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Chapter 1: Global Supply Chains: The Role and Importance of Transportation
Learning Objectives:
1. Appreciate why efficient transportation systems are so critical to advance the

growth and development of regions and countries, and how they contribute to
social and political systems as well as national defense.
2. Discuss the importance of transportation to globalization and how it contributes to

the effective flow of commerce among close and distant regions.
3. Understand how global supply chains can contribute to the competitive position
of countries and allow them to penetrate global markets
4. Appreciate the dynamic nature of the global economy, which can impact and
change the competitive position of a region or country in a relatively short period
of time.
5. Explain the underlying economic basis for international exchange of goods and
services for the overall benefit of two or more countries or regions and gain some
perspective on the volume and overall importance of the more advanced countries
of the world
1
6. Discuss the size and age distribution of the population and the growth rate of the
major countries of the world and understand how the size of the population can
impact a country positively or negatively.
7. Understand the challenges and opportunities associated with the worldwide

growth in urbanization and why there has been such a major shift from rural to
urban areas.
8. Appreciate the importance and impact of land and resources to the economic
advancement and development of the various countries of the world and how they
can be exploited to their advantage.
9. Explain why technology has become such an important ingredient for the
economic progress of companies and countries in today’s global economy and
understand the need for and types of technology.
10. Discuss the overall characteristics and importance of globalization and supply
chains in the highly competitive world economies of the 21st century.
Chapter Overview:
In previous editions of this text, transportation was referred to as the “glue” that holds the
supply chain together, and an enabler of the underlying tactics and strategies that have
catapulted supply chain management to the level of acceptance that it now enjoys in
many organizations, both private and public. For example, transportation management
systems technology along with complimentary software are used by many organizations
to improve logistics and supply chain efficiency, effectiveness, and execution.
Transportation has moved from playing a reactive or supporting role to a role that is more
proactive and enabling. In other words, transportation has become much more strategic
2
for organizations in determining their ability to compete in the growing and complex
global marketplace.
The global marketplace is also changing on a continuing basis, that is, it has become very
dynamic, and is buffeted by economic, political, social, and natural forces, which can
impact a country or region negatively or positively in the short or long run. For example,
the rising cost of fuel has impacted the rates charged by transportation service providers,
which in turn impact the distance that it is economically feasible to transport goods. The
cost of labor can change over time to the disadvantage some geographic areas and benefit
others. For example, the labor cost advantage that China enjoyed, along with low rates
for ocean carrier movement, had a positive impact on their ability to sell products on a
global basis. These advantages have diminished somewhat allowing other countries to
develop and improved competitive position because of market proximity, labor costs, or
other factors. These changes in turn impact global supply chains and their associated flow
of goods.
In this chapter, the initial focus will be upon developing an overview of the flow of
global commerce and trade overtime on a worldwide basis not only to understand the
importance and magnitude of global supply chain flows but also to gain some perspective
on important changes that have occurred. A variety of economic data will illustrate the
impact of the overall changes that have occurred. The next section will examine the
underlying rationale and economics of global flows of goods and services. In other
words, the “why” of global flows will be discussed to understand the advantages of
international trade to countries and consumers, in contrast to the “what” of the first
section of this chapter. The third section will provide additional insights into the factors
that can contribute to the economic advancement and development of countries. The final
section of the chapter will provide an overview of the supply chain concept including its
development, key characteristics, and major activities.
Global Supply Chain Flows
3
Early in the 21st century, frequent reference was made to acronyms such as the BRIC
(Brazil, Russia, India, and China) or VISTA (Vietnam, Indonesia, South Africa, Turkey,
and Argentina) countries. The former were identified as the top emerging economies and
the latter are those developing at a fast pace. The development of the BRIC and VISTA
countries was seen as an indication of opportunities for “sourcing” of materials, products,
and services and the identification of potential markets for the more developed economies
such as the United States, European Union (EU), and Japan. Also, they were a sign of
more economic balance in the world and continued growth. Consequently, one noted
author1 declared that the world was really flat because of the developing economies.
Interestingly, there have been some economic shifts already with respect to these
countries, and the future importance of some of the VISTA countries is not clear. For
example, South Africa has been added to the first group, BRICS, by some economic
pundits. Nevertheless, all of this supports the observation made earlier about the dynamic
and competitive nature of world markets. An important caveat is the potential for
disruption caused by political instability, associated acts of terrorism, and military action,
which can cause a major disruption in global trade flows.
Traditionally, many countries imported raw materials that were scarce or not available in
the importing country, and they then produced finished products mostly for domestic
consumption. The raw materials were much lower in value than the finished products that
contributed to the imbalance of trade among developing and developed economies.
However, that situation has changed, countries that previously imported materials for
domestic production and consumption are exporting more finished products while so-
called underdeveloped countries are participating more in manufacturing, especially of
parts of a finished product. A very good example is the automobile industry. The typical
automobile of today has over 10,000 parts, which can be manufactured in many different
countries. Furthermore, the individual parts may be exported and put together into
subassemblies that are frequently shipped to an assembly plant in another location. So a
ford assembled in Detroit may have less U.S. made parts than a Toyota assembled in
Mexico. The efficiency of the global supply chains and especially the transportation
systems afford these more complex operations as compared to an earlier era when the
4
auto parts were produced in locations, which were more contiguous to the assembly
plants. This is also an excellent example of companies using logistics systems analysis to
evaluate the trade-offs among production costs, transportation services, and inventory
carrying costs to arrive at the overall best location for efficiency and effectiveness.
As indicated earlier, the global supply chains of today allow production of products with
parts being produced in several countries before the final finished product is assembled.
A major contributing factor to the global supply chains and the economics of production
is the efficiency and effectiveness of global transportation and associated services. The
improved global supply chains with faster transit times and lower rates help to promote
global trade. Consumers received not only lower prices but also in many instances better
quality food and manufactured products. In the next section, we will examine the
economic basis and complimentary logic for global trade.
The Economic Basis and Logic of Improved Global Trade
Absolute and Comparative Advantage

As the European countries advanced economically in the 18th century, there was a
growing recognition of the value and potential of international trade. Adam Smith in his
1776 book, The Wealth of Nations,2 not only provided a rational basis for a market
economy based upon open or free competition, but he also advanced the so-called Theory
of Absolute Advantage that provided an economic basis for “free trade” among countries.
Essentially, he stated that if two regions or countries produced and consumed the same
two products, for example, eggs and butter, but had different costs of production, trade
could be beneficial. For example if Country A had an advantage with producing eggs (50
centers versus $1 per dozen) and Country B had the advantage with butter (75 cents
versus $1.25 per pound), Smith concluded that A should produce eggs and buy butter
from B, while B should produce butter and buy eggs from A. Both would benefit by
being able to buy more of each product at lower prices than if they each continued to
produce both products. This example is somewhat simplistic because it does not consider
transportation costs for delivery or other costs that could be incurred. If the additional
5
costs were added to the production costs, the subsequent “landed cost” would have to be
lower than the importing country’s cost of production. In other words, in the example
earlier, the eggs produced in A would have to have a landed cost in B (50 cents plus
transportation costs) less than $1.00.
The Theory of Comparative Advantage was advanced about 40 years after the publication
of Smith’s Wealth of Nations by several economists.3 they maintained that even if two
countries produced and consumed the same two products and one country could produce
both products at a lower cost (absolute advantage in both products) than the other
country, it could possibly be beneficial for both countries to specialize and trade. It would
require the country with the advantages to specialize in the product that it had the greatest
comparative advantage over the other country. For example, if Country A could produce
butter for 75 cents less than Country B and Country B could produce eggs for 25 cents
more than Country A, A should produce eggs. Again, transportation cost and other costs
would have to be considered to develop a landed cost.
In today’s more complex, global economy, there are more variables than the traditional
factors of production (land, labor, capital and entrepreneurship) that can give advantages
to countries and provide a basis for global trade flows. Some of these factors help to
explain the development of the so-called BRIC and VISTA countries that were
previously discussed. For example, two of the BRIC countries, India and China, have
developed and prospered during the last 20 years because of factors such as improved
global transportation, faster communication with lower costs, population growth, and
technology advancement. China, for example, has taken advantage of their low labor
costs, including skilled workers, ample raw materials, and capital to invest in production
facilities. India’s expanding population and growth in technology expertise contributed to
their economic advancement. In a later section of this chapter, China and India’s
advancing economies and leadership positions in the world economy will be discussed in
more detail.
Contributing Factors for Global Flows and Growth
6
Important factors that are frequently cited for greater economic development may include
population growth and age distribution, urbanization, land and resources, economic
integration, knowledge dissemination, labor mobility, financial flows, and investment in
infrastructure by public and/or private agencies to promote improved transportation,
faster communication systems, improved financial services, and increased flow of goods
and services. These same factors also become the driving forces for overall globalization.
At this juncture, it would be worthwhile to examine some of these factors in terms of the
global economic growth and development of selected countries.5
While the total population of a country is an indicator of economic growth potential in

terms of workforce and consumers, it has some limits. We need additional information
about the population to draw meaningful conclusions such as age distribution and
education levels. If we examine population age distribution on a macro level, the young-
age balance is shifting throughout the world. In the more developed regions in 2005, the
proportion of older people (over age 65) is almost the same as children (under age 15),
15.3 percent versus 16.9 percent, but by 2050, the numbers are predicted to be 29 percent
versus 15.4 percent, respectively. Europe will have the greatest disparity followed by
North America. The longer life spans in developed countries are exacerbating the young-
age disparity ratio and have important implications for the labor force in various
countries and the needs of consumers for food, housing, and medical care.
The private sector and the public sector will be challenged by these changes in terms of
the size of the workforce, medical care, and even retirement benefits, but some
opportunities are likely for certain types of business including heath care, housing,
transportation, food products, and so on. Much depends upon immigration policies,
technology, retirement ages, and educational opportunities. Net, there could be benefits
but challenges also will persist. An interesting opportunity could occur with more mobile
migration among countries. The European countries with their “graying” populations
could probably benefit with a migration of younger individuals from less developed
countries not only to help care for the older citizens but also to provide a younger
workforce for the developed economies. Even in the United States this could be a
7
possible benefit. Table 1-6 compares selected age groups in the United States for 2000
and 2010, and an interesting group is the 25-44 age bracket, showing that in 2010 there
was a decline of almost 3 million people in this group compared to 2000.
Urbanization
There has been a noticeable demographic shift in a number of countries with the
migration from rural to urban areas. In 2000, 47 percent of the world’s population lived
in urban areas. By 2030, it is estimated that the number will increase to 60 percent, and
the change will be most rapid in underdeveloped counties. This will cause additional
challenges for those countries to provide the housing, infrastructure, health care, and
security necessary for effective and prosperous expansion. The rural areas will also face
challenges with smaller and likely older populations. There will be opportunities for
business to help alleviate the burdens for the public sector and develop new business
opportunities for domestic and global economic expansion. The challenges will be
daunting in some cases. A relatively new term is the megacity (more than 10 million
people). It has been estimated that Asia will have 18 megacities, the United States will
have five, but there will be nom in Europe. This will be an interesting demographic
change with important implications for global trade. The megacities in some countries
especially Africa will be faced with inadequate infrastructure, especially transportation
and utilities, to support the population growth.
Land and Resources

The availability of land and critical resources such as energy, food, and water are of
paramount importance for economic viability and future development. Technology will
play a critical role in mitigating the scarcity of key resources from desalinization of ocean
water, to fracking for increased oil and gas production, to biotechnology for improving
crop yield and food production. Fracking for oil and gas production has already changed
the global dynamics for energy with the United States likely to become a net exporter and
the changes in transportation requirements, which will be discussed in later chapters. All
three are keys to stable economic growth and development but the geographic disparity
among areas of the world could be daunting and lead to political conflicts. The public and
8
private sectors can both be instrumental in alleviating the challenges and potential crises.
Our success in this area will be of immeasurable importance for peace and prosperity.
Transportation can play and important role in resolving the disparity by moving these
resources efficiently and effectively among regions and countries, but governments and
businesses have to provide the stable and economic basis for this to happen. The
expansion of oil and gas pipelines in recent years and improvements in rail tank cars and
water vessels are based upon such growth. Technology has two important dimensions. It
can be viewed as an internal change agent that can enhance the efficiency and
effectiveness of an organization and its ability to compete in the global marketplace.
However, technology can also be viewed as an external driver of change similar to
globalization. In many organizations, the rapid development of new technology by
technology companies whether it was hardware or software changed in “rules of
engagement” and enabled new forms of competition or new business models. The new
technology and new companies changed the nature of the competition, which meant that
existing companies had to change or perish. There are many examples of established
organizations that were blindsided by the technology. The internet alone was the biggest
‘culprit’ or agent of change because it made information available in real time to large
segments of the population via their personal computers, telephones, or other devices.
The development and sharing of so much information is a major force for changing
business models and for the obsolescence of some business. Travel agents, for example,
became passé. Amazon without stores can compete with Walmart’s store network, as can
Zappos with more traditional shoe sales organizations. Technology and transportation
services have been major factors supporting these changes. For example, companies have
been able to outsource selected internal functions like customer service centers or
personnel service. One of the most significant impacts has probably been more efficient
and effective supply chains and related services such as high-tech warehousing and
overnight delivery via Federal Express or UPS. From the specially designed supply
Chains of Amazon and Zappos to the realigned supply chains of companies like Macy’s
or Kimberly Clark, supply chains have become a critical ingredient for profitability and
customer service.
9
While information technology has been and will continue to be an important dynamic for
external and internal changes and economic growth, there are additional dynamics noted
in the in the text that also will be important for future growth and development. Among
the more important of these technologies are industrial robotics, additive manufacturing
or so called, 3D printing and digitization and advanced computational methods to model
and changes the manufacturing and distribution systems of many companies.
Globalization
Globalization has become a very frequently used term or concept not only in business
related conversations but also in more casual settings. Individuals probably have many
interpretations and use the word differently in different settings. However, in this
particular context, globalization can be used synonymously with economic integration
and development across country and regional borders. The integration will increase the
flow of goods and services globally based upon the logic of comparative advantage
discussed previously. Also the efforts to eliminate and/or reduce tariff and non-tariff
barriers will promote greater interregional flow. However, military and terroristic
interruption poses a real threat to increased global economic progress.
The global interdependence can be good or bad news. On the good side, the lower prices,
wider availability of goods and services, land and resource development, and new
employment opportunities have benefited many countries and regions of the world, both
developed and developing areas. However, the benefits and advantages have not been
equal for all; that is, some have benefited more than others, but on a macro level, and one
could argue that the wins have outnumbered the losses. On the negative side, the
interdependence can lead to global recessions as was the case in 2009 with serious
repercussions felt throughout the world. The economic recovery has been very painful
and has required government intervention. There are still lingering economic problems
from this recession in some areas of the world. However, there have been strong
recoveries in other regions such as North America and some countries in Europe.
10
On a micro level, the global interdependence has increased the level of complexity and
competition with shorter product life cycles, new forms of competition, and new business
models. Outsourcing, offshoring, and insourcing have become part of the lexicon of
businesses. The information technology previously discussed has allowed supply chains
to be reexamined and redesigned for more efficiency and effectiveness and even better
execution. The fast or even real-time information flows globally have even allowed
companies to connect in sharing information and to collaborate much more expeditiously
than in the past. This has placed a premium on flexibility of planning and operations to
respond and adjust to changes in the competitive environment. Also, visibility of
inventory and other assets has become an important dimension for efficiency and
effectiveness.
Supply Chain Concept
References to supply chain management can be traced to the 1980s, but it was not until
the 1990s that supply chains captured the attention of senior level management in many
organizations. They began to recognize the potential of effective supply chain
management to improve global competitiveness and to increase market share with
consequent improvement in share-holder value.
Supply chain management came into vogue during the 1990s and continues to be a
focal point for making organizations more competitive in the global marketplace. Supply
chain management can be viewed as a pipeline or a conduit for the efficient and effective
flow of products and materials, services, information, and financials (usually cash) from
the supplier’s supplier through the various intermediate organizations out to the
customer’s customer (see Figure 1-7). In essence, it is a system of connected networks
between the original vendor and the ultimate final consumer. The extended enterprise or
boundary spanning perspective of supply chain management represents a logical
extension of the logistics concept, providing an opportunity to view the total system of
interrelated companies and their impact on the final product in the marketplace in terms
of its price-value relationship.
11
Figure 1-7 also illustrates the basic characteristics of a supply chain that are important to
supply chain related decisions. The definition, which is part of the illustration, indicates
several important points. A supply chain is an extended enterprise that crosses the
boundaries of the individual firms to span their related activities involved in the supply
chain. This extended enterprise should attempt to execute a coordinated or integrated
two-way flow of goods, information, and financials (especially cash). The three flows
illustrated in the figure are very important to the competitive success of the organizations.
Integration across the boundaries of the several organizations in the essence means that
the supply chain needs to function like one organization in satisfying the ultimate
customer by delivering an appropriate price-value relationship for products in the
marketplace.
One of the realizable outcomes of supply chain management is the sharing of sales
information on a more real-time basis to reduce uncertainty, which reduces the need for
safety stock. In this sense, the supply chain is compressed through timely information
flows from the marketplace. In other words, inventory can be reduced in the supply chain
by timely, accurate information about demand. If point of sale (POS) data were available
from the retail level on a real-time basis, it would help to mitigate the bull whip effect
associated with supply chain inventories and would reduce costs. It should also be noted
that transportation plays an important role in the level of supply chain inventory. One of
the components of transportation service as discussed was reliability of delivery. It was
noted that if service was unreliable, companies carried more inventory or safety stock,
which would be true along the whole supply chain. It was also noted that transit time had
an effect upon inventory, namely, longer transit times could contribute to higher
inventory levels. Longer transit times combined with unreliable service exacerbate the
need for safety stock in the supply chain. Consequently, the transportation is an important
cog in the whole supply chain in terms of efficiency and effectiveness.
The third and final flow indicated is financials, or usually and more specifically, cash.
Traditionally, financial flows have been viewed as one-directional-backward in the
supply chain. In other words, this flow is payment for goods, services, and orders
12
received. A major impact of supply chain compression and faster cycle times has been
faster cash flow. Customers receive orders faster, they are billed sooner, and companies
can collect sooner. The faster cash-to-cash or order-to-cash cycle has been very important
for companies because it reduces the amount of working capital they need in their
system. If cash flow is slow, a company needs more working capital to finance the
processes until they collect from the customers. There are some companies that have
negative working capital or what financial organizations refer to as “free” cash flow.
They collect form their customers before they have to pay their vendors or suppliers. In
such companies as Dell and Hewlett Packard, the period between collection and payment
may be as much as 30 or more days. This cash can be used for financial investment
purposes or another source of funding for product development or other improvements.
Cash flow measures have become an important metric of the financial community to
gauge the viability of companies. Slower cash flows increase the need for working capital
and may require loans from time to time to pay suppliers, service providers, or even
employees. Frequently, one will see in the financial analysis of an organization references
to their cash flow situation. Supply chain management provides organizations with an
opportunity to improve customer service and cash flow, and transportation service is an
important part of this equation.
Study Questions
1. Transportation has sometimes been described as the glues that holds global supply
chains together. What is the meaning of this statement and do you agree? Why or why
not?
Most students will probably agree that transportation is the “glue” of the supply chain
since it connects the individual parts of the chain with product movement, but they should
point out that information is also important to holding the supply chain together. The
essence of the statement is that supply chains are extended enterprises with many “parts”
and the final outcome is a product delivered on time to a particular location without
damage or delay. Transportation and information flows are key to this outcome. They
13
should also point out that transportation as well as information can provide a strategic
advantage and, therefore, should be an important part of the planning process. Overall
supply chains play an important role helping organizations to gain strategic advantage in
the global economy of the 21st century.
2. During the last 20 to 30 years, there have been a number of countries whose economies
have experienced important economic expansion and development. One group of
countries has been labeled the BRIC countries and the other the VISTA countries.
Identify each of the nine countries and provide some insights about their economies and
economic importance.
BRIC countries are Brazil, Russia, India and China. The VISTA countries are Viet Nam,
Indonesia, South Africa, Turkey and Argentina. The BRIC group is generally considered
to be the most advanced economically. China is clearly the most important as indicated
by the grade flow data in the chapter. They are important for manufactured productions
well as resources. India has advanced rapidly through their educated and industrious
citizens and technology, and organizations in India have become an important part of
many supply chains. Russia and Brazil both have vast resources that can be the basis for
funds but are also developing more advanced manufacturing sectors. They are both
challenged by their geography and size as well as political factors. The VISTA countries
have established themselves as countries for sourcing some basic manufacturing because
of low cost labor. They also provide agriculture products and other resources for
exporting. The key dimension for both the BRIC and VISTA countries is that the
establishment of global supply chains has allowed them to be a part or play a role in the
global economies.
There is abundant information about the BRIC and VISTA countries on the
internet if you want to make this question a special assignment or extra credit.
3. The theories of absolute and comparative advantage have been offered as an economic
rationale for trade between and among regions and countries. Compare and contrast the
14
two concepts. Which of the two do you think is more important for explaining the growth
in global trade during the last 25 years? Why”
Both theories are offered as a rationale for expanded trade between and among regions
and countries to promote growth and development. Absolute advantage is the oldest
concept and easiest to explain since in the two country scenario each country has an
advantage in the production of one or more products. Comparative advantage postulates
that even if one country has the advantage in both products, trade can still be
advantageous. Comparative advantage has probably been the most important for overall
development in our complex global economy since countries can produce so many
products that are competitive with other countries to some degree. However, absolute
advantage is still important to rationalize some major trade flows especially for basic
materials and agricultural products. There are also seasonal and weather related factors
that provide advantages at particular times of the year for different regions
4. The overall growth of global trade had more than doubled since 2000. Why? What has
been the most important factor prompting this growth. Is this rate of growth likely to
continue in the future? Why or why not?
There are a number of reasons for this growth. Some of it can be explained by population
growth and improved education systems in developing countries. Capital for development
has become more widely available from private and public sources. There is also more
acceptance of products manufactured in other countries. But probably the most important
reasons are trade agreements and lower tariffs on imported products that have been
greatly expanded because of the recognition of how important global trade can be to
economic development and the health and welfare of the citizens of the country. One of
the biggest challenges to the progress that has been made in promoting global trade is
the political instability and terrorism that has developed some areas of the world such as
Africa and parts of the Middle East. These factors undermine these benefits that can
accrue from the growth in global trade. One can argue that the growth will continue
15
because of the economic and political forces at work in the global economy, but there
will be ups and downs or bumps along the road because of human error and greed.
5. The size of a country’s population and the associated age distribution can be causal
factors for economic growth. Why is the size of the population important to economic
development? Can size be a disadvantage? Why is age distribution important?
The sheer size of the population can be very important because labor is one of the prime
factors for economic growth, and population numbers indicate the availability of labor.
The size of the population can also indicate the market size or potential for buying
products. Size can be a disadvantage if the economy cannot provide opportunities for
employment. Large size can also challenge the education system and may require
government resources to sustain the basic needs of the citizenry. Age distribution affects
the size of the labor pool of available employees. Also, older populations require more
medical assistance and other services which can drain the resources of individuals
and/or government agencies. The population data and commentary in the Chapter
provide the basis for some interesting discussion. Again, this is a topic that has abundant
information available on the internet, and could be the basis of a special assignment. The
differences in population size, growth rates, age distribution and education levels are all
factors to consider for economic development.
6. Energy, food, and water are frequently cited resources that are critical for economic
development. Explain the importance of each one to economic development. What
disparities exist among countries with respect to these three resources? How can these
challenges be resolved?
Energy is a primary ingredient to support agriculture and manufacturing as well as

transportation. Consequently, if much of the needed energy has to be imported, it will
increase the cost of the producing products and may put a country at a disadvantage in
producing and/or exporting products. Food is almost self-explanatory since it is needed
16
to sustain the citizenry of the country. When there is a shortage of food, a country will be
challenged unless they can offset this shortage with advantages in some other area such
as mineral resources and/or labor productivity. Water is a critical resource for
individuals, agriculture and manufacturing and other businesses and organizations. The
absence of adequate water supply is one the most debilitating conditions for an economy.
There are major differences around the globe in terms of the availability and quantity of
these resources. Technology may be able to solve some degree of this problem, but not all
of it
7. Technology can impact economic development on both a macro and a micro level.
What types of technology do we need to have such impacts on a macro basis? On a micro
basis?
On a macro basis technology is needed to increase the productivity for agriculture and
manufacturing in many parts of the world. Improvements can be made also in the supply
chains especially in the transportation area. On a micro basis, technology can improve
the quality of life for many people through medical treatment, safety and aids for seniors
We have made significant progress with technology, but some individuals feel that we
have only ”scratched the surface of the potential” to improve economic development.
The supply chain has been the beneficiary of technology, especially information
technology, to improve efficiency effectiveness and execution. However, in the last
decade, the “hard side” of technology has been receiving more attention in
transportation, warehousing and manufacturing to improve efficiency and effectiveness.
8. Robotics has attracted more attention in recent years. Why? How are robots being used
in supply chains?
Robotics has indeed received more attention in a number of areas especially health care,
manufacturing and distribution. Some people see robotics as strictly replacement for
labor, but now robots are being viewed as complimentary to improve manufacturing and
distribution productivity and improve the health and welfare of the population. Robots
17
are being used in warehouses to put away item and for order picking, as well as for
loading and unloading transportation equipment. Robots have potential in other areas of
the supply chain especially transportation.
9. The economic integration associated with globalization can provide an opportunity for
more widely dispersed development. Why is this possible? What are the major stumbling
blocks to such integration?
Economic integration can release the power of comparative advantage and provide more
growth and development along with prosperity. The major stumbling blocks are “fear”
and “terror” which are associated with individuals and groups who will exercise their
ability to thwart trade flows for selfish or self-serving agendas. Collaboration among
organizations is a global supply chain can be a driving force for more efficiency and
effectiveness.
10. Supply chain management has enabled some companies to operate more efficiently
and compete more effectively on a global basis. What inherent characteristics of supply
chain management contribute to these outcomes?
Supply chains that are efficient and effective and well executed can indeed make
companies more competitive. The basis of this outcome is related to systems analysis and
trade-off analysis which provides an opportunity for organizations to do what they can
do best and depend on other organizations to provide the rest. The coordination and
collaboration that should be inherent in supply chains are important ingredients for
efficiency and effectiveness.
CASE 1-1 Clearfield Cheese Company: A Sequel
Small companies that produce milk based products have experienced growing
competitive pressure from large regional producers who sell to large chain stores and
wholesalers. As these chain stores have attracted more customers from nearby smaller
18
communities and rural areas with their prices and product variety, they have negatively
impacted the sales of small local stores who are often the most important customers for
small to mid-size food processors such as Clearfield Cheese Company. Clearfield Cheese
Company has successfully thwarted this type of competition to this point by the
aggressive management actions pointed out in the case. Their success has been in
recognizing the challenges and responding aggressively. Now, they appear to be at
another important cross road in their ongoing development, and they need to ‘stay out in
front” of the competitive challenges with decisive strategic action.
The current situation, as described in the case, presents a different but related type of
competitive threat—the dietary changes that are popular in the United States. These
changes are essentially a move to more “healthy” types of food which may not be milk-
based. The Clearfield Cheese Company has identified several possible competitive
strategies to protect themselves against a decline in sales and profits related to this dietary
trend: (1) Establish a new division or company to produce non-milk based dairy products
such as soy or almond milk; (2) expansion of the sales of existing products into Mexico
and Central America; (3) expand their current product line or items to sell in their current
market areas.
All three of these alternatives have advantages and disadvantages and a logical argument
could be made for any of the three suggestions by students. The lowest cost alternative in
terms of investment is probably #3 and it would also probably involve less risk for the
company since there would fewer unknowns and potential surprises. However, it
probably has the lowest potential for long run growth. #1 probably has the next lowest
risk of failure, but they could minimize their investment by developing facilities in their
current area and sharing facilities and labor to the extent possible. Their history and
experience in the area would provide advantages for development and growth while
minimizing investment and risk. This alternative has more growth potential over the
longer run than #3. #2 would probably have the greatest growth potential because of the
size and age of the populations in Mexico and Central America but the highest risk
because of the distance, language differences and trade policies and regulations.
They could endorse all three with a phased in approach over a 5 to 7 year period using the
sequence suggested above starting with #3 then #1 and finally #2. They could delay or
move ahead more aggressively with the sequenced alternative based up their success or
lack thereof.
CASE 1-2 KEMS LLP
The case provides an interesting opportunity for students to do research on the two
biggest “partners” of the United States in terms of imports and exports. The Chapter
provides relevant information about both countries in terms of imports, exports,
population size and distribution, etc. which will be a good start for addressing the case,
but there is a wealth of information available and accessible to them via the internet that
will provide data and information for an effective analysis to support their conclusions.
Expansion into either country or both will require investment and will have risk to
19
consider. They should probably explore the possibility of acquiring an established 3PL
company in one or both countries as they did in Europe. There is risk and investment
involved with this strategy, but if done carefully, there are many advantages. This
approach provides an established “footprint” with current and potential customers. If the
investment is too high to purchase existing 2PL companies, they can explore the
opportunity for this geographic expansion through their current customers which could be
a win-win for all. The proposal to expand into South America would have more risk,
The lower cost and lower risk alternative would be to expand on a commodity basis as
opposed to a geographic basis. There are similar products that could have potential such
as the inbound, cold chain for pharmaceutical companies.
A stronger case can probably be made for the second alternative in the short run with a
longer run strategy based upon geographical expansion.
20
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REGISTER.
A, Aa, 122
Aafje, Aafke, Ava, Aba, 205, 231, 232
Aai, Ari, 211
Aalbert, 253
Aaldert, 253
Aalk, 185
Aalse, Aalsen, 214, 216
Aalsma, 240
Aalst, 74, 76, 78, 79
Aalt, 165
Aaltje (Aeltsje), 132, 185, 201, 217, 227, 232, 248, 250, 251
Aan, 191, 232
Aardappeldoggen van Wagenborgen, 55
Aardappelkappers van Aksel, 67
Aardappels van Nieuw-Bokswoud, 63
Aardenburg, Ardenburch, 77
Aart, Arend, Art, Aan, Arnold, 191, 232
Aartswoud, 63
Aaye (Aeye), 217, 248, 250, 251
Abbe, Abbo, 212, 213, 216, 229, 253

Abbe Ferwer, 268
Abbeke, 216
Abe, Abo, 212, 221, 229, 253
van den Abeele, 184
Abele, 221, 229
Abele Jeltez, 258
Abke, 253
Abraham, 203
Achlum, 37
van Acker, 134
Acxele, Aksel, 77
Ada, 231
Adaloald, 164
Adaloltiswilare, 164
Adalric, Adelric, 165, 201
Adam Albertz, 258
Adam Scomaker, 266
Adde, Addo, 212, 229
Ade, Ado, 229
Adel, 101, 219, 220, 249
Adela, 132, 219, 220, 232
Adelaart, Adelhart, Athalhard, 188

Adelaïde, 119
Adelbald, Albad, Albet, 201
Adelberchta, Elbrich, 233
Adelbert, 151
Adelbertha, Albertina, 185
Adelbrecht, 100, 101, 149, 151, 165, 168, 200, 212, 249, 253
Adelbric, 201
Adelburg, 201
Adeldag, 201
Adèle, 131, 219
Adelolf, Adellof, Adelwolf, 200
Adelen, 219
Adelgar, 232, 233
Adelgarde, 201
Adelgonda, 201
Adelharda, 168, 201
Adelhart, 151, 165, 168, 174, 232, 253
Adelhelm, 161
Adelwald, 160, 164, 165
Adelwin, 151
Adetschwil, 164
Adger, Aldgar, 200

Adololdeshusen, 165
Adriaan, 211
Adriaenssens, 146
Adser, 200
Aebbe, 278
Aecht Jonckfrouw, 264
Aeff, 262
Aeff Willems, 264
Aefje, Aefke, Aefken, (Aafje, Aafke), 132, 205
Aef wedue, 264
Aelbert, 101
Aelbert Lemken Ruelkens dochter, 185
Aelbrecht, 145, 253
Aeldert (Aaldert), Adelhart, 200
Aeldrik (Aaldrik), Adelrik, 200
Aelmoed (Aalmoed), Adelmod, 201
Aelse, Aelsen (Aalse, Aalsen), 214, 216
Aelthie Metzler, 267
Aeltsje (Aaltje), Aelheyt, Adelheid, 201, 217, 248, 250, 251 [294]
Aelwyn (Aalwijn), Adelwin, 200
Aepke, 273
Aerland (Aarland), 201

Aernout (Aarnout), Arnold, Arnwald, 134, 145, 149, 191
Aesga Syckaz, 273
Aesge, Easge, 273
Aesge Aesgesz, 258
Aesge Molner, 268
Aetse (Aatse), 214
Aeye (Aaye), 248, 250, 251
Age, Ago, 212, 116, 229
Agele, 216
Agge, Aggo, 132, 212, 229
Agilhart, 233
Agneessens, 185
Agnes, 228
Ahlshausen, 164
Aike, Aico, 229
Ailke, Ailco, 229
Aise, Aiso, 229, 214
Aite, 214, 215
Aitse, 214
Ajuinen van Aalst, 74
Akersloot, 63
Akke, 217, 226, 250, 251

Akkerghem, 74
Akkrum, 36, 42
Aksel, Axel, 67, 77, 78
Al, All, 151
Alaert, Alairt, 146, 188
Aland, Eland, 202
Alaric, 167
Alart, Adelhart, 132, 174
Alaswinde, 167
Alawic, 167
Albarda, Alberda, 235
Albert, Adelbrecht, 100, 101, 131, 145, 149, 150, 151, 165, 168, 200, 202, 235,
249, 253
Albert Pouwels, 258
Albert Smidt, 267
Albert Wilkis, 258
Albrecht, 145, 149, 253
Aldburga, 201
Aldeboarn, Oldeboorn, 117
Alderden, 168
Alderding, 168
Alderse, 168
Aldershem, Oldersum, 168

Aldershoff, 168
Aldersma, 168
Aldersma-heerd, 168
Aldersna, 168
Aldert, 168, 188, 200, 203, 253
Alderts, 168
Aldertsje (Aldertje), 168, 203
Aldertsna, 168
Alderwick, 114
Aldgrim, 201
Aldrik, 165
Aldring, Alharding, Adelharding, 168
Aldringa, Alderdinga, Adelhardinga, 168
Aldringa-borg, 168
Aldringham, 168
Aldrington, 168
Aldrink, 168
Ale, Aio, 105, 130, 212, 216, 229
Alef, Alof, 200, 227, 262
Alem, Adelhelm, 161, 201, 202
Alewijn, 101, 151
Aleyt, Aleida, Adelheid, 189

Aleyt Arts Creppendochter, 183, 190
Aleyt Hayes, 264
Aleyt Moerkens, 183, 190
Aleyt van Poelgeest, 190
Aleyt Weefster, 270
Alfert, Alfred, Adelfred, Adelvrede, 200
Alger, Adelgar, 200, 227, 232, 249
Alida, 237
Alincthun, 103, 105, 106, 129, 130
Aling, 216
Alingewolde, 105
Alkama-state, 153
Alke, Alken, 151, 153
Alkema, 153
Alkemade, 154
Alkema-sate, 153
Alken, 153
Alkenrath, 154
Alkesweer, 154
Alkham, 154
Alkington, 105, 154
Alkje, Alkjen, 153

Alkmaar, 6, 63, 94, 154
Alko, Alco, 153
Alkofen, 105, 152
Alkoven, 152
Alla, 151
Allaert, 146, 150, 151, 164, 165, 168
Allama, 151
Allana, 152
Allard, Allart, 168, 188
Alle, Allo, 105, 130, 149, 150, 151, 153, 212, 229, 241
Alle Ferwer, 269
Allema, 151
Allema- (Alma-) state, 151
Allen, 152
Allena, 152
Allenbüttel, 152
Allendorf, 152
Allentrop, 152
Allenrode, 152
Allerda, 168
Allerda-sate, 168
Allerding, 168
Allert, Adelhart, 150, 151, 168, 188, 227, 232
Allertje, 168
Allert Kannemaker, 268
Allerts, 168
Allertsma, 168
Allertsoog, 168
Alles, 151
Alleshausen, 152
Alligny, 105
Allincourt, 105
Allinckx, 146, 149, 151
Alling, 153
Allinga, 151
Allingahuizen, 105, 152
Allinga-sate, 105, 151
Allingawier, 105, 130, 151
Allingham, 152
Allinghausen, 105, 153
Allington, 105, 129, 130, 152 [295]
Allink, 149, 150, 151
Allinson, 152
Allinx, 146, 151

Allis, 152
Allison, 152
Allix, 151
Allo, Alloo, 151
Alma, 151, 241
Alma-borg, 152
Alma-heerd, 152
Alman, Adelman, 201
Alma-sate, 151
Almer, Adelmar, 200
Aloyn, 151
Alse, 153, 214
Alsema, 153
Alsing, 153
Alske, 153
Alsma, 153
Alssema, 153
Alsum, 154
Alta, 153
Alt, Alte, 153, 214
Altekana, 153
Altema, 153
Alten, 153
Altena, 153
Altena-sate, 153
Altes, Althes, 153, 154
Altikon, 154
Alting, 153, 154
Altinga, 153
Altingen, 154
Altink, Altinck, 154
Altje, Altjen, Altjo, 151, 153, 216
Alts, 153
Altunga, 153
Alvesmerscene, 120
Alwart, Adelwart, 201
Alwin, Alwijn, 150, 151
Ame, 212
Ameland, 6, 27, 88
Amele, 214
Ameling, 216
Amersfoort, 6, 62
Amke, 215
Amme, 212
Amse, 214
Amsterdam, 5, 7, 63, 65, 88
Anchem Goeswynssoen, 173
den Andel, 56
Andela, 235
Andele, Ando, 214, 221, 232, 235
Anderen, 59
Andreas, 204
Andries, 146, 147, 151
Ane, 212, 227
Angenietje, 228
Anjum, Anningahem, 127
Anne, 127
Annee, 227
Annema, 127
Annezin, 127
Annineshem, 127
Ans, Anso, 224
Anscke Rogdrager, 269
Anske, 223, 232
Anthonius Fyscker, 269
Antwerpen, 5, 72
Apeluiders van IJsselstein, 62
Appegarbe, 128
Appi, 253
Applegarth, 128
Arafrid, 114
Aragis, 114
Ardenburch, Aardenburg, 77
Are, 114
Arema, Aerma, 114
Arend, Arnwald, Arnhold, Aernout, Arnout, 132, 191, 200
Arendonk, 71, 72
Arent Brouwer, 269
Arent Hoedmaker, 268
Ari, Aai, 211
Ariaen, 262
Arien Busschut, 272
Aringzele, 113, 114
Arink, 114
Arkenbout, Archimbald, 167
Armgard, 201
Arnt, Art, 192
Arnt Ebben, 192

Arnt Lysen Lyskenssoen, 186, 192
Arnt wilen Noyen van Doernen, 179
Arohildis, 114
Arolinda, 114
Art den Wize van Asten, 181
Art geheyten Ayen naturlike soen Hermans van Eyndhouts, 192
Art Peters Meeussoen, 177, 192
Art Peter Metten Swagerssoen van Milheze, 177
Art Stamelaert, 180
Art van den Loe Henrics Mettensoens soen, 175, 179
Art van den Paependonk, 181, 192
Art van Gheel wittige soen wilen Maes Shoegen, 187, 192, 194
Arys Glaesmaker, 269
Arum, 8, 35, 37
Ashbourne, 117
Asing, Asinga, 216
Assendelft, 63
Aswyn, 201
Ate, Ato, 229
Ath, Atta, Atsje, 230, 274
Athal, 101, 219, 249
Athala, 219
Athalbercht, 101, 149, 249, 253
Athalbrand, 249
Athalgar, 249
Athalwin, 101
Atse, Atso, 214, 221, 229
Atsje (Atje), 215, 216, 221
Atte, 212, 216, 221, 229
Auck, 274
Auck Mester Syweks, 264
Auck Piers, 264
Audeland, 114
Auderwick, 114
Audringhen, 96, 97, 101
Audrehem, 114, 168
Audreselles, 113, 114
Andruicq, 114, 121, 122
Auke, Auco, Audo, Avo, 214, 215, 220, 229, 232
Aukje, Auda, Ava, [296]217, 220, 225, 227, 228, 232, 250, 251
Au Pauvre, 115, 126
Aurelia, 225, 228
Aurich, Aurik, 5, 57, 58
Avis, 259
Axel, Aksel, 67, 77, 78
Aye, Ayen, 192, 216
Ayen Hermanasoen van Eyndhouts, 174
Ayenwolde, 105
Ayle, 274
Ayold, Ayolt, 200, 227
Azijnzeekers van Temseke, 73
Baard, 34
Baardeghem, 73
Baart, 148
Baartje, Baatje, Berendje, Berendina, Bernharda, 232
Baas, 141
Baasrode, 73
Baayum, 36
de Backer, 140
de Backere, 138, 140
Baeckaert, 144
de Baecker, 134
Baeff, 262
Baerd, Baert 134, 148
Baertsoen, 147, 148
Baetsje (Baatje), 251

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Solution Manual for Transportation: A

Global Supply Chain Perspective, 9th

Test Bank for Transportation: A Global Supply Chain

Solution Manual for Transportation: A Global Supply

Solution Manual for Supply Chain Management: A

Solution Manual for Supply Chain Management: A

Test Bank for Supply Chain Management: A Logistics

Test Bank for Transportation: A Supply Chain

Supply Chain Management A Logistics Perspective 10th

Test Bank for Supply Chain Management A Logistics

Transportation: A Global Supply Chain Perspective,

Chapter 1: Global Supply Chains: The Role and Importance of Transportation

1. Appreciate why efficient transportation systems are so critical to advance the

2. Discuss the importance of transportation to globalization and how it contributes to

7. Understand the challenges and opportunities associated with the worldwide

Global Supply Chain Flows

The Economic Basis and Logic of Improved Global Trade

Absolute and Comparative Advantage

Contributing Factors for Global Flows and Growth

While the total population of a country is an indicator of economic growth potential in

Land and Resources

Energy is a primary ingredient to support agriculture and manufacturing as well as

CASE 1-1 Clearfield Cheese Company: A Sequel

CASE 1-2 KEMS LLP

Aafje, Aafke, Ava, Aba, 205, 231, 232

Aai, Ari, 211

Aalse, Aalsen, 214, 216

Aalst, 74, 76, 78, 79

Aan, 191, 232

Aardappeldoggen van Wagenborgen, 55

Aardappelkappers van Aksel, 67

Aardappels van Nieuw-Bokswoud, 63

Aart, Arend, Art, Aan, Arnold, 191, 232

Aaye (Aeye), 217, 248, 250, 251

Abbe, Abbo, 212, 213, 216, 229, 253

Abe, Abo, 212, 221, 229, 253

van den Abeele, 184

Abele, 221, 229

Abele Jeltez, 258

van Acker, 134

Adalric, Adelric, 165, 201

Adam Albertz, 258

Adam Scomaker, 266

Adde, Addo, 212, 229

Ade, Ado, 229

Adel, 101, 219, 220, 249

Adela, 132, 219, 220, 232

Adelaart, Adelhart, Athalhard, 188

Adelbald, Albad, Albet, 201

Adelberchta, Elbrich, 233

Adelbertha, Albertina, 185

Adèle, 131, 219

Adelolf, Adellof, Adelwolf, 200

Adelgar, 232, 233

Adelharda, 168, 201

Adelhart, 151, 165, 168, 174, 232, 253

Adelwald, 160, 164, 165

Adger, Aldgar, 200

Aecht Jonckfrouw, 264