Transportation Modes in a Supply Chain

We always couch operational excellence in the context of overall supply chain design. Why suboptimize on transportation, manufacturing, purchasing or any other elements of the supply chain? Lets look at the entire supply chain - across the enterprise and look at optimization. Operational excellence is not limited to just the manufacturing area. Lets take a look at the transportation or logistics function, which applies to both in-bound raw materials and out-bound finished products. There are essentially only six modes of transportation:

* Air- fast, but very expensive.
* Truck - quick, inexpensive, but very flexible.
* Railroad - inexpensive but slow, best used for large quantities of materials.
* Ship - the least expensive, very slow, often the only choice for transcontinental shipments.
* Pipeline - very cheap and reliable, primarily used for oil and gas, and chemical products.
* Electronic - the latest mode that delivers "content" like music, books, etc via the Internet.

Another major decision that supply chain managers must confront is the route and network by which finished products are shipped. A route is the specific path along which a product is shipped. A network is the collection of locations and routes along which products can be shipped. Decisions like "do we ship direct or do we use distribution" have a significant effect on supply chain costs, and customer service metrics.

Synchronous LLC is committed to maintaining a continuing dialogue on operational excellence and best practices for the process manufacturing industry. To pose a question, contribute a best practice, or otherwise add to the dialogue, send a note to RobBaldwin@SynchronousLLC.com . To subscribe to our weekly newsletter send your preferred email contact address to Webmaster@SynchronousLLC.com with SUBSCRIBE in the subject line.