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Managing Supply Chains: A Logistics Approach
Managing Supply Chains: A Logistics Approach
A LOGISTICS APPROACH
COYLE | LANGLEY | NOVACK | GIBSON
Weeks 8-9
TRANSPORTATION MANAGEMENT
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Learning Outcomes
The Learning Outcome for weeks 8-9 are:
• CLO2- Analyze logistics management approaches and
trade-offs to support cross-functional decision making
across a supply chain
• CLO4- Analyze logistics and supply chain management
issues that have an impact on business performance.
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
After reading this chapter, you should be able to do the following:
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Learning Objectives
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Introduction
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Challenges to Carrying out this Role, continued
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Modes of Transportation
● Motor Carriers
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Table 10.1
U.S. Domestic Freight Shipments 2010
● Railroads
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Modes of Transportation, continued
● Air Carriers
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Modes of Transportation, continued
● Water Carriers
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Modes of Transportation, continued
● Pipelines
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Modes of Transportation, continued
● Intermodal
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Figure 10.2
Widely Used Intermodal Combinations
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Figure 10.3
Transport Management Planning Activities
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Transportation Planning and Strategy
● Functional Control of Transportation
• Which department will be responsible for
transportation?
○ logistics
○ procurement
○ marketing
● Terms of Sale
• Free-on-board (FOB) Origin (buyer)
• FOB destination (seller)
Freight = transportation costs
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Table 10.2
Responsibilities Under FOB and Payment Terms
Source: Adapted from Bruce J. Riggs, “The Traffic Manager in Physical Distribution Management”, Transportation and Distribution Management, 1968
p. 45
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Transportation Planning and Strategy, continued
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Transportation Planning and Strategy, continued
● Modal Selection
• Accessibility
○ Accessibility advantage: Motor carriage
○ Accessibility disadvantage: Air, rail, and water
• Transit Time
○ Transit time advantage: Air and motor carriage
○ Transit time disadvantage: Rail, water, and pipeline
• Reliability
○ Reliability advantage: Motor carriers and air carriers
○ Reliability disadvantage: Water carriers and rail carriers
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Transportation Planning and Strategy, continued
● Modal Selection
• Product Safety
○ Safety advantage: Air transportation and motor carriage
○ Safety disadvantage: Rail and water
• Cost
○ Cost advantage: The cost of transportation service
varies greatly between and within the modes
○ Cost disadvantage: Motor carriage and air
transportation
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Table 10.3
Comparison of Modal Capabilities
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Transportation Execution and Control
● Shipment Preparation
• Corporate transportation routing guide
• Last-minute, cost-saving decisions
○ consolidate freight
○ coordinate shipment deliveries
○ take full advantage of container capacity
○ an accurate freight count should be taken
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Transportation Execution and Control, continued
● Freight Documentation
• Bill of lading
○ originates the shipment
○ provides all the information the carrier needs
○ stipulates the contract terms, including carrier’s liability for loss
and damage
○ acts as a receipt for the goods the shipper tenders to the carrier
○ in some cases, shows certificate of title to the goods
• Freight bill
○ carrier’s invoice for carrier charges listing:
shipment
origin and destination
consignee
items
total weight
total charges
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Transportation Execution and Control, continued
● Transportation Metrics
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Transportation Execution and Control, continued
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Table 10.5
Transportation Performance Scorecard
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Summary, continued
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Summary, continued
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Summary, continued
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