The Role of Transport Within the Supply Chain

Transport and Logistics Management

BMO3418

Assessment 1

Literature Review – The Role of Transport within the Supply Chain

SEMESTER 1 / 2017

PREPARED BY:                Tuan Nguyen     (s4531258)

TUTOR:                        Christopher Taylor

CLASS:                        12 p.m Friday

The Role of Transport within the Supply Chain

Transport is a great contributor to the competitive force in business and the economy. This is achieved by moving goods from the locations of their production to areas of demand providing an essential service of linking an organisation to its consumers and suppliers. Transportation is a vital activity in the logistic function promoting the economic utilities of place and time. Place service implies that consumers have the product that they require at the place where they expect it. For the success of any business, it is important to ensure that consumers have the right commodity when and where they require it. There is a lot of literature regarding the use of transportation in business, and this review seeks to highlight the importance of transportation in the supply chain.

TSENG and Yue (2005) use the definition of the Council of Logistics Management to come up with their definition. The Council of Logistics Management defines logistics as a part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements (TSENG & YUE 2005). The authors also highlight John and Woods definition which employs five important terms: inbound logistics, logistics, physical distribution, materials management and supply chain management. They use these two definitions to come up with their definition of logistics which is the process of handling and moving goods from the beginning to the end of the production, sale process and waste disposal to meet consumer needs and add the business competitiveness. According to TSENG and Yue (2005), transportation plays a vital role in the supply chain, and this is more complex that carrying goods for proprietors.  This complexity is depicted only through high quality management. Goods can only be sent to the right place at the right time to consumer needs through a well-handled transport system. This leads to efficacy and building a bridge between consumers and producers. TSENG and Yue argue that transportation is at the heart of efficiency and economy in business logistics and it expands other functions of the logistic system.

Bardi, Coyle and Novack (2015) also share the same perspective with TSENG and YUE in their definition and importance of transportation in the supply chain. The genius about John et al. text is that they propose a way through which transport can be measured. The two measurement units presented are ton-mile for the demand unit or metric, and the unit for measuring distances covered by people is passenger-mile. However, these two methods of measurement can offer intermodal comparisons (Bardi, Coyle &. Novack 2015). A case in point, intermodal comparisons are not homogeneous for comparison purposes. This text looks at the significance of various modes of transport which are water transport, pipeline, and rail transport. The authors argue that water transport has the edge over other forms of transportation regarding market share, tons per mile and freight expenditures.  Concerning energy cost per dollar, water transport is the second most efficient means of transportation after rail transport. Airlines are also used in the transportation of good and services, and one of their main advantages is that they facilitate the transportation of perishable goods over long distances. The text by Bardi, Coyle and Novack delivers general trends of the current domestic and global trends equipping a reader with the solid understanding of the role of transportation in the supply management chain.

Carana Corporation (2003) also created a document detailing the importance of transportation in international trade. The report was presented to the USAID as part of the Trade enhancement for the Service Sector. This paper seeks to highlight various constraints and weaknesses in the provision of business support services increase transportation costs and limit the ability of companies in developing nations to satisfy the needs of an increasingly sophisticated transport and logistics demands of the global economy and consequently undermine the competitiveness of traded goods (CARANA Corporation 2003). CARANA Corporation additionally discusses efforts required in to address this constraint at the global and country level. CARANA employs various approaches to outline a roadmap for the country-specific analysis of the trade support services sector to enhance the development of national strategies geared towards improving developing nation’s ability to compete in the global market through efficient and logistic systems.

According to Hazen and Lynch (2008), the only activity that is capable of providing both place and time utilities through inbound and outbound logistics is transport. Logistics involves various approaches such as planning inventory, forecasting demand, and the storage and delivery of good and services. Hazen and Lynch go on to highlight optimised logistics performance which denotes these activities are working hand in hand to ensure that customer of the logistics are satisfied with the service and at the corresponding time, the cost incurred by the government is reduced. This optimal performance needs a better understanding of how logistical actions and activities affect service for consumers and total cost (Hazen & Lynch 2008).

Hazen and Lynch uses various examples to underscore their argument, for instance, they state that an organisation looks to limit its interest in stock. The organisation chooses to hold all its stock in one central region, for it has been expressed that merged stock diminishes stock speculation. Kazemi and Szmerekovsky (2015) also share the same view as Hazen and Lynch when they argue that warehousing expense should not be limited because the organisation is keeping up just a solitary office rather than a few areas (Kazemi and Szmerekovsky 2015). Clients found near the focal distribution center will be satisfied with this choice because the organisation must travel just a short way to convey things to these close-by customers. Be that as it may, consumers in remote regions from the focal stockroom are probably going to be disillusioned.

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