Transportation in supply chain

To satisfy the daily needs of life, people consume resources. These resources include basic daily necessities such as water, food and cloths. Because these resources are not readily available everywhere on the surface of Earth they need to be moved to different locations. This movement is called transpiration.

Transportation provides a significant link between the various stages in the supply chain, whereas distribution is the driver of the links. By nature transpiration and thus distribution involve at least two stages in the supply chain: supply-manufacturers and manufacturer-wholesaler distribution system.

Given its significant to the supply chain transportation should be better planned, managed and leveraged by the supply chain professional.

Transportation-related decisions significantly affect cost as well as responsiveness of the supply chain.

Transportation cost is a significant component of the supply chain cost for most manufacturing firms. A thorough understating of the cost structures in transportation allows a firm to make relevant trade-off when taking relevant decision.

Transportation creates spatial utility by reducing distance gaps among suppliers, producers, and consumers. Transportation allows raw materials and parts/components needed for production to be shipped to producers’ locations. Likewise, transportation allows finished goods made by producers to be shipped to consumer’s locations.

With the growth in e-commerce and the associated home delivery of products, transportation costs have become even more significant in retailing.

 From the book industry to the grocery industry, on-line firms are delivering products in small packages to the customer’s home instead of full trucks to a retail outlet.
Transportation in supply chain