. TRANSPORTATION
IN SUPPLY CHAINS
SH. YAKUBOV | 06.06.2011

2. AGENDA
IMPORTANCE
MODES
CHARACTERISTICS
COSTS
SUMMARY

3. TRANSPORTATION

4. IMPORTANCE
GREATER COMPETITION
ECONOMIES OF
SCALE
LOWER COSTS

5. GREATER
COMPETITION
EFFICIENT
TRANSPORT
=
SYSTEMS
GREATER COVERAGE
FASTER DELIVERY

6. ECONOMIES OF
SCALE
CHEAP+EFFICIENT
TRANSPORT SYSTEM
LOCATE PRODUCTION WHERE THERE’S A
GEOGRAPHICAL ADVANTAGE

7. LOWER
COSTS
INEXPENSIVE
TRANSPORTATION
$$$$$$$$$$$$
REDUCED COSTS

8. Ordering
6%
Management
11%
Transportation
29%
Inventory
17%
Movement
8%
Warehousing
17%
Packaging
12%
Cost ratio of logistics items. (modified: Chang, 1988)

9. MODES
WATER
RAIL
TRUCK
AIR
PIPELINE

10. PRICE
$=
RATE OF TRANSPORTING GOODS
ACCESSORIAL + TERMINAL CHARGES

11. PRICE
WATER
$$ RAIL
$$$ TRUCK
$$$$$$ AIR
$ PIPELINE
$

12. TRANSIT TIME
AND VARIABILITY
TRANSIT TIME =
TIME IT
AVERAGE TAKES FOR SHIPMENT
TO MOVE FROM ORIGIN
TO ITS
ITS POINT OF
DESTINATION

13. TRANSIT TIME
AND VARIABILITY
DIFFERENCE IN TRANSIT TIME
VARIABILITY= BETWEEN VARIOUS MODES
OF
TRANSPORTATION

14. MODES
WATER
RAIL
TRUCK
AIR
PIPELINE

15. LOSS AND
DAMAGE
EVERY SHIPMENT IS
SUBJECT TO
RISK
OF LOSS & DAMAGE

16. TRANSPORT
COSTS
LABOUR
FUEL
MAINTENANCE
TERMINAL
ROADWAY
ADMINISTRATIVE
ETC.

17. VOLUME
DISTANCE
DEMAND
RATES
RELATED
RATE
PROFILE

18. VOLUME
RATES
RELATED
RATE
PROFILE

19. DISTANCE
RATES
RELATED
RATE
PROFILE

20. DEMAND
RATES
RELATED
RATE
PROFILE

21. SUMMARY