Transportation - Delivery in the Supply Chain

We like to focus on the overall supply chain in process industry companies. Transportation moves the product between different stages in the supply chain. Transportation responsiveness has the same effect as other supply chain segments - responsiveness comes at the expense of cost efficiency. Really?

The preferred mode of transportation also affects the inventory and facility locations in the overall supply chain. The role of transportation in a company's competitive strategy figures prominently in consideration of customer needs. If a customer demands a high level of responsiveness, a supplier can use transportation as a competitive driver - assuming the customer will pay for the premium. If a customers primary decision making is focused on cost, a supplier will make decisions based on lowering transportation cost at the expense of responsiveness.

A company should use both inventory and transportation to increase responsiveness, or efficiency, the optimal decision for the process industry firm should find the optimal balance between the two.

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.