TLMT600Wk1

12/3/23, 4:00 PM Transportation and the Supply Chain

https://myclassroom.apus.edu/d2l/le/enhancedSequenceViewer/147775?url=https%3A%2F%2Ff54cbe36-23a9-4505-85fe-e251f80ec34d.sequences.… 1/2

Transportation and the Supply Chain For this first week of our discussion we will be focusing on transportation and the supply chain. The role or impacts that transportation can affect the role of a supply chain performance in positive or negative ways. Within the total supply chain management (SCM) concept, the goal is to meet customer service objectives while minimizing inventory and associated costs. SCM is seen as an integrative approach for planning and controlling the flow of material from suppliers to end users; it has also been stated that SCM and cooperative buyer-supplier relationships can prove useful in meeting the goals of the logistics function. The greatest impact occurs when transportation is disrupted between the supplier and warehouse. In the traditional structure the retailer, warehouse, and supplier experience the greatest inventory fluctuations and the highest goods in transit to their facilities (Hazen & Lynch, 2008).

Whether you are a 3PL, manufacturer, wholesaler, distributor, retailer, importer, exporter, supplier, customer, logistics service provider or other type of firm that participates in supply chain management, a major key to success is time compression. Increasing velocity, rapid response to changing market conditions, minimizing time-and sustaining that velocity--are the reasons for collaboration, integration, supply chain visibility and other endeavors to accelerate the movement of product and information (Asia, 2004).

Studies have shown that manufacturers and wholesalers have over 60 days of inventory and that retailers have over 90 days of inventory capital tied up. These times do not include the entire inbound inventory in the supply chain. Real supply chain inventory is likely 25% higher. This is a very significant amount of capital tied up in inventory (Asia, 2004).

Council of Logistics Management (1991) defined that logistics is ‘part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements’ (n. p.). Johnson and Wood’s definition (cited in Tilanus, 1997) uses ‘five important key terms’, which are logistics, inbound logistics, materials management, physical distribution, and supply- chain management, to interpret (p. 1685). Logistics can be seen as defining the whole process of materials and products moving into, though, and out of firm. When looking at inbound logistics, one sees that you are referring to the movement of material received from suppliers (Taylor, 2005). Another area of logistics is materials management which focuses on the movement of materials and components within a firm (Taylor, 2005). When looking into the physical distribution you are referring to the movement of goods outward from the end of the assembly line to the customer (Taylor, 2005). Last is supply-chain management which is considered bigger than logistics and provides links to logistics more directly with the user’s total communications network and with the firm’s engineering staff (Taylor, 2005).

Supply Chain Management (SCM) can be divided into three main areas: purchasing, manufacturing, and transport. From end to end, this includes decisions about which input materials to use, production quantities, inventory levels, distribution network configuration, and transportation for both the input materials as well as for the finished products. Logistics Management is the component of SCM that focuses on how and when

12/3/23, 4:00 PM Transportation and the Supply Chain

https://myclassroom.apus.edu/d2l/le/enhancedSequenceViewer/147775?url=https%3A%2F%2Ff54cbe36-23a9-4505-85fe-e251f80ec34d.sequences.… 2/2

to get raw materials, intermediate products, and finished goods from their respective origins to their destinations. Today, international trade is commonplace and increasing market share in emerging markets is highly desirable. It is therefore safe to say goods are rarely consumed where they are produced, and transportation services are the essential trait d’union between all of the elements of the Supply Chain. Effective, cost efficient Logistics Management can be a real point of competitive differentiation (Cristini, n. d.).

To practice effective, cost efficient Logistics Management, an organization must lay the foundation for a responsive, economical transportation network. With a responsive, economical transportation network, an organization is able to implement major strategic changes to reduce costs and increase customer service levels with very little disruption to the overall supply chain flow (Cristini, n. d.).

12/3/23, 4:00 PM Overview of Logistics System

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Overview of Logistics System (source: BTRE, 2001)

A responsive transportation network begins with end-to-end network visibility. Visibility allows the business to centralize production operations to lower-cost areas without impacting customer service levels, because any uncertainty within the network can be monitored and appropriately managed to keep inventory levels as low as possible.

An economical transportation network actually begins with a shift in attitude. Businesses are often trapped in the traditional view that transportation is a necessary evil – an inevitable source of cost and risk. And who can blame them? Transport is by far the largest component of the cost structure of a business’ logistics (Cristini, n. d.).

The road ahead is therefore still long, but the systemic impact of transportation-related figures clearly demonstrates that transportation is much more than just the financial drain associated with trucks, pallets, and warehouses. When the appropriate tools to manage complexity and guarantee visibility are in place, transportation provides an organization with the opportunity to continuously create operational efficiency and improve the bottom line – ultimately unlocking previously untapped value for shareholders (Cristini, n. d.).

The role that transportation plays in logistics system is more complex than carrying goods for

the producer to the consumer. When you have a well-managed transportation system, goods will be sent to the right place, at right time to satisfy customers’ demands. In addition, it will bring efficacy to your company, and build a bridges between producers and consumers (Taylor, 2005, p. 1662).

To keep transportation systems competitive periodic reviews need to happen.

The review of logistics system in a broad sense might help to integrate the advantages from different application cases to overcome their current disadvantage On the other hand, the review of transport systems provides a clearer notion on transport applications in logistics activities. The development of logistics will be still vigorous in the following decades and the logistics concepts might be applied in more fields” (Taylor, 2005, p. 1671).

We all know that transportation systems are designed to operate under normal conditions, but we as well know that disruptions such as those caused by an accident or by a storm are rather common and well mitigated. Once in a while, those disruptions are at a much higher scale and it takes place to the extent that the security of a whole region or nation is compromised (Rodrigue, n. d.).

A disaster involves extensive damage to people and physical infrastructure that is unforeseen in nature, scale and extent. It often implies that their risk of occurrence has not been properly assessed and a large share of the damage is the outcome of a lack of preparedness (Rodrigue, n. d., n. p.).

12/3/23, 4:00 PM Overview of Logistics System

https://myclassroom.apus.edu/d2l/le/enhancedSequenceViewer/147775?url=https%3A%2F%2Ff54cbe36-23a9-4505-85fe-e251f80ec34d.sequences.… 2/2

Transportation can also be considered a critical infrastructure since any disruption within one of its components can have major impacts on the economic and social well-being of the entire region of that area (Rodrigue, n. d.). One way to effectively assess how critical an infrastructure is would be to consider the impacts its removal would have on the flows and activities it services (Rodrigue, n. d.). “From an economic standpoint, the impacts of disasters are dependent on three factors; 1) the nature and level of incidence of disasters; 2) the level of exposure of populations and infrastructures and; 3) the level of vulnerability of populations and infrastructures” (Rodrigue, n. d., n. p.).

Video – What is Logistics Management? Meaning, Importance, Basic Functions & Strategies | AIMS UK - YouTube

12/3/23, 4:00 PM Transportation and the Supply Chain

https://myclassroom.apus.edu/d2l/le/enhancedSequenceViewer/147775?url=https%3A%2F%2Ff54cbe36-23a9-4505-85fe-e251f80ec34d.sequences.… 1/2

Transportation and the Supply Chain For this first week of our discussion we will be focusing on transportation and the supply chain. The role or impacts that transportation can affect the role of a supply chain performance in positive or negative ways. Within the total supply chain management (SCM) concept, the goal is to meet customer service objectives while minimizing inventory and associated costs. SCM is seen as an integrative approach for planning and controlling the flow of material from suppliers to end users; it has also been stated that SCM and cooperative buyer-supplier relationships can prove useful in meeting the goals of the logistics function. The greatest impact occurs when transportation is disrupted between the supplier and warehouse. In the traditional structure the retailer, warehouse, and supplier experience the greatest inventory fluctuations and the highest goods in transit to their facilities (Hazen & Lynch, 2008).

Whether you are a 3PL, manufacturer, wholesaler, distributor, retailer, importer, exporter, supplier, customer, logistics service provider or other type of firm that participates in supply chain management, a major key to success is time compression. Increasing velocity, rapid response to changing market conditions, minimizing time-and sustaining that velocity--are the reasons for collaboration, integration, supply chain visibility and other endeavors to accelerate the movement of product and information (Asia, 2004).

Studies have shown that manufacturers and wholesalers have over 60 days of inventory and that retailers have over 90 days of inventory capital tied up. These times do not include the entire inbound inventory in the supply chain. Real supply chain inventory is likely 25% higher. This is a very significant amount of capital tied up in inventory (Asia, 2004).

Council of Logistics Management (1991) defined that logistics is ‘part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements’ (n. p.). Johnson and Wood’s definition (cited in Tilanus, 1997) uses ‘five important key terms’, which are logistics, inbound logistics, materials management, physical distribution, and supply- chain management, to interpret (p. 1685). Logistics can be seen as defining the whole process of materials and products moving into, though, and out of firm. When looking at inbound logistics, one sees that you are referring to the movement of material received from suppliers (Taylor, 2005). Another area of logistics is materials management which focuses on the movement of materials and components within a firm (Taylor, 2005). When looking into the physical distribution you are referring to the movement of goods outward from the end of the assembly line to the customer (Taylor, 2005). Last is supply-chain management which is considered bigger than logistics and provides links to logistics more directly with the user’s total communications network and with the firm’s engineering staff (Taylor, 2005).

Supply Chain Management (SCM) can be divided into three main areas: purchasing, manufacturing, and transport. From end to end, this includes decisions about which input materials to use, production quantities, inventory levels, distribution network configuration, and transportation for both the input materials as well as for the finished products. Logistics Management is the component of SCM that focuses on how and when

12/3/23, 4:00 PM Transportation and the Supply Chain

https://myclassroom.apus.edu/d2l/le/enhancedSequenceViewer/147775?url=https%3A%2F%2Ff54cbe36-23a9-4505-85fe-e251f80ec34d.sequences.… 2/2

to get raw materials, intermediate products, and finished goods from their respective origins to their destinations. Today, international trade is commonplace and increasing market share in emerging markets is highly desirable. It is therefore safe to say goods are rarely consumed where they are produced, and transportation services are the essential trait d’union between all of the elements of the Supply Chain. Effective, cost efficient Logistics Management can be a real point of competitive differentiation (Cristini, n. d.).

To practice effective, cost efficient Logistics Management, an organization must lay the foundation for a responsive, economical transportation network. With a responsive, economical transportation network, an organization is able to implement major strategic changes to reduce costs and increase customer service levels with very little disruption to the overall supply chain flow (Cristini, n. d.).