TRANSPORTATION

HOW the inventory is passed along

in the Supply Chain
 Role of TRANSPORTATION in Supply Chain
• Transportation moves the product between
different parties in a Supply Chain.
• The choice of transportation, affects the –
Inventory- Dell flies some of its components from
Asia, because doing so allows company to lower
the level of inventory it holds. As the components
are required by Dell it orders it from Asia Via Air
Transport which gets delivered the same or next
day to Dell, so Dell need not require to keep large
inventory.
 Role of TRANSPORTATION in Competitive Strategy
• If the firm’s competitive strategy targets
customers who demands a high level of
responsiveness and that the customer is willing to
pay for this responsiveness, then firm use faster
mode of transportation .
• If the firm’s competitive strategy targets
customers whose main criteria is price, then
company use that mode of transportation which
reduces cost.
 COMPONENTS OF TRANSPORTATION
1. Transportation Network-
It includes the routes along which the product can
be shipped.
i.e. whether transportation will be direct from
supply source to the demand point or will include
consolidation points.
Whether multiple demand points will be included in
single run or not.
2. Transportation Mode-
Mode of transportation could be either Air, Sea,
Road (Trucks, Rail), and information goods can
be sent via internet.
Can choose any of the mode of transportation
depending on factors like-
Speed
Size of shipment (Individual parcels , to full trucks ,
to entire ship)
Cost