Historia

Chapter 6. Transport Fundamentals and Decisions

Transport Fundamentals and Decisions
In Chapter 6, we will define the meaning of transportation and the important role that it plays in logistics. Also, different
transportation modes that exist nowadays will be described, as well as how to select the best option under a particular
context. We are going to identify and evaluate the logisticsdifferences faced between a single origin and destination, versus
one with multiple origins and destination points.

6.1 Factors Affecting Transportation Decisions
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 hands. Transportation plays
a key role in every supply chain becauseproducts are rarely
produced and consumed in the same location. Transportation
is a significant component of the cost most supply chains
incur. With the growth in e-commerce and the associated
home delivery of products, transportation costs have become
even more significant in retailing. From the book industry
to the grocery industry, on-line firms are delivering products
in small packages tothe customer´s home instead of in full
trucks to a retail outlet. As a result, transportation cost is a
larger fraction of the delivered cost of products sold on line.
Any supply chain´s success is closely linked to the appropriate
use of transportation. Oxxo –a convenience store chain
with operations in Mexico- has effectively used a responsive
transportation system to lower its overallcost. To achieve a
high level of product availability at a reasonable price, Oxxo
carries a low level of inventory at its stores and replenishes
frequently as products are sold. To lower the transportation
cost of frequent replenishment, Oxxo aggregates products
destined for different retail stores on trucks leaving a supplier.
At distribution centers, Oxxo uses cross-docking, a process
inwhich product is exchanged between trucks so that
each truck going to a retail store has products from different
suppliers. Oxxo also uses its transportation system to allow
stores to exchange products based on where shortages and
surpluses occur. The use of a responsive transportation system
and cross-docking allows the company to lower inventories
and costs, and increase profits.Transportation is thus a
key to Oxxo’s ability to improve the marching of supply and
demand while keeping cost low.
Supply chains also use responsive transportation to centralize
and operate with fewer facilities. An interesting example
on an international basis can be identified on Amazon.
com, which relies on package carries and the postal system
to deliver customer orders from centralizedwarehouses.
Effective transportation is a key to the success of any on-line
business, because these businesses often attract customers
from distant locations, and the products must be transported
from the seller to the customer. With the growth in e-commerce
over the Internet, on-line grocers are relying on effective transportation
to provide convenience to customers in the form of
home deliveryof groceries. As home deliveries of all products
grow e-commerce, transportation will play an even more significant
role in the success of these supply chains.
Transportation is a significant link between different stages
in a global supply chain. For example, the computer manufacturer
Dell currently has suppliers worldwide and sells
to customers all over the world from plants in Texas,Ireland,
Brazil, China and Malaysia. Transportation allows products
to move from suppliers to the assembly plants and from the
assembly plants to customers. Similarly, global transportation
allows international retailers like Wal-Mart to sell products
manufactured all over the world –including products
manufactured in several Latin American countries- in the
United States.

6.2 Modes of...