Few systems in your distribution chain have as much of an effect on your company as your transportation selection. Delivery strategies ensure that shipments to and from your location run smoothly and reach their destinations on time.
Technology on its own is not nearly sufficient help manufacturers keep up with the trucking industry’s often bewildering array of updates, rules, and roadblocks. Since transportation is so important to your company’s success, it’s critical to include it in your overall strategy.
Unfortunately, this term contributes to the misconception that transportation management is distinct from procurement and sales. In reality, transportation costs affect the bottom line, either positively or negatively, and that considerations must be made as part of wider buying and logistics planning.
How Does Transportation Work
Supply chain transportation management is the coordination of goods transportation from producers to distributors to wholesalers and, finally, to the general public. It’s an important aspect of supply chain planning, with the ultimate goal of ensuring that products are delivered effectively, at the lowest possible cost, and to the location where they’re required so that demand can be met.
Since transportation is so important, warehouse managers should look into it inside their supply chains. In the end, this is the only way to lower overall costs in a model where transportation can account for more than half of total operating costs, which is a large portion of a company’s supply chain costs.
Transportation Risks to Consider
Successful supply chain transportation planners face more risks than ever before, so managing these risks is critical for keeping a supply chain going as quickly as possible. Driver shortages, cyberattacks, and aging infrastructure are just a few of the recent threats facing the transportation industry. With fewer drivers on the road, the pressure on the remaining drivers will increase, potentially increasing the risk of fatigue-related accidents.
It is important for businesses to keep up with technological advancements in order to stay competitive. With the recent proliferation in automotive technology, the sector is more vulnerable to new threats, such as hacker cyberattacks, so it’s critical that drivers use the most up-to-date security techniques and apps.
The continued deterioration of roadways and transport systems is another rising transportation danger. Delays can occur everywhere, from collapsing bridges and major roads to increased traffic jams on the rails and in the air. As a result, vehicles consume more fuel and sustain more damage, necessitating more frequent maintenance and use of vehicle towing services.
The effectiveness of your supply chain is determined by the strategic use of adequate transportation. Adopting a sensitive transportation system that uses cross docking. Finally, cross docking aims to reduce total costs.
Companies must improve clarity and accountability across the transportation supply chain, as well as use a robust transportation management system, to better mitigate these and other risks, as well as to improve performance and reliability. Learn more about the global supply chain and how transportation plays a role in logistics.
Supply Chain Risk Management
While the risk of a coronavirus pandemic originating in China was expected, but no one took it seriously because common wisdom held that global sourcing was the solution.
These examples show that supply chain transportation management philosophies must be rethought urgently. It’s critical to recognize that ideology, sentiment, and wishful thinking are often used to influence organizational decisions.
Prescriptive analytics is an option worth considering. It is possible to construct a model that accurately represents the organization’s supply chain using modelling tools. Then, using internal and external data, run what-if scenarios to find the best transportation and sourcing options. It is possible to predict the disruption when the unimaginable occurs and identify feasible alternatives using prescriptive analytics. In this way, supply chain transportation strategy can be critically rethought.
Rethinking Transportation Management in the Supply Chain
When someone discovers a novel way to do something, everybody follows. This is one of the features of modern transportation management.
Despite the fact that software planning systems have benefited nearly every cost center in the supply chain, transportation is still frequently organised using spreadsheets. Innovative companies now offer a demand-sensing approach based on statistics and downstream data, which is used to help goods manufacturers boost supply chain efficiency. Today, transportation planning is one of the few unexplored levers for manufacturers to reduce operating costs, increase profits, and generate new revenues to reinvest in the company.