transportation ppt
TRANSCRIPT
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Transportation in the Supply Chain
Akash Bhasin
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Supply Chain
• All facilities, functions, activities, associated with flow and transformation of goods and services from raw materials to customer, as well as the associated information flows
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Transportation
• Transportation is jointing between stages in the supply chain.
• It is a way to move product from manufacturing to the final consumers.
• Transportation within a supply chain Example – Amazon sells products on the
internet and uses FedEx to deliver products to customers.
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Kinds of Transportation costs
• Inbound costs – costs that includes for bringing materials in to the facility.
• Outbound costs – cost of sending material out of a facility
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Supply Chain for Denim Jeans
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Transportation• Rail
– low-value, high-density, bulk products, raw materials, intermodal containers
– not as economical for small loads, slower, less flexible than trucking
• Trucking– main mode of freight
transport in India– small loads, point-to-point
service, flexible– More reliable, less damage
than rails; more expensive than rails for long distance
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Truckload (TL)
• Low fixed cost – carriers do not own or maintain roads
• Door-to-door convenience• Good speed and frequency (small dispatch lots)• Cannot carry large loads• Major Issues– Utilization– Consistent service
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•Air–most expensive and fastest,
mode of freight transport–lightweight, small packages –high-value, perishable and
critical goods–less theft
•Package Delivery–small packages–fast and reliable–increased with e-Business–primary shipping mode for
Internet companies
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•Water–low-cost shipping mode–primary means of
international shipping–slowest shipping mode
•Intermodal–combines several modes of
shipping-truck, water and rail–key component is
containers•Pipeline–transport oil and products
in liquid form–high capital cost,
economical use–long life and low operating
cost
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Transportation Costs• 63% of total logistics expenditures• Fixed Costs
– road/railway acquisition and maintenance, terminal facilities, transport equipment, carrier administration
• Variable Costs
– fuel, labour, equipment maintenance, handling, pickup and delivery
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Internet Transportation Exchanges
• Bring together shippers and carriers• Initial contact, negotiations, auctions
• Examples– www.nte.com– www.freightquote.com
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There are two keys players in any transportation that takes place within a
supply chain
• Shipper - party that requires the movement of the product between two points in the supply chain
• Carrier - party that moves or transports the product
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16
Transportation Network Designs
Suppliers Retailer Stores
Direct Supplier Network
Suppliers Retailer Stores
Direct Shipping
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Suppliers Retailer Stores
All Shipment via DC
DC
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Risk Management in Transportation
• Three main risks to be considered in transportation are:
– Risk that the shipment is delayed– Risk of disruptions– Risk of hazardous material
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Risk mitigation strategies
– Decrease the probability of disruptions– Alternative routings– In case of hazardous materials the use of modified
containers, low-risk transportation models, modification of physical and chemical properties can prove to be effective
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Choice of Transportation Mode
• A manager must account for inventory costs when selecting a mode of transportation
• A mode with higher transportation costs can be justified if it results in significantly lower inventories
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Walmart Transportation system
• Fast and responsive transportation system.
• Distribution centers serviced by more than 3500 company owned trucks.
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Cross-docking• To make its distribution process more
efficient, Wal-Mart makes use of a logistics technique called “cross-docking
• In this system, the finished goods are directly picked up from the manufacturing plant, sorted out and then directly supplied to the customers.
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• The system reduced the handling and storage of finished goods, virtually eliminating the role of the distribution centers and stores.
• The manufacturer directly forwarded the goods to a place called the “staging area.”
• The goods were packed here according to the orders received from different stores and then directly sent to the respective customers.
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Video
• http://www.youtube.com/watch?v=ViLjw7b_0_U
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Thank You