Logistics & Transportation While a global supply chain enables companies to leverage lower cost manufacturing, there are

significant challenges imposed on transportation managers in ensuring products delivered over long distances arrive on time and are distributed to the right locations. Transportation costs are typically 5-6% of a companys revenue and a major contributor to overall product costs. Better transportation management helps companies improve their overall supply chain efficiency. The longer lead times with global suppliers, volatile fuel prices and risks such as unavoidable delays, make estimating the cost and time associated with transportation difficult. As a result, companies incur high expedite and inventory costs. To reduce transportation overheads and ensure that the right product reaches the right location on time, transportation managers require a centralized view into all of their transportation activities as well as the ability to understand transportations impact on product inventory.

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 customers handle. In this exciting new broad look at the business of transportation, including Supply Chain Management, Logistics, & procurement. Freight transportation costs in the United States amount to about 6% of the GDP. Many manufacturers & retailers have found that they can use state of the art supply chain management to reduce inventory & warehousing costs while speeding up delivery to the end customer. Any supply Chains 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 from different suppliers. Meanwhile, the booming growth in shipments to & from China is creating both bottlenecks opportunities. Many major corporations have invested in significant

buying offices in China, India, & elsewhere. There 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 eg, 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 firms 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. Wal- Mart has used responsiveness transportation to reduce inventories in its supply chain. Given the importance of transportation to the success of their strategy, they own their transportation Fleet & manage it themselves. Transportation systems for the new economy need to be very responsive but most also be able to exploit every opportunity for aggregation, some cases even with competitors, to help decrease the transportation cost of small shipments. Managers must use the information technology available to help decrease cost & improve responsiveness in their transportation networks. Satellite based communication systems allow carriers to communicate with each vehicle in their fleet.

Pipeline transport Is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes using compressed air can also transport solid capsules.

A method of transportation in which liquid, gaseous, or solid products are moved over long distances through pipelines. It is used mainly for conveying natural gas, petroleum, and solid materials. Pipelines are classified in terms of their purpose and territorial layout as trunk, or main, and industrial pipelines. Trunk lines include natural-gas and petroleum pipelines, which usually carry the product from the place of its extraction to the sites of processing and consumption, to industrial plants, or to seaports for transshipment to tankers and continued transportation. Trunk lines also carry finished petroleum products from refineries to areas of consumption. Pipeline transportation is also used within industrial plants, where other products suitable for this mode of conveyance are transported in order to continue the production process. Pipelines in tank farms, industrial pipelines for petroleum, natural gas, and mixed products on oil fields, and municipal pipeline networks for natural-gas distribution, water supply, and sewerage are also part of pipeline transportation. Pipeline transportation is a progressive and economically advantageous mode of transportation. It is characterized by flexibility, the absence of freight losses in transit, complete mechanization and automation of labor-intensive loading and unloading operations, and recovery of packaging. As a consequence, transportation costs are loweredfor liquid goods, for example, the costs of pipeline transportation are one-third of those for railroad transport. Further development of trunk pipelines is linked to an increase in pipe diameter and the pressure of natural gas or petroleum conveyed through the pipeline and to the provision of compressor units for higher pressures. The transport of liquefied natural gas is another possible way of reducing transportation costs. Intermodal freight transport involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation (rail, ship, and truck), without any handling of the freight itself when changing modes. The method reduces cargo handling, and so improves security, reduces damage and loss, and allows freight to be transported faster. Reduced costs over road trucking is the key benefit for intracontinental use, as well as reduced greenhouse gas emissions.[1] This may be offset by reduced timings for road transport over shorter distances.