HOW COULD

AUTO MANUFACTURER USE

TRANSPORTATION TO
INCREASE THE EFFICIENCY OF
SUPPLY CHAIN?

By,
Anusha Shetty
Anupama Honamore
Arun Kumar
WHAT IS A SUPPLY CHAIN ?

 Supply Chain is dynamic and involves constant

flows of products, information, and funds.

 The task of supply chain is to design, plan, and

execute the activities at the different stages so as
to provide the desired levels of service to supply
chain customers profitably
OBJECTIVE OF A SUPPLY CHAIN:

 Maximize the overall value generated.

 Value is the difference between what the final product
is worth to the customer and the effort of SC expends
in filling customers request

 Supply Chain Profitability is the total profit to be

shared across all supply chain stages.

 Supply Chain Management involves the management

flow between and among stages in a SC to maximize
total SC profitability.
DECISION PHASES

 Strategy (Design)
Locations, Capacity channel design, Warehouses,
Manufacturing, Outsourcing

 Planning
Supply scheme, Inventory policy, Subcontracting

 Operations
Allocation of individual orders to inventory or production,
deciding to transportation routes, etc.
STRATEGIC FIT:
Competitive
 Strategy:
Define ways to satisfy customer requirements through products
and services
Product Development Strategy


Marketing and Sales Strategy



Supply
 Chain Strategy:
Design strategy to achieve the right mix of efficiency and
responsiveness

Supply
 chains serving multiple products and multiple customer
segments require the right balance between effectiveness and
responsiveness.
ACHIEVING STRATEGIC FIT:

 Strategic fit means that both competitive and SC

strategies have same goal.

 Basic steps to achieve strategic fit:

 Understanding the customer and supply chain
uncertainty.
 Understanding the SC capabilities.
 Achieving strategic fit.
UNDERSTANDING THE SUPPLY CHAIN:

Responsiveness
 Response to wide range of quantities (excess capacity)
 Meet short lead time
 Handle a large variety of products
 Meet a high level service

Efficiency
 Economies of scale
 Low capacity (excess costs)
 Low cost transport
EFFECTIVE SUPPLY CHAIN MANAGEMENT :

Effective supply chain management requires

simultaneous improvements in both customer service
levels and the internal operating efficiencies of the
companies in the supply chain.
 Customer service at its most basic level means consistently
high order fill rates, high on-time delivery rates, and a very
low rate of products returned by customers for whatever
reason.
 Internal efficiency for organizations in a supply chain means
that these organizations get an attractive rate of return on
their investments in inventory and other assets and those they
find ways to lower their operating and sales expenses.
SUPPLY CHAIN DRIVERS

Drivers determine supply chain

performance. For each driver, managers
must make tradeoffs between efficiency
(cost) and responsiveness
DRIVERS OF SUPPLY CHAIN
PERFORMANCE:

 Inventory
 Transportation
 Facilities
 Information
 Inventory
All of the raw materials work in process (WIP), and
finished goods within the supply chain. Inventory
policies can dramatically alter a supply
chain’s efficiency and responsiveness.

 Facilities
Places within the supply chain where inventory is stored,
assembled, or fabricated. Decisions on location, capacity,
and flexibility of facilities have
a significant impact on performance.
 Information
Data and analysis regarding inventory, transportation,
facilities, and customers
throughout the supply chain. It is potentially the biggest
driver since it. Affects all the other drivers.

 Transportation
Modes and routes for moving inventory throughout the
supply chain.
Transportation refers to the movement of product from
one location to another as it makes its way from the
beginning of a supply chain to the customer’s handle.
TRANSPORTATION’S IMPACT:
 Fastertransportation allows a supply chain to be
more responsive but generally less efficient. Less
than full truckloads allow a supply chain to be
more responsive but generally less efficient.
Transportation can be used to support a firm’s
competitive strategy. Customers may demand
and be willing to pay for a high level of
responsiveness
TRANSPORTATION DECISIONS:
 Mode of transportations the manner in which a
product is moved (air, truck, rail,
ship, pipeline, electronic).Each mode differs
with respect to speed, size of shipments, cost,
and flexibility. Routes are paths along which a
product can be shipped. In house or outsource
the transportation function. Many companies use
third-party logistics providers (3PL) to perform
some or all of their transportation activities.
TRANSPORTATION:
TOYOTA (A GLOBAL AUTO
MANUFACTURER)
Global production and distribution network
HOW COULD AUTO
MANUFACTURER USE
TRANSPORTATION TO
INCREASE THE EFFICIENCY
OF SUPPLY CHAIN

BY ARUN KUMAR
5TH SEM MCA
TRANSPORTATION IN SUPPLY
CHAIN
DEFINITION

Transportation refers to the movement of

product from one location to another as it
makes its way from the beginning of a
supply chain to the customer’s handle.
SUCCESS OF TRANSPORTATION
 Any supply Chain’s success is closely linked to the
appropriate use of transportation.

 Wal- Mart has effectively used a responsive

transportation system to lower its overall costs.

 At DCs, Wal- Mart uses cross-docking, a process in

which product is exchanged between trucks so that
each truck going to a retail store has products form
different suppliers.
KEY PLAYERS TRANSPORTATION:
 Here are two keys players in any transportation that
takes place within a supply chain.
 The shipper is that party that requires the movement of
the product between two points in the supply chain.
 The carrier is the party that moves or transports the
product. For e.g., when Dell uses UPS to the ship its
computers from the factory to the customer, Dell is the
shipper & UPS is the carrier.
MAKING TRANSPORTATION
DECISIONS IN PRACTICE:
 Managers should ensure that a firm’s transportation
strategy supports its competitive strategy.
 Firms should evaluate the transportation function based
on a combination of transportation costs, other costs
such as inventory affected by transportation decisions, &
the level of responsiveness achieved with customers.
 Managers should consider an appropriate combination of
company-owned & outsourced transportation to meet
their needs.
TRANSPORTATION PLANNING
HELPS COMPANIES LIKE YOURS:

 Lower transportation costs

 Enhance service levels

 Decrease cycle time

 Increase profits from bidding and backhaul

 OPTIMIZED PLANNING FOR TRANSPORTATION
MODE:

 Transportation Planning is a tactical tool aimed at

selecting the best modes of transportation and carriers to
fulfill transportation requirements, while leveraging
savings opportunities through consolidation.

 It generates intelligent supply chain management and

plans and reduces shipping costs in everything from
mode and carrier selection and shipment consolidation to
vehicle routing and scheduling. 
ANY QUESTION FROM THE AUDIENCE ???

THANK-YOU