A framework for transportation decision making in an integrated supply chain

Theodore P Stank and Thomas J Goldsby

Supply Chain Management

2000, Vol. 5, No. 2, p. 71-77

 

1)      Introduction

  1. a) Transportation decision faced with
  2. i) Economic deregulation
  3. ii) Safety and social regulation

iii)     Escalating customer expectations

  1. iv) Increased globalization
  2. v) Improved technologies
  3. vi) Labor and equipment shortages
  4. b) Transportation managers
  5. i) Must be grounded in traditional logistics functions
  6. ii) Provide a strategic edge by meeting elevated service requirements and increasingly lower costs

2)      Decision-Making framework

  1. a) Leading firms
  2. i) Coordinate purchasing, operations and logistics
  3. ii) Manage the physical and information flows internally and externally

iii)     Collaborate closely with external materials and service providers

(1)   To cut channel cycle times

(2)   To reduce inventory levels

(3)   Tom improve goods flow

  1. b) Planning information
  2. i) Managers provide information including

(1)   Resource availability

(2)   Delivery requirements

  1. ii) Transportation department should provide information including

(1)   Capabilities

(2)   constraints

iii)     Planning allows managers to

(1)   Arrange shipments and consolidate loads or routing efficiencies

(2)   Take advantage of associated cost savings

(3)   Ensure minimal customer service failures

(4)   Avoid unnecessary costs

3)      Total network and lane design decisions

  1. a) Consideration of Network link / node structures
  2. i) Supplier
  3. ii) Plant

iii)     Distribution center

  1. iv) Customer locations
  2. v) Physical flow
  3. b) Decisions at this level
  4. i) Long term decisions of appropriateness and availability of transportation modes
  5. ii) Level of outsourcing

4)      Lane operations decision

  1. a) Focus on daily operational freight transactions
  2. i) Coordinate product movements to meet service requirements
  3. ii) Facilitate JIT and value added activities
  4. b) Decisions at this level
  5. i) Inbound/outbound consolidation
  6. ii) Temporal consolidation

iii)     Vehicle consolidation

  1. iv) Carrier consolidation

5)      Mode/Carrier assignment decisions

  1. a) Focus on evaluation and selection
  2. i) Pool of potential carriers, decreasing based on criteria identified
  3. ii) Shipments evaluated based on the service criteria to be met and cost constraints
  4. b) Decisions at this level
  5. i) Selecting carrier from multi-modal set based on availability and existing rates

6)      Service negotiations

  1. a) Focus on
  2. i) Managing relationships with Transportation service providers
  3. ii) Price is central concern

iii)     Understanding of service expectations is also necessary

  1. b) Decisions at this level
  2. i) Every facet of the relationship must be negotiated
  3. ii) Contract must be developed

7)      Dock level decisions

  1. a) Focus on
  2. i) Timeliness of information
  3. ii) Effective planning

iii)     Blocking and bracing of loads to protect goods

  1. b) Decisions at this level
  2. i) Load planning
  3. ii) Routing

iii)     Scheduling

8)      Conclusions and key points

  1. a) Processes will continue to evolve affected by
  2. i) Deregulation
  3. ii) IT advances

iii)     Time-based competition

  1. iv) Globalization
  2. b) Managers must ensure that shipper goals are aligned with those of the transportation provider
  3. c) Managers must ensure that risks and rewards are shared