Podcast
Questions and Answers
What is the primary role of transportation in supply chain management?
What is the primary role of transportation in supply chain management?
- To store products until they are needed
- To move products between locations in the supply chain (correct)
- To provide customer service during delivery
- To dictate product pricing based on delivery speed
Which of the following parties is NOT directly involved in the transportation process?
Which of the following parties is NOT directly involved in the transportation process?
- Carrier
- Infrastructure owner
- Shipper
- Retail manager (correct)
What is one key characteristic of air transportation?
What is one key characteristic of air transportation?
- It allows flexibility in transportation routes
- It is best for large, heavy products
- It offers fast delivery for small, high-value items (correct)
- It has the lowest shipping costs
How do package carriers primarily transport products?
How do package carriers primarily transport products?
Which mode of transportation is specifically mentioned as costly but fast?
Which mode of transportation is specifically mentioned as costly but fast?
Which of the following influences the effectiveness of transportation in supply chain management?
Which of the following influences the effectiveness of transportation in supply chain management?
What is a unique feature of information goods in transportation?
What is a unique feature of information goods in transportation?
Which mode of transportation would generally NOT be chosen for small, high-value items?
Which mode of transportation would generally NOT be chosen for small, high-value items?
What is the primary service offered by package carriers?
What is the primary service offered by package carriers?
What is a significant advantage of trucking over rail transportation?
What is a significant advantage of trucking over rail transportation?
Which mode of transportation is ideally suited for heavy, low-value shipments that are not time-sensitive?
Which mode of transportation is ideally suited for heavy, low-value shipments that are not time-sensitive?
What is a limitation of water transport?
What is a limitation of water transport?
Which type of products are primarily transported through pipelines?
Which type of products are primarily transported through pipelines?
What describes intermodal transportation?
What describes intermodal transportation?
Why might companies choose water transport for certain shipments?
Why might companies choose water transport for certain shipments?
What comprises a transportation network?
What comprises a transportation network?
What is one major advantage of direct shipment transportation networks?
What is one major advantage of direct shipment transportation networks?
Which consideration is NOT important when designing a transportation network?
Which consideration is NOT important when designing a transportation network?
What defines a milk run in transportation logistics?
What defines a milk run in transportation logistics?
Why is transportation decision-making considered significant?
Why is transportation decision-making considered significant?
Which of the following statements about direct shipment networks is true?
Which of the following statements about direct shipment networks is true?
How do milk runs contribute to cost reduction?
How do milk runs contribute to cost reduction?
Which of the following is NOT a consideration in transportation network design?
Which of the following is NOT a consideration in transportation network design?
What role does an intermediate site typically play in transportation networks?
What role does an intermediate site typically play in transportation networks?
How do milk runs help reduce transportation costs in supply chain management?
How do milk runs help reduce transportation costs in supply chain management?
What is one significant advantage of using a tailored network in transportation?
What is one significant advantage of using a tailored network in transportation?
What is an essential component for operating a tailored network in transportation?
What is an essential component for operating a tailored network in transportation?
What type of risk involves the possibility that a shipment may not reach its intended destination due to external disruptions?
What type of risk involves the possibility that a shipment may not reach its intended destination due to external disruptions?
What role does cross-docking play in the logistics strategy of Seven-Eleven Japan?
What role does cross-docking play in the logistics strategy of Seven-Eleven Japan?
What should managers ensure regarding a firm's transportation strategy?
What should managers ensure regarding a firm's transportation strategy?
Which statement about Peapod’s use of milk runs is true?
Which statement about Peapod’s use of milk runs is true?
Which of the following is NOT a type of risk to consider in transportation?
Which of the following is NOT a type of risk to consider in transportation?
What is the primary benefit of using cross-docking in a supply chain?
What is the primary benefit of using cross-docking in a supply chain?
In the just-in-time (JIT) manufacturing system, which of the following is true?
In the just-in-time (JIT) manufacturing system, which of the following is true?
Why might a distribution center (DC) hold inventory instead of shipping products directly to stores?
Why might a distribution center (DC) hold inventory instead of shipping products directly to stores?
How does the milk run system benefit suppliers and distributors?
How does the milk run system benefit suppliers and distributors?
What is a key characteristic of W.W. Grainger's distribution strategy?
What is a key characteristic of W.W. Grainger's distribution strategy?
What advantage does Peapod gain by using milk runs for delivery?
What advantage does Peapod gain by using milk runs for delivery?
What would most likely hinder the implementation of cross-docking?
What would most likely hinder the implementation of cross-docking?
What shipping method does Toyota primarily utilize for its JIT manufacturing system?
What shipping method does Toyota primarily utilize for its JIT manufacturing system?
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Study Notes
Transportation in Supply Chain Management
- Transportation is the movement of products within a supply chain, from supplier to customer.
- The shipper requires the movement of the product.
- The carrier transports the product.
- Transportation infrastructure owners and operators (roads, ports, etc.) and policy-setting bodies heavily impact the effectiveness of transportation.
Modes of Transportation
- Air: Fast, expensive, best for time-sensitive, valuable, and long-distance shipments.
- Package Carriers: Deliver small, time-sensitive packages (FedEx, UPS, USPS).
- Truck: More expensive than rail, but offers door-to-door delivery and shorter transit times.
- Rail: High fixed costs (tracks, locomotives), long transit times, ideal for heavy, low-value, non-time-sensitive shipments.
- Water: Limited to certain areas, slowest mode, prone to delays at ports and terminals.
- Pipeline: Primarily for transporting crude oil, refined petroleum products, and natural gas.
- Intermodal: Combining multiple modes of transport (e.g., truck/rail), increasing in popularity due to containerization and global trade.
Transportation Networks
- A collection of transportation modes, locations, and routes for shipping products.
- A well-designed network achieves responsiveness at a low cost.
Designing Transportation Networks
- Direct or Intermediate Shipments: Consider whether to send goods directly to the buyer or through an intermediate site.
- Intermediate Site Function: Should the intermediate site stock products or act as a cross-docking point (direct transfer without storage)?
Importance of Transportation Network Decisions
- Backbone of Supply Chains: Impacts cost, customer demand, available facilities, products transported, delivery time, and administrative processes.
Types of Transportation Networks
- Direct Shipment Network: Products sent directly from supplier to buyer, eliminating intermediate warehouses, but limited flexibility.
- Direct Shipping with Milk Runs: Single truck delivers from one supplier to multiple buyers or picks up from multiple suppliers for one buyer, consolidating deliveries for cost savings.
- All Shipments via Intermediate Distribution Center (DC) with Storage: Products shipped to a central DC for storage and then sent in smaller batches to buyers.
- All Shipments via Intermediate Transit Point with Cross-Docking: Products cross-docked at a transit point (DC) and sent directly to buyers without storage, minimizing inventory and transit time.
- Shipping Via DC with Milk Runs: Milk runs used from a DC to deliver small lot sizes to multiple buyers, optimizing outbound transportation costs.
- Tailored Network: Combining different network types for cost optimization and responsiveness, requiring advanced information infrastructure.
Risk Management in Transportation
- Delays: Congestion along roads or at ports and airports.
- Disruption: Intermediate nodes or links disrupted by external forces.
- Hazardous Materials: Risk of hazardous materials during transport.
Transportation Decision-Making in Practice
- Aligning Transportation Strategy with Competitive Strategy: Managers should ensure transportation strategies support the overall business strategy and set incentives to achieve this.
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